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2021-02-16
To Build or to Buy? That is the Question

Perhaps you have been searching for a home in Champaign County for a while, and nothing is meeting your needs. Perhaps you have also reached a point in your search where you want to find the ideal home, and not just settle. In this case, you might choose to build rather than buy a preexisting home, but how much does it really cost?

The cost of custom homebuilding is determined by a number of factors, such as where the home is located, the type of materials used, and the size of the home.

A customized home is also different from a production build. While you select certain customization options within a subdivision, you are limited to what the developer or builder offers.

In 2017, the average cost to build a home was $428,000. That figure is based on a single-family home of around 2800 square feet. Based on that, the average cost to build a home is $153 per square foot.

Breaking Down the Costs

So, you are really starting from scratch by building a home.

Typically, after you’ve bought land, you’ll begin with what’s called site work. This includes inspections, plans, and preparing the land for construction. Site work costs around $16,000, depending on how extensive the work is. 

A home foundation will typically cost around $25,000. This includes excavation to ensure that your land is level before construction begins, as well as concrete and lumber. If your home will have a basement, expect the cost to be higher.

Prices for framing are tens of thousands of dollars, and finishes, such as walls and support structures, are comparable to what you pay for exteriors.

You should plan on spending $35,000 for your HVAC and plumbing.

Next, you will need to figure out the cost for the interior finishes in your home. This is where most of the budget goes, and there’s a lot of variety based on what sort of finishes you want. Interior finishes include everything from your countertops and cabinets to your trim.

Is it Cheaper to Buy or Build?

It’s not easy to answer whether or not it’s cheaper to buy or build a home. It all depends. For example, the average sale price of a home in 2017 was just under $291,000, which is significantly less than the average building price of $428,000.

It’s not that you can’t build a cheaper house than the $428,000 figure. It depends on where you live in Champaign County and the type of materials you choose.

If you decide to build a house, you’ll need a construction loan, unless you plan to pay cash as you go. A construction loan is typically converted or refinanced into a mortgage loan once the home is built.

The application process is similar to that of a mortgage, but the funds are disbursed in a series of back-to-back draws. Your builder requests a withdrawal when they are moving onto the next phase of the project. The lender sends an inspect to verify the progress.

In the end, the decision to buy a pre-existing home or to build one relies on what you really need and your budget. Feel free to speak with us about how you can realize your dream of owning a home in Champaign County.

Visit our blog twice a week for more helpful real state articles and local Champaign County news. Follow us on Facebook! Rose Price can help you find the ideal home in Champaign - Urbana! Start your home search now with our powerful home search feature.

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