Congratulations! You’ve been able to save up enough money to be able to make an important purchase and to reach one of the biggest milestones one can reach in adult life. But, this great achievement also means that there’s an equally great decision to be made. How do you go about acquiring your first house?
For this, there are two routes to take. You can either buy a pre-built home or you can have your own home built. Each route has its own advantages and disadvantages. Your decision is going to be based on an assessment of these two most important factors:
Expense Rigidity
One of the most important, if not the most important, aspect of buying a house is your finances. In fact, whether you’re buying a carton of milk or a house, you’re going to have a budget that determines the range of your choices.
Expense rigidity refers to how accurately you’re going to be able to estimate your expenses when purchasing a house. This is extremely important because you want to know if you have enough resources to even make the purchase at all.
For example, it’s far easier to determine how much money you’re going to shell out when you’re buying a pre-built house. Manufactured Homes, in particular, do not have any underlying expenses. The transaction for them is as easy as buying a carton of milk (figuratively speaking). The asking price is rigid and, depending on how old the home is, you’re only going to need to factor in repair costs if there are any.
In stark contrast, when you build a house from the ground up, you now have to factor in time and the risk of your project getting stalled by unforeseen circumstances. Natural calamities, construction delays, and design changes all run the risk of inflating your bill. Avoid building a new house if you have a strict budget to adhere to.
Risk and Warranties
We’ll keep this simple because it only requires minimal explaining. When you build a new house, you’re going to be guaranteed that everything in your house is brand new and under warranty. This means that there’s a significant reduction in the chance that there may be faulty components of your house.
On the other hand, with pre-built houses, you’re likely to encounter some defects that have surfaced over time depending on how old the house is. Warranties are important because there are some house components that are more expensive to have repaired than to have replaced by a new one. As a general rule, one should assume that the older the house is, the more likely it is to have structural defects.
Other risks may not necessarily be tangible. House histories are also a risk. Whether you’re a skeptic or you’re scared witless of ghosts and the supernatural, a home with an emotional defect (a house where a violent crime of suicide occurred) is going to sell for less (if you decide to sell that house later on).
