10 Extra Costs When You Buy a New Construction Home

When you purchase a new home, there are a lot of costs that you might not think about. Some of the common costs of home ownership, in addition to the mortgage payment (principal and interest) include property taxes, homeowners insurance, and utilities. However, these are costs that many people expect to pay eventually — even if they didn’t consider them when figuring what payment was affordable.

Photo via Wikimedia Commons

Other costs, though, can come as something of a surprise. When we bought our home (a new build house), a few years ago, we were so focused on the process of buying a home that we didn’t really take into account some of the costs that can come with a new house. Some of the costs that surprised us (even though they probably shouldn’t have) included:

Some Extra Costs that Might Surprise You

1. Landscaping

While we knew, on some level, that we would need to landscape, we didn’t realize how costly it would be. We wanted a fence, and a lawn, and space for a garden, and shrubbery. In the end, we employed some xeriscaping concepts to help reduce the total lawn area (although we still have lawn), and we did a lot of the work ourselves. We cut and put up the fence panels, and we planted most of our plants — after buying them on sale in the fall. My husband had help from his cousin in building garden boxes.

Still, we were surprised at the costs involved, from purchasing fencing materials to buying the wood for the garden boxes. We ended up doing the landscaping in stages, over the course of three years, in order to better afford the expense.

2. Window Treatments

As we moved our possessions into our new home, it occurred to us that we had nothing to cover the windows. Since we live in a subdivision, this really isn’t an acceptable state of affairs. So, even as we prepared for our first night, we needed to buy some window treatments. We wrote down the measurements for all our windows and headed to the store.

While you can usually hang blinds without buying more than the kit containing them, curtains are another matter. We had to buy curtain rods to go with the curtains. Since we had lived in rentals up to that point, we had always taken window treatments for granted. It didn’t even occur to us to think that we would need them. The same was true of shower curtains — and shower rods.

3. Major Appliances and Fixtures

If you buy a previously owned house, or are used to renting, you might expect your new house to come with light fixtures and all the major appliances like refrigerator, range, oven, dishwasher, washer, dryer, etc. Don’t make any assumptions! Make sure you ask the realtor or the developer what exactly is included and not included in the deal. It is never a nice surprise to move in and find out that you have to spend another $5k on appliances and fixtures.

4. Utilities

You might think that newer homes are more energy efficient, but you may not have considered that:

  • Larger house costs more to heat and cool.
  • New utility providers are more expensive than your previous providers.
  • Major appliances using gas vs. electricity causing a big change in utility costs.

For instance, we had moved to an apartment that uses electricity for everything once and we would never do it again because heating the home and making hot water during the winter time was ridiculously expensive.

5. HOA Fee / Condo Fee

Many first-time homeowners may not be aware that certain houses, especially those in gated communities, townhouses, and condos, come with an extra cost in the form of Home Owner Association (HOA) Fee or Condo Fee. This could range from several hundred dollars a year, or several hundred dollars a month! So be sure to ask about these fees before you jump in.

6. Property Tax

If the house is built on an empty lot, you might be surprised by the following year property tax as the city adjusts the value of the property (now with the brand new house sitting on the previously empty land). Depending on where you live and what was built over the land, your property tax bill could easily double the original amount.

7. Unexpected Repairs

It’s easy to feel like you can skip the home inspection and home warranty service when you buy a new house — after all, it is brand new and every thing should work right? No so fast. Sometimes people cut corners, or things simply do not have the benefit of extensive use, resulting in things breaking down.¬†Another unexpected problem with new construction is that the house may settle in a weird way resulting in cracks or strange bumps and dips.

Other Costs to Consider

1. Furniture

If you are moving into a larger place, you might want more furniture. In our case, our new home was slightly smaller than our rental, so we didn’t buy any new furniture when we moved in. Furniture can be an especial challenge if you have been living in a partially furnished rental. The first apartment we lived in after we married came with a kitchen table and chairs, as well as a TV stand (or an entertainment center). When we moved to our next rental, we realized that we needed a table, and possibly something to put the television on (but that could wait).

Before you move into your new home, consider what you have already, and what will be left behind. There is a chance that you will want to buy more furniture items if you aren’t going to have what you are used to.

2. Costs of Moving

Of course, when you are ready to move your stuff in, you have to pay for it. Some of the expenses that come with moving your things include:

  • Cost of packing materials (boxes, tape, etc.)
  • Cost of truck, whether you hire movers, use a pack-it-yourself, or rent a truck and drive it yourself
  • Storage for items that you can’t move in yet, or if you can’t get into your new house
  • Fees related to transferring utilities, or disconnecting or transferring phone and other services

There are some ways to reduce some of these costs, such as looking on Freecycle for boxes, or checking with local stores for discarded boxes. Many people even save their boxes from each move, ready to use them for next time.

3. Maintenance

Many people overlook the costs related to maintaining a home. When you live in an apartment where the common area is maintained for you and many repairs are covered by the rent, you might be surprised by how much tools, parts, and professional services cost.

As you prepare to move into a new home, consider some of the costs that can come with it. Homeowners insurance is likely to cost more than renters insurance, and your utility costs are likely to go up. Also, consider what your new living area will be lacking, and save up so that you can make the purchases that will truly make your house a home.

About the Author

By , on Feb 27, 2012
Miranda Marquit
Miranda is a professional personal finance journalist. She is a contributor for several personal finance web sites. Her work has been mentioned in and linked to from, USA Today, The Huffington Post, The San Francisco Chronicle, The New York Times, The Wall Street Journal, and other publications. She also has her own personal finance blog: Planting Money Seeds.

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Leave Your Comment (5 Comments)

  1. Giorgio Moroder says:

    Did a realtor write this article to discourage people from buying a re-sale home?


  2. Shawn says:

    This is a response to Wayne. Most new construction today isn’t anywhere near the durable quality of older homes. It would cost a great deal more to build new houses as they were some 20 years ago and more. Let’s face it, the general mind set of today’s society in a ‘WalMart’ mentality

    I can’t count how many ‘new’ homes I’ve worked on in repairs, some quite extensive from rot and mold due to production type slap em up construction. Make it look good, never mind the integrity or substance of what’s underneath. Believe it or not some of these homes are only a few years old.

    To Miranda,
    I’ve a similar post on my blog though not as extensive as this http://www.rockfordremodeling......rading-up/

    Funny when I first link to this page from my FaceBook, I thought it was 4, but alas I see there are many other good pints to Remodeling vs New Construction or even ‘Trading Up’

  3. Photon0312 says:

    Window treatments are a real pain; I’ve had friends spend upwards of $50 a window for even relatively simple window treatments. Multiply that times a dozen or more windows in a moderately sized house, and you’re talking hundreds – almost thousands – of dollars!

  4. Tyler S. says:

    We ran into a number of these issues when moving into a new apartment, too! There are always things you take for granted and don’t realized how much you relied on until you are caught without them!

  5. Wayne says:

    Since you are buying new, I wonder if these initial costs are offset at all with lower repair costs? I don’t know if it would be possible to figure out, but something tells me that buying a new construction probably also has some cost benefits.

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