Part of the fun (and stress!) of buying a new home is all of the choices you get to make from the vast number of upgrade options available to personalize your home. Though a base price home comes with standard features that are adequate to build a home with, most home buyers relish the opportunity to put their own “fingerprints” on their new home by selecting their own perfect options. Thus begins the sometimes challenging process of options selection, and the very first thing you should do is figure out what your options budget is.
When going through the home builder’s options list, the most important consideration is going to be what your budget is. Your lender will have issued you a pre-approval letter showing a maximum sales price that you can afford. You will have then selected a floorplan that the builder offers that will have a base price (standard price of the home without any options or lot premium). To this price, you then add a lot premium (if applicable) based on your homesite selection. The difference between what your maximum sales price is from the pre-approval letter and what you have already added up with the base price and lot premium is what you have left as your options budget.
For example, Sally Steamboat is pre-qualified for a loan with a max sales price of $225,000. She found a great floorplan with Builder XYZ, and it has a base price of $190,000. She then looked at the various lot choices, and found a nice lot adjacent to the community park that has a $10,000 lot premium. So, before she has added any options to her home, she is already priced at $190,000 + $10,000 for a current subtotal of $200,000. This leaves her with the ability to still add up to $25,000 in options to her home.
What about the Design Center?
This is where it can get really tricky when going through the options selection process: most builders have you choose certain options with the sales associate, and then they ship you off to a separate appointment at a later date to choose your “colorization” options. Due to the vast amount of choices when it comes to carpeting, floor tile, cabinets, and countertops, most builders utilize either an in house or third party Design Center.
The Design Center will have designers with a tremendous knowledge about flooring, cabinets, countertops and matching colors. Just with carpet alone there can be dozens of different grades in a vast array of colors. The designer’s job is to help you best choose the flooring, cabinets and countertops to match each other and to fit your budget. In some cases, the additional options might just be your flooring, cabinet, and countertop selections. With some builders, you may actually be choosing much more at the Design Center including upgrades for faucets, light fixtures, door handles, door styles, appliances, and on and on. The challenge here is figuring out how much to spend with the sales associate doing your initial options selections, and then how much to keep in reserve to spend with the Design Center. To help clarify and prioritize what options are the most important to you, one way to look at them is to break them into Hard to do Later Options and Convenience Options.
“Hard to do Later Options” vs “Convenience Options”
Here is where we start getting down to the hard choices. Unless you have an unlimited budget where you can buy every option in the book, you are going to have to pick and choose which options are most important to you. Go through the options list and pick out all of the options that you would like to have in your home. Then add up the cost of the options on your list and see how the price stacks up to your options budget. If you have gone over your budget, then it is time to pare down the list and separate your must have options from your convenience options.
To clarify, what I call Convenience Options are items that can relatively easily be added to your home at a later date. The builder offers Convenience Options because they help complete the home; i.e. it is convenient to add the options with the builder so that you do not have to go out and buy them later. These would include items such as appliances, a garage door opener, ceiling fans, light and plumbing fixtures, window blinds, interior paint color, landscape upgrades, and so on. Even upgraded countertops and flooring can be moved into this category if the budget is getting too tight.
Contrast that with items I call Hard to do Later Options. These are options that can be quite difficult or even impossible to add at a later date, and strong consideration should be given to them over the Convenience Options. Options in this category are covered patios, electrical options, plumbing line options, room conversions, insulation upgrades, cabinet upgrades, bathroom options such as added sinks and showers, and the like. If it comes down to one vs the other, err on the side of choosing a Hard to do Later Option, as you can always add a Convenience Option later if you want it bad enough.
Just remember that buying your new home is supposed to be an enjoyable experience, so try not to let the options selection stress you out too much. I will go deeper into specifics on certain options in later posts. Let me know what you think down below!