Building A House vs. Buying
According to the CREA National Price Map, the average sale price for a home in Ontario was $1,086,493 in February 2022. On the other hand, the cost to build a custom home in the GTA ranges from $480 – $1,050 per square foot, according to Atlus Group. This leaves many wondering about building a house vs. buying a house and which option is better.
Source: The Canadian Real Estate Association
Source: Atlus Group
With so many factors to consider, we’ve laid out the pros and cons you should acknowledge before making the big decision between building a house vs. buying in Ontario.
Buying Your Home
When looking to purchase an existing home, there are some advantages and disadvantages you should know before pulling the trigger. At the end of the day, it all comes down to what you desire, budget, and flexibility.
The Pros of Buying
- Move-in quicker: Any big construction project takes a lot of time and planning. If you need to move as soon as possible, buying a home allows you to eliminate a lot of time waiting.
- Negotiate a price: Buying a home on the market means that you will pay a price at which the market values. This could be cheaper than building a new home and also may leave room for negotiating a lower price.
- Existing landscape: According to HomeGuide, the average cost to landscape a new home can range from $3,000 to $15,950. Purchasing an existing home can help you save on these costs because the landscape is usually already in place.
- More land: Older homes usually come with more land than newly built homes. This means that you could potentially have a bigger backyard or an extra bedroom.
- Developed communities: Purchasing a pre-existing home usually means that you’ll be in a developed community. You’ll find places like schools, shopping malls, public transportation, parks, and other amenities that are nearby.
The Cons of Buying
- Less energy-efficient: Older homes are usually less likely to be energy efficient. Newer homes are built with updated building codes and newer technology. Buying an older home can mean more money spent on running things such as the air conditioning or the heat.
- Stress from the market: Depending on the market, there could be some competition for a house. This can turn into a bidding war that results in a higher sale price than you originally expected.
- Maintenance and repairs: If a home has been around for some time, there could be unwanted maintenance and repair costs. An example of these costs can include old plumbing and electrical issues that have been left unattended. Be sure to get the home professionally inspected before making a decision.
- Cost of remodeling: There’s a good chance that an existing home doesn’t have the exact layout you desire. The cost of remodeling an existing floor plan can be very pricey and time-consuming.
- No builder warranty: Newly built homes usually come with a warranty that can offer some protection against major problems. Depending on the age of the warranty, some existing homes may not offer the same type of protection.
Building Your Home
When looking to build your dream home there are also some advantages and disadvantages you should consider before moving forward. Building your own home relies heavily on a budget and time waiting, but can be very rewarding in the end.
The Pros of Building
- More freedom: When building a new home you have total control over what’s included. You have the freedom to do things like build your floor plan and choose a specific location. The opportunity for customization is endless when building a home.
- No competition: The stress of the market is thin when you choose to build a home. In comparison to a pre-existing home, the advantage of building your own home means no bidding wars.
- Fewer repairs and maintenance: A newly built home usually means fewer repairs and ongoing maintenance because everything is brand new.
- No toxic materials: Older homes may contain asbestos, lead paint, or mold. These toxic materials can put your health at risk if not properly addressed.
- Energy efficient: A newly built house is almost guaranteed to be more energy-efficient than an older home. This means that it will be less expensive to heat or cool your new home. You’ll find newer appliances and technology that are Energy Star rated.
The Cons of Building
- Higher costs: Building a home requires the right budget. Unexpected costs could arise throughout the project leading to higher costs that you didn’t plan for.
- Land loans: Not only will you need to find land to build on, but you also may need a land loan which can be hard to obtain. These loans typically include a high-interest rate and a down payment between 25 and 30%.
- Non-negotiable price: Unlike buying a pre-existing home, you usually can’t negotiate a lower price on your home. This is because there are a lot of costs involved in developing a new home.
- No pre-existing landscape: Building a new home means building everything from scratch and that also includes a new landscape. As mentioned earlier, the cost of the landscape for a new home can get expensive.
- HOA Fees: Homeowners association fees are expenses that residential property owners may need to pay depending on the land developer at the time of community planning.
Building A House vs. Buying: Which Option is Better?
The ultimate decision on whether you should be building a house vs. buying depends on a variety of factors. Buying a pre-existing house can save a lot of time and money but can also be very stressful if you’re not careful. Building a new house can be very rewarding but can also get expensive if you don’t budget accordingly.
Either way, Legacy Homes of London can help you build or buy. We have access to real estate agents that can help you start the process if you’re looking to buy. If you’re looking to build your dream home, then contact us today to start your home-building journey.