Buying a new construction home isn’t cheap. In general, buying a home is one of the biggest – if not the biggest – investments you’ll ever make, and when you have the option to build a home with every aspect customized to your liking, things add up fast. There are a lot of pros and cons to building new construction, but one major pro is control over the final cost. You’re still going to be spending a lot of money, but if you’re smart about it, you can build your dream home and keep it within (or even under!) your budget. Here’s how.

Set a budget, and stick to it

Before you even meet with the developer’s sales representative you should be checking in with a financial advisor to find out how much you can afford to spend. As with any new home purchase, it’s awfully easy to spend more than you intended to. That’s why it’s important to know not just how much you want to spend, but how much you can. Once you have that number, think of it as written in stone, and don’t go over it – no matter how tempting.

Give yourself flexibility with the base price

The first price you’ll see on your new construction home is the base price. This number includes the basic structure and finishes, and often the lot cost and landscaping cost as well (if it doesn’t include the latter two variables, be sure to factor those in to what your base price is). What the base price doesn’t include is things like extra structural options (think: fireplaces, 42″ cabinets, and room extensions) and interior and exterior upgrades, which you’re likely going to want to make quite a few of. For that reason, choose a new construction home with a base price that gives you a lot of wiggle room in terms of final cost. In my own experience, even being budget conscious we spent about $60,000 over our base price, so it was important that our initial price gave us the space to do that without overspending.

Choose your builder wisely

If you’re not dead set on living in a certain development, compare a few different builders in your area and choose the one that offers you the most for your money. Some builders offer lower or more inclusive base prices, more reasonable upgrades, and/or better incentives, so it makes sense to do a bit of research prior to choosing who you’re going to go with. Make sure to compare quality as well as cost, since none of the money that you spend should be going toward faulty or low-quality features and design.

Ask about closing cost incentives

You won’t pay for your new construction home until it’s move-in ready (minus the down payment, which you’ll pay early on for your contract and permits), but you’ll still want to start working with a lender as early as possible to ensure you’ll be good to go when closing time comes along. Some builders offer special incentives if you work with their preferred lenders – say, a couple thousand dollars off of closing costs – so it may make sense for you to contact those lenders first, and if you get a fair mortgage deal through them, go that route.

Can you install it yourself? Do it

Most builders are fair in their pricing, but like all things with your home, professional labor is always going to cost more than a DIY. If you’re handy, consider taking on some of the projects yourself after you’ve moved in, which should save you a lot of money. Some things, like kitchen sinks and countertops, need to be installed prior to closing for the bank to approve your loan, but there are tons of things you can hold off on and do later. For example, we were quoted $800 for our kitchen and bath cabinet pulls, but found we could buy the hardware ourselves for less than $100 and then install them on our own. If you can handle not having the house completely ready when you move in, it’s definitely worth getting out your toolkit and taking on some of the tasks yourself.

Do research on your appliances

The builder of your new construction home generally contracts with one or two appliance manufacturers, and then gives you a few options of base and upgraded appliances through that company. But that doesn’t mean you have to go with what’s offered. You have two options here if you want to cut costs on appliances: you can look for lower cost options from those manufacturers and then see if the builder can accommodate (they usually can), or you can close without your appliances and have lower cost ones installed afterwards. You can even do a bit of both. Don’t just take what’s offered at face value – there’s a lot of variance in appliance costs. With some research, you’ll be able to get what you want at a price that makes sense for your budget.

Don’t knock fake wood floors

Think outside the box when it comes to wood flooring and you can get the exact same look for less. You can get laminate, or even vinyl, flooring that looks like wood for a fraction of the cost, and because they’re scratch resistant and water resistant, you’ll save money in the long run, too. The only thing you’ll have to sacrifice is the knowledge that your “hardwood” floors aren’t the real deal, but that’s a small cost to pay for getting the same look without spending nearly as much money.

Go standard and upgrade later

When it comes to design features like lighting fixtures and window treatments, you’re usually better off shopping around for a deal than going with the limited options offered by your builder. Choose to have the standard options installed (which are already included in your base price), and then upgrade them within your budget later on. You can find great deals on unique pieces at secondhand stores and on low-cost design and d√©cor websites, and you’ll save even more if you can then install them yourself. As a bonus, you can try to sell the standard features that you swap out after you’ve removed them.

Spend where it counts

Not all upgrades are valued equally. You have to think in terms of not just what you want with the house, but what will get you a return on your investment later on. For example, it’s probably worth splurging a bit on taller cabinets and a deep-pour basement, but a 50 square foot bump out in the master bedroom is going to cost a lot more than it’s going to return. Of course, you’re building your new construction home to live in, not purely as an investment property. But if you have to make cuts to stay in your budget, start with the upgrades that are less likely to recoup their high price tags.

Do a line-by-line breakdown of what you’re spending

Before you sign off on your final price, make sure to get a template of all of your decisions and actually read through it. You’ll be able to see exactly where each dollar is going, and you may realize that some choices you made early on in the process no longer seem so necessary. This is likely something your builder will require you to do anyway, but it’s important to really take the time to read through it. When we did this for our home, we realized that the extra $2,000 we were going to be spending for an upgraded banister (a choice we made at our very first design meeting) just wasn’t worth it, and downgraded to the standard banister, which was nice enough on its own. While we may have gone with the upgrade if we hadn’t made additional costly decisions after that, it made more sense to spend big where it mattered and cut down costs where it didn’t.
Saving money on a new construction home requires that you act as a conscious consumer. Find a balance between the things you need and the things you want, and look for creative ways to save money where you can. Building new construction is never going to be cheap, but you’d be surprised by how budget friendly you can make it with a little ingenuity. Pay attention to where your money is going, and don’t overspend for the sake of convenience. Do it right, and at the end of the day you’ll have a beautiful home and money left over for some new furniture.