Build New or Renovate? Custom Home vs Whole-Home Remodel

The Biggest Decision in Home Building

Every Bay Area homeowner who wants a significantly different home faces this question: do you start from scratch or transform what you have? Both paths lead to a home you love, but the journey, cost, and timeline are very different.

Quick Comparison

Factor	Custom Home	Whole-Home Remodel
Cost	$250-$500+/sqft	$150-$400/sqft
Timeline	12-24 months	6-12 months
Design Freedom	Complete	Limited by existing structure
Energy Efficiency	Current code (Title 24)	Varies by scope
Disruption	None (you don’t live there)	High (may need to move out)
Best for	Wrong layout, structural issues	Good bones, great location

Building a Custom Home

A custom home is designed and built specifically for you. Every room, every ceiling height, every window placement reflects your preferences and lifestyle. There are no compromises forced by an existing structure.

When building new makes sense:

• Your current home has a fundamentally wrong layout or poor structural condition
• You own a vacant lot or plan to demolish and rebuild
• You want energy efficiency, smart home systems, and modern building standards throughout
• The home you envision is dramatically different from what exists

What to expect:

• Total project cost for a 2,500 sqft home: $625,000-$1,250,000+ (construction only)
• Design phase: 3-6 months for architecture, engineering, and permitting
• Construction phase: 9-18 months depending on complexity
• You keep full control of every decision from foundation to finishes

Whole-Home Remodeling

A whole-home remodel transforms your existing home while preserving the fundamental structure. This can include new kitchens and bathrooms, reconfigured floor plans, updated electrical and plumbing, new finishes throughout, and even structural modifications like removing walls or adding dormers.

When remodeling makes sense:

• Your home has good bones (solid foundation, sound framing)
• You love your neighborhood and lot
• The layout mostly works but needs updating
• You want to preserve character or historical elements

What to expect:

• Total project cost for a 2,500 sqft home: $375,000-$1,000,000 depending on scope
• Design phase: 2-4 months
• Construction phase: 4-8 months
• You may need to relocate during major phases of construction

The 60-70% Rule

Here is the most practical decision framework: if your remodel estimate exceeds 60-70% of what a comparable new build would cost, building new usually makes more sense. You get better energy efficiency, modern systems, a warranty on everything, and zero hidden surprises behind old walls.

Example for a 2,500 sqft home:

• New build estimate: $900,000
• If the remodel exceeds $540,000-$630,000, consider building new
• At that budget level, a new home delivers more value per dollar

This rule has exceptions. Homes with historical significance, unique architectural character, or irreplaceable craftsmanship may be worth preserving regardless of cost.

Hidden Costs to Consider

Remodel Hidden Costs

• Discovery costs: Opening walls in older Bay Area homes often reveals outdated wiring, galvanized plumbing, asbestos, or inadequate framing. Budget 10-20% contingency.
• Temporary housing: 4-8 months of rent during major remodel phases ($3,000-$6,000/month in the Bay Area)
• Matching challenges: Blending new and old can require custom work that costs more than starting fresh

Custom Home Hidden Costs

• Demolition: $15,000-$40,000 if you are removing an existing structure
• Site work: Grading, utility connections, and soil preparation ($20,000-$80,000)
• Carrying costs: Mortgage payments on your current home plus construction financing

How Custom Home Helps You Decide

Custom Home builds both custom homes and handles whole-home remodels. Our two-phase process starts with design and planning, which means we can actually help you make this decision with real numbers.

In Phase 1, we evaluate your existing home (if remodeling) or your lot (if building new), create designs for your preferred approach, and deliver an itemized budget. Some clients start planning a remodel and realize that building new gives them more for their money. Others discover that a strategic remodel achieves everything they want at a fraction of the cost.

The Phase 1 investment gives you the information to make this decision with confidence rather than guesswork.

Ready to Explore Your Options?

Whether you are leaning toward building new or renovating, the first step is the same: a consultation to assess your property and discuss your vision.

Schedule a free consultation to start the conversation with Custom Home.