Skip to main content

If you are shopping around for a home, you might be curious to know what the hidden costs of buying a new build home are.

Well, there are a handful of potential costs that can impact how much you spend in total.

To learn more about them, check out the information we’ve provided below.

If you would prefer to talk to someone directly about the hidden costs you might encounter when buying a new build home, call us today at (702) 310-6683, and one of our experienced real estate agents will be happy to assist you!


The Hidden Costs Of Buying A New Build Home

Table of Contents

1. Site Preparation
2. Permits And Inspections
3. Upgrades And Appliances
4. Closing Costs And Various Other Fees
5. Homeowners Association
6. Property Tax
7. Home Defects
8. Land Acquisition And Post Construction Property Maintenance
Additional Costs Of Buying A New Build Home


1. Site Preparation

Preparing your site can be a costly endeavor, but how much you end up spending depends on the size of your property, its layout, how much foliage there is, whether or not there are obstructions present, and the overall scope of your project.

To prepare your site for construction, you’ll need to clear away brush, demolish old structures (if there are any), haul away debris, grade the site, add material to the site, and create a foundation for your new house.

During this phase, your homebuilder may require a temporary power source until a permanent power system is put in place. If this is the case, you’ll have to pay for their power bill.

Budgeting And Your Site Preparation Cost

Two great ways to avoid getting surprised by your site preparation cost are to (1) ask about development fees before clearing begins and (2) ask your builder for a guarantee against overages.

At the very least, your builder should be able to provide you with a reasonable approximation of how much your site prep will be.

The average cost of clearing land in the United States is $3,500 per acre, but this doesn’t take into account other factors like design fees, government fees, connecting utilities to your property, and adding sidewalks, all of which are part of the greater mix.

With that said, as it strictly pertains to site preparation, you can expect to pay a few thousand dollars at least.

2. Permits And Inspections

Permits are a necessary part of the new home construction process and are something that can’t be avoided.

Permits include but are by no means limited to mechanical, plumbing, electrical, and driveway permits.

In addition to paying for these and other permits, you’ll also need to pay for an inspection of your home, which is usually a few hundred dollars.

Although the cost of a home inspection isn’t too much, some people might be tempted to skip this step.

We would strongly recommend against this since getting an inspection is necessary for ensuring that your new construction home has been built to a high standard.

3. Upgrades And Appliances

Building a new home doesn’t necessarily guarantee that it’ll come with all of the bells and whistles that you might see in a model home.

If you have visited a model home and are basing your buying decision on it, keep in mind that builders use model homes to convince buyers to commit.

Tip About Builder Model Homes

Some ways homebuilders put their best foot forward are by doing window treatments, adding bathroom accessories, installing extra appliances and electrical outlets, building expanded showers, creating custom tile patterns and flooring, and adding attic storage.

While there is nothing wrong with any of this, there will most likely be differences between what you see in the show house and what you end up seeing in your home.

Guide The Conversation With Your Builder

As you can imagine, before committing to a home purchase, it’s a good idea to clarify with your builder what features of the model home will be present in your design.

We also recommend staying present during the building process as much as possible since this will help you avoid potential issues with your new home build.

When homebuilders and work crews see that you are engaged in a friendly manner, this incentivizes them to do a great job.

4. Closing Costs And Various Other Fees

While closing costs are not unique to new construction homes, they are worth mentioning here since they are fairly pricey.

Closing costs in Nevada run anywhere from $3,500 to $7,500 and include the agent’s commission, homeowners insurance, and mortgage insurance.

If you are unfamiliar with the way closing costs work, builders take two approaches—cost-plus or fixed price.

A cost-plus contract essentially means that you are financially responsible for changes in your project, mistakes, changes in material prices, and construction delays.

In a cost-plus setup, you also pay the cost of construction in addition to a fee to the homebuilder.

A fixed-price contract, on the other hand, means your builder is financially responsible for changes in your project, mistakes, changes in material prices, and construction delays.

Many people prefer this option since it provides them with more assurance.

Not only are their builders responsible for keeping projects on budget, but their builders also provide prices in advance.

Fees Associated With Buying A New Build Home

Other fees that you can expect to pay throughout your home’s construction process are your:

Credit report fee, title insurance, appraisal fee, HOA Fees, escrow, attorney (not required, but this can be helpful in certain situations), prepaid interest fee, architectural & engineering fees, surveys fees, and road closure fee.

5. Homeowners Association

HOAs play an important role since they are responsible for maintaining the quality and safety of neighborhoods. But they do come with a drawback—HOA fees.

If you’re buying a new build home in a neighborhood and are going to be sharing amenities, then HOA fees are to be expected.

This may or may not be a big deal to you, but it is an extra cost that should be kept in mind.

6. Property Tax

Naturally, when you get a new property, you’ll have to pay property taxes.

But did you know that there are a couple of differences between property taxes for new construction homes and property taxes for older homes?

The differences are that one, you’ll probably pay less at closing for your new construction home than you would if you bought an older home, and two, the property taxes on your new construction home will get more expensive after the first year.

The reason for these differences is that the property tax you pay on a newly constructed home for the first year is an assessed amount.

Once your property is reassessed the following year, its value will increase, thanks to the house, the driveway, utilities, and everything else that you’ve added.

To help you avoid getting hit with a dramatic change in your property tax amount, some lenders require that you pay the assumed rate on your improved property.

7. Home Defects

There are many ways that builders cut corners, but one of the most common is outsourcing projects to vendors without your knowledge.

Sometimes, though, even well-meaning builders make mistakes.

In either case, the best way to avoid running into hidden issues is to be around occasionally during the building process and to show knowledge of the construction, as this will incentivize the builder to do quality work.

Common Hidden Home Defects

Common issues found when buying a new build home include cracks in the concrete (outdoors and indoors), drainage problems, mistakes in the flooring, drywall damage, improperly installed cabinets and doors, poorly installed windows, and issues with appliances.

8. Land Acquisition And Post Construction Property Maintenance

The cost of acquiring land is one of the more obvious challenges you’ll encounter when buying a new home.

Whether you are getting land through your builder or buying it on your own, acreage can be very expensive, so it will have a huge impact on how much you spend.

Once you’ve acquired the land, cleared it, and built your home, you’ll then have to pay for landscaping if you are too busy to do it yourself—another expense to add to the list.

Additional Costs Of Buying A New Build Home


When buying a new build home, the cost of painting may be something that is not considered.

However, the cost of painting can be significant, especially if the home is large.

In addition to the cost of paint, there is also the cost of labor.

Many people assume that when they are buying a new build home, they can just pick a color and go.

But in reality, most new construction homes come primed and painted in just one color.

This can add several hundred dollars to your total cost of the home.

If you’re not happy with the color that’s been chosen for you, or if you want to paint a different color yourself, then you’ll need to budget for painting costs.

Depending on the size of your home and the number of coats of paint that are required, painting can end up costing thousands of dollars.

The cost of painting a new build home can range from $1,000 to $2,000.

So before you buy a new build home, be sure to consider the cost of painting and whether it’s something you’re willing to pay for.

If not, then be sure to ask about the availability of other colors and whether any painting costs will be waived if you choose a different hue.


One of the hidden costs of buying a new build home is the potential for delays in the completion of the house.

While many buyers may be excited to have the ability to customize their home, they may not be aware of the consequences that come with delay.

Delays in the completion of a new build home can mean that homeowners are unable to move in on schedule or may even have to delay their move altogether.

This can cause problems for those who are already living in a rented home or have another property they need to vacate by a certain date.

In some cases, buyers may find themselves paying two mortgages at once if they are unable to sell their old home on time.

Delays can also mean added costs for the buyer.

If contractors need to be brought back in to complete work that was originally scheduled for earlier in the process, this can lead to an increase in cost.

And, if homeowners are forced to live in a temporary housing situation while their new home is being completed, this can also be costly.

In short, there are several hidden costs associated with buying a new build home.

It is important for buyers to be aware of these costs and factor them into their decision-making process.

Got Questions? Contact Us Today

While the process of buying a new build home can be complicated, we simplify it for you by providing you with expert information and insights derived from our years of helping people buy and sell homes in the Las Vegas area.

Potential home buyers can greatly benefit from opening a dialogue with us.

We help you avoid unexpected costs, find the top houses on the market that accommodate your budget, and if you are ready to get a house, guide you through the buying process.

We are invested in your success and finding you a home that will improve every aspect of your life!

We offer a wide selection of services, including traditional and commercial sales, REOs, short sales, property management, probate, buying distressed homes, cash advances, and flips.

If any of these services interest you, call us at (702) 310-6683 and speak with a highly experienced real estate agent today!

Side Note: We know that investing in a home is a big step, which is why we offer an entirely free, no-pressure consultation.

If you have any questions, please feel free to contact us at any time.

At The Real Estate Guy, we are all about investing in and building great relationships with our clients over the long term.

Translate »