Hi y’all! We closed on our first home just a few weeks ago and it has been a total whirlwind! I’ve promised on Instagram for weeks that I’d chat about our experience building our first home vs buying an established home. This is a topic I couldn’t find a lot of information on when we were getting started, so I hope this post will be a valuable resource for you! We have learned so much, and my best friend is a realtor so I have picked her brain to share with you all too! I am giddy about making our place a cozy home for my family, and everyone who walks in the doors. Look forward to home posts coming so soon! Let’s get into today’s topic of our experience building versus buying a home!
Dress linked here! So comfy for summer!
Building vs. Buying Timeline
Time is a HUGE factor when you consider if you should build or buy an established home. Building a house can vary on timelines and time of year. In general, the average timeline is six months. For us, our timeline worked out where our lease will be up around when we close on our home. It gets tricky to own a home and build at the same time, or if your lease is up at your rental and you have to figure out what to do for a few months. We have friends who moved in with family for about 4 months after their home sold. Is temporary un-comfort a sacrifice you are willing to make for your dream home?
How do you start the home building/buying process?
Getting started is pretty much the same!
Know your budget!
This is HUGE! Sit down, look at all of your monthly bills, and come up with a number that you’re comfortable paying per month for necessities. Think mortgage, utilities, bills, and groceries. If you’re not sure, overestimate your budget so if things end up being cheaper, it’s a win! Ideally, your mortgage should not exceed 30% of your monthly income. I also recommend getting your credit score in a great spot, because it will be checked several times throughout the process. For us, we never thought we could afford to build our very first home. After talking to friends and asking sales consultants, we realized this wasn’t the case at all. I’ll talk about that later!
Find a great neighborhood!
Consider the price of homes within the neighborhood. Ideally you would buy below your budget, and choose to live in a place that is building equity yearly. This is so when you sell one day, you end up making money instead of losing money on your home. It always helps to have more expensive houses around you, because that helps drive your home value up as well. Besides the money aspect, envision yourself there! Do you know people who live in the neighborhood? This was HUGE for us. We believe in fighting for community, so we built where we already had great friends. It is invaluable to know your neighbors! Also consider proximity to grocery stores, restaurants, and entertainment if that is important to you. We drove through our neighborhood dozens of times before choosing to live there!
Get Pre-Approved for a Mortgage!
Talk to different mortgage lenders and get pre-approved for a mortgage. This will give you the amount you can take with you home shopping. Make sure you do this within 6 months of when you plan on buying because the bank does a hard inquiry on your credit. After 6 months, your pre-approval expires and the bank has to pull your credit again. That happened to us because we almost bought a house before we built, and our credit took a small hit. Learn from us, and make sure you close on your house before the six months is up!
Find your perfect home!
This is where building and buying an established home gets a little different. Make sure the house you buy is something that will work for you and your family for the coming years. The home buying process can be a pain, and I promise it’s not something you’ll want to do every year. For us, we chose to build a 3 bedroom, 2 bathroom house for our family to grow into. If you are buying an established home, do you want it to be move in ready? Do you want a total fixer upper? How about a few projects here and there? If you’re planning for projects or remodels, consider that in your overall home budget as well!
Wanna build? Here are the first steps!
1. Visit builder model homes in the neighborhood you are wanting to build in. We LOVED our sales consultant, and she became a dear friend.
2. Pick your lot! This isn’t always an option if the neighborhood is close to being finished. We built in a section that was almost done and there were already houses on either side of us. We would have picked this lot anyways though so it felt like it was meant to be! Our neighborhood is still opening new sections, which is great because you get to choose where you live. It’s so exciting to watch the process unfold.
3. Choose your home plan! This is so exciting. As I mentioned before, we built a 3 bed, 2 bath! The best part about building is that there are often different exterior options too. We got to pick a beautiful exterior with a front porch which makes my hospitable “come and stay awhile” soul soar! Sometimes there are restrictions on which plan you can build if you are building in an established neighborhood. Often they won’t let identical plans be within 2 or 3 houses of each other so talk to your sales consultant about that.
4. Put down earnest money. Earnest money is a sign that you are serious about the home and intend on following through with the home building process. This is something that is common to buying a home, but builders require an initial deposit to sign your contract. The amount varies, but that money goes directly towards closing costs in the end. We considered it as a sort of first payment towards our house. Make sure you’re serious because earnest money is hard to get back if you pull out of the deal!
That’s it! Wow what was a lot of information!
I’ll talk in a later post about the design process of building, and what happens each step of the way. Have you bought or built? What did you learn along the way?! Tell me in the comments and join me over on Instagram for more day to day peeks as we make our new build house home.
Love you big!
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