There are questions I’ve been asked that seem like they would be easy to answer, but when it comes to real estate I’ve found that oftentimes these ideas require me to do a bit more research.

I received just such a question last week; the individual had been saving for a long period of time, but was being stymied by home prices that seemed to be rising every year. He wanted to know: isn’t it cheaper to buy some land and build a house?

It sounds easy, and if you do construction professionally, maybe it would be. But let’s be pragmatic and take a close look at what this project would entail. We’ll consider Santa Rosa: according to Trulia, the current median home price is $480,000. This is a finished home, with land, in an established neighborhood that already has the basics like sewer, water, and garbage. So let’s see how that figure compares to the price of purchasing the land and building on it.

Because I didn’t receive more than the question (no background), I’m approaching this as a project for a buyer with no land, and no building experience.  Let’s look for land, a plan (or architect) and some professional builders. On, you can get an average estimate of what it will cost to hire the builders, and mid-range it’s around $53,312.00. Sounds okay, but that’s only what you’d pay the workers building the home. It’s not including the materials, roughly $294,179 for a 2,000 square foot home costing about $150 per square foot; general contractor fees, which could be anything from drywall to electricity – a rough estimate of $6,397.44-$7,996.80, and any inspections or permits you may need. So, (very, very) roughly, we’re already close to the $400,000 mark – and this is before we’ve even chosen a plot of land or bought a set of plans to follow (which can be an additional 5,000 – 15,000 dollars).

Now, these are all guesstimates; the price of each custom-built home is dependent on the individual’s preferences and situation. They may already own land that’s been passed down, they may own a construction company, or they may want to skip building from the ground up and pay to have a modular put on a lot they already own. However it goes, just by the numbers (and to avoid headaches) looking for an already existing home would seem to be the most prudent (and least expensive) course of action. Check out the slideshow above for comparisons.