Building your home

Building or Buying a Home in Tennessee

Deciding between building a new home or buying an existing one is a significant milestone in anyone’s life. In Tennessee, this choice comes with its own set of considerations, including costs, timeframes, and personal preferences. In this article, we’ll break down the key factors to help you make an informed decision.

Average Cost of Building a House in Tennessee

The average cost to build a house in Tennessee is approximately $131 per square foot. This translates to an average total cost of $261,940, excluding expenses like land acquisition, permits, and excavations. The range can vary widely, starting at $104,800 for an 800 sq. ft. home and reaching up to $655,000 for a 5,000 sq. ft. residence.

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Framing Lumber – a Major Material Cost

For a 2,000 sq. ft. home, framing lumber alone can cost around $33,000, according to Forbes Home. Keep in mind that material costs can fluctuate due to factors like supply chain disruptions and market demands.

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Time Investment

Building your own home is not only expensive, but it’s also time-consuming. On average, homeowners spend between 9 to 12 months on the construction process. Even with a contractor, expect to invest a considerable amount of time in overseeing the project.

Home Building Financing Options

If you don’t have the funds readily available, there are various financing options available. Construction loans, including construction-to-permanent and construction-only loans, can cover both land acquisition and building costs. Personal loans can also supplement specific aspects of the construction process, while home equity loans are suitable for existing homeowners looking to finance a new build.

Comparing Building and Buying

In most cases, buying an existing home is more cost-effective than building a new one in Tennessee. This is due to additional expenses associated with building, such as land acquisition, permit fees, and excavations. As of April 2023, the median sale price for homes in Tennessee is $359,800.

Breakdown of Building Costs

To give you a clearer picture, let’s look at the breakdown of costs for a 2,500 sq. ft. house:

  • Material Costs: Approximately $147,500
  • Contractor Charges: 10% – 20% of the total construction value
  • Electrical Costs: $7,500 – $12,500
  • Roof Installation Costs: $2,800 – $32,200
  • Plumbing Costs: $12,000
  • HVAC Installation Costs: $12,500
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Additional Costs

Apart from construction costs, you’ll need to factor in:

  • Land Purchase Cost: Average of $17,000 per acre
  • Land Preparation Cost: Between $1,500 – $3,000
  • Permit Costs: Vary by county, but can amount to around $5,000

Conclusion: Building vs. Buying

Ultimately, the decision between building and buying a home in Tennessee comes down to your specific circumstances and preferences. If you have land and a vision for your dream home, building may be the right choice. However, if you’re looking for a quicker, more cost-effective option, buying an existing home is likely the better route.

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