Buying or Building a Home?
Buying a home is one of the most significant investment commitments of our lives. Countless buyers spend lots of time and energy searching or designing their "dream home" before making final decisions. Here in Portugal, there is the added aggravation of existing bureaucracy, especially if you have to resort to credit, so it is indispensable to think of all the details. The processes of investing in a home are time-consuming and essential. However, there is always the first decision to make: are you buying an existing home or building one? Casas do Barlavento helps you in this decision with this guide featuring all the pros and cons of each choice.
Building a House vs Buying One - Pros & cons
There are many factors to consider when looking for a home: location, the urgency to purchase, market trends, taxes, property conditions and of course budget. In fact, the decision depends primarily on the preferences and availability of each buyer.
Advantages of buying an existing home
1. Easier and less bureaucratic - if we think of all the legality and bureaucracy inherent in building a home, buying a second hand or turnkey property is a lot easier. You just need your list of preferences, look for a real estate agent and, if applicable, deal with the housing loan. If you don’t have time to spend when buying a property this is undoubtedly the most convenient option for you.
Check also: Changes in Housing Mortgage Loans
2. Faster and can negotiate price - A local real estate agent who knows the area can help you find what you are looking for faster, guiding you in the negotiations and assisting you in the paperwork. In the second-hand housing market, you can make an offer and negotiate, with the help of your real estate consultant, who tries to find out all the details to get the best for you. As soon as the deposit is made, you may have a closed deal in a few weeks.
Check also: How important is it to have a Real Estate Agent?
3. Ready-to-move-in house - When buying an existing property, you can move in after you go to deed.
4. Living in a community near established neighbourhoods - Construction sites are often located outside urban areas on the edge of the suburbs. Plot opportunities are usually away from local facilities and areas of interest.
5. Renovating at your own pace - once you have acquired your home, you can upgrade at your own pace, as you have time and money availability.
Check also: When is a license required for housing renovations?
Disadvantages In Buying an Existing House
1. Buyer’s Remorse - Despite all the advantages of buying an existing home, you are unlikely to find exactly what you want. The reasons can be attached to the monetary limitation, or you bought in a hurry, or simply because there is nothing built that ticks all the boxes.
2. Limited location and quality of the neighbourhood - If you prefer more privacy you will always be limited to what already exists. Unfortunately, you also have no guarantee that you won´t end up choosing a property with a neighbour who likes to vacuum at 3 a.m.
3. Option of customising denied - if you choose a turn-key house you will be limited as to the alteration of the structural layout, finishes and functionalities of the property.
4. Uncertainty about the construction and finishing’s quality and materials used.
5. Inheriting Maintenance issues - You can’t forget that when you buy an existing home you are buying the good and the bad. In addition, if the property is used or older there are no building guarantees (properties older than 5 years).
Advantages of building a house
1. You get exactly what you want - one of the strongest reasons for building a property is to design it exactly the way you want it: plans, finishes, style, colours, layout, you can choose everything, to your liking, from beginning to end. Usually the only limit is your budget.
2. Economically more accessible - you can negotiate materials with suppliers and, if you have everything organised, avoid budget overruns.
3. More energy-efficient home - it is easier to prepare a home that is being built with more efficient technology and improve in insulation.
4. Knowledge of the quality of materials used and construction guarantee, which is of at least five years.
5. Choice of leaving bases prepared for the future - as you have full control, you can leave, for example, pre-installation of air conditioning in the garage in case you later wish to convert it into an office.
Disadvantages of building a home
1. More bureaucratic process - Before you can start to think about the decoration and the designers you have, you must buy the plot, apply for licenses, planning permits and comply with all the legal requirements.
2. Need more time and greater availability - To build your dream home you will need a lot of dedication, decision-making and much more time than if you bought a property ready to live. Hiring and supervising architects and contractors requires a lot of availability and also some experience. It is not in weeks that you plan, build, and choose finishes for a home.
3. Harder Financing - If you need financing to build be aware that more paperwork is required than for a traditional acquisition, as the amounts loaned are made available as construction progresses.
4. Budget slippages - lack of experience and organization can lead to astronomical budget holes as well as delays in house completion. It is advisable to keep your list of priorities in mind and know where you draw the line with your spend limit so you don’t get into unnecessary financial risk.
5. Essential but unexpected expenditure - the construction land - Although the construction of the property can be less expensive with the acquisition of the land it can make the total expenditure higher. Depending on where the land is, you may encounter expenses for, plumbing, accessibility and electricity.
Check also: Palmares – An exclusive project in a unique location
Having said this, what you should remember is that before you decide to build or buy a home, you should seek as much information possible and evaluate all the financial and bureaucratic details of your choice.