New Construction: Should You Go Builder Grade Or Upgrade?

Who hasn’t walked through a model home and thought, “I’ll take it! Even down to those fancy place settings on the dining room table!” That exclamation is typically followed by a sad-face realization that, A) The place settings are not for sale, and; B) All those fancy upgrades are going to cost you. A lot.

Models are typically fancied up by the builder and interior designer and outfitted with all kinds of bells and whistles including upgraded flooring, countertops and appliances, lighting, window coverings – you name it. The idea is to show buyers what their home could be. If they have an extra $100K or more to sink into it.

If that’s not you, either because you want to stay within a certain budget or you’re already stretching to buy a new home, you don’t have to forgo upgrades altogether. In fact, buying a home with builder grade everything is not considered a great idea from a value standpoint.

“A surprisingly large amount of the money you spend on your new home will be determined by the options and choices you make – and those options are forever changing,” said New Home Source. “For example, granite countertops and stainless steel appliances, both considered pricey upgrades for years, are now standard in most new homes. However, going with the most common (or lowest) denominator is not always the best way to save—or spend – your dollars.”

There’s also the fact that, when you do go to upgrade later on, you’ll have to deal with a number of issues. Here are five reasons to do some smart upgrades now.

The cost

Ultimately, how much you upgrade (or not) is dependent on cost. Finding out that a model home has $86,000 worth of upgrades, which far exceeds your budget, can be devastating. Breaking them down to individual items and comparing the cost to what you would spend down the road is a good first step.

It’s also important to remember that your selected upgrades don’t require you to write a check to the builder. They get rolled into your mortgage. Add $20,000 in upgrades to your $400,000 mortgage, and you’re looking at about $80 a month.

Photo by Arthur Rutenberg Homes – More kitchen photos

Yes, you may be able to finance your new floors or countertops at Home Depot, and you may even be able to qualify for zero percent interest. But,…