Price Differences Between Display Homes and Custom Builds

a living room with a fireplace

There are several decisions homebuyers make when shopping for a new home. These decisions include choosing the location and budget. Homebuyers also have the option of buying a pre-existing home or building a new house.

Purchasing a display home is a third option. If you’re in the market for a new home, you may be wondering how the cost of purchasing a display home compares to the cost of a custom build. Explore some of the distinctions between these options and factors that could affect the costs.

What is a display home?

Homebuilders construct display homes to enable potential builders to tour a home before building. These houses typically double as sales offices. It’s common for builders to construct a display home when they’re selling lots to build in a new neighborhood.

What is a custom build?


A custom build is a house constructed specifically for you. You choose your lot and design plans. You also make critical decisions about the house, including kitchen cabinets installed, the flooring, and the paint colors.

What factors affect the price of a display home?

Display homes usually include multiple upgrades because the quality of the materials used and optional design features included entices builders to invest in upgrades. When you tour a display house for sale, you will be looking at a home that’s been used for tours and doubled as a sales office. It’s possible kitchen appliances were used for baking cookies before an open house, and at least one bathroom was likely in use. Ask how long the house was used as a sales office. You should also confirm whether the house was ever occupied. These factors could affect how much you’re willing to spend on the property because of potential wear and tear on appliances and household systems.

What factors affect the price of a custom build?


Custom builds with a base model and standard options. Your choice and model choice will determine the number of square feet in the house, the available yard space, and the starting price of the home. You can also opt to invest in optional upgrades. For example, you may want quartz countertops in your kitchen, but quart may not be a standard option. You might opt to alter the design plans to include a vaulted ceiling in your living room. To make these changes, you would need to pay extra fees. You may also opt to pay extra costs for additional features, such as landscaping or a deck.

What other factors affect the cost of a home?

Whether you’re buying a display home or building, you’ll need to secure a mortgage. Use a home loan comparison tool to compare home interest rates. The comparison tool allows you to review the interest rate for fixed and adjustable-rate mortgages. Your monthly payments will fluctuate with an adjustable-rate loan, but some lenders charge buyers break fees for clients who opt for fixed-rate mortgages, affecting the cost. Use the loan comparison tool to review your options to find a loan with a lower interest rate to reduce your payments. You can also choose between a 15-year mortgage and a 30-year mortgage. Your loan options will determine your loan’s interest rate and terms, which could affect your monthly mortgage payment amount.

Your down payment will affect the overall cost of buying or building. Homebuyers who put 20% of the property’s price down may receive lower interest rates and avoid the cost of purchasing mortgage insurance. Mortgage insurance protects lenders from losses if you default on your mortgage payments.

There may be factors that affect your insurance costs for a display home. Empty homes can be broken into and used for parties or occupied by squatters. Prior insurance claims and criminal activity could affect your insurance costs, and extensive repairs may have been required, which could affect the home’s value.

Several factors affect the price differences between custom builds and display homes. The length of time the display home was in use and its use could affect its price while adding optional upgrades to a custom build could increase its cost. The lot size and location may also affect the cost of the property.