Buying a newly built home can be a great option for homeowners looking to minimize maintenance issues, or who prefer common areas, like parks or clubhouses, to be maintained by a Home Owner’s Association within their new community. But, be sure you’re well informed on all the expenses involved in purchasing new construction. Though some things might be more expensive up front with new homes, you’ll be saving a bundle in the long run.
Here are five expenses you might not expect as a new home buyer:
In addition to the purchase price of your home, you'll have to pay a variety of fees to close your deal and obtain financing. These fees vary from state to state and can add up to hundreds or thousands of dollars. Examples include loan origination fees, document preparation fees and title insurance costs. There are benefits to purchasing your home through a new construction builder. They have connections with mortgage and title companies and often offer incentives for using one of their preferred business partners.
- Homeowner Association Fees
If you move into a planned community, co-op, or a condominium, you'll probably have to pay monthly homeowner association fees. These funds are used to maintain common areas, such as parks, greenways, trails, rec rooms, tennis courts and swimming pools. The fees help maintain the beauty and value of these communities for years to come. So you know that your investment will be safely stationed in a well maintained area. If you have young children, or lead an active lifestyle, these HOAs give you a major advantage in amenities and maintenance.
- Moving Expenses
If you can't move all of your furniture and belongings by yourself or with friends, you'll have to hire a moving company. You'll probably need to purchase moving and packing supplies as well; think, boxes, padding, tape, dollies, etc. If you're moving out of an apartment, you might be on the hook for cleaning fees and damage repairs.
During the buying and construction process of a new home, your builder will do the best they can to work with you and time your move so they align. If you’re concerned about your move in date, talk to your builder to ensure your timelines are in sync.
- Utility Deposits
Once you move into your new home, you'll start paying monthly bills for such utilities as water, electricity, natural gas and trash collection. Many utilities charge account setup fees, upfront deposits, or both to initiate service. These charges can add up to $100 or more.
Although utilities are an expense that every home owner has to deal with, keep in mind that your brand new home will have the latest in energy efficiency and save you money on utility bills for years to come.
- Home Maintenance Costs
Most newly built homes come with a builder's warranty that protects you from major repairs for at least a few years. But you'll still have to pay for any damage to your home and routine home maintenance. Chores can include lawn mowing, brush clearance, tree trimming, tree removal, chimney sweeping, snow removal, rain-gutter cleaning, pest control, and security patrol and alarm monitoring.
Smart buyers set aside savings for these and other unexpected costs before they purchase a home. Get informed, and stay knowledgeable about the new home buying process and how it will impact you.