The Hidden Costs of Buying a Newly Constructed or Model Home

Everyone loves buying something new. Whether it's new clothes, a new car, or even a new toy for the outdoors, the idea of owning something brand new gives a person a great deal of satisfaction.

When it comes to buying a home, many people also prefer a newly constructed or a model home as opposed to an existing home. In building a new home, a home owner can choose the type of appliances he wants, the paint color of the house, the floor coverings, light fixtures and more. In addition to all these choices, a new home also comes with the underlying assurance that the new owner isn't buying someone's else's problems.

However, there is a down side to buying a new home versus an existing home that many new homeowners never even think of. Brand new homes often come without certain basics that most of us don't even realize until after we've moved in. These basics can add to the cost of purchasing a new home.

Window coverings

Existing homes come with draperies, louvered shades or other types of window coverings. Brand new homes come with plain windows and no hardware. My 2800 square foot home cost nearly $20,000 to outfit with new draperies, mini blinds, curtains and hardware.

Landscaping

Most builders included sod, a few shrubs, one small ornamental tree, and an underground sprinkler system in the price of a new home. What's not generally included are all those other landscape features typically present in an older home, such as shade trees, bushes, and flower beds. A basic landscaping package can start at about $2000 with decent sized shade trees running an additional $200-$500 each.

If you are moving from an apartment or another rental, you'll probably need to budget for a lawnmower, weed whacker, hoses, fertilizer spreader, and other other yard tools for a total cost of around $1000-1500.

Top soil

In some communities, developers scrape the topsoil and sell it before turning Gramp's farmland into a subdivision. Many new homes have only a few inches of top soil separating their lawn from the hard packed clay or caliche beneath. Lawns in new subdivisions can be costly to maintain and often can't be dealt with organically, requiring regular applications of Weed and Feed.

One of my friends adds nearly $1000 a year in peat moss and composted manure to her flower beds plus spends an additional $500 for an annual lawn care treatment program. Without these additives, both her lawn and bedding plants look stunted and weak.

Outdoor structures

There's a number of things that are found in a back yard of an existing home that most of us take for granted. When building a new home, many of these things aren't included and have to be added at a later date by the new owner. These often include decks, fences, pergolas or awnings, garden or potting sheds, hot tubs, swimming pools, playground equipment, walkways, trash cans, clothes lines, trellises, pavers or pumps for those who can irrigate. A wooden fence runs on average $17 per linear foot, and a pergola can cost anywhere from $1000-3000. A decent sized garden or tool shed can be purchased between $500-$1000.

Miscellaneous interior hardware

While most builders do include basic hardware, there are usually a few things the owner must add at a later date. This may include towel bars and racks, pantry shelves, closet storage systems, closet organizers, vent shields, coat hooks, fireplace tools, CO2 alarms, cable hookups, extra phone jacks, and shower curtain rods.

Refrigerators, washers, dryers, air conditioners, and water softeners

High end builders typically include a water softener and air conditioner in their homes, whereas entry level builders often do not. In areas of intense summer heat, an AC unit is a must. Expect to pay between $2000-$5000 for an air conditioner. For families moving out of a rental into their first home, they might not have a refrigerator, washer or dryer. These three appliances are almost never included in a model home and can run between $2200 - $7000 in cost.

Miscellaneous exterior hardware

There's all sorts of basic exterior hardware and equipment that is often not included in the price tag of a newly built home. This may include readable house numbers, mailboxes (unless in a subdivision), hose hangers, flag brackets, plant hooks, exterior phone jacks, exterior grill hook ups, and garage shelving . Again, these are small ticket items but can add to the price of buying a new home.

New furniture

This cost often gets overlooked, but typically buying a new house means buying some new furniture to fill up those empty rooms. If you can't use certain rooms for lack of furniture, you might have been better off buying a smaller home.

These are just some of the unexpected costs a buyer can encounter when purchasing a new model home or having a new home custom built. Some of these features may be bundled up with the new mortgage, such as pergolas, fences, and possibly the refrigerator. Many of these items however, are out of pocket expenses that a buyer will have to budget for unless he doesn't mind sheets on the window and an unsecured yard for the next several years.

Before purchasing a model home or having a new home custom built for you, it pays to write a list of the items that are immediate needs for your home and setting aside a fixed amount to cover those costs. When it comes to buying a new model home, it's better to scale back slightly to cover those unexpected costs, rather than overextending your budget and not having the money to purchase these essential items.