To Build or Buy? Helping Residential and Commercial Clients Decide

Written by Posted On Wednesday, 24 October 2018 13:18

As real estate professionals, it’s our aim to help buyers find the property that fits their dreams, visions and goals. Yet, while there are some instances in which finding this match is simple and straightforward, others may present more of a challenge. One of the most delicate decisions facing many homeowners today is whether to build or buy. As wishlists grow longer and more specific in nature, the call to build is felt even stronger, especially when the potential for custom features is presented. Conversely, waking into a move-in-ready property is equally appealing for most, as it removes the time and effort required to make a space livable.


This conundrum applies to both residential and commercial buyers, from single persons seeking to buy their first place to major corporations looking for a place to put down roots. As experts in this industry, how do we know which way to steer them? The answer might lie in analyzing how they answer a select few questions. Before beginning down either route, it can be helpful to sit down with your clients and hold a short interview centered on these inquiries.


1. Do you know the perks of buying an existing property?

Besides being an often quicker process, many home buyers might not realize the myriad advantages presented by buying a pre-built property. The two to lead with are convenience and reduced costs. Though not always the case, an existing home is typically more cost-effective to procure than a new, custom-built one.


After the pre-approval process is complete, buyers are able to shop around for a space that has the exact qualities they want. From there, they can work one-on-one with their agent to negotiate an offer and fill out any applicable paperwork. Then, in the event that the offer is accepted, there is typically only a one to two-month waiting period before the move-in process can begin.


While there are necessary steps such as home inspections, appraisals and financing meetings that must be undertaken, even the lengthiest approval process can be quicker than a laborious building project. This can make buying a home an especially attractive option to those on a tight schedule, such as people who have to move quickly for work-related purposes.


2. How much of a project do you want to take on?

Buyers might be interested in the idea of buying an existing home and moving right in, only to find one that catches their eye but needs a ton of work before it’s liveable. Before going down this route, it’s helpful for agents to ask what level of elbow grease they’re willing to put into a place (or hire someone to take on!).


Are they ready to knock down walls to create the floor plan they want? Or, are they content with working around an existing layout? What about carpet, tile, paint colors and more? Is an older-model home with four bedrooms but only one bathroom totally out of the picture? What about an office building that’s been around since the early 1940s and needs a ton of work to get it up to both code and speed? It’s important to understand the level of effort buyers want to exert throughout the journey before steering them one way or another.


3. How important is customization?

Along the same lines as the question above, it’s helpful to inquire about how much customization and final say the buyers want to have on the place. Have they been developing a detailed wish list for years, filled to the brim with specific finishes, flooring, decor and more? If so, they may be best served by a custom build, where they can get everything their heart desires, granted it’s within their budget.


On the other hand, they may not have a clear design gameplan and be willing to look at the potential of an existing place, then brainstorm ways to make it fit their needs.


4. Do you have access to local building resources?

Buyers might love the idea of building a custom property, but lack the connections or means to do so. Chiefly, they’ll need to be able to secure land, a step that may prove incredibly difficult in a pre-established neighborhood. Then, they’ll need to be in contact with a general contractor, subcontractors, architects and more to help get the project off the ground. Regardless of whether they want to build a brick home in a gated community or a metal shop building for their business, knowing who to call to do the job is an important first step.


As their real estate agent, you may have connections in the community that you can point them toward. On the other hand, if they’re looking to build away from town, this might be a step they need to complete on their own. Having these personnel on board is a critical first step, in either case.


5. Are you looking to resell?

Are your buyers just looking for a first home that they can eventually sell down the road? In this case, a new home can often earn them a higher dollar than an older model one. For one, it will likely be built according to new, healthier standards. Concerns such as asbestos, lead-based paint, mold and more will be eliminated, immediately raising the resale value.


From green or Energy Star-ranked appliances to LED lightbulbs, there are myriad small touches that builders can incorporate into a home to make it more energy-efficient and attractive to future buyers as well. In this way, though a new home can be costlier to procure in the short-term, builders can often recoup that investment down the road. They are also less likely to deal with the frequent maintenance and repair issues that can plague those who live in an older home.


As their trusted agent, it’s your responsibility to help your buyers discern which of these two paths is best suited for them. Take your time with the interview and make sure you understand both their short-term needs and long-term perspective. You’ll need both to help guide them down a path of buying or building that gets them into the property of their dreams

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