BUY OR BUILD?
The idea of having a home built to your exact specifications is an exciting notion. However, although building a home does have numerous benefits, there are also several vital aspects that should be considered before the project is started such as cost, time and personal preference.
Perhaps one of the biggest reasons that certain people opt to build their home is the fact that they can customise it to suit their preferences. A new home is also more energy efficient, especially with more energy-saving elements having been introduced to the market in recent years. Opting for a new home can also be a health benefit, as purchasing an older home could potentially expose you to certain toxic materials, such as asbestos, lead paint and mould.
Despite the perks, there is also a downside to building a home, such as the fact that it often costs more than initially expected. There is also the task of finding the right contractor for the job. One of the first aspects that need to be researched thoroughly is the competency of the builder. The success of a building project will be based on how competent the contractor is to complete the endeavour in a professional manner and within the allotted period. Whether it is building a home from the ground up or merely taking on a renovation project – using the right contractor is essential. Subpar artistry will cause issues down the road and will be costly to rectify at a later stage – not to mention the fact that the home will be unsafe for its occupants.
Only choose a builder that is certified by the National Home Builders Registration Council (NHBRC). NHBRC aims to reduce the risk of sub-standard building work as much as possible and ensures that only qualified, experienced contractors, are used to build homes. If the build is being financed, the bank will insist that the builder is a registered member of the NHBRC before releasing the necessary money.
Timing is another aspect that requires careful consideration. If the property is not finished within the expected time frame, it can have some harsh financial implications. During the build, you will require accommodation until the property is habitable. Either this means staying with friends or family, which is cost effective but sometimes inconvenient, or incurring the cost of renting a home while you wait - bearing in mind you will also be paying for the land and building costs of their new property. A delay in the project can cause a financial setback if you are not prepared for it.
If a bank is financing a building project, you will be required to provide several documents such as the building plans, which should include a schedule of finishes to determine the property’s market-related value once it is complete. These documents will be used to determine the size of the loan granted within the parameters of the bank’s credit policy. Irrespective of whether buyers decide to purchase an existing home or build one, in most cases they will be required to have a deposit. However, due to the higher risk involved with building a home, the deposit required to finance the build of a home will be higher.
Along with the risk involved in building, there is also the chance that the cost of the project will be greater than what you would pay to purchase an existing property with similar features. Even so, some people still want the creative freedom to design a home – regardless of paying a higher cost.
Building a home and buying an existing home both have their pros and cons. The answer to what would be a better option is therefore based on personal preference, individual requirements and financial situation. Regardless of the option that is decided on, property should be viewed as a long-term investment, and the necessary research should be done to make an informed decision.