Wasting Money on New Construction Upgrades

Avoiding Overspending and Brain Overload


Many buyers sign a new home contract, thinking that they are buying a replica of the model home. Not so.  Sometimes almost everything you see is a new construction upgrades.  That means a builder upgrade at an additional cost to the home buyer.  This is a time to not let your emotions drive the cost up, just because you think you must have it.


New Construction Upgrades Model Kitchen

Selecting new construction upgrades can be an overwhelming experience for home buyers that have not studied up on new construction home options and sometimes buyers simply overspend on unnecessary add on’s.


Buyers will not know their total purchase until they pick out the new construction upgrades, and this is done after you sign the contract.  To clarify;  first you sign a contract for the base price of the home.  That part is easy.  Then you add in the costs of the upgrades which are being priced out by the salesperson as you say you want it.


Before you know it, you are spending more than you need to on new construction upgrades that might  not be a wise investment.



Tips on how not to overspend on builder upgrade


Sorting through new construction builder upgrades is very confusing and this intense decision making can give home buyers brain overload.  There are too many options, choices and price points. It is best to get familiar with these options, before you sign a contract.


Home buyers have different ways to accomplish this.



  • Visit a Preview Night.  Many builders are offer an “open house” at their design center once a week to let prospective buyers become familiar with their products.


  • Obtain the structural and home option list.  Some builders are reluctant to provide this to because sometimes they are hard to decipher.  However, it at least will offer you an overview of options and pricing.  Your buyers agent can help you understand the new construction upgrades.


  • Make an appointment with new homes sales representative to price out some of your “must haves”. This is the best place to start to see what your pricing is on the most important features.


  • Check out builders models or homes that are completed.  Keep in mind model homes can have $50,000-$200,000 in upgrades, and some upgrades may not be offered with your chosen floor plan or specific community.


  • Go into the building process with a maximum budget in mind.  Be sure you can qualify for that amount, if you are financing your purchase.


Planning for your Design Appointment


The design appointment is the date you make decisions to stick with new construction upgrades you select.  You will decide to stay with features included in the base price of the home or elect to change or add some upgrades.  The design appointment lasts 4 to 8 hours and can be intense because you have to make final and binding decision.


It is best if you have pre-studied these options, and bring someone with you, such as a spouse, friend, relative, or your experienced buyers agent.   The design consultant is good about making suggestions, and keeping track of your hierarchy of choices, however, they will not make decisions for you.  Only you can make the final decision if you are stuck between choosing between two different tiles…


Do not stress on the first go around with the selections.  You will have the opportunity to revisit a particular item or edit your selected new construction home upgrades at end of your appointment.


Alternatives to Selecting New Construction Upgrades


Some buyers just do not want to bother with the selections that go into a new home, because it is time consuming, they are not available, or do not know how to coordinate colors.  The good news there alternatives to selecting new construction home options.


Considering buying an inventory home.  This is a home that the builder is building for buyers that need a completed home quickly or a home that came back on the market from a previous buyer. These homes already have all your home options and upgrades preselected.  You cannot change these selections.  The advantage of buying these homes is you have one total upfront price at the onset of the contract that will not change.


Select “Design Packages”, if offered.  Lennar and Shea homes quickly come to mind, where buyers can select a “Design Package”.  These are predetermined and pre-selected colors and options, it is all coordinated and streamlined for the home.


Contractual Considerations for New Construction Upgrades


New construction upgrades impact a few things once under contract such as timeframes, second deposits, and appraisal.


Timeframes:  Buyers are obligated to make elevation and structural options selects within 0 to 7 days under contract.  Design Center Studio appointments are held within 14 to 30 days from contract.  If you live outside Orlando, you will need to make arrangements to travel to your design appointment for selections.  Most builders will not conduct design appointments over the phone or through face time.


Second Deposits:  Once you select your new construction home upgrades, builders will have formula to compute a second deposit to be payable.  If your new construction home options are under the predetermined threshold a desposit may not be due.


Appraisals:  Unlike resale contracts, builders contracts do not contain a clause where a buyer could back out of the contract if appraisal amount does not meet the total purchase price.   This means if you add too many options that do provide value, you will be required to bring additional money to closing.  There is an exception if you are doing a FHA or VA loan.


Get Representation When Buying New Construction


The article, “New Construction’s Hidden Costs Can Burn Buyers” recommends to hire your own agent to represent you in a new construction purchase.  Buyers Broker of Florida has buyers agents that specialize in representing home buyers in Central Florida.   They can educate you on the process, advocate when problems occur, and can be a second opinion when needed.  Contact Buyers Broker of Florida if you are consider purchasing a new construction property. 407-539-1053

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