Thinking about building your next home or buying an existing one in Preston? In a small, rural market like Fillmore County, the tradeoffs look a little different than they do in a big metro. You want the right mix of value, timeline, and long-term fit without surprises. In this guide, you’ll learn how new construction and existing homes compare in Preston, what to watch for with lots and utilities, how financing and appraisals work, and a simple checklist to make a confident decision. Let’s dive in.
Preston market snapshot
Preston is the county seat of Fillmore County with a small-town profile and a population of about 1,300 to 1,400 as of the 2020 Census. The area includes older homes, farms, and rural lots, with fewer contemporary subdivisions than larger suburbs. That means new-build options can be limited and the pool of buyers for resale is smaller.
New subdivisions and large tract developments happen less often here. If you’re curious about upcoming lots or approvals, check with the City of Preston Planning and Zoning, the Fillmore County Recorder and Assessor, and local builders active in nearby towns like Spring Valley and Lanesboro. Because parts of Fillmore County sit in bluff country, topography, floodplain, and road access can affect site costs and feasibility. Always confirm utilities and site constraints early.
Cost comparison: new vs existing
The base price of a new home tells only part of the story. You’ll want to compare total cash required and ongoing costs for each path.
New construction cost components
- Land or lot price. In-town lots with municipal water and sewer are often easier and can be more predictable on cost. Rural lots that need a well and septic add expense and extra steps.
- Site work. Clearing, grading, foundation prep, driveways, erosion control, and tree removal are common. Sloped or irregular bluff lots can increase costs.
- Utilities. Plan for water and sewer connection fees or well and septic permits and installation. Power, internet, and phone hookups can be slower and more expensive in rural settings.
- Builder price and upgrades. Cabinets, flooring, lighting, and bath fixtures can move the budget quickly. Get a detailed inclusions list in writing.
- Soft costs. Design or architect fees, permits, surveys, engineering, and inspections all add up.
- Carry costs. If you need temporary housing during construction, include that plus taxes and insurance during the build.
- Landscaping and finishes. Driveways, patios, decks, and fencing are often line items, not afterthoughts.
Ongoing costs for new builds
- Energy efficiency. New homes are built to current energy codes and often have lower utility bills than older homes, but ask for insulation values, HVAC specs, or a projected energy rating.
- Maintenance. With new systems and a new roof, you’ll likely have fewer repairs in the first 5 to 10 years.
- Property taxes. A new build increases assessed value. Ask the Fillmore County Assessor when your assessment adjusts and how to estimate taxes.
Existing home considerations
- Purchase price vs. move-in cost. Existing homes include land and finished site work. Per-square-foot pricing can be lower than a comparable new home, but verify with local comps and contractor estimates.
- Immediate projects. You may need to plan for updates like roofing, mechanicals, or windows. Estimate 5- and 10-year capital projects so the comparison is fair.
- Character and landscaping. Existing homes offer mature yards and established neighborhood feel. You trade some customization for instant setting and faster occupancy.
Note: Construction and land costs change quickly. Skip national averages and rely on recent MLS sales, local builder bids, and subcontractor estimates for Preston.
Timeline and permitting in Preston
Typical build timelines
- Production or tract plans: about 4 to 9 months from permit to move-in, depending on finishes and permit speed.
- Semi-custom homes: usually 7 to 12 months or more.
- Custom homes or challenging sites: about 9 to 18 months or more, especially with engineering needs or supply delays.
Winter slows exterior work in southeast Minnesota, so build schedules often depend on season and crew availability.
Permits and inspections to expect
- City permits. Building, electrical, plumbing, and mechanical permits run through the City of Preston.
- Septic and well. Permits and soil testing go through Fillmore County Environmental or Health Services if you’re outside municipal utilities.
- Access and stormwater. Driveway or culvert permits, erosion control, and any watershed or bluff setback rules may apply.
- Inspections. Plan for foundation, framing, mechanical, and final inspections based on local schedules.
Warranties and builder protections
Many builders offer a common “1-2-10” warranty structure: one year for workmanship and defects, two years for mechanical systems, and ten years for structural components. Coverage varies by builder, so get the exact warranty in writing, including what is excluded. Third-party warranties are sometimes available. Verify licensing, references, and any complaints with Minnesota state agencies, and negotiate clear contract terms for schedules, change orders, and what is included versus an upgrade.
Financing and appraisal realities
Loan options to consider
- Construction-only loan. Short-term financing that you refinance or convert to a permanent mortgage later.
- Construction-to-permanent loan. A single-close structure that simplifies closing, though terms and down payments vary.
- Finished homes with incentives. Some builders offer closing cost help or rate buydowns if they have inventory.
Construction loans often require larger down payments and higher closing costs. During the build, you may make interest-only payments.
Appraisals in small markets
Appraisers rely on comparable sales. In Preston, there may be fewer recent new-build comps, which can lead to conservative valuations. Be ready to support value with local sales and builder pricing history. If you plan high-end custom finishes, confirm that the local market will recognize the value.
Rate and cost risk over time
A longer build timeline exposes you to interest rate changes and possible cost increases. Include a contingency reserve and discuss interest reserves or payments with your lender so there are no surprises.
Resale outlook in a small market
Preston and nearby towns typically have a smaller buyer pool than metro areas. That can mean longer time to sell and more price sensitivity. Location, lot quality, and practical floor plans carry outsized weight.
- New construction pros. Lower near-term maintenance, modern systems, energy efficiency, and warranty appeal to many buyers.
- New construction cons. A premium price may narrow the buyer pool and create appraisal gaps if similar comps are limited.
- Existing home pros. Often a lower initial outlay with proven comparables and established neighborhood context.
- Existing home cons. You may need immediate updates, which add to your total cost of ownership.
If you plan to stay 10 years or longer, the premium for new construction can be offset by lower maintenance and modern systems. If your time horizon is short, resale risk and the size of the buyer pool deserve extra attention.
Utilities, lots, and site feasibility
Before you fall in love with a floor plan, make sure the lot works. In Fillmore County, details like municipal water and sewer versus well and septic affect both timeline and budget. Bluff setbacks, wetlands, steep slopes, floodplain, and seasonal access can all change site work and engineering needs.
For rural lots, ask about soil tests for septic, well depths in the area, and realistic timelines for permits. For in-town lots, confirm connection fees and any special assessments. A quick feasibility check can save months and thousands of dollars.
Decision checklist for Preston buyers
Use this simple checklist to decide between building new and buying an existing home.
- Timeline. How fast do you need to move? Existing homes usually allow faster occupancy.
- Customization. Do you want to choose layout and finishes? High desire for customization leans toward new construction.
- All-in budget. Include land, site work, utilities, soft costs, landscaping, and temporary housing if needed.
- Hold period. Planning to stay 10 years or more favors new construction. Shorter holds increase resale risk.
- Appraisal support. Will your price and finishes align with recent comps in Preston or nearby towns?
- Lot feasibility. Municipal utilities or well and septic? Any bluff setbacks, slope, wetlands, or floodplain concerns?
- Financing fit. Are you comfortable with construction loan terms, rate risk, and carry costs?
- Risk tolerance. Are you ready for change orders, supply delays, and inspection schedules?
Smart next steps
- Verify the lot. Confirm utilities, access, and site constraints with the City of Preston and Fillmore County Environmental or Health Services.
- Price with precision. Get at least two builder bids and a local general contractor estimate if you’re going custom.
- Dial in financing. Talk to local lenders about construction-to-permanent options and interest-only payments during the build.
- Protect the contract. Ask for a detailed inclusions list, clear change-order terms, a written schedule, and warranty documents.
- Reality-check resale. Review recent comparables from the local MLS for Preston and nearby towns to gauge buyer demand and pricing.
Work with a responsive local guide
Choosing between new construction and an existing home in Preston comes down to your timeline, budget, and comfort with the building process. With smaller inventories, rural utilities, and bluff-country sites, local due diligence matters. If you want practical, hands-on guidance, a detailed plan, and help coordinating with the city, county, lenders, and builders, connect with John Nelson. Schedule your free market consultation and move forward with confidence.
FAQs
What are the biggest cost drivers for building in Preston?
- Land price, site work on sloped or irregular lots, and rural utility needs like well and septic drive most cost differences beyond the builder’s base price.
How long does new construction usually take in Fillmore County?
- Expect about 4 to 9 months for production plans, 7 to 12 months for semi-custom, and 9 to 18 months or more for custom homes or complex sites.
Do I need different permits for rural lots versus in-town lots?
- Yes. In-town lots typically connect to city water and sewer, while rural lots require septic and well permits plus soil testing through Fillmore County.
How do appraisals work when there are few new-home comps?
- Appraisers use the best available local sales and may value conservatively in small markets, so be prepared with recent comps and builder pricing history.
Will a new build lower my utility bills compared to an older home?
- New homes are built to current energy codes and often perform better, but ask for insulation values, HVAC specs, or a projected energy rating for your plan.
What should I confirm in a builder’s warranty and contract?
- Look for clear coverage terms, a written schedule, defined change-order process, a detailed inclusions list, and the specific 1-2-10 warranty details in writing.
