The Hidden Costs of Building a New Home

Guest Blogger #781, Entry #1847, November 20, 2012

So, after about two months of taking out your Saturdays and/or Sundays to look at the homes within your city that are for sale, you and your spouse have come to the conclusion that you would actually rather build your own dream home. Congratulations! There is definitely nothing like living in a space that has everything you want (and where you want it) within it.

Of course, it probably goes without saying that a project of that magnitude requires a lot of focus, patience…oh, and money.

Don’t forget about the hidden costs in building a new home

Actually, that’s why we’re here. To help to prepare you for your great undertaking by providing you with a list of some of the hidden costs that sometimes unexpectedly come up when planning to build a new home so that you will be well prepared during the process:

Finance costs.

Most of us don’t know people who can pay outright cash to have their house built. Therefore, there is a loan that has to be taken out. Whenever you go through a lender, there are going to be things like finance costs and mortgage fees. Make sure to inquire about the specifics on them.

Insurance and warranties.

Nobody really likes to pay for insurance, but we all accept that it’s a “necessary evil” to protect us from things that sometimes happen that are well beyond our control. Therefore, you definitely need to take out a self-build insurance policy and to make sure there are warranties purchased on all of the supplies and items used for the home.

Labor costs.

Sometimes materials arrive on time and the weather cooperates with the contractor’s schedule. Sometimes, it doesn’t. When there are delays in receiving supplies that are needed to work or there are weather conditions that make it impossible to do certain projects, that can cause labor fees to incur. You definitely want to ask the contractor about their policies on these kinds of matters before signing on any dotted line (even when it comes to things like the use of cranes: overheadcranetec.com).

Before you build, consider the hidden costs

A change of plans.

You may have started out with you wanting your kitchen to look one way, but in the midst of building, you might have discovered that you now want something totally different. When that happens, the designer and contractor have to totally reroute their plans as well. Time is money and so if/when you get to a point that you want/need to make some adjustments, be prepared to pay some additional monies for that.

Waste of materials.

When you do change your plans, what happens to all of the materials that you already used up? A lot of it ends up getting thrown away or recycled. Plus, you end up needing to purchase some new items. That’s definitely something that you need to plan for.

Theft.

No one really wants to think about the fact that their property or supplies could be stolen or vandalized, but it does happen from time to time. This is just one more reason why it’s a good idea to have an insurance policy in place. However, be prepared to still have to pay out of pocket for some of the smaller things (such as tools) that your insurance may not cover on your claim.

Connection fees.

Once your house is complete, it’s still not “move-in ready” until the utilities are on and you oftentimes have to put down a deposit on things like electricity, water and cable hookups. Thankfully, these are some of the less expensive items, but it’s still something to put on your to-do list. After all, a house is not complete without lights to turn on and running water, right. Exactly.

For more moving tips on Stagetecture, click here.