Updated: Nov 4, 2020
Ideally, home buyers would like to be the first owners of their new home. A home that has all the details they look for in a house. That's why many would consider having new-construction homes rather than buying a home from its former owner.
According to Home Advisor, the cost to build your own home varies from $100-$500 per square foot, depending on how customized and luxurious you want your house to be.
The cost will depend on factors like the location of the home, the materials, the professionals that you will be hiring for the construction, and the number of square feet. Here's a helpful tool to help you calculate these expenses based on location.
But is it worth the hassle?
Before you go on full throttle in building your own home, here's what you need to know:
1. Labor costs 30-60% of the total expenses.
Labor takes a big chunk of the home building process. This includes the permits that you have to pay aside from the manpower that you will be hiring. According to a research done by the National Association of Home Builders, last 2015, labor costs increase by 3.3% within a year, so expect a higher range of expenses when it comes to labor.
You can DIY, sure, but it will definitely take a longer time to do so. If you are committed to being hands-on, make sure you have a space to rent for a year or so as you build your own home.
2. You may take advantage of the builder warranty.
If you decide, however, to hire a builder to construct your home, there is also a big advantage for that. Builders can give a 10-year warranty for any problems that may happen to your home! Imagine having your home "insured" for the next decade. That will save you a lot of money in the next ten years. Although, of course, this may not be true for all construction companies, so make sure to ask what warranty they can offer before hiring them.
3. Say goodbye to beautiful landscaping - for now.
An empty lot wouldn't magically grow grass and tall trees in a matter of months. If you'd like to be surrounded by tall trees and luscious shrubs, you may have to wait several years. Unless you'd be willing to spend a few thousand dollars to achieve that curb appeal.
4. Ask your trusted realtor for recommendations.
Your expert realtor has definitely worked with the best builders, repairmen, and suppliers. They have built a strong relationship with them over the years of working together. It will be beneficial for you to first ask your agent about their opinion on the companies of different services that you are eyeing to hire.
5. Building your home is just a part of the whole picture!
You may save a few thousand dollars when you construct a house, but you also have to remember that you have to buy the land, the plumbing works, and the sewer work.
Also, building a home poses the possibility of a lot of mistakes and redoing in various parts of your home.
So what is really better?
There are a lot of pros and cons to both building and buying a home. Make sure you evaluate what works best for you, not just financially, but also with the lifestyle that you want to have. Building your own house may be cheaper or not, depending on your needs and wants in a home. Sometimes, buying one may save you money and a lot of time.
Evaluate all options first before making the decision. Consult a real estate expert. Ask your friends who bought a house and those who had their house made from scratch. Talk to those who will be sharing the home with you. Your house might be your biggest investment so do not rush into making a decision unless you are definitely certain about what you want.