Buying or Building a House: 5 Important Factors to Consider

Financing and the decision to buy or build are both covered in depth in my article “Buying and Financing a Home”. Here are 5 other important factors to consider when buying or building a home:

1. Be Prudent when Choosing a Neighborhood

Buying or building in an established and completed area reduces or eliminates the risk of a future development that may negatively impact the value of your home. If the area is not completed, research to determine what can be expected in future development. Is the area zoned residential only? Is there a green space or playground planned for the neighborhood? Is there a major public infrastructure such as a highway planned for the area? Are the other homes in the area well maintained? Such factors will impact not only the resale value of your home, but the quality of your life in the neighborhood.

2. Avoid Overbuilding

If you are building a house, do not make the mistake of choosing a design that is inappropriate for the area. For example, if most or all of the existing homes in the area are one level and are valued within a certain range, do not build a house using a design that is much larger, more elaborate, and more costly. Doing so runs the risk of being unable to recover your entire investment if and when you decide to sell.

3. If Building a House, Choose a Contractor Carefully

Be sure to assess their credentials by checking the Better Business Bureau or similar agency, asking for references, and preferably viewing some of their previous work. Taking these simple steps can result in a pleasant and positive experience. Failure to do such research can result in a stressful and possibly costly experience when building a house.

4. Buy or Build a House According to Your Needs, Not the needs of “the Jones’s”

For example, if you have or are planning a large family, then proceed accordingly. If not, staying within a practical size and design can result in huge savings when buying or building a house.

5. If Possible, Buy When the Prices Have Solidified and Are Trending Higher

If building a house is not for you, is now a good time to buy a house? While the answer depends largely upon your current financial situation and current mortgage rates, you may want to consider the current trend of the market in the area where you want to purchase. If house prices are dropping fast you may want to wait a while.

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