Pros and Cons of Custom Homes Vs Personalized Production Homes

This is part three of our series of articles comparing custom homes to personalized production homes. This article will focus on the pros and cons of custom homes vs. personalized production homes.

If you are considering the purchase of a new home, you may be trying to decide whether to have a custom home built or buy a personalized production home. There are very distinct differences between the two, so you should spend some time learning the specific details of each before you make a final decision.

custom homes vs production homes

Some of the questions you will need to have answered are:

Cost: What is the square foot cost for each type of home?

Time to Build: How long does it take to build each type of home?

Pros/Cons: What are the advantages and disadvantages of each type of home?

Options and Selections: What options and selections will you get to choose?

Warranty: What level of new home warranty should you expect with each type of home?

Touch Points: How much personalized service will you get from each type of builder?

Learning everything you can about the different types of new homes selections available will allow you to make a more educated decision about which option is best for you and your family. Please read our series of articles on this topic for more information and answers to all the above questions.

Custom Homes

Advantages:

  • You will be able to choose the location of where your home is to be built.
  • You will get to decide the details for every product and feature of the home.
  • Your new home will be unique from every other home.
  • The quality and functionality of the home will meet all your requirements and standards.

Disadvantages:

  • Custom homes are expensive to build compared to personalized production homes.
    • A custom home builder is not able to buy the supplies needed in bulk, making the materials for the home more expensive.
    • Labor will be more expensive as a custom home has never been built before and many details and problems will have to be worked out during construction.
  • In most cases you will have to find and purchase your own land to build the home on.
  • Custom homes take significantly longer to build than production homes.
  • You will have the added expense of hiring an architect to design the home, or have purchased plans modified, as well as finding a contractor who builds custom homes.
  • A custom home will depreciate faster than a production home.
  • It is difficult to get the home appraised for the total build cost. Thus, most banks will not lend the entire amount needed to build the home requiring a significant down payment from the homebuyer.

Personalized Production Homes

Advantages:

  • You have the flexibility of choosing from a variety of price points.
  • The land comes with the price of the home.
  • Production home builders offer a variety of floor plans to choose from.
  • There are fewer decisions to make which leads to less stress and less hassle.
  • A personalized production home is much less expensive to build than a custom home.
  • A personalized production home can be built much faster than a custom home.
  • A selections coordinator will help you make the best selections for your new home to personalize it to fit your needs.
  • Production homes are priced to meet comparable appraisal values enabling homebuyers to borrow the entire amount of the cost of the home depending on the type of loan chosen.
  • Many production builders offer comprehensive warranties such as the McKee Homes 2-10 Warranty Program that covers the structure for up to 10 years.
  • In many cases, you will have the added benefit of living in a community with access to amenities such as: golf course, clubhouse, fitness center, pool, tennis courts, basketball courts, baseball, volleyball, a park, playground and walking trails.

Disadvantages:

  • You won’t be able to design every aspect of your new home.
  • You won’t have as much input in how the home is constructed.
  • You won’t have unlimited land options from which to choose.
  • Because production builders build a large number of homes each year, they cannot offer as many touch points with their homebuyers as custom home builders.

The Bottom Line

The decision about whether to buy a custom home or a personalized production home is a very personal one and one only you can make. You should take as much time as you need to study all your options, and then will you be able to make the decision that is right for you and your family.

If you find yourself torn about which direction to take, you may want to visit some personalized production home builder locations to get a feel for what they have to offer. If after that you don’t find anything that suits your needs, you can always contact a custom home builder to compare the costs and options they have available.

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Cost of Custom Homes Vs Personalized Production Homes

If you are considering the purchase of a new home, the cost of new homes is one of the first considerations to look at.  When trying to decide whether to buy a custom home or a personalized production home, there are very distinct differences between a custom home and a production home; therefore, you should spend some time learning the specific details of each before you make any decisions. Some of the questions you will need to have answered are:

Cost: What is the square foot cost for each type of home?

Time to Build: How long does it take to build each type of home?

Pros/Cons: What are the advantages and disadvantages of each type of home?

Options and Selections: What options and selections will you get to choose?

Warranty: What level of new home warranty should you expect with each type of home?

Touch Points: How much personalized service will you get from each type of builder?

Learning everything you can about the different types of new homes selections available will allow you to make a more educated decision about which option is best for you and your family.

This article will focus on cost of custom homes vs personalized production homes. Please read our series of articles on this topic for more information and answers to the above questions.

Cost of New Homes – Custom Homes

When building a custom home, you generally acquire your own land, design your own floorplan (or have it designed) and submit it to the builder. Additionally, you will be directly involved in the planning and development of every aspect of your new home.

It’s extremely hard to determine the cost per square foot for a custom home because there are so many variables. But as a general rule, a custom-built home will cost you twice as much as a personalized production home. And the land cost is usually not included in that figure. You can expect the cost of a new home to average between $150 and $400 per square foot depending on which part of the country you are building in.

Hiring an architect to design a custom home will generally cost between 2-15 percent of the total construction costs, however the architect, or a representative from their firm, will usually oversee the project to make sure everything is done correctly.

It is possible to buy home plans online for less than $2,000 but it’s a good idea to pay an architect an hourly fee to review the plans before using them make sure they will work on your building site and meet the local planning and building department codes.

You will also need to pay for a building permit for your home which can add several thousand to tens of thousands of dollars to the building costs depending on the region where you are building. Most custom home builders will include this cost in their contract, but it’s important to verify this to avoid unexpected costs for your project.

Additionally, custom homes often cost more to build than the final appraisal amount, requiring a significant cash down payment by the homebuyer in order to procure a mortgage on the home.

Cost of New Homes – Personalized Production Homes

When having a personalized production home built, it’s customary for the home and land to be offered as a package deal. You will have the ability to choose from a variety of home floorplans and new home options; therefore, with a personalized production home, you will still have the opportunity to customize your home to a certain extent.

A personalized production home is a great option for those who want to customize their new home but don’t want the expense of having a custom home built. Or spending the time and hassle of trying to find just the right piece of land, at the right price, in a convenient location.

Just like a custom-built home, the cost per square foot for a personalized production home can vary widely depending on the home’s variables. However, with a production home, you won’t be paying separate costs for the land and for the home. The average cost per square foot of a production home can range between $80 and $120 or more depending on the builder, the location and the quality of materials being used.

Production homes builders offer a variety of floor plans to choose from, so there is no additional cost for plans or architects. All of the floor plans have been built many times before so there won’t be any surprises or design problems as often happens with custom homes. Production builders have their floor plans modified to meet building codes for each region and neighborhood they build in, so all of the planning has been taken care of in advance. The building permit and all fees are paid by the builder and included in the cost of the home.

Additionally, production homes are priced to meet comparable homes in the area and therefore generally appraise at or above the offered price.

The Bottom Line

The decision about whether to buy a custom home or a personalized production home is a very personal one and one only you can make. You should take as much time as you need to study all your options, and then will you be able to make the decision that is right for you and your family.

If you find yourself torn about which direction to take, you may want to visit some personalized production home builder locations to get a feel for what they have to offer. If after that you don’t find anything that suits your needs, you can always contact a custom home builder to compare the costs and options they have available.