You’re ready to take the steps toward owning your own home. How do you know what’s right for you? Here are a few things to consider before you build or buy your dream house.

Advantages of Building a House

The main difference between buying and building is the price. According to the Federal Reserve, the medium cost to purchase an existing home in the U.S. is $222 per square foot, compared to $150 to $200 to build one. However, creating your own house offers a lot of advantages — here’s just a handful.

The Opportunity to Start Fresh

With a new home, you can get updated appliances, finishes and home systems. You can install energy-efficient utilities that will reduce costs and support your overall quality of life, all while contributing to environmental conservation. Plus, the warranties on your appliances mean it’ll be long before you need to fix anything.

The Freedom to Customize

Building your own house allows you to bring your dreams to life, whether that’s an all-black bathroom with gold faucets or a living room with floor-to-ceiling windows. You also have a say in every architectural choice, from the floor plans to the materials builders will use in construction. Even if you build on a housing tract, you can still choose colors, flooring and particular finishes to make your home unique.

Obstacles of Building a House

Though building your home has many pluses, there are some considerations to note before you start breaking ground. Before you get excited about that new house smell, consider what will be necessary in the process.

Lengthy Process

It takes 12 months to 3 1/2 years to build a house. Generally, the process includes a preliminary phase — which involves signing contracts for the architectural design and site plans — and pre-construction, where the project gets approval. Only then will the construction start. There are often unexpected costs, material shortages or labor shortages. When you set a timeline, consider potential setbacks.

Location Issues

Your new neighborhood may be a few miles out of town in a developing area with few amenities. Expect to drive a few miles to reach your favorite spots while your new neighborhood develops. This also means construction will be around you for a while, even after you move in, which could become an issue if you prefer a peaceful environment.

Financing The House

You might need at least two loans to finance your building project, which require a good credit score and down payment to show lenders. You need to be prepared to buy the land where you’ll build your house, pay for construction, and acquire a mortgage when it’s complete. You also have to factor in the design and furnishings you choose, and unexpected costs.

Advantages of Buying a House

Rather than spending so much time in construction, buying a home off the market has plenty of positives. Once you’ve bought the house, you can move in within a few weeks or months. Some of the advantages of buying a house include the following.

Negotiation Privileges

There are several ways you can negotiate a lower price with the seller. Ask them to pay closing costs or a larger down payment. You could also ask them to lower the price after inspection if the house will need a lot of repairs.

Move-In Ready

Once you’ve bought the house, you can move in within a few weeks or months. That’s a huge advantage, considering the alternative is staying in a rental or with others for the foreseeable future. Do you really want to wait at least a year to move into your own space?

Good Location

Maybe you have an eye on a specific neighborhood you’ve always wanted to live in. A common selling point of already-built houses is that they are already part of an established neighborhood. You’ll have schools, shopping malls and other amenities close by.

Obstacles of Buying a House

As with most pros, there will be some cons. It helps to have an idea of the obstacles you might encounter. Here are a few things to keep in mind as you search:

You Might Have to Compromise

An existing house may have one or two items missing from your dream house checklist. As you go through different options, you might have to sacrifice some of those wants for a house that has most of your needs and desires covered.

Maintenance and Repairs

During the home inspection, issues could arise, especially if it’s an older house. You may need to include repairs or replacements for the plumbing or HVAC system in your budget. Although this could be a chance to negotiate downwards, it might also mean competition for you if someone is willing to put in a better offer.


Considering the 22-year-high mortgage rate, fewer people are selling their homes. Well-priced houses in good locations are scarce and the best offer wins. You must be prepared to compete with people who may skip inspections, offer more than the asking price or make cash offers.

How Do You Know What’s Right for You?

The advantages and obstacles of buying vs. building are relative to your preferences. Maybe a house a short way out of town is what you’re looking for. Perhaps you’d like to move into your new home two months from now. The most important thing is you’ll be able to afford and enjoy your new home, even with a few obstacles.