[imported_Shade]

You can purchase a house placement tool from the same vendors that sell houses I believe. From there, find a open lot and double click the tool, this will give you three options.
The first option is regular houses, it will give you the entire list and prices of the old school houses.
The second option is 2 story lots. These come in various sizes but can only be built up to 2 stories, plus a rooftop.
The third option is 3 story lots. These come in larger sizes than the 2 story ones and give you 3 floors plus a rooftop.

Once you place the empty lot you can select customize from the house sign menu. Here you will be given tools as if you were playing the Sims, where you can add walls, floors, roof pieces, doors, etc. When you finish with your design you can select to commit the changes to the house. This will charge you based on each item you have placed times however many floors you are using. This can add up quickly if you build a nice house but customizing is worth it in my opinion.

While you customize the house you are totally invisible to players and completely safe. Though you must be at full health and not have a combatant to begin.