Purchasing a new construction home in McKinney can be an exciting experience, especially for first-time buyers. However, while the idea of a brand-new home is appealing, there are several hidden costs that often catch buyers off guard. From upgrades to unexpected fees, understanding these additional expenses can help you budget effectively and avoid surprises. Here’s a guide to the hidden costs that first-time buyers should be aware of when buying a new construction home in McKinney.
1. Lot Premiums
What is a Lot Premium?
In many new construction communities, certain lots may come with a lot premium based on their location, size, or view. For example, a corner lot, a larger lot, or a lot with a view of a park or lake can have an additional cost attached. While these lots may offer more privacy or better views, they can also add thousands of dollars to the final price of your home.
Hidden Cost: Lot premiums can range from a few thousand to tens of thousands of dollars, depending on the desirability of the location.
Tip: Ask your builder about lot premiums early in the process and factor these costs into your budget if you prefer a specific lot.
2. Upgrade Costs
Customizing Your Home
One of the perks of buying a new construction home is the ability to customize features such as flooring, countertops, and cabinetry. However, many of the options displayed in the model homes are upgrades and not included in the base price. The cost of upgrading to premium materials or adding custom features can quickly add up, often exceeding buyers’ expectations.
Hidden Cost: Upgrades for flooring, appliances, fixtures, and finishes can cost thousands of dollars beyond the base price.
Tip: Prioritize upgrades that offer the best return on investment, such as kitchen and bathroom upgrades, and stick to your budget.
3. Landscaping and Outdoor Features
Exterior Work Not Always Included
While new construction homes often come with basic landscaping in the front yard, the backyard is typically left unfinished. Additionally, outdoor features like fences, patios, and decks are usually considered add-ons. If you’re planning on creating a functional outdoor space or finishing your backyard, these costs should be accounted for upfront.
Hidden Cost: Landscaping, fencing, and outdoor amenities can cost several thousand dollars, depending on your design choices.
Tip: Factor in the cost of landscaping and outdoor projects when budgeting for your new home, and get quotes from contractors early on.
4. Closing Costs and Builder Fees
Additional Fees at Closing
Many first-time buyers focus on the purchase price of the home and forget about closing costs, which can include fees for the title search, appraisal, and other administrative expenses. Some builders may also charge builder fees for administrative work, which are not always included in the initial price quote.
Hidden Cost: Closing costs typically range from 2% to 5% of the home’s purchase price, which can add thousands of dollars to your upfront expenses.
Tip: Ask your McKinney Buyers Agent and builder for a detailed breakdown of closing costs early in the process to avoid surprises.
5. Homeowners Association (HOA) Fees
Monthly or Annual HOA Dues
Many new construction communities in McKinney are part of a Homeowners Association (HOA), which requires homeowners to pay monthly or annual dues. These fees cover the maintenance of common areas, amenities, and sometimes security. While HOAs can enhance the appeal of a community, the fees can add an ongoing expense to your monthly budget.
Hidden Cost: HOA fees can range from $50 to several hundred dollars per month, depending on the amenities and services provided by the community.
Tip: Ask about the HOA fees and what they cover before committing to a community, and factor them into your long-term budget.
6. Property Taxes and Special Assessments
Higher Property Taxes for New Construction
Property taxes on new construction homes in McKinney can be higher than expected, especially in growing communities where new infrastructure and schools are being developed. In some cases, buyers may also face special assessments for community improvements, such as new roads or amenities, which are added to the annual tax bill.
Hidden Cost: Property taxes in new construction communities can be higher than average, and special assessments may add to your yearly expenses.
Tip: Research the property tax rate in the area and inquire about any potential special assessments when considering a new construction home.
7. Maintenance and Builder Warranty Costs
Ongoing Maintenance Not Covered by Warranties
While new construction homes often come with builder warranties that cover structural issues and systems for a limited period, ongoing maintenance is still your responsibility. Systems like HVAC, plumbing, and appliances will need regular servicing, and while they may be covered under warranty for the first year or two, maintenance and repairs outside of that period can add up.
Hidden Cost: Regular maintenance and potential out-of-pocket repairs once the warranty expires can add to your annual homeownership costs.
Tip: Set aside an emergency fund for unexpected maintenance and repair costs.
8. Utilities and Connection Fees
Initial Setup Costs
When moving into a new construction home, there may be connection fees for utilities such as electricity, gas, water, and internet. These fees can vary depending on the provider and the services you choose. Additionally, newer homes may come with higher utility costs during the initial months as systems are optimized.
Hidden Cost: Utility connection fees can range from $200 to $1,000 or more, depending on the service provider and location.
Tip: Contact local utility companies ahead of time to understand the costs of setting up services and budget accordingly.
Conclusion
While the idea of purchasing a new construction home in McKinney is exciting, being aware of the hidden costs can help you budget effectively and avoid any unpleasant surprises. From upgrades and landscaping to HOA fees and property taxes, these additional expenses can significantly impact your overall home-buying budget.
By working with a McKinney Buyers Agent, you can gain valuable insights into these hidden costs and make informed decisions throughout the process.
Ready to start your journey? Contact us to find the perfect home for you!
Call us at 469-269-6541 for more information about McKinney real estate!
About us: McKinney New Construction Expert Real Estate Agent
As a Top Real Estate Professional in McKinney, I understand the challenges that arise when buying a new construction home. There are over 100 builders in the DFW area. I work with most of the new home builders in McKinney and understand how various builders operate. I am familiar with the options they offer, current incentives and I frequently visit the upcoming communities they are building. I guide my clients through all steps of the new home construction process and aggressively protect their interests in the transaction.
As a holder of top real estate industry certifications and designations like CRS, ABR & GRI, I can offer my clients experience as a Buyer's Agent and REALTOR®, top Industry Customer Service, in-depth, up-to-the-minute and comprehensive market knowledge; honesty, integrity, dedication, and professionalism in my business.
Whether you are a first time buyer in McKinney looking to buy a home in Fields or whether you are relocating to McKinney from California or moving your entire family from areas like San Francisco, Fremont, Palo Alto, Los Angeles, San Diego in California due to job transfer with your company, I can help you find a new construction home in Fields in McKinney. Our relocation team eases the transition - whether you are moving across town or across the globe. We will work with you to find an area that best suits your professional, family and lifestyle needs. We have all the tools you need to help your home search. Whether it is video previews of homes, extended work hours, digital signatures for documents or more, we can make this process as comfortable as possible no matter where you are located.
What is most important to you in your new construction home in Fields in McKinney? Send us an email at info@NitinGuptaDFW.com or give us a call at (469) 269-6541 to schedule a no obligation consultation. We’ll give you honest advice about Fields community that you can use to help make your home buying decision.
