Buying a brand-new house is exciting, but it’s not just the sticker price you need to consider. Closing costs on new construction can sneak up on buyers if they’re not prepared. These extra expenses include fees from your lender, title insurance, appraisals, property taxes, and a pile of administrative charges. Typically, they range from 2% to 5% of the home’s purchase price.

Here’s the good news: when you work with NHC, our lowest prices per square foot homes starting from the $180s already help shrink those costs, and in many cases, you may not have to pay them at all. Let’s talk through everything you need to know.

Understanding Closing Costs on New Construction

Before diving into who pays, it’s important to understand what closing costs actually include. These one-time fees cover all the paperwork and services required to transfer ownership of your home.

What are closing costs?

Closing costs are separate from your down payment. They’re due at signing and ensure the legal and financial side of your purchase is complete.

Breaking Down the Typical Fees Included

Every homebuyer should know the basics. Here’s a quick breakdown of the most common charges tied to closing costs on new construction.

• Loan origination fees: These are what lenders charge to set up your loan.
• Title insurance and fees: These protect you and your lender from ownership disputes.
• Property taxes and escrow costs: These are prepaid to cover your first tax cycle.
• Appraisal and inspection fees: These confirm your home’s value and condition.
• Administrative charges: They cover processing, recording, and other back-end tasks.

Average Cost Range for New Builds

Since closing costs typically range from 2% to 5% of the home’s price, let’s break down an example. On a $250,000 home, that’s anywhere from $5,000–$12,500. Knowing these numbers helps you plan and spot deals when builders cover them.

Who Typically Pays Closing Costs on a New Home?

Once you know what closing costs are, the next question is: who pays closing costs on a new construction home?

In most cases, the buyer pays. But builders like NHC can change the game by helping cover these expenses when you finance through a partner lender such as NHC Mortgage. 

Here’s what that means for you:

• More buying power: Your down payment goes further, giving you more equity in your property upfront.
• Added savings: On a $200,000 home, closing costs can run $4,000–$10,000. Choosing an affordable builder like NHC means lower home prices and lower fees to match.

Real example: Imagine buying one of NHC’s affordable homes in Texas. You lock in the lowest price per square foot on the market, and instead of shelling out thousands for closing costs, you can put that money toward your down payment.

Negotiating Closing Costs on a Newly Constructed Home

A common misconception is that closing costs are fixed. But that’s not true! Whether you’re wondering who pays closing costs on a new construction home or how much wiggle room you really have, the truth is, there are always strategies to reduce what you owe.

Why You Should Always Negotiate

Builders and lenders want to close deals, and many will make adjustments if it helps seal the contract. Negotiating can turn new build closing costs from a stress point into a savings opportunity.

Strategies for Negotiating with Builders

• Ask early in the process: Builders are often more flexible before contracts are signed.
• Find the right builder: Look for scenarios where a builder pays closing costs through incentives tied to using preferred lenders, like NHC Mortgage.
• Bundle negotiations: Sometimes builders will cover fees if you agree to upgrades or a quicker close.

Tips for Handling Closing Costs on New Construction

All of the financial paperwork and processes when buying a new home can feel overwhelming, especially if you’re a first-time home buyer. Here are some tips to help you handle closing costs on your home with ease.

Pro Tip #1: Seeking Concessions from Builders or Sellers

Even though buyers usually cover closing costs on new construction, concessions are common if the market favors buyers.

• When to ask: During slower sales seasons or when builders need to move inventory.
• How market conditions affect concessions: In a seller’s market, concessions are rare; in a buyer’s market, they’re much more common.
• Maximizing leverage: Being pre-approved and ready to close quickly makes you a stronger candidate for deals where the builder pays closing costs.

Pro Tip #2: Exploring Your Lending Options

Your choice of lender directly impacts what you’ll pay at closing. Comparing lenders can help lower new-build closing costs and secure better terms.

• Choosing between multiple lenders: Compare at least three lenders for rates and fee structures.
• Rolling closing costs into your mortgage: Some lenders allow this, letting you pay costs gradually instead of up front.
• How lending options affect your overall costs: Builder-preferred lenders, like NHC Mortgage, often combine better rates with incentives where the builder pays closing costs.

To get even more specific about what your monthly payments could look like after closing costs, use our mortgage calculator.

Pro Tip #3: Negotiating with Your Lender

Even lender fees can be flexible if you know what to ask for. Here are some things to keep in mind when negotiating with a lender.

• Understanding which fees are negotiable: The origination, application, and processing fees are often up for discussion.
• Asking for waivers or discounts: Many lenders will reduce or waive fees to win your business, helping lower your overall new build closing costs.
• Benefits of shopping around: Comparing multiple offers ensures you’re getting the most competitive package.

Navigating Closing Costs with Confidence Through NHC

At the end of the day, closing costs on new construction don’t have to drain your budget. While buyers typically cover them, builders like NHC change the game by offering incentives through NHC Mortgage, ultra-low deposits, and the lowest prices per square foot in the market.

Our homes are built to last, with turnkey features installed, a range of updated floor plans to choose from, and starting from the $180s. By choosing an affordable builder, you can cut your costs, build equity faster, and make homeownership more achievable. 

Ready to get started? Explore NHC’s available homes today and see how far your budget can really go.

Frequently asked questions

Can you negotiate who pays closing costs?

Yes. While buyers usually pay, there are plenty of situations where a lender or a builder pays closing costs to make the purchase more affordable. Builders like NHC often provide incentives through preferred lenders, which can significantly reduce what you owe.

Are closing costs higher for new construction?

They can be, since new build closing costs sometimes include additional inspections and escrow requirements. However, builder incentives and special financing programs often offset these expenses, keeping them manageable.

What is earnest money for a new construction home?

Earnest money is a deposit showing your commitment to the purchase. Traditionally, it’s 1%–3% of the home price. With NHC Mortgage, it could be as low as $1,000, making it easier to secure your new home.

What happens if you don’t have all the money at closing?

If you don’t have enough saved to cover closing costs on new construction, some lenders offer no-closing-cost mortgages. These roll fees into your monthly payments so you can move forward without the upfront burden.