What To Expect When Building a Home

Cardinal Financial March 6, 2023 | 6 min read
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So, you want to build your own home, huh? Congratulations! Whether you’re a first-time buyer or someone who’s getting around to building the custom home you’ve been dreaming of your whole life, you’re about to embark on an exciting—albeit complicated—process. Don’t worry, we’ve got a few tips that’ll help you understand what to expect when building a home.

Getting Started

Building a home isn’t as simple (or as fast) as it appears in those home renovation shows. Teams don’t just show up with a truckload of 2x4s and some concrete. It takes time and coordination to do it right. When going custom, you typically have two “ins,” one of which is far easier than the other. 

Congratulations, whether you’re a first-time owner or someone who’s getting around to building the custom home you’ve been working for your whole life, you’re about to embark on an exciting process.

Option one? Go with a builder that already owns a plot of land and is selling empty lots for your future home. These are typically planned neighborhoods that you’ll have limited control over. You go in, pick a lot, select your finishes, and get financing. It’s straightforward and easy, but doesn’t allow the versatility that a fully-custom home likely would. After all, these planned neighborhoods usually feature set, blueprinted styles and more affordable materials.

Option two? Secure your own lot and hire an independent builder to build a custom home from foundation to finishes. This route is more involved, but grants the buyer (that’s you) more control over the process. 

Custom Construction Loans

Let’s say you opt for option two. In this choose-your-own-adventure story, you’re again looking at two routes:

  1. You need a plot of land to build on. Unless you already have one, you’re going to need to buy one. You could obtain separate mortgages for both the land and the construction, but this requires two applications, two underwritings (which means double the credit hit), two closings, and will result in two mortgage payments. 
  2. Alternatively, you can go for a one-time close loan. This accessible loan type allows you to bundle the purchase of the land and the labor into one loan. That’s one down payment, one closing, and one mortgage payment. If this option sounds like a better fit, get in touch with one of our experts to discuss the ins and outs of one-time close loans.

Looking Ahead

Next up? A whole host of steps…


If you’re hiring an independent builder, they may have existing home plans you can choose from. If not, or if you’re looking for something different, you can purchase new plans. Heads up, though: new plans may cost you, but it’s up to you to decide how the cost compares to the outcome. 

For pre-drawn plans, expect to pay upwards of $2,000 or more. For custom floor plans that allow you to map out pretty much every aspect of your home, expect to pay upwards of $10,000 or more. Note: These price points are estimates based on industry norms, but the exact cost will vary depending on the builder you choose.


When picking a builder, you’re going to want to do your research. Contractors can sometimes get a bad wrap for skipping out on work or using cheap labor and materials, but that’s not always the case. Our advice? Read as many reviews as you can, seek out referrals, and interview multiple builders before selecting one that you feel is equipped to build your dream home. 


Permits are required for just about every part of the construction process, as are inspections for the work being completed. Adding gas lines? Permit. Grading a yard? Permit. Wiring? Permit. They can be time-consuming and expensive to obtain, but they’re vital because they often require plans. Plans are beneficial because they show that your builder has the professionalism and foresight to hit deadlines and keep the project moving forward. 


When your team is ready to build, here’s a rough idea of the process you’re looking at, from start to finish:

  • Preparation (grading, leveling, etc.)
  • Foundation (crawl space vs. slab)
  • Framing
  • Rough plumbing, electrical, and HVAC
  • Siding, roofing, and insulation
  • Drywall and fixture installation
  • Countertops and flooring
  • Finishing touches
  • Final walkthrough


Not only will local and state officials come through to verify your home’s work is up to code, this is also your chance to look for anything you want taken care of before signing off.

Here, nothing is too small to bring up to your builder. Sure, things will settle over time, but you’ll want to keep an eye out for drafts, leaks, flickering lights, doors that aren’t level, and consistent paint coverage. Not sure about something? Ask your builder. 

After all, this is your home, your expense.

Building Is Great Because…

While building a house might be more complicated than buying an existing home, it comes with its own set of benefits. For starters, what’s not to love about whole-home customization? We’re talking location, layout, lighting, flooring, fixture finishes, equipment…everything

With that customization, you get access to new options for energy efficiency, meaning your new construction home can help you save on bills while saving a little bit of the environment. And, because you’re building from the ground up, you face little to no competition with the rest of the housing market.

Downside? The COVID-19 pandemic continues to have lasting impacts on the industry, meaning lead times are longer and materials are more expensive. Speaking of expenses…

The Cost of Building

Details vary, but Architectural Digest reports that building a house can cost anywhere from $500 to $1,000 per square foot depending on location. Meanwhile, American Home Shield’s 2022 American Home Size Index shows that the average size of a house in the United States is roughly 2,500 square feet. 

Crunching the numbers shows us that building a house that size can cost anywhere from $1.2 to $2.5 million—averaging out to $1.875 million. 

If that number caused your jaw to drop, take this bit of solace: Other resources pin the average cost of a custom, similarly sized home at roughly $500,000—just a little north of the average “sold” price of a home in 2022. 

What’s it all come down to? When building a house, your location, equipment, and finishing touches will push your costs up or down. The safe bet is to leave some cushion in your budget, just in case. Even safer? Get pre-approved for construction loan financing with a lender you trust (ahem, we know one).

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