As supply for homes on the market remains somewhat limited compared to demand, making this a continued seller’s market, many buyers are looking at every avenue they might have available to obtain a home. And while the most common approach here involves buying an existing home from the prior owner who has been living in it, there are a few other possible options as well.
At Altius Mortgage and our partners with Mortgage Ogden, we’re happy to help with all your home loan needs, no matter what sort of homebuying situation you’re in. In addition to the traditional approach to homebuying, two other main options may be present: Ordering a brand-new home build that will allow you to be the first person to ever live in a newly-constructed home, and buying a “fixer” home that requires some significant work to return it to a high quality level. Let’s dive into each of these three primary options — who they’re typically best for, what you should be thinking about if you plan to go down each road, and more.
Buying an Existing Home
As we noted above, by far the most common approach to obtaining a home is to buy an existing one from the prior owner. In this scenario, you’ll be working with a real estate agent to find homes that fit your budget and desired location, then going through the process of making an offer on a home, negotiating with the seller if necessary, getting a loan and closing on the deal.
One of the main advantages of this approach is that you’ll be able to move into your new home much more quickly than with either of the other two approaches, as there’s no need to wait for a build to be completed or extensive work to be done. You also may have more negotiating power when it comes to price, as the seller may be more willing to lower the price if they’re motivated to sell quickly. And because this is easily the most common approach to homebuying, you’ll have a wide range of homes to choose from (though also stiffer competition for them).
On the other hand, you may have less control over what sort of home you end up with when buying an existing one. You may not be able to find a home that has exactly the layout or features you’re looking for, and it’s also possible that you’ll end up inheriting some problems from the previous owner that will need to be fixed. For instance, an older home may need a new roof or have outdated appliances.
Still, buying an existing home is often the best option for those who want to avoid a lengthy and complicated process. If you’re not picky about every last detail of your new home and just want to find a place to live quickly, this is probably the route you’ll want to go.
Building a New Home
For those who have the financial capability and the time to wait, building a new home from scratch may be the best option. In this case, you’ll be working with a home builder to construct a brand-new home on either land you already own or land you’re in the process of purchasing. You’ll have much more control over the final product when you go this route, as you’ll be able to pick out every detail and feature of the home ahead of time.
This reality leads to a number of significant benefits. For one, you won’t have to worry about any preexisting problems that might come with an existing home, as everything will be new. You also won’t have to do any extensive remodeling work, as you’ll be able to pick out features like countertops, flooring, appliances and more that fit your taste and needs.
Now, the most obvious possible downside of a brand new home is price. Naturally, if everyone could afford it, everyone would choose to have a new home built rather than buy an existing one. But assuming you can find the right land and work with a good home builder, building a brand new home doesn’t have to be excessively expensive.
Another potential downside is time — it will almost certainly take longer to build a new home from scratch than it would to buy an existing one. So if you’re not in a huge rush to move, building a new home can be a great option.
Fixing Up a “Fixer” Home
And finally, we come to the option of fixing up an older, “fixer” home. With this approach, you’ll be buying an existing home that needs some work, then doing that work yourself (or hiring someone to do it for you).
The main advantage of this approach is cost. You may be able to find a fixer home for much less than you would pay for a move-in ready home, then put some money into fixing it up and still come out ahead. Moreover, you’ll have more control over the final product when you take this approach. If you’re handy and enjoy doing things like painting, drywalling or installing new fixtures, you can likely do much of the work yourself and save even more money. And even if you need to hire someone to do the work for you, you’ll still be able to pick out all the materials and features yourself.
On the other hand, fixing up a home takes time and effort — more time and effort than simply buying an existing home, in most cases. So this option is really only practical for those who are willing and able to put in the work themselves or wait for someone else to do it on their behalf.
For more on which type of home purchase is likely best for you, or to learn about any of our mortgage rates or other home loan services, speak to the team at Altius Mortgage today.