5 reasons to build over buying
“The definition of insanity is doing the same thing over and over again and expecting a different result."
— Albert Einstein
This quote has come to mind a couple of times over the last few months—typically 6 months into a housing search or around offer number 8 for my buyer clients.
It's after several disappointments and stressful multiple-offers situations when it becomes apparent that we need to regroup and try a different strategy as the market continues to heat up.
Maybe it's paying down debt to increase their purchasing power, looking a little outside their desired neighbourhood, or becoming open to taking on a few more renovations (hey, pink carpet isn’t that bad).
A few weeks ago, I was standing inside a 3-year-old home on a very undesirable lot—no privacy, super long driveway, drainage ditch in the middle of the front yard—a home that would be very tough to sell in any other market, but in this market would sell for $50,000 over asking.
This was our 'time to regroup' moment. I realized they could build this home, brand new, on a nicer lot for the same price that this home would sell for.
If you are looking to make a move but don't want to wade into the current resale home market, here are the top 5 reasons to consider building in 2021.
Shrinking Inventory of Resale Homes
There are very few resale homes on the market; the number of active listings is actually at a 30 year low.
This limited selection of homes means you could be waiting a very long time for a home that suits your needs to come to market.
Choosing to build a custom home means that you can work with a builder to design your dream home or tweak existing plans to get exactly what you want – no need to wait for the perfect home to hit MLS
Avoid the bidding wars
Where multiple offers have become commonplace in the resale market, the supply of available lots in most new neighbourhoods exceeds the current level of demand. Meaning you can skip the bidding war and purchase a home for list price.
New construction homes are priced based on the market value and cost to build, meaning it's unlikely that you will overpay for a home.
Skip the renovations
When shopping for resale homes with buyers, there are very few times when a buyer walks in and says “I love absolutely everything about this house.”
They often have a laundry list of items that they plan to change after purchasing the home, whether it's something small like paint colour or something much larger like the layout.
By building, you have the opportunity to choose the finishes including flooring, cabinets, siding, trim, and paint colour to ensure the home is uniquely you, right from the start.
One of the most challenging aspects of buying a home in 2021 is trying to plan, especially if you have a home to sell—putting you into tough competition with new homebuyers moving from apartments at the home seller's convenience.
It's hard to know when the perfect resale home will come to market or if you will be the successful bidder. Building gives you the certainty of knowing what your next step will be and often gives you 8 months to plan.
Gain peace of mind
Most builders are partnered with a new home warranty program.
This often includes a 1 year bumper to bumper (or deck to deck) warranty which covers any issues that may arise in your first year of ownership plus a 7-10 year warranty on major structural defects, giving you peace of mind on your investment.
Real Estate Advisor based in Halifax, Nova Scotia. I help people buy and sell homes with Engel & Völkers.