Now it’s time to step back and consider some of the hidden costs that could derail your good planning if you’re not prepared for them.
1. Permits and Fees
Building permit applications and fees are required for new home construction, and the costs can add up. While no one likes paying fees, these permits ensure that the building code is being met and that you are protected from unsafe construction.
Check with your builder to be sure that these charges are included in your quote before you sign the contract.
2. Site Preparation
You’re dreaming of moving day, but before construction can even begin, your building lot will have to be cleared and graded, with special attention paid to site drainage. If your home has a basement, excavation will be needed. And of course, power and water lines will have to be laid and connected to your home. In addition, there is always the risk that your builder will encounter large rocks or ledge when they start digging. Because it's impossible to know what's beneath the soil, typically the cost to remove these objects falls to the home owner. Before the heavy equipment starts rolling, be clear on who is responsible for all of these known and unknown costs.
Many new builds include front yard landscaping (probably sod, but not much else), and even less landscaping in the backyard. Talk with your builder about the specifics of their landscaping policy. Are fences included? Decks? Pathways? Shrubbery and trees? The driveway? If not, be sure to set aside enough money so that you don’t end up with a dream home on a nightmare site.
You think you’ve thought of everything, but in the middle of the build you decide that the living room needs more pot lights or that you really have to have a double sink in the master bath.
Keep in mind that changes will mean extra labor and material costs, and may slow down other parts of the project. That’s not to say that you should never deviate from the original plan, especially if it means getting an element that really matters to you, but be prepared for delays in the project and for additional costs.
With a factory-built home, these types of extras are all decided upon before the construction process begins. The benefit of this is that you will have a guaranteed price for your home. If avoiding unwanted costs and surprises is important to you, you may want to seriously consider a factory built, modular home.
Customizing your home comes at a price. Little things like upgraded cabinet hardware, or big things like upgraded counter tops, can be a shock to your pocket book.
Your builder may offer a basic finish package, which may or may not include appliances. If appliances are included, you may want to go with a swankier model, for more money, of course. Also, unlike when you buy a home from another owner, you’ll be responsible for all window treatments. Depending on the size, shape, and number of windows in your new home, this can add up to a substantial additional cost.
Yes, you already have furniture, but if you’re moving into a larger place, you’re likely going to need more. And even if you’re downsizing, you’re probably going to want to choose some pieces that add the perfect touch to the home you’ve worked so hard to create.
Building a brand new home can be an exciting and satisfying experience, but there’s no doubt that it is a major undertaking. Without proper thought and planning, there’s the potential for costs to spiral out of control. Working with an experienced builder will mitigate the chance that you’ll be waylaid by unexpected costs. You might also consider asking the builder to put you in touch with one or two previous customers who maybe able to alert you to things you hadn’t yet considered.
And remember, no matter how much you research and plan, there’s always the chance that a hidden cost will blindside you. Set a little extra money aside with this in mind, and with any luck, you won’t need it.
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