One of the most exciting parts of buying a new construction home is having the ability to personalize it right away. But putting a personal stamp on a home invariably comes at a cost, with the level of customized options and upgrade choices being added to the home’s base purchase price.
What sort of upgrade prices should a homebuyer expect to pay? Which upgrades are most common? Which are most cost-effective or convenient to do at the construction phase? And if a homebuyer is considering going builder-grade at purchase what might the implications and costs be for remodeling in the future?
Which upgrades are best done at the construction phase?
If a project is going to be disruptive or messy down the road (i.e. a full-gut of a kitchen, requiring new plumbing and electrical, or putting on an addition) it’s better to do it when the home is being built. It’s more convenient to have that work done before the homeowner occupies the home.
Similarly, doing extensive work later can come with additional, unexpected costs, if work on adjacent spaces or removal of existing design elements need to be done.
Recommended builder upgrades include any structural work (i.e. additions or footprint alteration), cabinetry, flooring, windows, doors, staircases, countertops, plumbing or electrical rough-ins and exterior hardscaping.
Which upgrades can wait?
Items that are relatively quick and easy to replace can generally be done by the homeowner or their contractor down the road. Products and materials might be available at a less expensive price if the homeowner has time to shop around.
Decor pieces such as cabinet hardware, plumbing fixtures and light fixtures can easily be sourced and installed as a DIY project. Paint is another easy DIY task that can be tackled after the fact.
Determining new construction upgrade costs
Homebuyers often fall in love with the image of what their new home might look like when touring a model home. However, a model home is decked out with many upgrades, giving the builder the chance to demonstrate what a home could be, and also providing a compelling sales opportunity for homebuyers who wish to replicate the same aesthetic.
After the wow-factor wears off, buyers want to know what the price tag will be to transform their desired base model to the magazine-worthy show home that caught their eye.
As to what the individual upgrade costs are, the short answer is – it depends.
There are so many variables at play that will influence upgrade prices like material choices, location, availability of local labor, size of the home, as well as the type of builder (production, semi-custom or custom).
In the current buyer’s market, builders may be more reluctant to publish set upgrade price lists, given the role that upgrades play in competition with other builders and as a negotiation tool with prospective buyers. These prices can and will fluctuate.
Even so, it is cheaper to build a new home rather than buy on the resale market. According to HomeAdvisor, the average cost to build a home in the U.S. is $281,000, and the national median sales price for an existing home at the end of 2022 was $366,900, according to the National Association of Realtors (NAR).
Homebuyers may find it more effective for upgrade budgeting to ballpark potential costs based on a percentage of their base purchase price. Typically, a buyer should expect to add anywhere from 10%-20% (or in some cases even up to 30%) for upgrades.
Buyers should be aware that it is easy to rack up upgrade costs in a hurry, so devising an upgrade strategy ahead of time can help delineate spending limits. Buyers need to decide whether to bundle in as many upgrades as they can afford at the time of purchase, to negotiate additional upgrades into the base model purchase price, to defer some upgrades until later as remodeling projects, when budget and timing permit, or a combination of all three.
What might it cost to DIY if I wait?
Considering remodeling costs against builder upgrade quotes can help apply context for budget decisions to see if it makes more sense to include costs when the home is built, or to spread them out over time and DIY later.
Remodeling magazine’s most recent release of the Cost vs. Value report indicates that the national average cost of a kitchen remodel ranges anywhere from just over $28,000 to $158,000 depending on the size of the home and scale of the project. A primary suite addition will range from $175,000 to just under $357,000, again depending on the size of the addition and the scale (i.e., custom luxury finishes) of the project.
While these price tags are substantial, homebuyers can expect to recoup costs anywhere from 71% for a minor kitchen remodel up to 53% for a major, upscale kitchen project; for additions, the return on investment is generally about half of costs, varying depending on the nature of the addition.
HomeAdvisor says that home renovations cost anywhere from $10-$150 per square foot, depending on the size of the home and finishes chosen. A kitchen remodel will cost anywhere from $5000-$65,000. Breaking down kitchen components, cabinetry will cost $100- $3500 per linear foot; countertops will run $1200-$5300/ slab, depending on material chosen; flooring can cost anywhere from $800-$6750, depending on material and size of the room. Window replacement will cost on average $6250 and exterior doors, $1150.
Preparing for upgrade selections
When considering upgrades for a new construction home, the first task for homebuyers should be to set a budget, understanding that the base price for a model typically is “bare bones” and that higher-end finishes or structural modifications will add to that price.
Create a wish list for upgrades, along with priorities, should you have to negotiate or defer. In making this list, cross-reference the builder’s specification sheet to determine exactly what is included with the base price.
At the design center, “Don’t be shy. Make sure you really share how your life works at your home and how you might want that to evolve or improve based on your new home,” says Lee Crowder, national director of design & model experience with Taylor Morrison.
Basic builder vs. upgrades
When a buyer heads into the design center to make their choices, they will be presented with builder-grade basic, and likely two or three other options in different price points (and homebuyers can expect to make dozens of side-by-side decisions). But make sure the comparison has context. It is important to understand what builder basic means and whether these options meet a buyer’s overarching goals for their home design
Firstly, builder basic does not automatically mean bad. On a relative scale to other categories of finishes and features (i.e. builder basic to semi-custom to luxury custom) it is allocated at the bottom, but pricing also reflects that.
Builder- grade products are usually mass-produced, so builders (and the homebuyer) benefit from this economy of scale. They are usually more widely available than some custom items. Builder grade applies to a host of different building materials, like lumber, flooring, cabinetry, windows, doors, lighting and plumbing fixtures and materials,
What distinguishes builder grade from a potential upgrade is less about the look, but is more about inherent quality and durability, especially when it comes to material and product choices. Upgrades that modify the space or expand the footprint, hinge heavily on elevating function, ultimately creating more usable space, or making existing space “better”.
The cost-savings at purchase that comes from going with builder grade doesn’t necessarily mean compromising on aesthetic, but you are almost always compromising on longevity, which means that cutting costs at purchase may mean replacement or repair costs more quickly.
Take windows for example. Windows tend to be overlooked as part of décor, but play a vital role in both critical curb appeal and how a home interacts with outdoor space (i.e. window placement and creating paths for natural light). They also are extremely important in how effectively you can heat or cool your home.
Builder-grade windows tend to made from lower-quality materials, which look quite similar to higher-end windows, but offer lower levels of insulation and are less durable.
Builder-grade doors tend to be hollow or thinner than their upgraded counterparts. “Upgrading to solid-core doors is an upgrade that will be long lasting and add value to your home. Rather than swapping out every door in the home, you can upgrade maybe your first floor to solid core and leave what is included from the builder upstairs,” says Crowder.
Builder-grade cabinetry is often made from particle board, or a similar product, and is usually assembled with a basic butt-joint. Buyers can select from a number of different colors and door front styles. Upgraded cabinetry is typically made from sturdier wood (and there is quite a selection across price points) and benefits from higher-end assembly, like dovetail joints and soft-close hinges. There is greater opportunity to customize details, as well as size.
Buyers need to weigh upfront costs with builder upgrades against the potential costs of remodeling and having a compressed timeline if items need replacing or repair sooner.
Cabinetry is a worthwhile builder upgrade
Among the most common (and most recommended) upgrades that buyers should do at the construction phase is cabinetry.
“If it’s in your budget, upgrading your cabinetry during the construction phase is more cost efficient than updating later. To redo cabinetry down the road, it not only costs more, but also requires a lot of renovation overall to tear out different areas such as countertops and plumbing,” says Crowder.
Upgraded cabinetry is not just higher-end wood and assembly, but is also higher-end function, with modifications to support usability.
One of the best ways to do that is to run cabinetry to the ceiling. Base models tend to stop several inches short of the ceiling. Extending it not only has aesthetic benefits, it creates more storage, which is always a good thing.
It’s also smart to make cabinetry most functional by including pot-and-pan drawers, pull-out drawers and deeper over-fridge cabinets.
“Cutting boards and cookie sheets and things that are big like that are often stacked or nested together in an upper or base cabinet. It’s almost like playing Jenga to pull out what you need. There are better ways to store a cutting board so that it’s easy to pull out, say in a vertical divider in a base cabinet, right near the knives and trash can,” says designer Courtney Zanelli.
“These are the types of upgraded features that are important for functionality, how we outfit each cabinet to maximize its efficiency, so that the homeowner has the tools necessary to perform the task at hand while standing,” says Zanelli.
Higher-end flooring is more durable
Upgrading with the builder to higher-end flooring (like hardwood, or better tile) is going to save you money in the long run because it is more durable and will require less maintenance and repair.
Above the eventual cost savings, flooring plays a crucial role in decor, particularly in an open-concept home, which homeowners often underestimate. Flooring underpins the style statement and homeowners may be setting themselves up for trouble if they have multiple types of flooring that they add to patchwork-style over time.
“You want a really nice aesthetic flow. In order to achieve that, you’ve got to make sure you’re really consistent with flooring. You don’t want your flooring to be broken up and choppy,” says Susan Hill, principal and owner of Susan Hill Interior Design.
“Instead of having hardwood only in the space as you need it and then tiling your kitchen and carpeting your family room, it’s worth the spend to put hardwood everywhere to help create that system of aesthetic flow, “says Hill.
Zanelli says, “People underestimate trend transition. You have to be mindful of sightlines. For example, when I am in an adjacent room where I can see into the kitchen, how do I feel about the change in flooring material?”
Ideally that transition should create calm and not confuse the eye, but rather contribute to the sense of space.
Crowder says, “Even if your home has smaller square footage, picking one type of flooring for the main living area will make it feel larger.”
If hardwood is beyond the budget, “Laminate flooring is a popular alternative to traditional hardwood. Laminate flooring combines the beauty of wood with the toughness of an engineered material,” says Crowder.
It’s the right time to put on an addition
If a homeowner thinks that increasing living space or modifying a floorplan is potentially in the future, it is wise to do this at the construction phase as a builder upgrade. Doing so later on is not only very disruptive, it can be very expensive as well.
There is a middle ground here, as homeowners can plan ahead for expansion at the construction phase and complete the projects later when the budget and timing suits. For example, perhaps a homeowner intends to add a bathroom. Have the room built during construction and leave it unfinished with rough-ins to tackle later.
Although you will pay more for upgraded windows at construction, you will begin to realize cost savings for this upgrade almost immediately. Additionally, upgraded windows allow homeowners to defer window replacement for longer, as better windows have a longer lifespan.
Builder-grade windows will start to deteriorate more quickly, with seals breaking down, letting in moisture and becoming ineffective at blocking heat transfer.
Triple-paned windows with special coatings are not only more durable, homeowners can expect to save potentially hundreds of dollars on their energy bills. Upgrade with aluminum or vinyl frames to give windows a bigger role in the décor.
Upgrade the staircase
A potentially overlooked builder upgrade is a staircase, especially if the staircase is a focal point on a main floor. A well-done, upgraded staircase is a design anchor on a main floor, with a number of different tread, railing and baluster styles.
It’s especially smart to upgrade the staircase with the builder if a homeowner is considering a wooden staircase. A standard staircase is usually carpeted and made with cheap plywood, because the carpet conceals the wood. This means that a staircase remodel in the future could require a total replacement, which could cost anywhere from $900 to $4,000 or more depending on placement of stairs (basement stairs or attic stairs for example are cheaper than main floor stairs).