Move-in readiness, low maintenance costs, energy efficiency, and the freedom to customize your space — there are numerous benefits of buying a newly built home. But amidst the excitement, there can be hidden costs that may not show up in the brochure.
Here’s a short guide explaining some costs you should watch out for when buying a new construction home. And of course, we’ll offer some tips to keep your finances intact so you don’t end up house poor!
Upgrade Fees
When you reach out to a home builder and share your needs, they typically give you a “standard” package. This price only covers the structure. The base price is appealing, but it doesn’t cover the upgrades you might have seen in the model home you toured.
You might need to pay extra for landscaping, a deck, a fence, a functional porch, or even interior design features. Countertops are the most common example. The standard package for a new home might include laminate, so upgrading to a more durable surface like granite can cost thousands more.
Moreover, bathroom upgrades, such as a glass shower enclosure, a deep soaking tub, or an advanced shower system, might cost extra.
So what can you do? When looking for new construction homes in Phoenix AZ, trust reliable builders only. They won’t hesitate to give you a detailed list of what’s truly included in the standard package. Builders like Dream Finders Homes will clarify what each upgrade will cost, preventing any financial surprises in the long run.
Homeowners Association (HOA) Dues
Many new and developing communities are part of a homeowners association, which is why you might be required to pay the HOA fees. These fees cover the maintenance of community areas like pools, gyms, and parks. In more upscale developments with golf courses and clubhouses, the HOA fees can touch thousands.
Before signing on, take a closer look at the HOA’s budget and operational guidelines. Ask how often the dues increase so you can plan accordingly.
Closing Costs
Many builders offer financial assistance and cover some portion of the purchasing cost to encourage buyers. But that doesn’t mean you won’t have to pay anything extra. For instance, standard closing expenses include:
Loan origination fees – a charge from the lender for processing your loan application.
Title search and title insurance – to ensure the property has a clean title free of liens or encumbrances.
Prepaid taxes – you might have to pay a few months’ worth of property taxes while closing.
Recording fees – for recording the purchase deed with the local government.
Here, too, reading the fine print can be super helpful.
Post-Purchase Costs
A lot of buyers overlook this. Yes, a newly built home is ready to move into, but you still need to incur some additional expenses to make it comfortable.
Some post-purchase expenses include:
- Window coverings, such as blinds and curtains
- Lighting fixtures, such as modern lamps or task lights
- Bathroom accessories
- Appliances
Create a small budget buffer for these finishing touches.
