While that is true, what is somewhat surprising is the amount of money that buyers of new construction put into their new home almost immediately after moving in. Several years ago, we purchased a newly constructed home after several years in an older, resale property. We were excited about the prospects of owning a brand-new home, with everything shiny and freshly installed. We quickly realized that “all that glitters isn’t gold” and that our new home was going to require more attention and money than we had planned.
Buying a new home is great. Everything is bright, shiny, and new. One of the things we hear a lot from buyers of new homes is that new construction is popular because nothing needs to be replaced.
Our experience with new construction is not unlike many buyers of newly constructed houses. According to the National Association of Homebuilders, buyers of newly constructed homes spent an average of $11,930 on alterations and repairs in their first year of ownership. That’s more than double the amount spent on improvements in the first year after purchasing an existing home.
So Where Does the Money Go? Our Experience
While we knew, on some level, that we would need to landscape, we didn’t realize how costly it would be. Ultimately, we wanted a fence, a small patio and some additional plants. In the end, the fence became a “no-go”, but we did select to go with a smaller patio area and some additional plants.
Window Treatments (Curtains and Blinds)
As we prepped our bed for the 1st night in our new home, we realized that our owner’s suite sat right under a streetlight and faced directly onto a crossing street. Having oncoming traffic and being able to see into our bedroom was not cool! So, window treatments became a number one priority. My wife wasn’t satisfied with just any window treatments, nope, plantation shutters for every window in the house. Goodbye fence, and the big screen TV that I planned, and hello plantation shutters!
Appliances and Fixtures
While our home came with a brand-new gas stove, dishwasher, and microwave, our old refrigerator, washer, and dryer were included in the sale of our previous home. Blah blah blah blah
Note: 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 a refrigerator, range, oven, dishwasher, washer, dryer, etc. Don’t make any assumptions! Make sure you ask the Realtor or the builder sales representative what exactly is included and not included in the deal.
If you are moving to a larger place, you might want more furniture. Luckily for us, our new home was smaller than our previous home, so we didn’t plan on needing to purchase any new furniture. In fact, we sold a bunch of our furniture from our previous house, prior to the move.
After being in the house for a few weeks, some new pieces of furniture, but not my big screen TV moved further down the list, while a new sofa and chairs moved to the top of the list.
Note: 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.
Although the home is brand new, it doesn’t mean everything is upgraded, or everything is there. Some homes do not come with a deck or patio and some homes only include basic items like floors, lighting, cabinet accessories, etc. Another item that is often missing is ceiling fans and bedroom light fixtures.
For us, our new home came with a screen porch, but we wanted a patio area adjacent to the screen porch for our grill and outdoor patio furniture. After one of our cats ripped through the screens, extra heavy-duty screens became a much-needed upgrade.
Most new homes come in one basic color; e.g., “basic builder beige” or some form of base gray paint. For us, the common rooms stayed with the base gray, while the bedrooms all received a paint upgrade.
Average 1st Year Costs
Here’s the breakdown of the average first-year costs for each type of homebuyer, according to NAHB’s analysis of the U.S. Consumer Expenditure Survey.
For buyers of new homes
- Alterations and repairs: $11,930
- Furnishings: $5,122
- Appliances: $4,254
For buyers of existing homes
- Alterations and repairs: $5,761
- Furnishings: $2,665
- Appliances: $2,499
For owners who didn’t move
- Alterations and repairs: $2,966
- Furnishings: $904
- Appliances: $1,442
There are many benefits of buying new construction, but it’s important to read your contract carefully so you understand exactly what you’re getting. As you are walking around touring new home communities, remember that the upgraded model home is not the home that will be delivered to you at closing. Work with a REALTOR who is well versed in new home construction that can help guide you through the process.
Don’t make any assumptions about what you’ll be getting if you buy a new home. It can be more expensive and come with many more uncertainties than you bargained for.
However, if you prepare for the experience, you’ll know how to watch out for your best interests and spend your money wisely.