There are a lot more options to buying a home than you might think. Prospective buyers will narrow in on amenities and square footage based on the budget at their disposal, but there are plenty of other factors to consider. It can be a truly intimidating task, especially considering the financial investment involved.

That is why we’ve created this guide to help you navigate the pros and cons of two of the most common options for buying a home: building a custom home and buying pre-owned. While the better option will depend on your situation, this guide should help you determine which route will best suit your needs.

Building a Custom House


The biggest perk of building a custom house is being in control of every detail. You can add any element that you’d like - so long as you have the budget for it. You can choose all the finishes and fixtures that suit your tastes, but you can also adjust for your own needs and preferences. Want a master bedroom on the bottom floor? You can adjust the floor plan to have every room where it will be most convenient for one person: you.

Home buying can be a very competitive process and there is always a risk of losing out on a perfect house if another person makes a better offer to the seller. According to the National Association of Realtors, the average time a pre-owned home is on the market is thirty days. In many markets, houses move extremely fast and it can be challenging to find the right house in the right location. By building a custom home, you can skip the stress and focus on looking ahead rather than over your own shoulder.

Building a home is generally cheaper per square foot as well. This isn't always the case, of course, as it depends very much on the market and area where you live. This breakdown from Dave Ramsey is very helpful to see an average schedule of costs, but remember it is just an average so this isn't exactly the way it might be for you.

There typically won't be any large, expensive maintenance projects in your early years of home ownership, either. For the first several years of living in a custom home, you won't need to replace any of the appliances or HVAC systems.

Older homes can also be very energy inefficient. A new home is a blank slate to add energy efficient elements including solar panels, smart lighting and heating and cooling systems. By accounting for these things, you can ensure lower utility costs once you move into your new home.


Unfortunately, the value of a custom home can be hard to predict. Towns and cities can go in and out of demand - as can the amenities with which you’ve stocked your custom home. When you build a custom home, you're also taking a gamble on the location. If the area you build in becomes less popular or profitable when you go to sell, you may end up losing money.

While custom homes cost less per square foot than a pre-owned home, home buyers generally spend more in the process of building a home than when they buy pre-owned. This generally comes from adding special amenities to the design and when the total is added up, it can become more costly to build your own home. To some, that may be worth it to get exactly what they want. However, it is worth considering both sides. When you consider the taxes, the labor costs and the time you have to spend living somewhere else while the house is built, it can really add up.

Building a custom home is also a time-consuming project. It can take up to six months, and sometimes even longer to build your home. While you are building, you will need to be living somewhere else. If you're in an apartment and need to break a lease, that can be yet another added cost along the way.

You might face limitations from your builders as well. If you’ve got exotic plans in mind, be careful; your builder might not be able to pull off everything you have in mind.

And finally, you can't haggle on the price when you build your own home. Home buyers can luck out at times on their house hunt and find homes significantly under market value. When you build your own home, however, the price is exactly what it is.

Buying a Pre-Owned Home


Everything is very straightforward when you’re looking into buying a house on the market. Real estate agents generally set up house showings where a prospective buyer can get a look at the property. You know exactly how the home looks and what might need work before you ever make an offer.

Room renovations are becoming a popular option for new homeowners. You can buy a pre-owned home and remodel the kitchen to suit your tastes, for example. This option takes much less time than building an entire home and will cost a lot less than what people spend on building from the ground up. If the house you choose has an older kitchen or bathroom, you also have the opportunity to work with real estate agents and the seller to negotiate a better price.

While you don't want to think about selling the moment you move in, it is always something to keep in mind. Pre-owned homes come with a history of property value that can help you predict the future value of your property. If you look at the history of the home and the other homes in the area to have an idea, it can provide great peace of mind for one of the largest purchases of your life.

Buying pre-owned is generally a much faster, more efficient process.The paperwork isn’t always intuitive, but you can work with a real estate agent on the more complicated details and finish the transaction in short order. In fact, a home can be sold in one day if done efficiently.

Haggling is another great perk to buying pre-owned. As mentioned earlier, there are times when a buyer can luck into a deal with a home priced below market value. In other circumstances, you can work with your real estate agent on an offer that allows you to get what you need in a new home. Agents work as moderators in the haggling process and can make it much easier to get a deal done, too.

Renovations can also be done at your own pace. If a lot of the work on the home is simply updating you can do them piece by piece as you have the time and money. If you're handy, you can do some of the work yourself too as you're living there to help save money on labor costs. It can also be a fun project to tackle with the family.

The home will likely come with mature trees and plants. This generally isn’t something that home buyers think about, but mature plants provide privacy and can even help reduce your utility costs by providing shade.

When building a brand new house, adding trees and shrubs are necessary for privacy and curb appeal, but they can be very expensive. With a pre-owned home, you’re already ready to go.


With a pre-owned home, there’s always a risk of uncovering a serious issue once you move in. If the house you choose needs an entirely new room or bathroom remodel, breaking into walls always comes with the fear of uncovering a larger issue. Electrical wires can be frayed, for example, or an internal leak could be found. And while it’s a good thing to find these issues, you can never be entirely sure that they’ll be found during the initial home inspection.

Outdoor renovations like siding, gutters and roofing can also be expensive projects over time. The home may also have structural issues as you begin doing these renovations that you wouldn't know about otherwise.

You may also have to make compromises during the purchasing process. For many of us, our dream house has a lot of elements that can be very expensive. But there are also things we need in a house like a certain number of bedrooms, a good school district or neighborhood or other elements. In many cases, you may have to sacrifice the wants you have for the needs of your family or partner.

Maintenance costs can be very high in some older homes, as well as their energy bills. Older homes usually require updates to become energy efficient, simply because they weren't built for the times we live in now. It can become costly to heat and cool a home during the winter and summer months - and these are costs that you’ll face each year. If you decide to update with solar panels or central air, in the end, it may be a good investment for your personal comfort. However, these upgrades will be costly and might not be feasible when you first purchase your home.

Owning your own home can be an amazing source of pride and joy. It is a huge step financially and it can be a truly awesome thing for some people. A place to call your own is a very special thing to have. But it can be hard to decide if you should set your sights on something that is already built or start from the ground up and make a custom home. It all depends on your situation and budget.

As you can see, there are good and bad things for both choices. Deciding what is right for you can be a fun process and if you are patient, soon enough you will have a home to call your own. It's best to consult with a real estate agent to decide what will work for you and the location you are looking to live. The right home for you may already be out there - and if it is not, you can build your very own!

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