Buying vs. Building Your Home

There’s more than one way to own a home.You can either buy a home, or you can buy a plot of land and hire a contractor to build your home.


The Trends

Records show that buying is much more popular than building. More than 50% of all homes bought were already built.

All across the nation, custom building isn’t a popular option. Although, custom building is more popular in the northeast and midwest than in the south or the west. 

New home construction has been on the decline since the great recession, when there were too many homes on the market and not enough buyers to snatch them up. Ever since then, new home construction has been minimal. 

So Which is Better?

Here are some pros and cons to consider.



  1. Faster timeline. You won’t need to pay rent or mortgage while waiting for someone to literally construct your home from the ground up.
  2. Convenience. Buying a home is always a hassle – but it is much more convenient than buying land and hiring a company to build your home. 
  3. Easier financial process. You’ll have an easier time acquiring financing and getting your mortgage ready to go.



  1. Unexpected repair costs. You will probably have maintenance and repair costs sooner than later. The price of the house itself may be cheaper than a custom build, but you have to factor this into the equation.
  2. Renovations. Since you’re not custom designing this home, you may want to make renovations to meet your needs. This is another additional cost outside of the sales price.  
  3. You will never find “the perfect home.” Every home you find on the market will have quirks and details you don’t like. This is less likely to be the case if you custom build.
  4. Market competition. If you’re buying a home off the market, you will have to compete with all the other buyers out there. 




  1. You build what you want. This is the most obvious perk – when you custom build, you get to include all the details you need right from the beginning. 
  2. Save money on repairs. You won’t have any expensive repairs or maintenance work for a few years. 
  3. Clean title – guaranteed. When building a home, you don’t have to worry about issues with the title or deed. It all starts fresh with you.
  4. No market competition. You won’t have to go through the bidding wars.



  1. Higher down payment. Typical construction loans require 30% down and have a higher interest rate. This is much worse than a housing loan – and you generally have to have this loan in place once you get the land.
  2. More expensive. Of course, buying anything brand new costs more money. You’re paying a contractor or company to build a custom home. Plus, you’ll have to pay for the land in most cases. 
  3. Location and zoning laws. Space is an increasingly rare commodity. To custom build, you need to find a plot of land that is available and zoned correctly for your home. These are not as easy to come by as you might think. Some zoning approvals take years while you have to continue paying interest on your loan.
  4. Extended time frame. You won’t be able to move in immediately. It can take 6 months to a year to build a new home, depending on what you’re looking for. Expect delays and be patient.


Choosing whether to buy or build really comes down to a decision between cost and convenience. 

Evaluate the pros and cons, make your choice – and then contact to get assistance with your down payment.

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