If you’re buying a new home for the first time, you’re probably most excited to get to the fun stuff of personalizing your home. Before you jump into the design center and start studying your kitchen counter options, it’s good to understand how the process works.
For many buyers who have not purchased a newly built home before, determining which features are standard and which features are optional can be a little confusing. Model homes often include upgrades and additions that cost extra money, so as you tour homes be sure you ask the sales professional about included features.
Match Your Floorplan with Your Lot and Your Budget
By the time you’re ready to make a final decision and have narrowed your choice to a specific community and builder, you should have a solid understanding of your budget including the cash you need for a down payment and closing costs and the amount you plan to finance with a mortgage.
As you visit model homes and study floorplans, you’ve probably identified the style of home you prefer and the layout, such as one with an open floorplan with a central kitchen or one with the kitchen at the back or front of the house.
At the same time, you should look at the site plan and discuss which lots are available and which you might prefer. You should ask about future development plans so you know whether a swimming pool, park or child care center will be located nearby. Some buyers would love to have those amenities next door, while others may want to live a little farther away from potential noise. Consider your entrance and exit from the community, too, particularly if it’s a large development. If you opt to be far from the main road, that could add a little to your commute time on busy mornings, but it may also be a more peaceful location.
It’s best to narrow down your choices to one or two floorplans and consult the sales professional about whether these particular models are available on the lot you want. Not every floorplan can be built on every lot. In some cases, there are issues with the size or configuration of the lot, so perhaps there won’t be space for a three-car garage or a sunroom. In addition, builders often commit to diversifying the look of a neighborhood with a variety of exterior styles so you may not be able to build the model you want if the adjacent lots are already under contract to have the same model built.
In some cases, lot premiums are charged for the most desirable lots, so you’ll need to decide if you want to spend the money to get your preferred view. A sales professional can help you match the floorplan you want with your lot preferences and your budget.
Make Sure the Options You Want Fit Your Floorplan
Besides making sure your preferred floorplan can be built on your preferred lot, you also need to mesh your options with your floorplan before you make a final commitment. While interior choices can be made later, any structural options need to be identified when you choose your floorplan and lot.
For example, if you want a side sunroom rather than a rear sunroom or you want to add a second entrance near the garage, you’ll need to make sure these features can be added to your chosen floorplan and that there’s space on your lot for the new configuration. The sales professional on site can help you make this determination and look at the plans for adjacent sites to make sure your choices are possible.
Some buyers like to purchase a house with the intention of adding a deck or screened porch later or changing the landscaping. If that’s your plan, it’s best to discuss it with the sales professional to be certain that your future plans can also be accomplished.
Budgeting for Options
When you’re ready to commit to your floorplan and lot, you’ll also need to finalize your choices for optional features. Keep in mind that options add to the total cost of your property. You can finance the options into your mortgage and you can even estimate exactly how much particular choices will add to your monthly payment. For instance, if you’ve been preapproved for a loan at $700,000 and the floorplan and lot you’ve chosen total $615,000, you have as much as $85,000 to spend on options. If you’re financing your home with a 30-year fixed rate loan at 4%, each $10,000 you spend on options will add about $50 to your monthly payment.
You can also pay cash for some options if you want to spend more than your mortgage limit on features. In rare cases, builders may ask you to pay for cash for options if you are spending far above the norm for that community. A builder won’t want to get stuck with a house they cannot sell if for some reason the contract falls through before closing.
Some builders offer nearly unlimited personalization, but it’s also common to have options such as “level one” and “level two” upgrades on things like your kitchen and bathroom counters, your cabinets and your floors.
Unless you have an unlimited budget, you’ll need to carefully decide which upgrades you want now and which can wait. Sales professionals and design center consultants can help you make individualized choices, but in general, it makes the most sense to spend money on things that would be difficult to add later. Structural choices such as a full bathroom on the main level instead of a powder room, a sunroom addition or a fireplace are all things that could be costly to add in the future. You may also want to opt for things like a rough-in for a bathroom on the lower level so you can finish the basement more easily later. Also consider upgrading your flooring, since replacing all of it at once can be an expensive proposition compared to replacing just your kitchen counters or window treatments.
Fortunately, the design experts and sales professionals who work with your builder will be able to provide advice to help you build the home of your dreams and still stay on solid financial ground.