May 11, 2022


The first question that pops up in everyone’s mind is whether to buy an existing home or acquire land and build a custom house. Both have their pros and cons, but it is almost impossible to decide until you compare both options side-by-side.

There are many factors that can influence your decision such as the budget, aesthetics, overall covered area, the floor plan and much more. In this article, I’ll go over the most important points to consider in either of these situations. Keep reading to learn more.

Building A House

The first step to building a house is to envision it. What do you want the interior and exterior to look like? What materials do you want to use? Is there a theme you have in mind?

Understanding what the answers to these questions entail is key.

Building A House

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Advantages Of A Custom-built Home

Let’s have a look at some of the advantages of building your own house:

  • Having a house exactly how you imagined it to be is a dream come true for many. You can pick your favorite tiles, customize the floor plan, alter the size and number of rooms and bathrooms, decide if you want an open concept design or prefer defined walls and so much more!
  • You will be able to use high-quality building materials for the construction. Using premium quality products will ensure that your house will stand all challenges, especially in extreme weather conditions, and will keep its aesthetics for years to come.
  • Maintenance in a new house is low as everything is new, from appliances to the exterior, so your costs will be relatively low as well!
  • You get to select the location or the size of the lot. Do you prefer a corner home or a huge mansion with a view of the ravine? It’s all up to you!
  • Higher energy efficiency. You can control the power consumption and increase the energy efficiency by installing energy-saving lights and appliances. In the beginning, it may create more upfront costs, but you can save up to 10% more energy and get rebates as well.

Being able to customize your house is an incredible feeling, and you get exactly what you once dreamt of. You can create a living space where everything is situated perfectly and in the right place.

Downsides Of A Custom-Built Home

On the flipside, here are the disadvantages:

  • You can not move in right away. The entire construction process to build a house takes a long time from beginning to the end. Every property is different so it is not easy to give a precise timeline. However some houses take a longer time to be built due to the upgrading requests, or back orders of building materials.
  • Waiting for the house to be built can result in additional costs if you don’t already own a house, and are currently renting.
  • Hiring experts to build your home can be heavy on your wallet if you don’t have construction skills/insights.
  • Finding the perfect builder can also be time-consuming. Getting quotations from different home builders and then making the right decision can add up a few more months in your journey to acquiring your perfect home.

Average Cost To Build A House

The average cost to build a new home costs around $287,466. This can increase and decrease based on many factors, such as the size of the home and even the location.

Prices can also increase depending on the quality or type of building material you choose from, the cabinets, built-ins, custom interior, and any exterior features you choose. As a fun and useful exercise, compare this number to a few houses on the market that you are interested in. Is it higher? Is it lower? This may help you make your decision.

Average Cost To Build A House

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Additional And Upfront Costs

Once you are done with the purchase of land, the first thing that you should be looking into are preparation fees.

Before the actual construction, the land must be prepared. This includes clearing away trees, plotting, fixing the drainage, placement of driveway, etc. 

Secondly, the other cost that not many people think of is utilities. The empty lot doesn’t have access to electricity, gas and water that collectively can cost anywhere from $10,000 to $25,000. The cost can fluctuate drastically depending on the size and type of the property.

Closing costs can also range somewhere from 2.5% to 6% of the purchase price. In addition to all the other costs, you need to hire a lawyer after closing for all the legal documentation handling and management. Additionally, during this process, you have to seek mortgage approval. This brings added costs such as the commission to the mortgage specialist.

Buying An Existing House

Buying an existing home is a perfect option if you are looking to move in right away. The first step would be listing down the essential features and the areas in which you are willing to compromise.

Most importantly, you must acquire information on the properties with the help of a real estate agent. Get to know the seller's market in the neighborhood you are buying the house.

At the time of purchase, you may have a number of questions popping in your head.

  • Is it the perfect house?
  • Am I getting value for money?
  • Are there enough rooms?
  • (Most importantly) Am I making the right decision?

Advantages Of Buying An Existing Home

Here are the advantages of buying an existing home:

  • You can move in right away! Compared to building a house, purchasing an existing home is easier and faster. There is no waiting around for builders to finish your home, which will save you time (and potentially money as well). 
  • Older homes are normally in an established neighborhood, which means that it is in proximity to schools, shopping malls, and other amenities.
  • You will probably pay less for an older home depending on the structure and age of the house. If needed, after the purchase, you can make all the necessary upgrades based on the current trends.
  • Compared to building a new home, getting an existing home has better aesthetics as the front/backyard normally has fully matured trees which is a lot more visually appealing than a barren land.

Buying an old house has a few disadvantages as well. Read on for more information.

Disadvantages Of Buying An Existing Home

Let’s review the cons of buying a home that already exists:

  • It is not easy to find your dream home. When you are buying an existing house, you have to make compromises which may come in the way of you and your perfect home.
  • Bidding wars are more common than ever! As today’s housing market mostly benefits the seller, it is not easy to compete with the bids, resulting in you potentially having to pay higher prices.
  • Buying an existing home can result in higher maintenance costs as you may have to change fixtures, inefficient older appliances, hardwood flooring, and pipelines. But this solely depends on the home's condition; some may have maintenance issues and others may not.
  • Upgrades in exterior and interior features can add extra cost to the overall purchase.

Average Cost To Buy A House

The cost to buy an existing home varies from location to location, the covered area, the type of the house, the age of the building, the upgrades made before selling, and other various factors. On average, the cost to buy a single-family house is $333,000, according to the National Association of Realtors. Keep in mind, there are many tips to help you buy a house, including putting your finances first and knowing about the different loan types available.

Average Cost To Buy A House

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Additional And Upfront Costs

Both upfront costs and additional costs depend on the property itself. If the old appliances aren’t as efficient and are faulty, you may be looking at an additional $25,000 depending on which brand you choose for the new appliances. At the time of closing, you should have a budget of at least 1.5% of the purchase price as the closing cost. To make your life easier, view the buying a house checklist to ensure you are ready.

Similar to a new construction, you will be looking for home insurance, lawyer fees, and mortgage approval. All the listed costs can fluctuate depending on the location and the property.


In conclusion, if you are building a house, you get the perfect number of rooms, beautiful architecture, high-quality building material and appliances, and low energy consumption. But at the same time, you have to be ready to face additional costs and the long wait to move in.

If you are thinking of buying an existing home, you can move in right away. You can also find schools, gyms, restaurants, and hospitals in closer proximity but keep in mind, an older house can result in high maintenance cost in the long term.

For some people, the pros of building a house outweigh the cons, whereas, others prefer buying an existing home based on their requirements. Either way, by the end of the process, you will be the owner of your dream home and in today’s world, owning a house is a privilege. 

Make sure to consider the pros and cons of building vs buying before making a final decision.

About the Author

As a native Washingtonian, Carlos Reyes’ journey in the real estate industry began more than 15 years ago when he started an online real estate company. Since then, he’s helped more than 700 individuals and families as a real estate broker achieve their real estate goals across Virginia, Maryland and Washington, DC.

Carlos now helps real estate agents grow their business by teaching business fundamentals, execution, and leadership.

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