Things to Think About When Building a Custom Home

exterior of a custom home

When house-hunting, would-be homeowners are usually presented with three routes to that lifelong dream of owning their own property. They can buy a prebuilt home, work with a builder to modify a home that is under construction, or they can build a custom home from scratch.

Most first-time homebuyers start-out fantasizing about building a custom home, but end up buying a prebuilt home. This is because buying a prebuilt home is the easiest way to become a homeowner. Buyers simply pick their home off-the-shelf and are spared the hassles of new building construction.

But this is quite different from what happens when a buyer chooses to build their home from start to finish. Building a custom home is the pathway to homeownership which offers the most benefits and the highest level of satisfaction, explains But it is also the riskiest.

That’s because homebuyers who choose this path must deal with multiple challenges that the typical person is not equipped to handle. Some of these issues include; finding the right lot for a home, creating a feasible budget, navigating construction financing, choosing a builder, among other things.

But the question is; if building a custom home is so hard, why are more and more people doing it? The simple reason is that the rewards of building a custom home eclipses the difficulties that homeowners have to endure in the process of completing their residence.

Custom homes offer the following benefits that are not available with prebuilt houses:

  • A custom home can be built where the owner wants it

  • It is specifically designed with the owner’s needs and lifestyle in mind

  • It is future-proof since it is built with the owner’s future needs in mind

  • It allows owners to maximize space and functionality

  • It may be cheaper than buying a prebuilt home


custom home with red brick exterior

In short, a custom home is a home in the truest sense. It represents the homeowner’s idea of what their home should be. But, to make the most of their custom home, would-be homeowners should be aware of the following issues that are unique to custom home constructions.

The right sequences when building a custom home

This is the sequence most people follow when building a custom home: they buy a lot, design the house, and then look for a builder to build it. This order feels right intuitively, but it is wrong because it forces the homebuyer to impose their home design on a lot that might not match it. The better way for homebuyers to do this is to determine the home they want and then along with the builder look for the right lot.


Finding the right lot

The location that a buyer chooses imposes limitations on what kind of home they can build. Qualities of an area that can influence home design include zoning, the style of other homes in the neighborhood, groundwater, the slope of the land, presence of underground rocks, processes for connecting the utilities, and the area’s building codes. Before buying a lot, it is essential to verify that the desired home can be built on it

Budget and design misalignment

This is another part where homebuyers use the wrong sequence. Typically, the owner sits with an architect to design their dream home before considering the cost of actualizing the design. This is a wrong approach that forces the owner to make painful compromises or risk overspending. The right way is to set the budget for the project and then design a home that fits comfortably within that budget.

Financing a custom-home

Bank financing is mostly set up with buyers of prebuilt homes in mind. Financing a custom home is different from funding a regular owner-occupier home because the home for which the homeowner seeks a mortgage does not exist. As a result, there is no collateral to secure the loan against. This is why custom home projects are typically financed with a construction loan. This type of loan is more suited to the risks associated with new building construction.

Considerations when designing the home

One of the biggest mistakes people make when designing a custom home is failing to consider the possibility of selling the property in the future. As such, they design the house in such a way that it becomes hard to sell. The second mistake is when the owner designs without taking their future needs into account. A custom home should be designed to allow the family to grow into it.

Finding the right builder

The builder is arguably the most crucial person in a custom home construction. Homeowners should follow a stringent screening process when choosing their builder. In addition to competence, experience and other vital factors, the builder must have worked on similar projects. This should be the primary criterion for short-listing builders. When searching for the right builder, it is best to speak to many companies and always ask for relevant references.

Whatever can go wrong will go wrong

Finally, homeowners should view the project schedule as a guideline because delays will happen. Secondly, there will be many unexpected costs, some of which must be settled out-of-pocket. This is why there should be a project contingency account. And lastly, project owners must roll-up their sleeves and prepare to dirty their hands.


This article is provided to you courtesy of Alltrade Property Management, a property management company in Louisville, KY.


Leave a Comment