When you’re looking to move, the question of whether it’s better to buy a home or build something new can linger in the back of your mind.
If you opt to purchase a home, the square footage, number of bedrooms, bathrooms, property, and more are already determined.
Those who decide to build a home may encounter a few surprises along the way.
Building a new home can be one of life’s greatest adventures.
But the process can cause a lot of stress as expenses begin to add up. The budget could change, expenses might fluctuate, or in some cases, you might not know what the all-in cost will be until the project nears completion.
That doesn’t mean it’s impossible to save money during the process, you just have to know where to look in order to save.
1. Get Multiple Quotes
If you haven’t begun yet, one of the best ways to save money while building a house is to shop around for different vendors, such as the architect, construction company, or financial lender.
Once you decide on the best construction company for your project, it will without a doubt come with suggestions for other vendors to work with — such as plumbers, electricians, or interior designers.
If this option has been presented to you, do not feel pressured into signing with their vendor. Instead, take the time to shop around. It may work out to your benefit.
But, if you’ve done the research and discover their preferred vendor has the best option, then you can feel at ease with the decision.
2. Consider the Property Location
Building a home allows you to customize everything — from layout and the number of rooms to how the home is situated on the property.
If you’re considering buying land to build your home on, there can be benefits such as privacy and acreage.
But it can also mean the property doesn’t have the necessary infrastructure like utility, power lines, or septic system in place. If this is the case, you will have to pay for the installation.
Depending on your financial situation, building on previously developed land might be the better option.
While building a new home, there might be projects that you can handle on your own, which can help to keep the costs down.
By getting your own materials and completing construction tasks yourself, you save on material and labor costs.
Do you have a green thumb? The landscape could be an area that you decide to tackle on your own — finding flowers or shrubs to plant and then finishing the area with mulch.
If you have an eye for design and are confident in selecting counter tops, fixtures, or flooring, you can opt out of utilizing interior design services.
To determine if this can save you money, get quotes from different interior designers and inquire about any potential manufacturer discounts they can utilize.
Compare those expenses (and potential savings) to what you would spend at a hardware store.
The same can be said for painting the interior of the house. If you’re comfortable with a paintbrush and roller, doing it yourself (or with the help of friends and family) can help save on costs.
4. Does Everything Have to be High-End?
There are areas of your new home that you should not skimp or compromise on, from the foundation to the roof.
But that doesn’t mean you can’t save on a few areas until you’re settled.
Cosmetic landscaping, for example, looks nice but is not more important than the foundation or energy-efficient windows.
If trying to save money during the build is important, look to the areas that you might redo in 15 years such as carpeting, washer or dryer, or a new kitchen floor, among other areas.
These aspects of a home are certainly important but should not cause you to spend more than has been budgeted.
Find a carpet that you like and is within reason for the budget as it will have to be replaced within the next decade anyway.
5. Think About the Future
Much like fashion, home décor trends come and go.
Decorative items won’t hold their value quite like structural elements, so it’s best to spend your budget where it will count.
Especially if the structural element would be difficult, or impossible to add later.
While designing your home consider adding something like a basement, rather than a deck — which can be added later if still desired.
Even if the basement is not finished, it will hold more value than a deck which you might tear down and rebuild in the future. A basement, however, cannot be added in the future.
The same can be said for the roof and siding, opting for a better investment during the build is ideal as opposed to opting for interior design elements.
Loving your kitchen floor is important, but not at the expense of a sub-par roof or siding — which protects the rest of the house.
6. Work with a Trusted Lender
Working with a trusted financial advisor can make all the difference and can help you to see that your dreams are possible.
It can also mean being approved for a loan that is manageable for your budget over the course of the life of the loan.
Some builders may have a preferred partner, bank, or credit union that they would recommend for your construction loan, but that doesn’t mean it’s the best loan option available.
Put your mind at ease knowing you have made the best decision for your future home — and your bank account.
To have all of your questions answered — no matter how big or small, contact our team of financial advisors today.