The Cost of New Construction Upgrades, is it Worth It?
When you decide to buy a new construction home one of the key factors that will play a huge role in your final purchase price is your desired upgrades to the existing finishes and features. New construction homes will always have a standard home option and oftentimes that the standard price is drastically different than what your final sale price could be. Why? Simply put, upgrades.
While each home will vary slightly pending on the home's location, size, and the builder that is being used, as a general rule of thumb, you should plan on spending around 12% of the base price solely on upgrades.
- Base price: $250,000
- Upgrade Cost at 12%: $30,000
- New Price: $280,000
With this cost, you will want to make sure that the desired upgrade costs will still fall within your pre-qualification for your mortgage approval. While spending that much extra may not seem worth it to some, paying for upgrades upfront prior to moving in will generally end up costing you less than if you were to choose to add the upgrades later down the line.
Not all upgrades are “bad” and not all upgrades are “good” either. There are some upgrades that are worth the extra cost and it is generally recommended that you focus your upgrades primarily in the kitchen. There are a few reasons for this, primarily being that the kitchen is the heart of the home and one of the main features and spaces that future buyers will pay extra attention to as the kitchen is a high value-boosting area within the home.
When choosing to upgrade your home you want to make sure to focus on the value of your upgrades. While upgrading the floors in the home will be costly, hardwood floors do add value and can provide a good investment return should you choose to sell the home down the line, whereas choosing to upgrade lighting fixtures can be costly but won’t generally add value to a future sale.
As with all home purchases, you should always explore all the options available to you and decide which feature and upgrades are the most important to you personally. What one homeowner may desire another may dislike, so ultimately upgrading your home to your liking is the most important.