New Construction Closing Costs
This page specifically covers the additional closing costs that may be incurred when purchasing a newly built home in Texas. This page is an addendum to our Mortgage Closing Costs for Purchasing a Home which breaks down the other $2,800 of “base” closing costs.
Four Additional Costs For New Construction
There is a price for that new home smell. There are potentially four additional fees that may be incurred when purchasing new construction compared to purchasing an existing home:
Owner’s Title Policy: the owners title policy is the “wild card” for new construction as some builders will pay for it and others won’t. Builders will often offer a concession to pay for this fee (which is about .75% of the purchase price) if you use their preferred lender. They may either offer a concession amount equal to the exact charge of the title policy or some approximated rounded amount. As an FYI, the true “custom builders” that only build four to five homes a year typically don’t offer this concession and buyers will be responsible for this cost. Check out our Title Policy Calculator for more information.
Survey: with new construction the buyer is typically responsible for paying the survey which is approximately $400 to $450. Our estimates will show $425 to be conservative.
HOA Transfer Fees: new construction homes that are part of a master plan community typically have one-time HOA transfer fee that ranges from $700-$725. We call this the “welcome to the neighborhood” fee and this fee is used to help build the HOA’s cash reserves.
Final Inspection: if the house is not fully completed and move-in ready when the appraisal is conducted there will be a final inspection required which costs approximately $175, depending on how much work the Appraiser has to do. This is often the last piece of the puzzle needed for the loan to fund as many closings occur the day after construction is completed.
Be sure to check out How To Pay Closing Costs page for various options on how to structure your loan.
Windsor Homes Incentive
If you’re buying a home from Windsor Homes of Texas then don’t forget to check out the Windsor Homes Incentives which help reduce your closing costs.