There are no two ways about it. Building a new home is an expensive endeavour, probably one of the biggest financial investments of your entire life.
But is there a way to save money when building your new home without sacrificing quality, comfort, and your dreams?
By understanding where your money goes in a new home build, you'll be empowered to make smart financial decisions and still get the home you wished for – without spending a ton of money unnecessarily.
Many prospective home buyers automatically assume the more square footage, the better. This isn't automatically true! Even if you're considering downsizing, your new home can still feel spacious.
What matters most in a new home is how well it functions for you, not its size. If you have a growing family and need three bedrooms, then a smaller three-bedroom house will serve you much better than a larger house with only two bedrooms.
Before looking at homes, make a list of both your "needs" and "wants." Needs are things you absolutely cannot live without (like the number of bedrooms or space for a home office.) Wants are things that you'd like to have but don't necessarily need (like a home theatre, three full baths, or a soaker tub in the master bath.)
The right home for you is the one that has most, if not all, of your "needs" in addition to several "wants." Once armed with your need/want list, you'll be better able to find homes that have everything you need, even if the total square footage of interior space is less than you might have wanted.
Most builders offer a wide range of optional features and upgrades that can be incorporated into your new home. Of course, these options also come with an additional fee.
Many builder's upgrades can potentially save you money in the long run, but if you're looking to trim down the bottom line, start by going with the "basic" model and then only adding upgrades if your budget can afford it. Remember, many upgrades such as appliances or lighting and other upgrades can be added later.
When talking to sales agents, builders, and representatives, it can be easy to get lost amidst the flurries of offers. The best way to prepare yourself is by insisting on getting everything in writing.
If a builder offers you a home for a specified price, get it down in writing. If the text looks intimidating, ask an attorney to review it for you. If the builder is offering special upgrades or premiums, make sure to get that in writing, too.
Not only will having everything written down help you make better decisions, it can also be used as a negotiation tactic. Showing one builder your offer from another builder ensures you'll benefit from increased competition and potentially walk away with a final price far below what you initially expected.
Not only is it important to get prices in written form, but you also need to be very sure about what you'll be getting for that price.
For example, do the appliances come with the house? What additional fees, if any, can you expect once you close on the house?
Many builders use showhomes that include a number of upgrades. Be sure you understand exactly what you'll get with the basic home model and which parts are considered upgrades that come at an additional cost.
Although today's builders generally work with up-and-coming communities, there are a lot of differences between your lot options in the same neighbourhood.
For example, a lot with a steeper grade or a lot that's a bit narrower than its neighbours might sell for far less than nearly identical lots elsewhere in the community. If you're comfortable with a less popular lot style or shape, you can likely get a premium home with a lower total cost. You might even choose to lock in your lot before you lock in your builder!
Flooring can always be replaced, but key architectural elements such as elevated ceilings, exposed beams, or the placement of doors and windows cannot.
Spend your money on the elements that count the most, and save your money for things that you can do later such as adding crown moulding, upgrading appliances, and window treatments. It's much easier to rebuild savings with time than to pay off large debts.
By carefully understanding the process of negotiating with your builder, you'll feel confident in your ability to make choices that will let your dollars go a lot further. Remember, ask as many questions as you feel is necessary – the informed buyer gets the deal!