Benefits of Building versus Buying a Home

Real estate services and home buyer advice using a mortgage broker or a housing sales agent to help a family navigate through the confusing options and choices as a home icon in red with confused roads and signs.

If you are interested in becoming a homeowner, you have two primary options: building a house and buying a house. To help you make the right decision, start by comparing the benefits that both offer. For example, although the current inventory is tight, existing homes are readily available. When working with a home builder, you may have to wait a little longer but end up with exactly what you want.

Overall Cost

Understanding the cost of building a house versus buying a house is important. You will most likely spend the same if not a little less at closing when buying a home from the existing inventory, however, there is a good chance that the home will need renovations. Depending on the square footage and the home’s current condition, you could spend between $10,000 and $20,000 or more for needed and preferred changes.

For new construction homes, especially if you hire a quality home builder there is no need for modifications or adding upgrades. You pick out what you want in the house from the start.  In addition when building a house that is brand new, there is also a 1 year warranty period on the entire home as well as a 10 year structural warranty. If something were to go wrong, the cost of repair or replacement would be covered.


Home Value

There is a difference in value for house building versus house buying. Typically, homes built today command higher values because of improved building standards. For example, new construction homes are more energy efficient, and some are designed with high-tech safety features. Simply put, local building codes today are significantly better than those of even five-10 years ago.


Transaction Time

Obviously, building a home takes time. Depending on the style and overall square footage, this can be anywhere from six to eight months to complete the home. In comparison, after closing on an existing home, you move in very quickly. Although the home buying process for an existing home is a bit faster compared to building a house, your life may be temporarily inconvenienced because of necessary renovations to get your home completed to your standards.


Financing Options

When buying an existing home you may find that there are more banks that provide loans for these types of purchases.  When building a home you will need to secure a construction loan.  Because of the higher risk of lending money on a house that does not quite exist yet, there are less banks that offer these types of loans.  Most likely the builder you choose will have a convenient list of approved lenders who offer the construction financing.


A huge advantage of building a house as opposed to buying a house is that you have more flexibility regarding the location. There are typically more available vacant lots in Southwest Florida then there are existing homes.  This allows a lot more flexibility with lot location.  For an existing home in an established neighborhood, there is nothing that you can do about the location of that home, you have to accept it where it is.