Building a New Home vs. Buying Retail - Comparing Costs

If you're ready to take the next step in living your best life and find a new home, it's time to weigh whether a resale or a new construction home is right for you. Building from scratch may seem daunting, but it can be a great way of getting the design aesthetic and functionality that suits your lifestyle — and there may be some financial benefits, too. 

Designing a Home from the Ground Up

Constructing a house from the ground up is an incredible opportunity to create something customized  just for you. However, no matter how exciting it is, you must be mindful of how your budget and timeline may be affected before taking this big step. Planning ahead is key, so lets talk a bit more about some of the costs and things you can expect.

Cost of building a house vs. buying an existing home

In the world of homeownership, building vs. buying can be a big decision. Factors like the neighborhood and home amenities impact the cost of both options. Ultimately, when compared side by side, building a home may be a bit more expensive than purchasing one that’s preowned. 

That said, building a new home may be easier on your wallet than you think. That’s because the price per square foot may be lower for constructing a new property when compared to buying an older property, in part because newer homes tend to have more room. 

On top of that, investing in building a new home also means you get fresh, modern designs and new appliances, lowering your maintenance costs over the first few years of ownership. When buying a previously owned home, you may inherit that home’s current problems which can add to the overall cost.

How long does it take to build a house?

Government statistics find that creating your dream abode in 2022 could take an average of eight months. Generally, that's one month to map out the details and paperwork and six months devoted solely to the actual crafting and building your unique space with all its special touches. However, this timeline could vary depending on your specific circumstances and who you decide to work. A production home builder, who may be constructing a whole neighborhood is likely able to build your home faster, where a fully custom builder will likely need more time.  

Let’s walk through each of the steps in a little more detail to see how long they may take, plus talk through some of the things that can impact your timing. 

Land Acquisition

Building your dream home starts with finding that perfect patch of land to make it a reality. Whether you're seeking acreage or a waterfront view, there may be a few hurdles involved in obtaining your property. These include potentially negotiating with multiple parties and understanding the restrictions on certain lands. 

Building in an existing neighborhood, or choosing to work with a production home builder is a great way to make your dreams of homeownership come true without sacrificing time and money. Since the infrastructure is already established, you can take advantage of preexisting amenities that will ultimately help you save on expenses. 

Design

Designing a home can be a complex, months-long process, especially if you are designing a home from scratch. But if you work with an experienced builder with an existing design, it makes the journey easier while still ensuring many details of the home are custom-made for you.  New construction home builders, like Pulte Homes, spend a lot of time ensuring their new home designs can cater to what today buyers want.

Foundation

Constructing a home in a builder community simplifies the foundation-laying process. There are no more guessing games about how long it will take to dig the foundation or worries about getting an unpleasant surprise when you receive the bill. With this piece factored in up front, you'll have peace of mind knowing the exact timeline and budget expectations ahead of you. 

Custom Finishes

Upgrading your home’s finishes can be a game changer — from textiles to textures, the possibilities are endless. But custom details take extra time. Supply shortages and fabrication challenges could potentially add months to your homebuilding project as you search for that perfect finishing touch. 

However,  working with a larger home builder can help you stay on your timeline by offering well-stocked, curated design options in plenty of styles and materials. This way, you don't get delayed while making those essential decisions about what best completes your space. 

Weather

Less a step in the process, and more a general watchout. While you hope to create your dream home as quickly and efficiently as possible, the weather can be unpredictable. You must remain prepared for anything Mother Nature may have in store. In areas where snow accumulates regularly or rainy days are abundant, it’s a bit easier to plan around, but a bad storm could significantly delay the building process so keep that in mind as you go through the process of building a new home.

Closing Fees for Building vs. Buying a Home

Whether rolling up your sleeves to build a brand new abode or getting the keys to an existing residence, it helps to know that many of the closing costs will likely be similar between a new construction home and resale (though not always). That’s because the fees for either option are tied into your financing or mortgage. 

But, if you're considering a newly built home, you could work with the builder's in-house lender. Doing so may allow you to negotiate those fees, resulting in some savings on closing costs. Remember, some savvy bargaining could make your dream house more affordable.

At the end of the day, building your dream home is all about creating the perfect space for you and your loved ones. The big things to keep in mind are timing and keeping track of the optional upgrades you select to avoid any unpleasant financial surprises down the line. Even if you opt for a resale home, chances are, you'll still want to spruce it up with fresh paint, trendy fixtures, and modern finishes, so just keep in mind these upgrades could mean whether you build or buy preowned, costs may be the same. 

Interested in new home construction? Your local Pulte community makes it easy, with an expert design team and in-house financing to help you every step of the way. Discover stunning floor plans and check out Pulte's new home communities today!

For more design tips, local attraction guides, and homeowner lifestyle articles, check out the Pulte Homes blog for inspiration.

Contributed by Christy Murdock Edgar