An Overview of New Home Construction Costs

New home construction is a great option for people who would like to build a home to their exact specifications. New homes tend to be the most energy efficient, cheapest to maintain and safest of all construction. Unfortunately, though, it is very common to underestimate the time and cost of building a home. This can leave many people wishing they had chosen a simpler option. 

Land Surveying

The first cost that will hit your pocketbook is the cost to survey and purchase land for the home. The land must be reviewed to assure there are no problems with how it is graded and set up. If it is not yet graded, the builder will have to take on this project as well. The cost of renting machinery to grade land appropriately for building can be very high. 

Building Materials

The cost of every single thing that will go into your home needs to be included in the quote. This does not just mean lumber and concrete. Every counter top, light fixture and flooring material will add up to the total cost of the home. Upgrades, like hardwood instead of carpeting, will make the cost jump even higher. 

Multiple Loan Applications

Lenders do not make it easy to obtain the funds needed to build a new home. Instead, they will typically require multiple small loans along the way. For example, you may have to take one loan to buy the land, one loan to finance the construction and one loan for the actual mortgage once the home has been built. This means you will have to submit multiple applications, each costing time and money along the way. 

Plan Submissions

Your lender is not the only place you will need to be submitting forms. The county, city or neighborhood where you live will also have to approve the plans. These plans need to be drawn my an architect, which is expensive, then approved along the way. From time to time, inspectors will come to the location to assure the plans are being followed. Each of these inspections can cost money and time. Building a home is not a quick process. 

Safety Inspections

Once the home has been built, safety inspectors will have to come through and make a final analysis of the work completed. They will be looking particularly at electrical wiring, plumbing and other issues that are not easy fixes if something is wrong. Unfortunately, despite the best efforts of builders, there is often something that is not completely up to code. You can bet and inspector will find this. The builder will then have to redo the work, and you will be charged. Cost to redo any project is never included in the initial quote. 

Unforeseen Costs and Delays

While your home is being built you will need to live elsewhere. This means you will be paying your existing mortgage or rent while you are financing the new property. A delay of even a week in the home's expected completion time can leave you several thousand dollars over budget.

 

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