Building a new home is an exciting journey—a chance to design a space tailored exactly to your needs and lifestyle. But for many future homeowners, the excitement can be dampened by unexpected expenses that weren’t part of the original budget. These hidden costs can creep up throughout the construction process and even after you move in. In this blog post, we’ll explore the lesser-known costs of new home construction and provide practical tips for planning and budgeting so you can build your dream home in Utah or the surrounding areas without unwelcome surprises.
Before you ever break ground, there are a series of administrative costs that must be accounted for. Building permits, impact fees, plan reviews, and inspections are all part of the process and can vary greatly depending on your location. In areas like Park City and Wasatch County, permit fees can run into the thousands.
In addition to city or county permits, you may need to pay for soil testing, environmental impact studies, or even special engineering reports depending on your lot. These necessary steps ensure your home complies with local codes and regulations, but they also represent a significant upfront cost that many homeowners overlook.
You may think purchasing land is the first big step, but preparing that land for construction is where the costs can climb. Clearing trees, grading the lot, excavating for the foundation, and connecting utilities like water, sewer, and electricity are often more expensive than anticipated. Rocky or sloped lots, common in Utah’s mountainous regions, can also pose additional challenges and increase excavation costs.
Access roads or driveways may need to be created or improved, and retaining walls or drainage solutions might be necessary depending on the terrain. These costs can add tens of thousands of dollars to your project and should be carefully assessed during the land selection phase.
Many homeowners find themselves making design changes mid-construction—and those changes often come at a premium. Whether it’s upgrading to hardwood floors, adding an extra bathroom, or switching to a higher-end kitchen countertop, every deviation from the original plan can increase your overall cost.
To avoid blowing your budget, work with your custom home builder to finalize your plans as thoroughly as possible before construction begins. Build a realistic upgrade allowance into your budget so you can make a few improvements without stress.
Your home may look complete on the outside, but you’ll still need to furnish it with appliances and fixtures. Items like refrigerators, washers and dryers, light fixtures, and ceiling fans are often not included in the construction contract. Depending on your choices, these can add up quickly.
Landscaping is another commonly underestimated cost. Sod, trees, shrubs, irrigation systems, fencing, and outdoor lighting are often left for the homeowner to handle after construction ends. Depending on your lot size and design goals, landscaping can cost anywhere from a few thousand dollars to well over $20,000.
While utility access might be nearby, connecting to local systems isn’t always as simple or cheap as it seems. You may need to pay fees to hook up to municipal water, sewer, electricity, and gas. In some rural areas of Utah, you may need to drill a well or install a septic system, which can significantly raise costs.
Make sure your home builder or general contractor has factored these connection costs into your initial bid. If not, request a breakdown of expected utility expenses based on your location.
Time is money, and any delay in construction can result in added expenses. Weather issues, permit delays, or back-ordered materials can all push your timeline back. This can mean higher costs for temporary housing, additional rental equipment, or extended construction loans.
Construction loans often require interest-only payments during the build, but those payments can stretch over months longer than anticipated. Ensure you have a financial cushion in place to cover these unexpected delays and consult with your lender about what happens if the build goes over schedule.
New home construction also comes with insurance and tax obligations. Builder’s risk insurance, general liability coverage, and homeowner’s insurance must all be accounted for. Property taxes will start accruing as soon as your home is complete, and they may be higher than you expect based on the final appraised value.
You’ll also need to budget for closing costs if you’re financing the build, which can include title fees, recording fees, and loan origination charges. Be sure to ask your lender for a detailed closing disclosure to avoid surprises.
If your new home is part of a subdivision or development in places like Heber City or Park City, you may be required to pay HOA fees. These fees can cover shared amenities like parks, walking trails, and snow removal, but they also represent a recurring cost that should be included in your monthly budget.
Some HOAs charge move-in fees or require approval for exterior finishes or landscaping plans, so it’s important to understand all HOA obligations before purchasing your lot or finalizing your build.
The best way to prepare for hidden construction costs is to do thorough research and build contingencies into your budget. Most experts recommend setting aside at least 10-15% of your total budget for unexpected expenses. This cushion can make the difference between a manageable surprise and a financial strain.
Work closely with a reputable custom home builder in Utah who understands the local building codes, climate challenges, and cost fluctuations. A good builder will provide you with a transparent estimate, help you stay on budget, and offer solutions that keep your costs under control.
Another tip is to communicate frequently and clearly with your building team. Regular updates and walkthroughs can catch issues early and prevent expensive last-minute changes. Investing in a detailed project schedule can also help avoid delays that lead to budget overruns.
Building a custom home in Utah, whether it’s in Wasatch County, Park City, or the surrounding areas, is a rewarding experience that can bring your dream home to life. However, being aware of the hidden costs of new home construction is crucial to ensuring that your dream doesn’t turn into a financial headache.
From permit fees and land prep to utility hookups and post-construction expenses, having a clear understanding of all potential costs will allow you to plan effectively. With a smart budget, a skilled builder, and the right information, you can create a beautiful, functional, and financially sound custom home that you’ll enjoy for years to come.
If you're ready to take the next step, our experienced team of home builders in Utah is here to help you navigate every aspect of the process. Contact us today to learn more about how we can bring your vision to life—on time, on budget, and with no surprises.
