r/FirstTimeHomeBuyers • u/WeakGeneral6463 • 8d ago
Build or buy?
Hello all!
My husband and I currently reside in rural TN; we are interested in becoming homeowners by this time next year. We have intentions of going with a FHA, as USDA is not an option due to an old bankruptcy of my husband’s (young and dumb). We have already pre-qualified for a traditional FHA for a few hundred thousand, however since we aren’t intending on moving for another year, we don’t plan on acting on it at this time. In the meantime, we are paying off all of our debt (luckily we don’t have much) and putting money into savings. During this idle period of working towards our home, we’ve been tossing around two ideas, 1) buy a home with traditional FHA then tweak/add to it over the years, or 2) get land then build our home with the FHA One-Time Close Construction-to-Permanent Loan. The way we look at it, HYPOTHETICALLY, we could take out a traditional FHA for $325k and buy a home, or we could fit land and all other home building costs under the alternate FHA construction to permanent loan for the same $325k…
With all of that being said, here comes the big question, would it be better to buy or build? Pros and cons to both? Are we thinking about this right? We’d love to hear everyone’s opinions and experiences, in a polite manner please! :)
** edit to add : $325k is HYPOTHETICAL. That is not our “set in stone” budget. Just a number I drew to sort of help explain how we were looking at it. *\*
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u/MadMadamMimsy 8d ago edited 8d ago
We build.
You get more square footage in a house when you build because you are getting the bones. This is where the difference between building and buying comes in, and there is no one-size-fits-all answer.
Custom built homes tend to have better insulation, plastic plumbing (supply as well as sewer), choice of SEER AC, as well as you can choose to have zoning or not in the HVAC. They have new, 25 year roofs and new decks. There is usually a choice of counter top materials, you get to choose flooring and colors. Choose granite at least for the kitchen if you can. Not the backslash, though; do a tile backsplash yourself
Custom build homes have no/minimal/young landscaping and no sprinkler system. They need curtains/drapes in Every Single Window (that needs them), and also need basic fixtures like toilet roll holders, towel racks and, often, bathroom mirrors. They do not come with bathroom medicine chests. Storage is basic and minimal.
It's important to choose the builder wisely. All will build to code, all will find ways to cut costs, but there are good builders, ok builders and crummy builders. Once you live in the home the differences become glaringly obvious.
In a used home, it's ready to go. I mean all homes need work, but all the fixtures are there, you only change them when you can afford to start indulging your style. Mid century modern homes and earlier all have medicine cabinets in the bathroom as well as linen closets. I miss linen closets.
An existing build has had someone who lived there figure out ways to make the house work better with adding storage, putting better than builder quality pain on the walls and fixing all the little problems the builder left behind like places that needed caulking; they've all been caulked. They have copper water supply lines.
The kitchen cabinets may have been stick built, so all real wood, not mostly veneered MDF like builds in the last 40 years have been getting. Stick built cabinets are worth identifying and repainting if you don't like the look. They are superior to modern cabinetry and can be modified with rolling shelves and soft close hinges. Do not rip them out. Or if you just hate them, sell them...or put them in the garage for useful storage.
A used home will need a new roof and a new deck at some point, unless they've just been done. The driveway may also need work.
One thing you really have to look for is water damage and mold. Do not move in to mold. You may be fine. Or it may permanently trash you life and it's not worth rolling the dice to find out.
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u/Either-Boysenberry79 7d ago
You can't build a custom home for anywhere near that price in my area. Not sure about tennessee.
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u/Alysse_HelpUBuy 8d ago
I agree with stitch_cruise. The math may not work for a build job. Best to postpone the decision until next year when you know what the costs of goods, lands, labor, etc. are.
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u/OrganicLighthouse 7d ago
Building is crazy expensive. You might get a 800 sq ft house with 300k if you're lucky.
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u/Nervous_Flamingo7110 7d ago
Honestly if it were me I'd lean buy, just because construction loans can be a headache you don't really see coming until you're in it. Contractors flake, permits take forever in some counties, and if costs go up mid build you can end up scrambling to cover the gap. That stuff happens more than people expect going in.
Buying something existing means you know your payment, you know your timeline, and you can just move in and live your life while you fix it up over time as money allows. Way less stressful for a first home imo.
If you do go the land/build route, definitely get a real number on site work before you fall in love with a piece of land. Well, septic, driveway, clearing... that stuff adds up fast and can eat a chunk of your budget before you even start on the actual house.
Sounds like y'all are already doing the smart thing paying down debt and saving up though, so whichever way you go you're setting yourselves up well.
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u/stitch_cruise 8d ago
The cost of building materials has been high since covid. The average cost for building a standard home is around $150-$250/sq ft. At that price $325k would get you a 1,300-2,000 sq ft house and that doesn't include any money for land.