Moving into a brand new home is exciting and is often the result of plenty of research and well-thought-out decisions. This is your dream home, customized to perfection. Everything from construction materials to appliances will be crisp, new and energy efficient.
There are plenty of advantages to building your new home, but today we’re making sure you’re well-informed when it comes to the many building costs that seemingly come out of nowhere. They add up quickly, so make sure you’re familiar with some of the most common building costs.
Some Building Costs You Don’t See Coming: Defects
When it comes to building costs, virtually any issue you might find in an older home can also appear in your brand-new home—and require some very extensive repairs. For instance:
- Deficient waterproofing or grading can lead to flooding and leaks
- Toilets can overflow
- Wooden floors can warp
- Electrical wiring can be installed incorrectly
- Siding can fall off
To protect yourself, research the builder’s customer reviews and reputation. It’s also very important to invest in an inspection by a home inspector who’s not affiliated with the builder.
Be sure to have one inspection performed after the home has been constructed, but before the finishes have been completed. Problems are easier to identify at this point in the process. Then have a separate inspection performed just before your loan closes and you take possession.
Commit yourself to fully understanding what kind of warranty comes with your new home. Your homeowners insurance policy may not cover all the latent defects that can arise.
And of course, report any problems to the builder immediately after you notice them.
Sometimes Necessities Are Missing
Sure, your brand new home is customized to your liking, but it still often won’t come with everything you need. Things like fences, decks, window coverings, appliances, and landscaping aren’t necessarily included.
It’s easy to think you’ll simply add these building costs in without much inconvenience, but each of these missing elements can be a major added expense. Before you sign a contract, you’ll want to do some homework. Note what’s missing and do some research to figure out how much these items will realistically cost, then factor these purchases into your budget.
If you know you can’t afford to pay for these essentials yourself, you still have some options. Could you get the builder to pay your closing costs? Or maybe it’s simply time to look for a new home that comes with all the essentials? What about buying a property that’s almost brand new, but still has those missing must-haves?
Those Upgrades Add Up
If you tour a model, you’re likely looking at most (if not all) of the upgrades your builder offers. Those glossy hardwood floors, solid granite countertops, bay windows and super-sized bathrooms are often not part of the basic model.
It’s incredibly common to see what’s possible and get lured into spending far more than the base price that was so appealing at first. The price difference can be tens of thousands of dollars, so make sure you know what you’re looking at before you tour a home and fall in love with something you can’t afford.
While you’re choosing the upgrades you love, keep the future resale value in mind, too. Go with upgrades that will appeal to the largest number of future buyers.
The Often-Overlooked Permit Costs
Ask your builder if the cost of the permits you’ll need are included in the price quote you received for the project, and make sure you request a list of every permit you’ll need. (Permits and required inspections will vary according to the region and your project’s scope, but typically include approvals for excavation, sewer or septic, blueprints, surveys, water testing or well drilling, utilities and adherence to zoning regulations.)
If any permits aren’t covered, include those costs in your price negotiations before signing a contract.
Excavation Costs and More
While builders take responsibility for construction of your home, they’re normally not responsible for preparing the land.
Many home builders often overlook the costs of excavation, drainage, soil samples that must be provided to your city or county, etc. Ask your excavation company for a list of what is included. For items that aren’t included in your quote, get a detailed estimate of what the cost will be, and ideally get a cap on any overages.
Don’t Forget Utilities
If your new home is being constructed in an established neighborhood, the lines for electric, gas, cable and sewer will probably already be within reach and can be conveniently brought to your property.
However, you’ll still be charged by each utility company for the cost of extending the lines to your property and for hooking them up. You will also be billed for permits and final approval from county inspectors. While it’s never safe to assume your builder will pay for these things, they just might.
Your brand new home can sometimes come with many more uncertainties than you imagined, especially when it comes to hidden building costs. But if you prepare for the experience, you’ll know how to watch out for your best interests and spend your money in a way that makes sense for you. Always ask questions, and be prepared to pay out of pocket for hidden building costs that might come along.