You’ve saved your money for a down payment and are ready to buy a home. But what if you can’t find your dream home for sale in today’s crazy real estate market? New home construction may be a viable alternative for homebuyers frustrated with the scarcity of listings. In this guide, we’ll explore the differences between building and buying your home in order to help you weigh pros and cons and decide which option is best for you.
Buying a House in Central Illinois
Like the rest of the country, Central Illinois has been experiencing a hot real estate market for the past year or so. “Homes in Illinois sold twice as fast in July 2021 as they did last year,” according to data from Illinois REALTORS® . However, Peoria, in Central Illinois between Chicago and St. Louis, appeared on a recent list of “10 Cities Where Sellers Are Slashing Home Prices.” So it’s worth taking a look at what’s on the market now before making your decision about whether to buy or build.
- You can find a move-in ready home
- Potentially more room to negotiate on price
- The application and approval process for a conventional mortgage is more straightforward
- May have to settle for not getting everything you wanted out of your dream home, depending on what’s available on the market
- Depending on where you’re looking in Central Illinois, homes may get snapped up quickly and it can be frustrating to decide on a home and then get out-bid
Building a House in Central Illinois
New home construction slowed in the last year due to supply-chain issues. However, some things are returning more to normal nowadays, so it’s worth looking into building a new home if that is truly your dream and first-choice option.
- Greater flexibility to choose a floor plan, materials such as cabinets and flooring, and other details like hardware.
- Avoid unexpected maintenance/repair costs that can come with buying an older, already built home (HVAC, appliances, roofing).
- May need to pay for two homes at once while you wait for your home to be built, depending on your situation.
- Have to obtain short-term construction financing and then transition the remaining balance to a conventional mortgage once your home is move-in ready.
Choosing an option based on your priorities
We’ve covered the practical factors in deciding whether to buy or build, but often the decision comes down to your personal lifestyle priorities. Consider these questions in your decision-making process:
Is your main priority to keep costs down and stick to a budget?
For example, retirees or families with young children may be especially budget-conscious, and new construction can help you avoid unexpected repair bills.
- While there are some up-front costs with financing new construction, you are much less likely to get walloped by a broken heater or other large repair/replacement cost for years after moving in.
- Just consider where you will live while your new home is built (your current house, a rental apartment, or with family?) and how you’ll afford your current living costs plus payments on your construction loan.
- Sometimes it’s easier to build your dream home than to find an existing property in the perfect condition for you!
- With new construction, you can choose energy-saving features such as solar panels to help you save on utility costs over the long run.
Is design control your main priority?
For the less budget-conscious, building your home offers complete control over the design, from floor plan and exterior features to landscaping, materials, and more. So, if you want a dog bath in the mud room, you can have one. Customize your home to fit your family’s needs and lifestyle. Finding a home on the market that already has everything you want may be impossible.
Is timeline your main concern?
Building a new home from the ground up can take as long as a year. If you’re moving to a new state or are in another circumstance that requires a fast timeline for finding housing, buying an existing home may be a better option.
Apply for a Mortgage or Construction Loan from Flanagan State Bank!
No two people’s financial situations and housing needs are the same, so why should all mortgages be equal? At Flanagan State Bank, we offer a variety of mortgage programs to fit your needs, competitive rates, and affordable payment plans to work within your budget. We also offer a variety of mortgage programs for customers unable to qualify for traditional lending because we believe everyone should have the chance to own a home. To learn more about construction and lot loans or conventional mortgages, contact one of our mortgage loan officers in Central Illinois and beyond, or apply online today!