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Surprise Costs Of Building A Brand New Home

surprise costs of building your new home above large fancy house on corner lot with landscapingBuilding a home is an exciting adventure.

Like buying a resale home, it is a major purchase that requires serious thought and analysis prior to pulling the trigger.

Some people might be surprised by some of the hidden costs of purchasing or building a brand new home.

My wife and I recently went through the home building process ourselves, so we thought we’d share what we learned both through our research and experience.

Here’s what you need to know.

The Starting At Price Isn’t What You’ll Pay

The first thing we learned when we considered building a new home is that the starting price you see on brochures is not what you’ll pay. You’d think there would be an option to get a house for exactly the starting price, but it’s pretty difficult to come across.

For instance, our builder only allowed a small subset of floor plans to be built on the non-premium lots. Of course, our floor plan wasn’t included.

There were two additional lots you could build any floor plan on, but they were in the worst location possible. In the end, we ended up paying five figures for a lot with a better location. It was a lot of money, but it was totally worth it.

Then comes the customization of your home. The base price comes with base grade everything. That includes carpet in almost the entire home and many finishes you wouldn’t want in your home.

Our builder had only one base level counter top choice, a dark green/brown granite that we hated. Instead, we had to pay a couple thousand dollars to upgrade our counters to something we could live with for as long as we live in our home.

Just to give you an idea, here are just some of the things we paid to upgrade. Some were reasonably priced while others were expensive. However, redoing them after the fact would have been even more expensive.

  • Cabinets,
  • Countertops,
  • Flooring, including laying tile in a pattern,
  • Tray ceilings,
  • Expanded shower,
  • Attic storage,
  • Adding a sliding glass door,
  • Appliances (and the fridge wasn’t included at all),
  • Electrical outlets, switches and extra lights,
  • Plumbing a sink in our laundry room and
  • Door hardware

Closing Costs Aren’t Included

Like buying a resale home, you’ll have to pay closing costs. Sadly, the builder wasn’t willing to pay for all of our closing costs like some sellers do.

So, we had to pay thousands of dollars in closing costs in addition to purchasing our home. Thankfully, we were able to negotiate a few discounted closing costs using our builder’s contractors, such as the survey.

Costs Keep Piling Up After Closing

If you think you’re done spending money after you close on your brand new home, you’re sorely mistaken.

Remember how I said we only paid for upgrades that were reasonably priced or difficult to change after we moved in? That means we saved some upgrades to do ourselves after we moved in. They weren’t always cheap.

In our case, I went ahead and replaced all of our sink faucets to a style we liked. I also changed out the lights in all of the bedrooms to ceiling fans, since we do live in Florida.

Our builder only used bright white CFL bulbs in homes, so we switched all of our lighting out to soft white LED lights as well.

To make things even more expensive, there are some things your new home won’t come with. For us, our home didn’t come with a refrigerator which is one of the more expensive appliances.

Additionally, almost no new home comes with blinds or window coverings. Thankfully, we don’t have a house right behind us so we only had to add window coverings to a few rooms before we moved in.

Depending on where you live, some homes don’t even come with landscaping or grass. In our case, our home was landscaped, but we’ll have to add both a fence and gutters to our home in the coming months.

After you close, you’re going to have to get the utilities transferred to your name. Our builder gave us five days to do so.

You’ll likely have to pay each utility an activation fee and some will require deposits or charge installation fees. We had to turn on our water, sprinkler water, electricity, natural gas, cable and internet.

These costs will easily add thousands of dollars to the cost of moving into a brand new home.

Making Your Home Your Own

After we moved in and unpacked most of our belongings, we realized some of our stuff wouldn’t look right in our new home. Thankfully, all of our furniture fits where we wanted it to go. 

If it didn’t we’d have to find one of the best places to buy furniture without financing. After all, we don’t want to go into debt, even interest free debt, to buy furniture.

That said, we still have many decorations and other items that will need to be changed out.

Additionally, we moved into a bigger home. That means we currently have some rooms that aren’t fully furnished how we’d like them. Those furnishings will cost us hundreds, if not thousands of dollars.

We’re not in a rush, though, so we have time to find good deals as well as find pieces we really want.

As you can tell, building or buying a brand new home comes with some extra costs that may not come with a resale home. It usually comes with all of the same costs as a resale home, too.

What is important to realize is it takes a significant amount of research to figure out how much your new home will cost you in total once everything is said and done.

Make sure you spend that time before you sign the contract to build your new home to make sure you can really afford the journey you’re about to embark on.

We love living in our newly built home. I’m not the type of person that worries if someone lived in a home before I did or not.

What I do love is the fact that all of the major pieces of our home, such as the floor plan, flooring, wall colors and more permanent aspects are all how we want them.

I am willing to do the minor projects I mentioned above, but there are no major home renovations in our future. To me, that’s worth the price of building a brand new home.

Are you considering building a new home? What costs surprised you? Have you built a new home in the past? Share your experiences below so others can avoid forgetting about any major costs I may have missed.


Monday 11th of May 2020

We are in the process of building. And to agree with another post. You are very limited on time with changes. Especially structural we wanted to change from a shower tub set up to a shower only. They haven’t even started building yet but the permit to build is already in process so we cannot make the change. Something to think about

Lance Cothern, CPA

Tuesday 12th of May 2020

Build a house is one of those things you don't do often enough to learn all of the gotchas in time. Sorry to hear you couldn't make the change.


Sunday 19th of February 2017

You definitely hit the nail on the head. We had almost the same experience as you. We built in a builder's development. Ran into the same situation with premium lots costing more and being restricted by lot size on which models you could build. We choose to go with spending the extra money on structural things (i.e. adding an extra 2' on the length of the family room). We had to pay extra to have electrical wiring for ceiling fixtures. Also would have had to pay extra to have the rooms painted anything other than "builders" white (as we call it). It has been almost 15 years so I don't remember everything but it was a lot, as you shared. Oh and don't forget to mention the HOA monthly fee if your development has a Homeowners Association!

Lance Cothern

Sunday 19th of February 2017

Yup, we have HOA fees, too. Luckily our builder sounds like they included more stuff standard. We got to pick one color for the whole house and it didn't have to be white, it just couldn't be a dark color.


Friday 17th of February 2017

Boy, we had a similar experience with our first home purchase. These builders sure do like to tack-on extras don't they! If we're honest, every larger purchase seems to be like this though. Show you the bling but get you hooked on the base model pricing.

Lance Cothern

Friday 17th of February 2017

So true! That's why research is sadly necessary with any large purchase these days.

Money Beagle

Thursday 16th of February 2017

I know someone who used one of those large homebuilders and they were limited in the number of changes that they were allowed to make, even if they were willing to pay for them. Basically the builder wanted the homes done within so much time, and had the crews lined up just so in order to make them efficient to where everything fell in line. Too many customizations would be more money in their pocket, but was offset by the potential workflow disruption, so they had to pick and choose the most important upgrades that they wanted.

Lance Cothern

Thursday 16th of February 2017

That makes a lot of sense, but thankfully our builder is big into letting you choose options. While we couldn't choose anything under the sun, they at least had a somewhat decent selection of things to choose from for all the major options such as flooring, appliance, counters, cabinets, etc. The easy stuff to change was cheaper to do myself like light fixtures and plumbing fixtures.


Thursday 16th of February 2017

Did you go with one of the large homebuilders who do entire neighborhoods? We went with an individual contractor who operates a little differently. He does spec houses but his main focus is custom homes. He does have a portfolio of floor plans you can choose from but he also has a draftsperson who can draw your custom plan. We had a floor plan we'd found nearly 15 years earlier and took it to her, told her what changes we wanted made. She incorporated those changes and drew up the final plans. We met with the builder and he gave us his list of suppliers who gave him his builder's discount so we went around to them and selected what ever faucets, lighting, door hardware, cabinets etc. we wanted, then took those bids back to the builder. He incorporated those into the bid so there was no up-charge for the higher grade materials......just what the vendors charged.

You are right about extra costs after completion. We had t pay a fee to the new water/electric department because we were in a different town. However, the same natural gas company serviced that town as well so no new deposit there. We also bought new furniture both to fill extra rooms and to better match the décor in the new house. But none of the old stuff got tossed. We simply moved it to the finished basement if it was replaced with new upstairs. I hope we don't choose to move again, but I wouldn't hesitate to build again. But perhaps we'll then be at a point where we choose an over 55 or assisted living community.

Lance Cothern

Thursday 16th of February 2017

We did go with a large builder that does neighborhoods. I'd say we got close enough to the perfect home without paying the higher price of going with a custom home builder. If we ever do build again (we think this will hopefully be our long term home), we would probably go with a custom builder like you did.

Unfortunately, there are no basements down here in this part of Florida. So it's sell the old stuff or find a place for it :)