Buy, Build or Fix: What’s 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.

Nearly a third of Americans who've never previously bought a home say they plan to in the next five years, according to a survey commissioned by NerdWallet and conducted online by The Harris Poll among 2,007 U.S. adults in January 2020.

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.

Buy if you can roll with the punches

What could be the downside to a move-in-ready house? All you need to do is move. But 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.

“You have to be ready to go yesterday,” says Simone Plush, a real estate agent with Washington, D.C.-area Century 21 New Millennium. Especially for first-time home buyers, the process can be “an emotional roller coaster,” Plush says. She encourages buyers to be strategic and swift when making an offer on a turnkey home. For example, looking at homes priced slightly below your budget lets you afford a competitive bid that’s over the asking price.

When you’re feeling frustrated, Plush says, remember your “why” — the reason you’re house hunting in the first place. Reconnecting to your desire to have a backyard for your kids, for example, can help you maintain momentum.