The Hidden Costs of Building a Home in Dane County (and How to Avoid Them)

Building a new home in Madison or Dane County sounds like a dream — brand-new finishes, modern layouts, and a design that’s 100% yours.

But before you sign a builder contract, it’s crucial to understand what’s really included in the base price… and what’s not.

Many first-time builders are surprised when they discover hidden costs that add thousands to their final total.

Here’s a breakdown of what to expect — and how to avoid costly mistakes during your new construction journey.

1. Lot and Site Preparation Costs

Most builders advertise a base price that covers construction only — not the land itself or site prep.

If you’re building on a new lot, expect additional costs for:

• Grading and excavation

• Driveway installation

• Sewer, water, or utility hookups

• Tree removal or soil correction

💡 Pro Tip: Always ask your builder for a “lot-specific estimate” — not just a base model quote.

2. Upgrades and Finishes

Model homes are gorgeous — but they’re often fully upgraded showcases, not the standard package.

Common upgrades include:

• Kitchen cabinets and countertops

• Flooring and lighting

• Exterior finishes

• Landscaping and decks

💡 Pro Tip: Review the builder’s standard features sheet and highlight which upgrades you truly need. A good agent can help you negotiate builder credits for key items.

3. Permits and Impact Fees

In Dane County, local municipalities charge impact fees to cover new roads, parks, and utilities in growing communities.

These fees can range from $3,000–$10,000+, depending on the city or town.

💡 Pro Tip: Ask your builder or local real estate agent which city you’re building in — Sun Prairie, Verona, Cottage Grove, and DeForest all have different fee structures.

4. Change Orders

Every change you make after signing the contract — even something small — can add up.

Need extra outlets? A different tile pattern? Moving a wall?
Those are considered change orders, and builders often charge a markup on materials and labor.

💡 Pro Tip: Finalize design decisions before construction starts. Once the build begins, changes can delay progress and increase costs significantly.

5. Landscaping, Fencing, and Outdoor Spaces

Your new home’s price likely doesn’t include:

• Sod or grass seed

• Driveway sealing

• Patio or deck installation

• Fence or sprinkler systems

💡 Pro Tip: Budget at least 1–3% of your total home cost for exterior work after move-in.

6. Closing Costs and Financing

Building loans work differently than buying an existing home.
You’ll often pay interest-only during construction and cover additional appraisal, inspection, and title fees.

💡 Pro Tip: Ask your lender if they offer construction-to-permanent loans, which roll everything into one closing — saving time and money.

🏡 Build Smarter with Alexander Real Estate

At Alexander Real Estate, we’ve helped countless Dane County buyers navigate the new construction process — from selecting builders to reading fine print.

Our mission is to help you build smarter, not spend harder.
We’ll help you compare:

• Builder incentives and upgrade packages

• Neighborhood fees and restrictions

• Lot costs and financing options

👉 Start your new construction journey
📞 Call or text 608-621-7188 today to connect with a local new construction expert.