Build, buy or fix?

What’s the best for first-time home buyers?

With a limited supply of entry-level housing for sale, getting your foot in the door you want could be a challenge if you’re looking to buy your first home soon.

Before you join the house hunt, decide which type of property best fits your goals. Here are the pros and cons of buying a turnkey home, building a new house or renovating a fixer-upper.

1 Buy if you can roll with the punches

In today’s market, competition is fierce. According to data from the National Association of Realtors, in December 2019 the inventory of homes for sale in the U.S. reached its lowest level in over 20 years.

Especially for first-time home buyers, the process can be “an emotional roller coaster,” says Simone Plush, a real estate agent with Washington, D.C.-area Century 21 New Millennium. She encourages buyers to look at homes priced slightly below their budget so they can afford a competitive bid that’s over the asking price.

2 Build if you want to call the shots

New construction might sound intimidating and time-consuming, but unless you’re starting from scratch with an architect and a piece of land, it can be surprisingly straightforward and speedy.

Jeff Mezger, president and CEO of Los Angeles-based builder KB Home, says his company averages three to four months from breaking ground to move-in day. The average home search takes about 10 weeks, according to a 2019 NAR survey, followed by several more weeks to close and get the keys.

“When you close on a used home, you’re on your own if something goes wrong,” Mezger says. “With a new home, you still have that relationship with us.”

3 Fix if location’s a must

Renovating a fixer-upper is tougher than it looks on TV, but if the house has good bones, you could snag an affordable home in your ideal neighborhood.

“First-time home buyers should not be shy about houses that have good mechanical and structural components that are just ugly,” says David Pekel, a former contractor who’s now CEO of the National Association of the Remodeling Industry. “You can fix ugly.”