Opinions wanted: Buying land and building a house vs. buying a pre-built home

6 thoughts on “Opinions wanted: Buying land and building a house vs. buying a pre-built home”

  1. Hi Steve,

    That’s a good question. If you buy a land and hand-pick all the contractors by yourself, I think you could get a house of better quality with the view you want. If you take the time to learn about how to build a house, hire a good architect to either draw your plans or modify existing ones to suit your needs, I guess you could end up with a better product at a good price. But read as much as you can on the subject, go see how they build homes, talk to contractors and make sure to budget at least a 15-20% extra because there are always things that you haven’t thought of.

    Before buying a piece of land, making a soil analysis and making sure that the municipality will let you build what you want there is always a good idea. Where will you take your water from? Will you need to dig a well? Is the water potable and how deep is the phreatic in the neighbourhood? This can affect your costs by a lot. Also inquire about what can be built on the surrounding lands… if they build a condo tower in front of you you won’t be happy. And if you start digging for the basement and find a huge rock that you’ll have to blow you won’t be happy either… this can cost 15-30k here in Canada.

    My experience is that most self-builders don’t plan well, don’t do enough due diligence before buying a land or starting the construction and underestimate the costs of building a house. They often forget major things in their planning and things rarely goes 100% as plannned anyways.

    Also, a bank won’t advance you funds until the work has progressed. So you have to build a part with your own funds and then call an inspection. Then they will give you some money. Here in Canada we don’t finance the land purchase with a mortgage at first. So you normally purchase the land with an interimary loan and when the construction will be over they will close the loan and include it in the mortgage.

    Notice that there are also great prefab or modular homes on the market nowadays. They will deliver the house you want on your land and zip it there for you. It’s much less stress and these houses look great and usually are of better quality. It is also harder to forget something big and you can customize it mostly the way you want.

    Anyhow, have fun planning your dream!

  2. I have built about 10 or so of my own homes. I have purchased about the same amount that were pre built. I will always spend more building my own than purchasing one already built. Why? I want this and I want that when I build and the house turns out fantastic and I make a lot of money on them. But I wanted cement stained counter tops and arched carved wood doors etc and that is money. I would buy a house that was very nice but did not have all these specialty items in it so even though it was high end – it would still be less HOWEVER….
    I think that when I build I get just what I want and when I buy I do not so I eventually end up restricting the house and it turns out nice and I make money on it but it is never just right.
    I will tell you that you should know exactly what you want when you start to build and do not get half way into a house building and then choose to have hand cut wood plank flooring put in instead of the tile. etc. design it ..know your products and select them .. find a builder and make sure that he will build to your specks and then be on the job with him while he builds to make sure that he is doing it right. Know your land. have a geo guy analyze it – what will the land do in flood type rain? there is a lot to know about building that I would never trust another person to do without knowing how it should be done.

  3. Theres a lot to consider when looking into land vs. already built home. I prefer buying land and building a home, even though it may cost more, because then you can get exactly what you want.

    1. I appreciate that, Brian. Our plans have changed since I wrote this blog post, though, so we won’t be looking into this any further. But in general, I agree – whenever possible, build. It means you get exactly what you want…and hopefully *where* you want it! 🙂

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