Hidden Costs of New Construction in Nashville

New construction homes in Nashville are booming. With stunning floor plans, modern finishes, and energy-efficient designs, it’s easy to see why so many buyers are drawn to them. But while that shiny model home looks perfect, the price tag on the sign rarely tells the full story.

Many buyers are surprised by hidden costs that sneak up during construction or after closing. To help you budget wisely and avoid frustration, here’s a breakdown of the most common hidden costs of buying new construction in Nashville.

1. Lot Premiums

When you tour a builder’s community, you’ll notice that some lots cost more than others.

A lot premium is an additional charge for a specific piece of land within the development — usually because it’s more desirable.

Common reasons for lot premiums:

• Larger or corner lots

• Lake, wooded, or hill views

• Proximity to community amenities like pools or trails

Typical Cost in Nashville:
$5,000 to $50,000 depending on location and builder.

Pro Tip:
Ask your builder early which lots have premiums and whether they’re negotiable. Sometimes, choosing a slightly different lot can save you thousands.

2. Upgrades and Customization Costs

The model home you fall in love with is rarely the base price version. Builders showcase premium flooring, cabinetry, countertops, lighting, and appliances to highlight their best work.

Common Upgrade Expenses:

• Quartz or granite countertops instead of laminate

• Hardwood flooring throughout

• Tray ceilings, crown molding, or custom trim

• Upgraded lighting, faucets, and hardware

• Smart home technology

Average Total Cost:
Upgrades often add 10% to 20% to the base price — sometimes more for luxury builds in areas like Brentwood or Franklin.

Pro Tip:
Ask for a detailed price list of standard features and upgrades before signing a contract. This will help you decide which upgrades are worth it and which you can skip or add later.

3. Landscaping and Fencing

Builders typically include basic front-yard landscaping, but many don’t include full sod in the backyard, fencing, or irrigation systems.

Typical Costs:

• Backyard sod: $2,000–$4,000

• Fence installation: $3,500–$8,000

• Irrigation system: $2,000–$6,000

If you have pets or kids, these costs can add up fast — and they’re often due right after you move in.

Pro Tip:
Negotiate for at least partial landscaping or a fence allowance when possible, especially if you’re in a competitive new subdivision.

4. Window Treatments and Appliances

Another surprise for many Nashville buyers is that some new homes don’t include window blinds, refrigerators, or washer/dryer sets.

Estimated Costs:

• Blinds for an average home: $1,000–$2,500

• Refrigerator: $1,500–$3,000

• Washer/Dryer: $1,200–$2,500

Pro Tip:
Check your builder’s included features list carefully. Builders often partner with appliance vendors, so you can sometimes get discounted pricing if you buy through them.

5. Homeowners Association (HOA) Fees

Most new construction communities in Nashville include a Homeowners Association.

HOA fees cover amenities like pools, walking trails, and landscaping of common areas — but they vary widely.

Typical Costs in 2025:

• Townhome communities: $150–$350 per month

• Single-family home communities: $50–$150 per month

Some neighborhoods also have one-time HOA initiation fees or capital contributions that are due at closing.

Pro Tip:
Ask for a copy of the HOA bylaws before you buy. Understand what’s covered and what’s not — especially if you’re responsible for maintaining your own yard or exterior.

6. Closing Costs and Builder Incentives

While some builders offer to cover closing costs, those incentives often come with strings attached.

For example, a builder might require you to use their preferred lender and title company to get those savings.

Typical Closing Costs:
2% to 4% of the purchase price.

Pro Tip:
Even if you use the builder’s lender, compare their rates and fees to outside lenders. Sometimes the incentive doesn’t outweigh higher interest rates or added fees.

7. Property Taxes and Assessments

When you buy new construction, your initial property tax bill may be based on the land value only, not the finished home.

After your first full year, the county will reassess your property, and your tax bill could jump significantly.

Example:
A lot valued at $50,000 may have annual taxes around $500. Once the completed home is valued at $550,000, your taxes could rise to around $5,000–$6,000 per year.

Pro Tip:
Ask your Realtor or local tax assessor for an estimate based on the home’s projected final value.

8. Builder Warranty Coverage

New homes come with a builder’s warranty, but coverage varies.

• Structural issues may be covered for 10 years.

• Workmanship and materials are usually covered for only 1 year.

• Appliances and systems fall under manufacturer warranties.

If you want extra protection, you may need to buy an extended home warranty, which typically costs $400–$800 per year.

Pro Tip:
Read the warranty carefully so you understand what’s included, what’s excluded, and how to make claims.

9. Delays and Interest Rate Locks

Construction delays are common due to weather, material shortages, or permitting issues.

If your build takes longer than expected, your mortgage rate lock could expire, potentially increasing your monthly payment.

Pro Tip:
Work with a lender experienced in new construction who offers extended rate locks or flexible options.

10. Utilities and Infrastructure Costs

Some Nashville developments charge buyers for part of the infrastructure setup, such as sewer connections, power hookups, or natural gas installation.

These costs might be rolled into your closing expenses or billed separately by utility companies after closing.

Pro Tip:
Ask the builder for a complete list of utility setup fees and average monthly costs so there are no surprises after move-in.

11. Post-Move Expenses

Even after closing, expect a few additional costs:

• Mailbox installation

• Light fixtures for rooms not included in the package

• Backyard decks or patios

• Custom storage or shelving

These finishing touches can easily add another $5,000–$10,000 to your budget.

Frequently Asked Questions (FAQs)

Q1: Are all upgrades in new construction worth the cost?
Not always. Focus on structural and high-impact features like flooring, kitchen finishes, and primary bathrooms. You can add cosmetic upgrades later.

Q2: How long does new construction in Nashville take to complete?
Most homes take 6 to 10 months, depending on the builder and weather conditions.

Q3: Do builders allow negotiations?
Yes, especially at the end of the year or if a home has been sitting unsold. You may be able to negotiate upgrades or closing costs instead of a price cut.

Q4: Is new construction more expensive than resale?
Usually, yes — but you’re also getting a warranty, energy efficiency, and customization options that can offset higher upfront costs.

Q5: How can a Realtor help with new construction?
A Realtor represents your best interests, reviews the contract for hidden fees, and helps you negotiate upgrades or builder incentives that you might not get on your own.

Conclusion

Buying new construction in Nashville is an exciting opportunity to get a home designed just the way you want. But the key to success is going in with eyes wide open about the costs that don’t always appear in the base price.

From lot premiums and upgrades to taxes and HOA fees, being informed helps you stay within budget and avoid surprises later.

If you’re considering building or buying new construction in Nashville, partner with an experienced Realtor who knows the local builders, contracts, and communities. With the right guidance, your dream home can stay beautiful — and financially comfortable — long after the closing date.