Is Buying Land and Building a House Cheaper?
Is buying land and building a house cheaper? It is an age-old question that many new house buyers think about. Well, a simple answer could be that it depends.
There are plenty of things to consider when you are building a house. The same is the case with buying an existing home.
In this article, we will decipher the answer you have been searching for.
So, let’s get started!
What Do the Stats Say?
Well, it is a statistical fact that buying a home is usually cheaper than building one.
Research by the National Association of Realtors® tells us that the average selling price of homes in the U.S. in 2018 was $288,900. The median price of constructing a new house is around $295,820, according to the data taken from HomeAdvisor. Click to see more about the cost of building.
However, it should not dishearten you from building your dream house just yet! Keep in mind that these are median prices.
Constructing your house for less money depends on several factors. These could be the type of house you want to build, or where you want your house built, or how big or small you want your house to be, or simply how much you want to modify it.
Types of House-Builds
Overall, there are three basic kinds of house builds that you can choose from when constructing your own home.
These kinds of homes are highly convenient. Manufactured homes are built somewhere else, like at a facility, and then transported to your home’s location. The whole house is positioned on a frame that can be easily picked up and taken to someplace else.
These homes bear a lot of similarities with manufactured homes. Like manufactured homes, modular homes are also built at another location. But, instead of transporting the whole house to the home’s location, these homes are transported in modular sections.
Another difference between these homes and manufactured homes is that they are fixed on a permanent foundation and cannot be moved to another place once complete.
Site-built or stick-built houses are the most expensive kinds of builds among the three. Location built houses are those homes that are built on their permanent location.
In other words, these are your custom homes that afford you all of the flexibility to customize your options. This allows you to build your home exactly as you prefer, but of course this option is more expensive.
When you decide to build your own house, you need a location. That means you have to buy land as well. Buying in urban areas will be costlier than in rural areas. In rural areas, you can get a good piece of land for a fairly reasonable amount of cash. And sometimes very cheap!
Here’s some information on acre of land cost.
Whatever kind of house you might want to build, you will have to find a piece of land, pay for it, and get it ready for construction.
This groundwork includes clearing the land. This includes trees, stumps, underbrush, and dunes. You will also have to connect the area with water and sewer systems. And don’t forget about the foundation.
It is important to consider the additional costs that come with building your own house. These expenditures include:
- Lawn / Grass
- New appliances for your home
- Getting the home ready with utilities
- Ensuring the property has sewer
- Ensuring your future plans for the property are approved by the county planning department
Questions You Should Ask Yourself
Before you decide whether you should get yourself into this project, you should ask yourself some questions.
- How long am I willing to wait to move in?
- Am I up for the challenge?
(the design-build process requires patience and resolve)
- Do I need everything in my house to be new?
Pros and Cons of Building a House
Pros of Building
- One of the biggest pros of building your own home is that you can customize your house, in any way you like. For example, you can make your house wheelchair-accessible if you have someone in your family who uses a wheelchair. And of course all the colors and upgrades. You have a blank canvas.
- Newly built houses are more up-to-date with the latest codes and government requirements.
- Newly built homes are generally more energy-efficient.
- Since you are the original owner, you will not have to worry about repairs and replacements.
- You will be in control of what kind of materials you want to be used in your home’s construction.
Cons of Building
- One of the biggest cons in building your own house from scratch is that it takes much longer to move in than just buying a house. It can take around 6-7 months to build a house from the ground up, and takes a lot of energy and focus.
- Unforeseen price hikes and inflation might throw a wrench in your plans.
- You can easily get flustered and overwhelmed with so many decisions to make, and you’ll likely have some setbacks along the way.
- Dealing with the contractor is a pretty hectic chore, so make sure to do weeks of research and check all the references.
Buying a House
These days buying an existing house is easier than it ever was. And if the price seems a bit high, think about all the stress you will be able to avoid. Buying an already-built home will keep you away from the stress of finding land, landscaping, dealing with builders, deciding each and every option, all while keeping the budget in mind.
Some Pros and Cons of buying a house are:
Pros of Buying an Existing Home
- You can move in much quicker.
- You will not have to do any landscaping development.
- You might be able to get an even lower price if you negotiate the price (depending on the current market).
- You can make upgrades anytime you want.
Cons of Buying an Existing Home
- You might have to do with older and used appliances (but you can always replace/upgrade if you choose).
- You might have to spend a little extra on repairs and replacements (depending on the home’s condition).
- There might be a lot of competition for the house you want to buy.
- Your HVAC system might be outdated and might be less efficient. And this can be a major expense ($10,000+) if the AC goes down shortly after moving in.
- An old roof can be a huge expense if it requires replacement.
Summary of Buying vs Building
It may also depend on the types of land you’re looking into.
In the end, you want a reliable team around you to help you in making the right decisions at the right time. Whether it is a realtor or a contractor, make sure that they are a good fit for you, and puts you on top of their priority list.
If you are looking for land in the United States where you can build your home, we will help you out. We can also help you sell your land. Call Land Soar at 386-200-5001 for assistance today.