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The True Cost of Home Ownership: Is It Cheaper to Buy or Build a House?

EDGEhomes Quick Move-Ins, Creek Ridge 602, Kate Floorplan, Herriman, Utah

We’re here to answer the burning question for future homeowners: Is it cheaper to buy or build a house?

You likely already know about some of the normal costs of purchasing a home vs. building a home, like real estate agent fees, closing costs, down payments, etc., but what about the smaller costs most people don’t think about that actually make a huge impact on a home and the years you’ll live there?

Here’s the truth:

At first glance, it might seem cheaper to buy a pre-owned home than building a new one.

However, even though it can cost you more at the beginning, building a home can save you money in the long run.

We want to highlight some of the costs that aren’t typically thought of but do make a difference in how much you end up paying in the long run.

 

Costs of Buying a Home

Let’s break down some of the unknown and forgotten costs of purchasing a home:

Who Worked On It Before?

With older homes, most appliances have been there for quite a while, sometimes upwards of 20 years, depending on how old the home is. Once appliances approach the 10 or 15-year mark, they tend to need a lot of maintenance, repair, and eventual replacement. Some appliances may fail on you sooner than that if they were not properly and routinely maintained through the years.

It’s a little nerve-racking to think that an inadequate technician may have worked on something in your future home. In some cases, the previous homeowner might have taken matters into their own hands and actually tried to fix it themselves. There’s no telling how accurate they were able to fix the water heater, furnace, stove, pipes, or other appliances.

In any case, when buying an existing home, be sure to hire a qualified and experienced home inspector to catch any potential issues the seller may be trying to hide or may not be aware of.

Replacing Appliances

As appliances age, they will need to be replaced. To give you some insight, this is what it typically costs to replace old appliances:

Furnace: A well-maintained furnace can last, on average, 20 years. When it needs replacing, it costs around $4,000.

HVAC System: An HVAC system typically will last 15 years and costs $7,000 to replace.

Roof replacement: A roof can last up to 25 years. A typical bill for roof replacement starts around $5,000 and goes up from there.

Moving into an older home that has been previously lived in leaves you wondering how old some of the appliances really are and how well they’ve been maintained throughout the years. Keep in mind that replacing appliances could also mean repairing some damage that has been caused by older devices.

Let’s think about a leaky pipe for a moment. A leaky pipe can cost you upwards of $850 to repair. Not only do you have to fix the broken pipe, but you have to take into account the damage that was caused by the water from the leakage. There could be mold or unsound structure that is unsafe for you to live in. And that’s just for a broken pipe. In these cases, you’re going to have more problems on your hands besides leaky pipes.

 

Costs of Building a Home

EDGEhomes Quick Move-Ins, Graystone 304, Herriman, Utah

Building a home in Utah can cost you anywhere between $256.7K – $800K+ depending on a variety of factors.

Nevertheless, the theme you will notice throughout this next part is this:

Yes, it can sometimes cost more upfront to build a home. However, it will be more cost-effective in the long run.

Brand New Appliances

When you’re building a new home, everything will be new. You’ll have a new fridge, oven, microwave, dishwasher, sink, AC system, water heater, you name it. The newer appliances are more advanced than others that were made 15-20 years ago, and run better than appliances made even just 5 years ago. New technologies have made it possible for more eco-friendly appliances on the market, which can help decrease the cost of your energy bill.

While new appliances tend to be more pricey, they will last you longer and function more efficiently, lowering your power bill compared to an older home with older appliances.

You won’t have to worry about your home becoming damaged from old, rundown appliances. Your dishwasher won’t break down on you when it’s new and your pipes will be intact and work well for years to come.

The Warranty

When building a new home, the structure, workmanship, and appliances are covered under warranty for an extended period of time. So even if you did have to replace some appliances or fix damages, you’d be covered in the new home you built.

Keep in mind that it’s important to read your warranty contract to be sure you understand what kind of coverage you are getting for your new home.

 

Let’s Break It Down: Is It Cheaper to Buy or Build a House?

close-up of man budgeting with calculator

If you haven’t guessed already, it will cost you less, in the long run, to build a home rather than buy one.

If you have the choice between buying or building, we suggest saving up your money to put towards a home you can create yourself. Building a home means customizing it to your needs and having a house that’s meant just for you.

 

Let EDGEhomes Help!

EDGEhomes is experienced in helping people build the homes of their dreams. We will work with you to get exactly what you want down to the finest details. With a variety of floorplans to choose from, you’ll be able to create the perfect home for you, in the community you want!

 

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Date

03/04/2020

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