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What To Know About the Additional Costs of Buying a New Construction Home

May 19, 2023
Mosaic Plan 5 Exterior at Barefoot Lakes by Brookfield Residential in Firestone CO

Buying a new home can be an exciting but expensive experience. It's important to be aware of the potential additional costs that may arise. By planning and budgeting for these expenses, you can ensure that your new home is a wise investment for you and your family.

Here are some unexpected costs you may face when purchasing a new-construction home.

14 Costs to Know About When Purchasing a New Home

1. Appliances

While some new homes come with basic appliances like a stove and dishwasher, others do not. It's important to check what appliances are included and to factor in the cost of purchasing and installing any missing ones.

2. Closing Costs

New construction home closing costs are fees associated with the purchase of a home and can include things like loan origination fees, title insurance, appraisal fees, and other expenses. These costs can add up quickly and typically range from 3-6% of the home’s purchase price, according to Investopedia

3. Deposit

Builders often require a deposit, which can range from 5-20% of the home's value, depending on the builder's policies and the cost of the home. This deposit helps cover building materials, contractor labor, the land cost, and permits.

4. Furniture and Decor

You may intend to reuse your existing furniture, but many people change their minds when they move into a new home. The cost of purchasing new furniture and décor to fit the space can be significant, especially if you're moving into a larger home. Budget for these purchases and consider upcycling some of your existing furniture to control costs.

5. HOA Fees

Many new construction homes are part of a homeowner association (HOA), which can come with monthly or annual fees. These can be up to several hundred dollars per month, depending on the benefits and services provided by the association. These fees can cover things like the maintenance of common areas, community amenities, and other shared expenses.

6. Homeowner's Insurance

The lender typically requires this, and can vary depending on the home's location, value, and features. The expenses of damage from fire or theft are usually covered, and additional coverage for floods or other damage may be added. This cost is usually wrapped up into the cost of the mortgage.

7. Home Warranty

New homes may come with a warranty from the builder, but this may not cover everything. Consider purchasing a home warranty to protect against unexpected repairs or maintenance costs not covered by home insurance.

8. Landscaping and Outdoor Maintenance

Many new construction homes come with a basic landscape, which may require additional time and money to customize. You'll need to budget for ongoing outdoor maintenance such as mowing the lawn, trimming trees and bushes, and maintaining the landscaping.

9. Legal Fees

There are legal fees associated with getting a home title. These title company fees can vary. Although this is a typical cost associated with purchasing a home, it can be forgotten when budgeting the overall price.

10. Moving Expenses

Moving can be expensive, especially if you're moving a long distance. You'll need to budget for moving expenses, such as renting a truck if you’re doing it yourself or hiring a moving company and buying insurance if you’re leaving it to the professionals. You may also need to be prepared to repair or replace any items that have been damaged, broken, or lost.

11. Property Taxes

As a new homeowner, you'll be responsible for paying property taxes on your new home. Your property taxes will depend on the value of the home and the tax rate in your area. You can expect to pay between 0.2% and 2.5% of the home's value in property taxes annually. This expense is also typically wrapped up in the mortgage payment. Be aware that you’ll still be responsible for property taxes when you finish paying the mortgage.

12. Repairs and Maintenance

Eventually new homes will require repairs and maintenance. While a new home should come with a warranty, you'll still be responsible for some of these expenses. Over time, these costs can add up, so it's important to budget for them accordingly.

13. Upgrades and Customization

Builders will often offer upgrades and customization options for finishes, fixtures, and appliances. While these additions can make your new home feel more personalized, they can also add significant costs to your overall purchase price. It's important to factor in these additional expenses before signing a contract.

14. Utilities

If you’re moving from an apartment, you’ll be confronted with the new responsibility of paying for water, sewage, and garbage. While most tenants are familiar with paying electricity and gas, these additional utility costs are typically paid for by landlords and should be accounted for when buying a home. The size and energy efficiency of the home will impact these costs, so be sure to ask your builder if they offer energy saving appliances and programs.

No Hidden Costs with Brookfield Residential

While these unexpected expenses can add up, you’ll be better off buying from a home builder that is upfront about costs.

Brookfield Residential homes never carry unexpected costs. With complete pricing transparency, we let you know what to expect so you can look forward to a home and community that will add value and enrich your quality of life. We offer a variety of home designs and features to meet the needs of varying lifestyles and budgets. Explore where we build to learn more.

Learn More About the Homebuying Process

The decision to buy a new construction home is a major one. It’s important to be prepared for the road ahead. The Brookfield Residential blog offers a number of resources that can make the process easier. You can learn about the homebuying process, real estate terms you should know, and more.

When you’re ready, contact us to learn more about what our communities have to offer. We’ll be expecting you!