A Cost Comparison Guide to Building a Home vs Buying One
You can live in the home of your dreams. But first, you have to consider the cost of building a home vs buying one. In these times and as always, the cost is a determining factor for the vast majority of people.
To discover the real cost of buying and building a home, keep reading.
Cost of Building a Home Vs Buying
Let’s get right to it.
Building a home, on average, costs $85.65 per square foot. For a 2,776-square-foot home, that works out to about $237,760 in the U.S., according to a survey from the National Association of Home Builders.
The main difference in the costs of building vs buying lies in the land. Existing home prices account for land value. Building a home, on the other hand, necessitates buying land first.
The latter’s more expensive.
Utilities are another factor. Building requires buying permits and paying for utility hookups. These expenses can be tens of thousands of dollars.
If you want to build, you may also have to excavate the land. Preparing the land for building may cost you several thousand dollars.
You can save a good deal of money on building a house by choosing cheaper materials. Houses are classified as economy, standard, custom, or luxury. The cost of homebuilding varies greatly by classification.
Interior finishes comprise 29% of the final construction cost. That translates to $67,939 for the average American home. To save on interior finishes, research their regional costs and find below-average prices on them.
More Price-Related Factors
When building a house, you need to plan for fixed expenses. Choose a contractor who wants to help you save on building materials. Third-party subcontracting is cost-efficient here.
Save on buying a house with a fixed, 15- or 30-year mortgage. With it, you’ll lock in a predictable monthly payment and interest rates.
All told, the price of a home depends less on whether you build or buy it and more on its location and features. Generally speaking, buying will be less financially risky. That said, you can reduce the price of building with affordable land and a dependable builder.
You need to be mindful of some costs whether you build or buy.
Closing costs can amount to 2% to 5% of the purchase price. The real estate agents‘ commission is 6%.
Also, consider property taxes. In 2018, U.S. property taxes increased to at least $3,498 per home. Yours may be even higher depending on your neighbourhood, property value, and state tax rates.
Homeowner’s insurance can be costly. In the U.S., the average annual cost of such insurance is $1,083.
Now that you know what you’re getting into, buy or build your home today.
The Price of Home
Everything has a price, including your precious home. No matter how priceless and valued your haven from the world may be to you, you still want to save money on it.
Now you can, by considering the factors that influence the cost of building a home vs buying. See how else you can save on your dream home by going to the site’s Construction section.
Thank you for reading!