The Pros & Cons of Building a Custom Home

Right now, many would-be homebuyers are facing a predicament, which is that there is a limited inventory of properties available. That might be one reason to consider building a custom home, but there are others.

There are downsides to think about at the same time. Whether the pros outweigh the cons depends on your unique situations and preferences, but the following are some of the upsides and downsides to at least make sure you’re aware of before making a decision.

The Pros of Building a Custom Home

When you’re thinking about building a custom home, the following are some of the upsides.

You Can Get Exactly What You Want

When you buy an existing home, undoubtedly, there are some things you’re going to have to settle on. You may be able to change them or update them later, but you’re more than likely not going to get precisely what you’re looking for.

When you build a custom home, you get what you want in every detail. You can design the space in a way that’s going to work for your lifestyle and your taste. At the same time, you have to be careful that this doesn’t turn into a home that’s so specific that you’ll be unlikely to sell it in the future.

You Can Customize Your Location

When you opt to build a custom home, you’re not just getting all the things you want in the house itself. You’re also getting the ability to choose where you want to build. For example, maybe you love the idea of buying land where you’ll have no neighbors around you, or you can have a beautiful view.

You’ll Have Less Maintenance

If you buy an existing home, you’re almost always spending at least some of your free time and money on maintaining it and making repairs.

When you have a brand new home, you can save thousands on maintenance each year. You’re not going to spend your weekends making repairs, and you’re free to do other things.

Of course, you’ll still have some upkeep you’re responsible for, like maintaining the lawn, but a lot less so if you bought an existing and especially an older home.

The Cons of Building a Custom Home

It’s not all upsides when it comes to building the home of your dreams. Downsides to think about include:

It’s Expensive

Building a custom home will cost more money than getting a comparable existing home in almost all cases. You’re going to have to work with a builder, and labor will be around 40% of your total costs. Along with labor, you’ll be paying for permits, design fees and of course the building materials. You can lower your costs somewhat depending on the materials and finishes you choose, but it’s tough to get labor costs much lower than what you’re quoted initially.  

Construction Loans Are Challenging

When you build a home, you may need a construction loan. Construction loans typically require a 20% down payment, and lenders consider them higher risk, which is the reason for that.

You’ll provide the lender not only with the documents you would typically when getting a traditional mortgage, but you’ll also have to provide plans for your project, estimated costs, and information about land value. You’ll have to give the lender a signed contract with the plans for your project, specs and the timeline for construction.

Building Can Take a Long Time

Finally, another downside that you’ll need to think about carefully is that building a custom home can take a long time. It will take at least three months to build a small, simple house. If you’re building a bigger home, you can count on it taking a year or more in some cases. Many delays can occur along the way, ranging from weather conditions to having trouble making decisions on certain things.


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