The Difference Between Custom Homes vs. Pre-Built and Modular

This is a custom house.

If you are searching for a new home, there’s a good chance you are caught deciding between custom, pre-built, manufactured, and modular homes. All these options have advantages and disadvantages that make it difficult for most prospective homeowners to choose. To ease your decision-making below is a comparison between these three distinctive home types.

Custom Homes

Building custom homes is an option that has gradually become popular among most homebuyers. Like personally tailored clothes, the end result is a home specifically tailored for you. Unlike pre-built or modular homes, you get to choose your preferred layout, size, location, and every other feature in the house.

Typically, you should work with a custom home builder, architect, and design firm that handles your house design needs. Every detail in the house requires your input or suggestion, including the materials used. Unlike the other options, you should begin by purchasing a piece of land, which makes this option more involved.

Advantages of Custom Homes

You should consider custom homes for the following benefits;

  • You Get Exactly What You Want

The biggest benefit of building a custom home is the leverage to choose your preferred design, specific features, and other particulars. It is difficult to find a home on the market with everything you desire unless you renovate it immediately after buying.

  • You Choose the Best Materials

Homeowners have total control over the building process. Y ou can decide what type of building materials are used in the house. Using the best quality materials, such as premium sidings and insulated concrete forms, assures that your house will remain beautiful for years. You can also decide to use sustainable building materials to conserve the environment.

  • Build an Energy-efficient Home

Unlike modular and pre-built homes, you can make your home as energy-efficient as possible. Hiring the best custom builder can make your house Energy Star Certified. While you may incur more during the construction, you will enjoy the latest installations, such as solar energy, which conserve energy. You can save up to 20% from your energy bill, which translates to thousands of dollars over time.

Disadvantages of Custom Homes

  • Time-consuming

Building a custom home obviously takes longer than buying an already built home. Custom homes are different, and you cannot accurately predict the precise timeline. It might take up to one year before you move into the house. However, if you work with experienced custom builders and pick a design that suits you and your family, the wait will be worth it.

  • You Will Pay More for Utilities

You can only build a custom home in rural or suburban settings because most estates already have approved designs and floor plans. Also, most people prefer building in remote locations to save money. Before settling on a location, find out if there is existing infrastructure for your basic utilities.

For instance, constructing a septic tank cost between $30,000 and $50,000. Drilling a well costs between $10,000 and $20,000. You may also have to pay more if the hydro connects from a long distance.

  • Greater Cost

The average cost of constructing a new house is approximately $200 per square foot. You will part with at least $400,000 for a 2000-square-foot house. These costs can increase depending on the building materials, location of the land, home builder fees, and other customized extras, such as cabinetry, interior built-ins, and exterior additions.

Pre-Built Homes

Also known as prefabricated or prefab homes, pre-built homes include manufactured and modular homes. Manufactured homes are constructed and assembled in a factory or warehouse and shipped to the site in various ways. On the other hand, different pieces of modular homes are constructed in the factory and assembled on the site. Modular homes may be built as sections of the house, rooms, or walls and later assembled.

Whether manufactured or modular, the cost of constructing pre-built homes is lower than other home construction options. You save a lot of labor costs when the product is constructed offsite. There is minimal material wastage also as builders purchase the materials in bulk and use the remaining on other projects.

According to the National Association of Home Builders, it costs an average of $76 per square foot to construct pre-built homes. However, this price varies depending on the quality and design needs. Some luxury modular homes can cost more than $200 per square foot, though the cost is 10 to 20% lower than custom homes.

Advantages of Pre-Built Homes

  • Design flexibility – Like custom homes, homeowners can choose from hundreds of design options to customize their modular homes. Remember to check your local building codes when modifying your plan.

  • Reduced construction time – It takes 30% less time to build modular homes than to build a house on-site. This is because the foundation on-site and the building construction at the factory are done concurrently. There are also minimal delays attributed to harsh weather, contractor delays, and other unexpected issues.

  • Reduced costs of construction – The cost of building prefabricated homes is lower than on-site constructed homes. Apart from reduced labor costs, manufacturers also purchase building materials in bulk.

  • Environmentally friendly – Prefabricated homes require fewer materials than houses constructed on-site. The remaining materials can be reused in other projects.

Disadvantages of Pre-Built Homes

  • Complicated financing process, which includes home construction loan and mortgage
  • Manufactured homes depreciate over time
  • There is a negative public perception, which can affect the resale value
  • Serious restrictions on the floor plan, square feet, and customization


Among the major decisions prospective homeowners should make is choosing between buying a house or building a new one. While deciding between buying and building is simple, thanks to the endless benefits of newly built houses over pre-owned homes, they should again decide between a custom and pre-built home.

If you are looking for an overly customized home with precise attention to detail, you should consider custom homes. While it is comparably expensive and time-consuming, working with an experienced custom home builder will give you the peace of mind that your full expectations will be met.

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