25 Ways to Save Money Building Your Dream Home - Good Financial Cents® (2024)

A couple of years ago, we embarked on the adventure of a lifetime. We built our first custom home – our dream home.

Having talked to many couples who have gone through the same process, we knew we were in for some stressful times. Along the way, we managed to find several tips for saving money and wanted to pass some of these dollar-saving tricks on to you.

Are you building a house soon? If so, take a breath, grab a notepad, and hang on–it’s going to be a bumpy ride. And remember: what doesn’t kill you makes you stronger. Husbands, another piece of advice: The wife is always right. Always. Trust me. 🙂

Now, let’s go build your dream home and save some money while you do it. Here are all the ways you can save money while building your dream home!

1. Know Your Mortgage Rates

Right now is arguably the greatest time ever to buy or build a home because mortgage rates are the lowest they’ve been in history. Even though building a home takes time and you have to deal with construction loans, it pays to stay ahead of rates and lock in at the optimal time.

2. Sell Your Own Home Without a Realtor

If you have the time and you live in a desirable neighborhood, consider selling your house at For Sale By Owner (FSBO).

That way, you pocket the proceeds and avoid paying the 6% realtor commission. We started in this direction because we weren’t in a rush to sell the house. We also felt that we lived in a “high demand” neighborhood and felt that a For Sale sign in the front yard would do the trick.

It did, in a sense, because we got several phone calls in the first weekend and even an offer. Unfortunately, the buyer couldn’t get financing, and the deal fell through.

We were bummed out, but not shortly after, we had a second offer. Unfortunately, the second deal fell through as well. This is when we decided that being our own real estate agent was a little more work than we had hoped for.

However, if you’re determined to save a buck and willing to give up some of your free time, FSBO can save you a TON of money!

3. Hire a Realtor With a Discount

When the first few deals fell through, we decided that we needed to generate more foot traffic to our house. Not ready to hire a real estate agent yet, we turned to FSBO.com. It allowed us to get an MLS listing so that every real estate agent in the market could see our house, and it got listed on the top websites like Realtor.com and Zillow.

If a real estate agent showed our house, we would only have to pay a 3% commission fee, but if someone found our house directly, we could still sell it without having to pay a dime to the realtors.

4. Hire an Awesome Real Estate Agent

As we got closer to our house’s completion, we decided that it was time to bring in the professionals. We had several “lookers,” and reflecting back, we probably had our house a little too high. It was tough, though, since we had two offers, but the competition was beating us out.

We found a local realtor who really knew our neighborhood, and after the first meeting, we realized how little we really knew.

After one planning meeting, we already felt much more comfortable with the situation compared to the previous experience we had. It turned out we had an offer two weeks later, and our house was off to escrow.

5. Requote Your Home Insurance

Nothing bothers me more than paying too much on insurance. Why? Because insurance companies bank on you sticking with them for a long time, and they’re happy to keep increasing your rate every year. If you haven’t shopped for home insurance for a long time, make sure you do today.

6. Get a Credit Card With 0% APR

Building your dream home may not be cheap, but you’ll save oodles of money if you take advantage of a credit card with 0% APR. These cards offer 0% APR – as in zero interest – for anywhere from 12 to 21 months, which means you can charge some of your home-related expenses without paying interest for a year or longer. No matter how you cut it, that’s a pretty sweet deal!

Here is the top 0% offer to help you save money while you build your dream home:

Discover It® Card: Another 0% APR card you should seriously consider is the Discover it® card. With this card, you’ll get 0% APR for a full 18 months. Meanwhile, you’ll earn 1 point per dollar spent on all of your purchases, plus 5X points in categories that rotate every quarter.

Once you start racking up the points, you can turn them in for statement credits that can help you save even more money on your new dream home. This is honestly one of the BEST DEALS for anyone building a new home. With 18 months at 0% APR and rewards, this card is an absolute no-brainer.

Read here to learn more about the Discover it® card

7. Have a Contingency Plan

The thought of carrying a second loan did not excite us a bit. To prevent such a catastrophe, we wanted to make sure we had a backup plan. We found some local real estate investors who were willing to pay us just over $1000 per month and then find a renter for our house. The house would still be in our name, and then after a five-year period, they would pay us an already agreed-upon price.

The plus side is that we wouldn’t have a mortgage payment (because the $1000 covered it). The downside was that the mortgage would still be in our name, which the bank would not like. It wasn’t the ideal situation, but it was definitely a good plan B.

Luckily, our house sold, so we didn’t have to journey down this path. With the real estate market still not stable these days, I would highly suggest having a plan B.

8. Visit Many, Many Homes

You think you know what you want your dream home to be, but do you really? After scouring the home books, we drove around and visited as many homes as we could.

We even drove to St. Louis (90 miles away) to get another perspective. If you can find a newly developed area, they may have some model homes that can give you tons of ideas.

9. Find a Good Architect

When it comes to having a vision of what something is going to look like, I’m horrible! On top of that, we had purchased a lot where the back of the home would face a lake, but the front would be facing a cul-de-sac. Essentially, we needed a unique layout that no home book could provide. (Good thing we borrowed them!)

Thankfully, the architect we hired really helped us establish a floor plan that was open (really open!) while maintaining the lake as a focal point when you walked into the home. In the end, the floor plan couldn’t have been any more perfect, and that’s all thanks to the architect.

10. Hire the Right Builder

I can’t stress this enough! The subdivision where we purchased our lot required us to use their builder. In many situations, this could be a really bad deal. We had seen his work and visited some of the other homes he had built, so we were confident in his ability but worried about the total cost.

We negotiated with the developer to allow us to get outside bids to make sure the builder’s cost was within reason (more on that next).

If you have the option to hire your own builder, DO YOUR HOMEWORK! Hiring the wrong builder can be a horrendous experience.

Before you hire a builder, get a list of references and ask to see some of their work. GET EVERYTHING IN WRITING. And I mean everything! It’s amazing how quickly people can forget a conversation. This applies to subcontractors as well.

11. Bid Out Your Cost

This is an easy way to save tens of thousands of dollars before you even begin the building process. As I mentioned above, we were required to use a certain builder but were still allowed to shop around to make sure his bid was fair. To our amazement, the 2nd closest bid (out of 4 total bids) was $40,000 higher!

Yes, that reads FORTY THOUSAND DOLLARS. That was a HUGE saving right out of the gate.

Why the difference? Honestly, we don’t know. We were told that some home builders just don’t need the work, so they price themselves out. Our builder has a 3-man team and then subs out most of the other work (drywall, paint, concrete, plumbing, etc.).

Of course, the most important thing is that the builder stays within that bid. If the bid looks too good to be true, have someone else look at it (we did). We realized that the allowance for the kitchen and bathrooms was a bit low for what we had in mind, but so were the other builders’ bids.

12. Have a Heart to Heart With Your Builder

Communication with your builder needs to be stronger than the communication in your marriage. Seriously. If you don’t tell them what you want, how are they going to know? Be specific, and make sure you are all on the same page. Trust me — it will save you many headaches and arguments in the end.

13. Find a Good Banker

Your banker is the instrumental piece that can save you tons of money in the beginning as well as thousands of dollars of interest over the lifetime of your mortgage. When we first started building, 30-year mortgage rates were around 4.5%. I was drooling and stressed that rates would shoot up.

By the time we were 30 days from completion, we were able to lock in our rate at 5%. The whole time, I was in constant contact with him (and I mean constant), making sure we pulled the trigger at the right time.

Unfortunately, we were a bit premature, and rates dropped a bit. Luckily, we were able to re-lock our rate at 4.875% by going through a different lender, and we didn’t have to pay an additional cost.

14. Negotiate the Construction Loan

Most builders are going to want a sizable down payment (usually around 10%) and will constantly be feeding you invoices to hand to your bank. To our luck and amazement, our builder only required a $5k down payment (which we paid in cash), though here are some tips on taking out a personal loan from a bank if you need to go that route.

In addition to that, he wasn’t constantly hounding us for more cash. In fact, I can remember my banker making a comment about how impressed he was that our builder had only received 40% of the construction loan when our house was over 80% complete. A rough calculation had us saving $4-$6k of interest because of this. Not bad.

15. Take Advantage of Online Stores That Offer Free Shipping

The cabinet hardware quote from our kitchen specialist was $450. We were able to buy the exact cabinet pulls on eBay for $135 with free shipping. We also bought the bathroom vanities that come with the whole package: vanity, top, sink, and faucet.

By buying on eBay, we were able to get a cheaper price, free shipping, and ask the seller for a discount.

In both cases, the eBay store owners gave us discounts: $75 off on one and $195 off on another. Proof that it never hurts to ask!

16. Search Online Wholesalers Instead of Buying Retail

We were able to buy a $6,000 front door for $2,300 unfinished, sent straight to our house. ($3,700 in savings!) We just needed to find somebody handy to help stain it. Luckily, my father-in-law is as handy as they come.

If you’re not as blessed and don’t have a handy family member, ask friends and coworkers, and I’m sure you can find someone to help stain your door for a few hundred bucks.

17. Buy Your Lighting on Sale

My wife knew what lights she liked, and she bought them from a few different places. Compare prices and buy from the place that gives you the best deal. She searched the Sunday paper flyers and compared Home Depot, Lowe’s, and Menard’s prices.

At least one of them had their lighting on sale when we needed it. Don’t forget that you can usually find a discount lighting store online that will beat any home store’s price.

Example: The chandelier that she wanted, out of the local distributor’s catalog, was $873. By searching online, she found the same chandelier on clearance for $174.99. It gets even better. See the next tip.

18. Never Buy Online Without Searching for a Coupon Code First

Coupon codes can usually save you 10% to 20% off at most online retailers. Rotate coupon codes and you can always find some type of discount out there.

Even Better Example: The clearance chandelier that she bought has a coupon code that gives us an additional 15% off clearance items. The chandelier originally priced at $873 that she found on sale for $174.99 only cost us $149 with no shipping.

19. Use It or Lose It

We were able to use my father-in-law’s employee discount to purchase all of our appliances; however, just don’t assume that the employee discount is the better deal. A mini beverage refrigerator we liked was $900 with the employee discount. By shopping around, we found a mini fridge very similar for one-third of the price, $379, plus a $50 mail-in rebate. Do your homework.

20. Get By With a Little Help From Your Friends

Have friends or family that can save you money when building your home? We were fortunate to have friends who did our house plan (architect), kitchen and bathroom countertops, and cabinets. Just to make sure we were truly saving some money, we also bid out the cost and confirmed that we saved a significant amount.

21. Sweat It Up

Are you afraid to get your hands dirty? If so, you may want to skip this section. If not, dive right in and start sweating it up. Use your own skills (or find someone who has skills) and do some of the labor on your own.

Again, with a handy father-in-law, we were able to tile the custom shower, hang the siding, install the kitchen cabinets, and install all the hardwood and tile floors on our own.

Tiring, yes. Worth it, most definitely. We saved thousands of dollars by doing some of our own work.

Be careful, though. If you don’t know what you’re doing, then this money-saving tip may end up costing you more in the end. You don’t want to have to go back and re-do your poor-quality job. Make sure you’ve got the skills and know how to use them.

22. Know All Your Tax Credits

Congress has passed many laws recently that are favorable for many homebuyers and homebuilders. The most recent update to the first-time homebuyers tax credit would have given us a $6,500 credit, except that we were 6 months shy of meeting the 5-year requirement – Doh! Luckily, we did qualify for nice credits for making our home energy efficient.

We netted some serious dough in tax credits for our energy-efficient windows and insulation. The big credit was for the geothermal unit that we had installed. We lucked out and were able to get a 30% tax credit on the price of the unit and installation cost. Previously, the credit had a cap of $2,000 if installed in 2008.

23. Collect Boxes

DO NOT underestimate the number of boxes you will need. You can never have too many. We called our local grocery stores, and they were willing to give us as many boxes as we could take.

All in all, I loaded over 5 loads of boxes in the back of my Tahoe, and a friend gave us about 20 additional boxes. This did not include the 40 or so storage bins that we already had.

24. Price Your Movers Wisely

Having never moved before, we turned to the Yellow Pages to look for some moving companies. We called three different companies to give us a bid on what it would cost to move our house. Keep in mind that our new house is only approximately 2 1/2 miles from our old house, so we did not have that far to go.

The first two moving companies didn’t even come out to the house and quoted us $80/hour and $107/hr respectively, and both expected the move to take around 6-8 hours. If we wanted them to pack the boxes for us, it was $24 per box and $34 if it was fragile (glassware and dishes). See why it makes sense to get plenty of free boxes?

The third company actually came out to look at our house to see how much we had to move. They quoted us $132/hour and claimed that the other companies underestimated how long it would take to move us and would then end up costing us more. Maybe so, but we weren’t sold yet.

Luckily, our fourth option was a referral from a friend. They had hired some guys from a local furniture store to move their house. After giving them a call, we learned that it would only cost us $475 total to move the entire house, and all we had to do was rent the U-Haul, which ended up costing us $49.98 plus $20 gas. Needless to say, we were sold.

25. Figure Out Furniture You Need in Advance

With an upgrade in the size of our new house, we knew that we had to buy some new furniture, most notably a couch. We set out months in advance and found an awesome couch that was on clearance for a fraction of what we would have had to pay if we missed the sale. Other examples are wall hangings, rugs, and other accessories, where we were constantly on the lookout for good deals.

Have you built a home recently? If so, how did you save some dough? What did I miss?

Hey Pinterest people! If you like this post, you might also like 85 Easy Ways to Save Money. Also, be sure to check my wife’s blog, House of Rose. Her Home Tour page has been pinned over 1 million times. Yowzers!

Final Thoughts – Ways to Save Money Building Your Dream Home

Building your dream home can be both thrilling and challenging. To save money, take advantage of low mortgage rates, consider selling your own home, and hire a realtor strategically. Architect expertise optimizes layout efficiency.

Utilize credit card offers for interest-free expenses. Smart bidding, communication, and tax credit awareness ensure budget success. Prudent decisions in mortgage rates, real estate transactions, and material choices can collectively lead to substantial savings.

With careful planning and resourcefulness, your dream home can become a reality without breaking the bank.