Buying & Selling
Deciding to Build or Buy
Before deciding to build or buy a home, know the advantages of both options. For today's house hunter, the decision to build or buy can be a difficult question. Although each option has pros and cons, one may offer a clear advantage for your family based on your priorities.
The Advantages of Building
When you build a new house, you don’t have to compromise on the wall color or the flooring choice—you get exactly what you want. Here are some of the additional benefits of building:
- Tax benefits.
By building yourself, you may be able to deduct the interest and points on the land and construction loans as well as any property taxes paid along the way.
- Flexible financing.
Some banks offer financing options that allow you to roll your construction loan into a traditional mortgage, potentially eliminating the need for a separate closing and its associated costs.
- Energy efficiency. One of the biggest advantages of building a home is that you have control over the use of practices and products that can save you hundreds of dollars each year in utility bills.
- Choosing your neighbors.
A new neighborhood hasn’t had the time to become widely diverse. So, if you want a neighborhood with lots of kids, you can build in a child-centered neighborhood.
- More living and closet space.
Building gives you the option of purchasing a smaller lot and constructing a zero-lot-line home. This way, you maximize your living space.
New homes are generally safer, since they may have smoke alarms, residential fire sprinklers, carbon monoxide alarms, and fire escape windows.
New neighborhoods often offer amenities an older neighborhood may not have, such as swimming pools, bike trails, clubhouses and picnic areas.
The Advantages of Buying
Purchasing a resale home means you’ll be able to check to see whether any defects in construction have shown up over the years. Here are a few other reasons an existing home may be for you:
- Time to move-in.
Since an existing home is already constructed, you generally won’t have to wait months or years before you can occupy it. This also means you won’t have to pay rent while waiting for your home to be built.
- Location, location, location.
Many existing homes are in neighborhoods that have been developed relatively near to the city center. This can save you time if your job is in or near downtown.
If you want a house where history happened, there’s no substitute for the real thing. Some older homes also have quirky details that add to its personality.
When buying an existing home, you’ll often pay less per square foot than you would for a new house because homes just weren’t as expensive to build in times past.
- Mature landscaping.
Mature trees and shrubs can add a lot of value to a home and provide shelter from the heat and cold, thus increasing efficiency.
- Homeowners associations.
Buying an existing home in an older neighborhood may mean you don’t have to pay expensive homeowners association fees.
The deciding factor in whether to build new or buy existing is ultimately personal preference. Do your homework before making a decision, evaluate your family’s needs and wants—and then prepare to enjoy your new or existing home for many years to come.
Selecting a Builder
Building a home is a completely involving experience. It requires extensive time, energy and dedication — not only on your part, but also on the part of your home builder. A builder who values the quality and reputation of its houses can make your home building experience enjoyable and efficient, and can help ensure you’ll end up with a place you love to call home. Keep these tips in mind when selecting a builder.
- Focus on value.
What a home costs is important—but how it’s built is vital. Keep in mind that the cheapest home available may also be cheaply built, and may cost you more in repairs over the long haul.
- Evaluate your needs.
Before you begin the process of selecting a home builder, determine whether you need a custom home builder or a production home builder.
- Stay close to home.
When selecting a builder, choose a company that has plenty of experience building in the area in which you want to live. Factors such as building codes and weather patterns can vary from locale to locale, so save yourself time and headaches by selecting a builder who knows the region.
- Ask around.
A builder’s reputation usually precedes them, so be sure to ask friends, family members and local realtors what they’ve heard about a particular company.
- Narrow it down.
Experts recommend interviewing at least three builders before making a final decision. Drive through some neighborhoods constructed by the builder and if you happen to see any owners outside, strike up a conversation. Ask if they have had problems with their home’s construction and about the service they have received from the builder since the sale.
- Check out the warranty.
A builder who trusts the quality of its product should have no qualms in offering a comprehensive home warranty, usually covering the home’s first 10 years. Read over the warranty thoroughly to know what potential problems the builder will be required to take care of, and what issues will be your responsibility.
- Check credibility.
Before deciding on a builder, ask to review a copy of the company’s most recent annual report. Strong financials indicate that the company is probably providing a quality product and may be around over the next 10 years.
Selling Your Home
Selling a home in today’s market requires hard work, careful planning and plenty of savvy. Following these tips can help make the process as smooth and painless as possible.
- Price your home fairly.
Research recent sales in your neighborhood, talk to home sellers and buyers, and check out the real estate listings in your local newspaper. You can also get an estimate of your home's value by searching for a house value calculator.
- Hire a real estate lawyer.
A real estate lawyer can guide you through the complexities of selling your home, from evaluating complicated offers and acting as an escrow agent to reviewing contracts and handling your home's closing process. He or she can also tell you what things, by law, you must disclose to buyers prior to a sale.
- Market your home.
Professional-looking lawn signs are one of the most important marketing tools for home sellers. It can also be helpful to create a detailed information sheet about your home, have your home listed on the Multiple Listing Service (MLS) and hold open houses to bring buyers to your home
- Negotiate offers.
Buyers and sellers have an Attorney Review Period of approximately three days to cancel or amend an offer once it has been made. Before you accept, consider the contract terms as well as the offer price, and assess your buyers’ financial viability. Finally, if you feel the offer is insufficient, don’t be afraid to make a counteroffer
- Prepare for a home inspection.
The potential buyer will hire a real estate inspector to examine the condition of your home. If you are concerned about how your house will fare when inspected, you may want to hire your own inspector first so you can address any problems before a buyer identifies them
- Expect a buyer appraisal.
The mortgage lender will order an appraisal of your home to make sure the offer is in line with what the house is worth. The company may also order a surveyor to make sure that the property boundaries are properly laid out and order a title search to determine if there are any liens against your property
- Close the deal.
On the day of the closing, the home's buyer will do a walk-through of the property to make sure all agreed-upon repairs have been completed.
All monies will be collected, any existing loans or liens will be paid, the deed will be transferred and insurance will be issued to ensure a free and clear title.
Note: Please refer to your state laws regarding the home-selling process as the customs and laws governing this process may vary.
Getting ready to show
Preparing to sell your home can be a daunting task. The best way to begin is to step back and view your home from a buyer’s perspective. Then, follow these tips to give your house that model-home appeal.
- Apply a fresh coat of paint inside and out.
- Rent a storage unit and free up space in your home and garage in order to convey the feeling of more square footage.
- Get rid of unnecessary clutter. Remove stacks of mail, newspapers, knickknacks, personal medications, photographs, unnecessary appliances and other potentially distracting paraphernalia.
- Fix any leaky faucets or running toilets.
- Add visually appealing accents such as potted plants, bowls of fruit and fresh flowers.
- Create a pleasant aroma in the home, especially if you have pets. Light a candle an hour before the buyer arrives or bake fresh cookies in your oven.
- Make a good first impression by improving your entryway: Replace porch lights, polish brass handles and replace worn doormats.
- Clear walkways and paths, and place some potted flowers by the front door.
- Improve your home's "flow" by creating open walkways and exposing as much floor as possible.
- Straighten sagging gutters and replace warped roofing shingles.
Painting can be a great way to add character to your home, if done right, it can be easy too. If you plan on doing some painting in your home, keep the following tips in mind.
- Prepare walls prior to painting. Patch nail holes, repair dents and dings, and sand all surfaces lightly.
- Wash walls with tri-sodium phosphate (TSP), which acts as a cleaning agent, stain remover and degreaser.
- Use mid- to high-grade paints and high-grade brushes and rollers. This will help make the application easier and the finished job look professional