Does it cost less to tear down and rebuild or buy a new existing built home?

Does it cost less to tear down and rebuild or buy a new existing built home?

This sounds like it’s an easy one to answer but the truth is – it’s not. It all boils down to what you envision for your dream home for you and your family. Often we get this question when buyers have been searching the market for quite some time and are looking for a home that suits their lifestyle and needs. They’ve considered building a custom home because they know it allows them to tailor that home exactly to what they desire. It’s usually after they’ve talked to a designer or builder that they change their mind. Why? Because they found out the considerable price tag that goes along with it. Not only that, building a custom home from scratch tends to be a very stressful process, no matter who you choose to build it. It involves many working variables and you’re dealing with human beings here, not machines, so there is only so much ‘control’ you have over certain factors. Which is why it’s so very important to find a builder who has not only a good track record for coming in on time and on budget, but also has visual and tangible evidence of internal streamlined project management systems and can walk you through how they manage your project from the back end.

The other KEY factor that is probably the single most important component of your build – is finding the right DESIGNER. We’re not talking interior design, we’re talking architectural design of course. When you have a competent and well organized architectural design firm handling the initial stages of your project, it can actually save you thousands of dollars and hours of time invested. Especially if you’re considering whether to build new or buy an existing home.

Here are 5 key factors we think are most important to consider when determining whether to tear down and rebuild (TDRB) or BUY NEW.

  1. Newly constructed homes can have severe problems that essentially make them huge ‘money pits’. They may look good for the first two to three years, and then but by bit they start to have more complex and costly problems. Things like water penetration or leaking windows, drywall cracks and multiple nail pops, uneven heat distribution (cold rooms and hot rooms when they should all have even temp), poor interior/exterior finishing applications like caulking or grouting coming apart, baseboards separating, siding coming apart, trim paint peeling etc the list is endless. Not to mention you can’t see what’s been done behind the walls. You can’t see if the builder has used shortcuts or cheaper plumbing materials, insulation methods, or electrical wiring, done by incompetent or rushed trades being paid the lowest dollar the builder can get away with.
  2. They often have interior layouts that have not been considered for future/modern uses and cheaper components that will all need to be replaced after only a few years, maybe you get 5 years out of them at most, but at some point they will start to show wear/tear and will need to be replaced. This is 99% of the time due to the spec builder who built the home – using the cheapest build designer or draftsperson to design the home. Many who are not paying a lot of attention to creating a beautiful, well laid out design, but are more concerned with cutting as much costs for the builder (as per the builder’s instruction) and getting the expenses down to a minimum, for maximum ROI once that home goes on the market.
  3. Energy Efficiency – do you want a home that is energy efficient? Silly question right? You want to make sure that any new home is wired for the most sophisticated electronics we use today. In some cases, newly built spec homes have sub par electrical layouts that don’t make sense or are very limited. The builder decided to just put in the minimum amount and figures the new owner can splurge on any additional requirements they want. Again – it boils down to ROI.
  4. You love where you live, but you hate your house. Now you’re considering whether instead of buying a new house, if you should tear down your existing house and build on the land you already own. Generally speaking, is it cheaper to do this? Our answer is – it depends. You need to ask yourself “How much value is in my house to other buyers if I were to sell, or is it a teardown for pretty much any buyer?” Then figure out how much is your mortgage, i.e. how much would you walk away with after a sale and how much would it cost to buy a new build where you want.
  5. DO YOUR RESEARCH. You need to know who that builder has built for before and where. Go and see the previous homes they’ve built, if possible – talk to the people currently living in the homes also built by that builder and see what their experience in the home has been so far. Often new home builders who don’t have a good list of references or can show you proof of their internal project management systems, usually (not necessarily all), are often what we call ‘track builders’ who’s business model is revolved solely around turning a large profit  over offering good quality product and a well organized build experience for their client. In the end we could strongly argue that it all boils down to whether you feel you have the time and energy to get through a custom build and receive a product and experience that surpasses all expectations, thus making the investment worth it. OR if you decide to buy a new home, make sure that the home you’re buying, isn’t going to cost you more or the same as what a custom would have, due to faulty workmanship, cheaper materials and a builder who will never show up for warranty fixes.

If you have any questions you’d like us to answer, or would like to leave comment please do so! We’re more than happy to respond. OR if you’re interested in finding out more about our Complimentary Site Feasibility Report, please feel free to contact us direct at info@phase1design.com or Call Us at 604-670-7668 We’d love to hear from you!

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