Building a House vs. Buying a House

[KandD]

I am just curious as to how expensive building a house is compared to buying a house. (percentage wise I guess).
If you resell do you make out on the deal?

I am not asking for any specific reason, my boyfriend and I moved into a house about a year ago and little by little we are fixing it up but there are so many little things that would be so convenient to have but probably never will. (A laundry room on the same floor as the living space, a bathroom with a closet instead of the closet being in the hallway, an upgraded kitchen, etc.)
So I am just curious as to how expensive it is to build your dream house, and I am not talking a monstorous over the top mansion but a nice new house that is customized.

It isn't going to happen anytime soon, but one day we will move and I am just curious....

 

[MrsPete]

I don't have the answer to this question, but I am researching it.

My reasons are identical to yours: I don't want a big, super-fancy house, but I want one that's tailored exactly to my wants and needs. For example, I want a medium-sized kitchen but a large -- think double walk-in -- pantry with space for not only food storage but also occasionally-used items like large platters, slow-cookers, etc. And I want the laundry room to be connected to my master-bedroom closet so I can fold clothes and already be where the items'll be stored. The things I want aren't really over-the-top expensive (though I expect they'll add up), but I want them just my way.

This doesn't really answer your question, but I'm reading a series of books called The Not So Big House, and you might enjoy it too. It's about designing a house to have just the things you want and skipping things that're not necessary. Since I started reading these books, I've changed my mind on a number of things I'd assumed about our house plans. It's solidified my idea that I don't want a formal dining room, and I love her discussion of alcoves for various purposes. Her style doesn't particularly match my style (she's rather contemporary, I'm more traditional), but her ideas are adaptable. I'm keeping a folder of ideas and pictures that I like, and I'm happy with how my progress is coming along.

What I've learned so far about money: I'm sure it's going to cost more to build your own house. When builders build in a neighborhood, they use all the same materials, and they get faster as they repeat the plans over and over. Your custom house will take more effort and time for them. Also, I don't want to skimp on materials; I want my house to last. If you start with a house plan (perhaps bought from the internet) and get an architect or builder to alter it to your specifications, that's going to cost. How much more? I don't have a handle on that question.

I already own the land on which I want to build, so I'm hoping that'll offset the extra cost of building. On the negative side, mine is not in a neighborhood, so I'll have to pay for a road, water, etc.

 

[KandD]

I don't have the answer to this question, but I am researching it.

My reasons are identical to yours: I don't want a big, super-fancy house, but I want one that's tailored exactly to my wants and needs. For example, I want a medium-sized kitchen but a large -- think double walk-in -- pantry with space for not only food storage but also occasionally-used items like large platters, slow-cookers, etc. And I want the laundry room to be connected to my master-bedroom closet so I can fold clothes and already be where the items'll be stored. The things I want aren't really over-the-top expensive (though I expect they'll add up), but I want them just my way.

This doesn't really answer your question, but I'm reading a series of books called The Not So Big House, and you might enjoy it too. It's about designing a house to have just the things you want and skipping things that're not necessary. Since I started reading these books, I've changed my mind on a number of things I'd assumed about our house plans. It's solidified my idea that I don't want a formal dining room, and I love her discussion of alcoves for various purposes. Her style doesn't particularly match my style (she's rather contemporary, I'm more traditional), but her ideas are adaptable. I'm keeping a folder of ideas and pictures that I like, and I'm happy with how my progress is coming along.

What I've learned so far about money: I'm sure it's going to cost more to build your own house. When builders build in a neighborhood, they use all the same materials, and they get faster as they repeat the plans over and over. Your custom house will take more effort and time for them. Also, I don't want to skimp on materials; I want my house to last. If you start with a house plan (perhaps bought from the internet) and get an architect or builder to alter it to your specifications, that's going to cost. How much more? I don't have a handle on that question.

I already own the land on which I want to build, so I'm hoping that'll offset the extra cost of building. On the negative side, mine is not in a neighborhood, so I'll have to pay for a road, water, etc.

That is a lot of good information. When we first started looking at houses about two years ago I was shocked at how many houses just weren't very practical for everyday living. One of them that we were very interested in but didn't go through with had not ONE closet on the first floor! Not a pantry, not a coat closet, not a bathroom closet. Most homes in our area (ours included) have the laundry in the basement which means you have to go up and down the stairs with laundry baskets every time you do a load.

Like I said, we aren't going to move anytime soon but it is something that I think about a lot and I figure with all of the people on the DIS I could get some interesting information.

Thank you!

 

[Buckalew11]

I think MrsPete has the right idea. We just built and moved in Oct.'09. I also read that series (our library had them!)

Anyway, I collected pics of things I liked and loved. I looked at every house plan book that our library had and a lot I bought or had given to me. The process of picking out a house plan took me about 1 1/2 years. I first picked one out and had it altered for my needs. That cost some $$ and then when I got bids on it, it was way over my budget! I had to trash it and choose a new plan. oh the heartbreak and disappointment of it all. And the bank said they'd give me that much money too! But we knew we didn't want to be that house poor.

At this point in time you can get some great prices on already built homes. However, we found out that we could not get exactly what we wanted, in an area we wanted in (not a subdivision), with the look I wanted in this town so we went ahead and built.

It was a great time to build too. Everyone wanted work. They showed up when they said and we did not have any lulls in the building process like people sometimes do. I had the worst trouble with my roofers. And we also built a 3 car garage, detatched, which they could have done but since they were the way they were, we got someone else to do the garage.

Building was a pretty fun experience. We found some really good deals out there and my house is appraised at far more than I had to spend to build it already. We were quite shocked that it came in as high as it did in this down time.

I'd just do a lot of the things MrsPete suggested and dream and write thigs down as you think of them.

 

[Pakey]

A custom house is like buying an already built house in the fact that you can spend in any given range. We spent two years working with an architect to design our dream home. I collected pictures and the architect was pretty good at being able to tell me what I could expect to spend for certain things. Those plans still had to be amended once bids came in; my husband and I took turns slashing things so we could bring it on budget. Some things sound great on paper but are not practical money-wise. We ended up with a house close to what we wanted but honestly, the sticks were barely in the air and I was already seeing things I wish I had done differently. I'm not sure there is such a thing as a perfect house.

I worked for a home builder at the time so I probably knew more about the process than the average person. One of the things we did was focus on spending the money on structural aspects rather than cosmetic items. We put in the cheapest flooring, countertops, light fixtures etc so that we could focus on french doors, good windows, roofing, better insulation, etc. We later put in the wood flooring, granite countertops, etc after living there for several years.

Not all custom homes do well on the resale market. What appeals to the person building the home may not appeal to the general market. Location also plays a key part; a custom home in a bad location will cost as much to build as one in a good location but the resale will be vastly different.

 

[KirstenB]

We built this home 12 yrs ago. Around here, builders can really save money by doing 5 basic floorplans in a neighborhood of several hundred homes. Just like everywhere in America.

If you choose your own plan, and interview builders, etc, it costs them more, because they can't stamp out the amount of siding, framing, roofing, wallboard, specific appliances, paint, carpentry etc x 100 homes. It costs them more, so it costs you more. We went into this process with that idea in mind, and it worked out fine.

 

[MarkBarbieri]

We built a custom house once. It was a great experience. It cost a bit more than an equivalent non-custom house, but not that much. The bigger difference comes from the fact that, because you are in control, you'll probably pick better materials. For example, we went with 2x6 exterior wall studs rather than 2x4.

One important lesson I learned is that you can't build the perfect house. Obviously, almost all of us are budget constrained, so some ideas that sound great get rejected because they just aren't worth it. Some things you want also contradict each other. For example, you can't have a house with huge rooms without having to walk long distances between rooms. You can't have a kitchen open to the family room and have the kitchen be quiet and private.

When we built our house, we took the opportunity to do fun things. We had one room that we kept debating over making it a guest room or a play room. We compromised by making it a play room with a queen size murphy bed hidden behind a wall of shelves. The shelves pulled apart, the queen size bed dropped down, and the edges of the shelves worked as night stands.

We had a section of shelving in the family room that swung open to reveal a secret stairway to the theater room. We also added a secret passageway between our two kid's bedrooms.

We also added some practical features that I always wanted. For example, the master shower had no glass and no doors. You just walked in, showered, and walked out. We also added outlets in the cabinets behind the bathroom mirror. That allowed us to charge toothbrushes and razors while hiding the cords and chargers but still keeping them convenient.

We were also able to save some money by not including stuff that we didn't want. We had a nice, big master bath with no jets. The jets are relatively expensive and are a pain to clean but we never used them in our other houses. We also didn't include a formal living or dining room in the plan. That probably didn't help resale, but we had no interest in having formals.

Finally, my wife was able to design the kitchen around the way that she really worked. She had double ovens, a very large sink, a stainless steel topped island, and tons of cabinet space.

We were also able to build in storage everywhere. We had a huge chest of drawers built into the back of our closet. We had a big pantry with a little broom closet in the pantry. I never could understand the need for a closet in a pantry, but it made my wife happy.

The other big thing we got by building a custom house was the ability to choose our own style. Every house in our area was dark stained oak traditional cabinets with wrought iron trim. We went with contemporary maple and brushed nickle trim.

The key thing is to make sure that you get a good builder that you can trust. Ours was great. We've talked to others that had nightmare experiences because their builders were bad.

Sadly, we only lived in our house for 6 months and then moved out of state. Still, it was fun to create.

 

[MomNeedsVacay]

I think it depends on the land costs right? I live in Alexandria, VA---there is no extra land to be had...that being said, if you wanted to build your own home, you would have to buy a lot with a house already on it (even a crappy lot will cost at least 500K) , get the permits to demolish, and then build...we know a family who did this....they bought a tear-down in a good neighborhood for 550,000---then spent another 500-600,000 building a house to their specifications...This whole process took 24 months in total.. And for those two years they had to rent another home for their fmaily to live in.

 

[The Mystery Machine]

I am just curious as to how expensive building a house is compared to buying a house. (percentage wise I guess).
If you resell do you make out on the deal?

I am not asking for any specific reason, my boyfriend and I moved into a house about a year ago and little by little we are fixing it up but there are so many little things that would be so convenient to have but probably never will. (A laundry room on the same floor as the living space, a bathroom with a closet instead of the closet being in the hallway, an upgraded kitchen, etc.)
So I am just curious as to how expensive it is to build your dream house, and I am not talking a monstorous over the top mansion but a nice new house that is customized.

It isn't going to happen anytime soon, but one day we will move and I am just curious....

I am in house #4 and have bought used, built a customized house, then model home, and now we are in another model home we bought 1yr 4months ago.

The answer to your question is location, school district, and timing for resell with used, model, or customized.

As far as cheaper to build vs buy, I am going to say not "cheaper". Sometimes you eat it on a customized home. You have to keep your customization "smart". That is the key. Don't build the biggest house in the neighborhood or put crazy updates in the house. You will never get that back out.

I will say that buying the model home works for us. We hate remodeling, we get everything new, we get the 1yr warrenty, we are specifically looking for a builder that wants to unload the house with many "upgrades".

The downside to buying in a new subdivision is that you have to wait until the neighborhood is complete before you can get your top dollar. That is a risk.

In fact one of the neighbors has a "for sale" sign in their yard. I mean OUCH. Normally it would be snagged however in this economy, they may eat it on their house.

 

[mumom95]

We've done both.

One big expense and can be big headache with a new home is the lawn. Depending on the size of your lot, sodding can be expensive. If you choose to seed, that's not too expensive, but dealing with the weed issue and how long it takes to actually grow in well is, in my opinion, a big pain in the neck. We chose to sod ours (not a huge lot, we lived in California) and it was well worth the extra money.

Plus with a new home you also have to purchase window coverings, where in an older home they are usually there (you may not like them, but you don't have to change them right away to get privacy).

All that being said, my next house I would like to have it custom built. It may be more expensive, but I like being in control and deciding what goes in and what doesn't. But we have no plans of moving anytime soon. It'll happen after the kids are grown and we are looking at a house that is just for us.

 

[quentina]

We found it cheaper to build than buy. In our development, it was about $50,000 cheaper to build with options versus buying with less options.

The problem was that we signed papers in Feb, house not done until December so.....it was a long wait. It worked out for us.

I will say, in a few years, I will be moving to a bigger home....and I will build. I love to be able to pick exactly what I want.

 

[MrsPete]

When we first started looking at houses about two years ago I was shocked at how many houses just weren't very practical for everyday living.

I agree, and I'd add this: Many houses just aren't practical for MY life. For example, to get all the nicey-nices that I want, I know I'd end up getting a house with a formal dining room. I don't want to pay for /maintain a formal dining room. I have one in my current house, and we never use it! Someone else, on the other hand, might see a formal dining room as an absolute necessity.

The process of picking out a house plan took me about 1 1/2 years. I first picked one out and had it altered for my needs. That cost some $$ and then when I got bids on it, it was way over my budget! I had to trash it and choose a new plan. oh the heartbreak and disappointment of it all.

Oh, I'd be so disappointed! Any hints on how to avoid that? I think I'm being reasonable for our budget, but I'd be happy if I could KNOW that I'm on the right track.

A custom house is like buying an already built house in the fact that you can spend in any given range.

I am absolutely sure you're right, and you can't pinpoint "my range" for everything. For example, I want to be sure we have the best windows and roof -- I see those as protection for the house (and avoidance of maintenance/replacement bills in the future). But I'm pretty sure we're going to go with wooden laminate flooring. I have no great love of whirlpool tubs and don't plan to splurge there. But I know just how I want my pantry arranged (for my canning), and I want wooden shelves there -- not ready-made wire shelving. We're going to be under 2000 sf, a rather moderate size. Anyway, it's hard to say, "She wants to build a luxury house" or "She's looking to build on a shoestring." My details vary-- that's why I'll never find exactly what I want already built.

Some things sound great on paper but are not practical money-wise. We ended up with a house close to what we wanted but honestly, the sticks were barely in the air and I was already seeing things I wish I had done differently. I'm not sure there is such a thing as a perfect house.

I'd love to hear details about your expectations vs. reality. As I said in a previous post, I'm in the process of researching, and I'm very interested in other people's experiences.

. . . When we built our house, we took the opportunity to do fun things . . . For example, the master shower had no glass and no doors. You just walked in, showered, and walked out . . . We were also able to save some money by not including stuff that we didn't want . . . That probably didn't help resale, but we had no interest in having formals . . . Finally, my wife was able to design the kitchen around the way that she really worked. She had double ovens, a very large sink, a stainless steel topped island, and tons of cabinet space.

Your ideas do sound fun!

I love the walk-in shower, and it's on our list as a "would like to have". How big does the shower have to be to do this?

Yeah, I knokw we're going to save by NOT including things that we just don't want: No formal living room, no formal dining room, no jet tub, no double sinks in the master bath --I know that these things are attractive to many people, but they're just not things that I want. Oh, here's another: When I think JUST about countertops, I like the look of granite . . . but I recently realized that when I look at pictures of finished kitchens that I admire, they're ALWAYS white countertops and about 80% of the time they're topped with butcher block. I'm hoping that eliminating these "no thanks, not for me" items will allow me to include some things that I really DO want such as a window seat in the living room, an open-air breezeway /outdoor room with fireplace that'll form the connection between the detached garage and the house, and storage storage storage.

Resale . . . I'm not quite on board with that. My circumstances are different. I've inherited family land. Lovely land, lots of it, in a wonderful area where I want to live when we retire. This land has been in my family more than 250 years, and if I sell it I'll be kicked out of the family. Okay, not seriously, but I cannot sell this land on a whim. My expectation is that I'll leave this house/land to my daughters. So instead of being concerned about resale, I want to be sure that my house is built solidly so that they won't inherit junk, and I want to choose something that can be added onto -- in case they someday need more bedrooms, a game room, or whatever they might want.

The kitchen matters a great deal to me too, and my ideas are definitely not like most people's. I want a medium-sized kitchen, but I want it connected to a massive pantry, which will form most of my storage. I want to see everything sitting neat and orderly on shelves in my walk-in pantry -- everything from my canned tomatoes to the crock pots and roasting pans -- not buried in bunches of cabinets. I want to be able to bring out just what I want TODAY -- I want my countertops to always be clear except for a few basic-basic items like good knives. I also want a small workspace in the pantry -- a place to drop grocery bags, a place to set a bowl while measuring out flour, etc. Those aren't things that appeal to everyone. Maybe they're things that appeal to no one but me.

One big expense and can be big headache with a new home is the lawn.

We could never have a real lawn -- not a 40-acre lawn -- but we get a VERY BIG tax break for having a forestry management plan with the county. I expect to surround my house with apple trees, peach trees, pear trees, and pecan trees. My brothers and I are working towards getting this management plan started; it's a great deal of work, but the tax benefits are very worthwhile, and once we have it in place -- and inspected and approved -- we'll automatically keep the benefits year after year after year.

 

[bumbershoot]

My brother and his wife have built 2 houses and bought 1 pre-made. Their building experiences really differed from one another.

The first was in San Antonio in a new, gated community. They were given quite a bit of leeway in the design of the house. Their kitchen wasn't all that big, and they had the master bedroom on the first floor. They just liked that better than having it upstairs with the guest rooms. They have never owned a dining table, and didn't need a dining room, but that started their tradition of having one empty room in their house. Not sure why they weren't allowed to eliminate that dining room.

They loved the house, and apart from the dining room, it was to their specs. My SIL was born to be a lawyer, and though she hadn't gone back to school to get her JD yet, she negotiated like one. Their house was the ONE house in the community that didn't have to replace fridge/stove/etc, because she *ordered* the builders to install and LOCK doors as soon as the appliances started coming in. The builders left the doors UNlocked in other houses being built, and everyone else had to replace the items at least once due to theft.

Their second built home was in CA, in a new part of an existing community. Their rules were much more strict, with a certain number of floorplans with a certain number of changes you could make inside each one. They really wanted this one plan, but it didn't work/wasn't allowed on the remaining land plots in the area. There was some sort of bidding process, it's an incredible story. So here they are, with a master bedroom (the size of our not-small rented condo!!!!) on the second floor, but the house is utterly soundproof, and there's a HUGE living room type area between the two connected guest rooms and the master bedroom.

They kept with the empty room for quite a few years, but finally broke down and furnished *half* of the room.

They got the second best, to them, floorplan. It involves a huge kitchen. I'm sure they haven't gutted that b/c of possible resale, but all they really need in a kitchen is a big fridge, pantry, microwave, and dish-washer. That's all they have EVER used in that kitchen; they thought a burner was broken for a *year*, because her mom couldn't get it to work, until I came in and used the burner while making dinner.

They are busy professionals with amazing careers and full traveling lives, and they often get restaurant food in the course of their working days, so they are either eating those leftovers or ordering in. Just no need for that kitchen.


Anyway, just shows the differences between areas.


I would suggest finding a good architect and slowly working on some plans with them!

A custom house is like buying an already built house in the fact that you can spend in any given range. We spent two years working with an architect to design our dream home. I collected pictures and the architect was pretty good at being able to tell me what I could expect to spend for certain things. Those plans still had to be amended once bids came in; my husband and I took turns slashing things so we could bring it on budget. Some things sound great on paper but are not practical money-wise. We ended up with a house close to what we wanted but honestly, the sticks were barely in the air and I was already seeing things I wish I had done differently. I'm not sure there is such a thing as a perfect house.

I worked for a home builder at the time so I probably knew more about the process than the average person. One of the things we did was focus on spending the money on structural aspects rather than cosmetic items. We put in the cheapest flooring, countertops, light fixtures etc so that we could focus on french doors, good windows, roofing, better insulation, etc. We later put in the wood flooring, granite countertops, etc after living there for several years.

Not all custom homes do well on the resale market. What appeals to the person building the home may not appeal to the general market. Location also plays a key part; a custom home in a bad location will cost as much to build as one in a good location but the resale will be vastly different.

I just really liked your whole post.

When we built our house, we took the opportunity to do fun things. We had one room that we kept debating over making it a guest room or a play room. We compromised by making it a play room with a queen size murphy bed hidden behind a wall of shelves. The shelves pulled apart, the queen size bed dropped down, and the edges of the shelves worked as night stands.
...
We had a section of shelving in the family room that swung open to reveal a secret stairway to the theater room. We also added a secret passageway between our two kid's bedrooms.
...

We also added some practical features that I always wanted. For example, the master shower had no glass and no doors. You just walked in, showered, and walked out. We also added outlets in the cabinets behind the bathroom mirror. That allowed us to charge toothbrushes and razors while hiding the cords and chargers but still keeping them convenient.
...
We were also able to build in storage everywhere. We had a huge chest of drawers built into the back of our closet. We had a big pantry with a little broom closet in the pantry. I never could understand the need for a closet in a pantry, but it made my wife happy.

I love all of that! And I'm so sorry you were only able to live there 6 months.

 

[KandD]

Wow, I am so impressed with what I have learned from just these few posts! I am going to have DBF sit down and read these because we talk about this all the time and we don't know anyone who has built (except his mother but it was so long ago that I don't think it is relevant at this point) so we are raelly clueless as to the process, cost, etc.

I thank everyone for your replies! Mark Barbieri, those are some of the COOLEST ideas I have ever heard! You're kids are so lucky to have such inventive parents!

 

[clovergirl5]

I would suggest building and throw in sweat equity, meaning you do some of the work yourselves. We have saved big time $ building 2 custom houses for ourselves.
Our first was just a simple ranch style with garage and basement out in the country on almost 2 acres. We did everything but install the carpet, final electricity, concrete, heating/cooling, countertops and plumbing. Everything else we did ourselves. Even the roughing in of the structure. Paint, staining/varishing, finishing, rough electrical, installing cupboards, appliances. As much as we could do, we did and saved from paying someone else. We eventually added a polebarn and 1 porch and 1 deck. We were in that house for 8 years when we needed something bigger for our growing family.

We sold that house for almost 3 times what we put into it. We walked away with $75,000 cash to put towards our next house.

We purchased 40 acres of land in a neighboring city in the country. We paid someone to rough in the structure and we did just as much as we did in the first house and added some nicer stuff like a jetted whirlpool tub and fireplace. It also has 5 bedrooms and 3 full baths. 3600 sq. ft. compared to our previous 2200sq ft. We have a lot for little money because we acted as our own contractor, semi-contracting work out and doing a lot ourselves. Its a lot of work and it took us 7 months but its our dream house.

We have never purchased a house before.

 

[KramBerries]

I love the walk-in shower, and it's on our list as a "would like to have". How big does the shower have to be to do this?

I don't really know. It took a little extra space because you have the "walk out" area. The shower was a bit on the large size because we wanted room for two.

We had friends that really did their bathroom up nice. They had a cubby next to the sink that looked like a medicine cabinet on the outside. Inside, it was much deeper and had its own outlet. They kept a hair dryer plugged in inside.

They also had a 2-way mirror with a TV behind it. I have to admit that I never really understood the point of having a TV in the bathroom, but it looked cool.