Can you save money building your own house?
In the current market, it’s extremely difficult to find a home, even one you’d simply tolerate living in rather than loving. Could building your own home be a way around it? The short answer is probably not. But since it’s a question that’s growing in popularity among people looking for a house in this Seller’s market, let’s look at why.
Things to consider about building your own house
Something that sometimes surprises people is that general contractors (i.e., the people in charge of coordinating the building process) tend to charge 20%–30% more than the actual cost to build the house. If you’re thinking about building a home yourself to save money, you may want to reconsider.
There are so many things that go into building a solid house. Here are just some of the things you’d need to do to build your own house, along with risks involved.
How will you find land, and do you know how to prepare it?
Finding land to build on is one of the hardest parts of building a house. You’ll likely be competing with large builders who can afford to purchase huge plots of land. And even if you can find a good plot, the costs to prepare it can be astounding.
Additionally, you likely can’t just “start building” on a plot of land. You have to make the plot suitable for building. For example, you’d need to know how to properly compact your structural fill material to protect the home’s structural integrity.
How will you get building materials and labor?
Professional contractors often have longstanding relationships with suppliers and subcontractors. They also have a history in their work that reduces subcontractor risk.
If you don’t have those relationships and histories, you’ll likely end up paying more looking for the right materials and labor to complete the job.
Also, if even if you can find materials, you may struggle to find top-quality labor. Subcontractors prefer to work with proven builders. Unless you can truly entice the best, you may find that the only labor forces available to you are second rate.
What will you do if something goes wrong after you build it?
Assuming everything goes perfectly—you find a nice plot of land and prep it, you find the right materials and labor force, and they build the house—what happens if something goes wrong with the house?
One of the benefits of working with a professional builder—either looking for tract housing or building a custom home—is that they have access to proven solutions should something go wrong. For example, professional builders can access a builders warranty from 2-10 Home Buyers Warranty (2-10 HBW).
This provides both performance standards for things like workmanship and distribution systems. It also provides protection again structural problems that make the home unsafe, unsanitary, or unlivable. Unless you’re a builder with a track record, this kind of protection may not be available to you.
And that can be a huge problem. The average cost to address a structural defect for professional builders is between $42,000 and $113,000.
In short, your best bet is to go with the pros
Being your own general contractor may sound romantic. But unless you have a ton of experience, lots of connections, and the ability to handle the huge risks involved in home building, your best bet is to use a professional.
2-10 HBW offers the most comprehensive home warranty coverage for homeowners. Let us help you protect your home.