First Home Considerations

First Home Considerations
Photo by Adriaan Greyling from Pexels
A while back my daughter bought her first home. When they were house hunting the Mrs. and I tagged along, and I must admit I was shocked how little $450k bought. I realize that the “times are a changin”. They settled on an 80-year-old 3-bedroom house – they were lucky as the first buyer could not get a mortgage, so the sellers, who had already moved out, were desperate for a quick deal. It got me to thinking about: First Home Considerations”

The house like nearly all the homes in this charming, friendly, old neighborhood had been added onto. A modest galley kitchen in desperate need of a redo. Every wall in the house in need of spackling, sanding, painting, and new moldings. The leaky exterior doors, one original, all in need of replacement. All of which became a family affair. His Dad the molding installer, my wife Carolyn, and her sister the master painters.  What is left is the kitchen, the last big task and it will likely cost at least $60,000. Walls will be moved, and an open design will hopefully be the end result.

Carolyn and I have been down this road ourselves as our first 80-year-old home needed everything including finishing the second story shell. What I could do, I did, everything else we judiciously contracted out. We sold that home for nearly three times what we paid for it. Thinking back, I came up with some advice on buying that first home (First Home Considerations). I also asked a group of financially astute experienced home buyers for their thoughts about my list.

1) Buy what you can afford. We would rather be snug in our modest cape cod than be stretched to our limit. Small usually means lower operating costs too. Work to get sufficient down payment to avoid the need for PMI (Private Mortgage Insurance may be required by your lender if you put less than 20% down see https://en.wikipedia.org/wiki/Lenders_mortgage_insurance )

Laura E wrote: “Buy a house within your means. There are lots of emergency expenses people don’t budget for.”

Bill B wrote: “My husband and I lived with parents until we could afford 20% down, took on a 15-year mortgage, and paid it off in a few years with no regrets. We stayed on top of all repairs. It is critical to have savings before purchasing a house and make sure you will be staying in that area–otherwise rent. We later moved to a better house on a lake and did the same…to us personally having no mortgage or debt is important to our mental health. We do private school, but anyone who has or might have kids definitely needs to think about school districts before buying a house.”

Tim S wrote: “Same here, modest, small home is awesome. I fix what I can (New hot water heater, new faucets, etc.), and hire out stuff I’m not comfortable with. Nothing beats a paid-off modest home, with low taxes. I drive around the subdivisions and see these giant homes, and wonder, “What will they do when the kids move out”?.. and how do they pay the taxes and utilities on that? I’m sure it hurts some people’s investment plans? I try not to judge, do what makes you happy.

2) Get an inspection! Every single time I bought they found costly things needing attention. I cannot stress this enough. I received a written report with pictures detailing what the inspector observed and the estimated cost to repair the issue. I have heard many nightmares and the common theme we did not get an inspector.

Betty M wrote: “The inspector went into the crawl space under the house. Fifteen minutes later he came out and pulled me aside and told me the ground floor bathroom was leaking and there was some seriously rotten wood. The pictures he took were indisputable. The repair cost $4,200 that would have killed my redecoration budget.”

Theodore T wrote: “Hire a good certified, licensed inspector, not some fly by night. It’s worth paying a few hundred dollars more for a professional inspector to save tens of thousands of future repairs.”

Kelly T wrote: “Totally agree on all these points. The other thing I would add is, don’t be afraid to walk away if you need to…. I threatened to walk away from another house when the furnace was tagged as unusable during the inspection and the seller refused to replace it. I figure “I was looking for a house when I found this one”. It’s not worth it to go through with a sale if there are problems with the house or you’d not feel safe living there.”

3) Emergency fund! Our 8-year-old furnace died last year $7,000. We also needed some stucco (Masonry -the real kind) $7000 too. The point is: do not expect to move and the expenses to stop. Toilets run, faucets drip, if want to keep the cost down you will need to do it yourself. Perhaps find a reasonable handyman. My son-in-law and I fixed a gas leak in the boiler room and installed a new vanity in the upstairs bath -I will bet that would have easily cost $500.

Bill R wrote: “I’d add that learning to do it yourself is very easy today with YouTube how-to videos on virtually every repair. That practice (especially if you are young) will pay off many times over as you acquire the tools and skills. I do things today that I was scared to do a decade ago. Not only do I enjoy it, but it gets done snappy and cheap.”

4) You will hear how older homes were built better. In some cases that is true, but an old home can hide a multitude of problems. Keep in mind the building codes were minimal or non-existent. Cast iron or lead pipes, substandard wiring, no insulation, drafty windows, etc.,

Rob F wrote “I owned a 1929 Tudor for 20 years and just sold it. I put so much money into that money pit that I will never buy an old home again. I’ll stay safe and sound in my 2BD townhouse which was half the cost of what my house sold for. NEVER AGAIN!”

Thomas M wrote: “I don’t like buying anything older than the 1980s personally. There are so many terrible building technologies out there including plaster and lath, asbestos insulation, knob, and tube wiring, Federal Pacific breaker panels, Poly B pipe, all the materials that contributed to the leaky condo crisis. At least something built after the 1980s is probably not going to have asbestos drywall and the wiring will be copper

John L wrote: “I’ll take a well-built, well-maintained old home over a hastily constructed new one any day. Our house was 100 years old when we bought it. No serious issues. The previous owners spent a lot of money on upgrades. I agree about investing more time/money on inspections, and adding to that, spend less on mortgage shopping.

This list of my First Home Considerations is by no means an attempt to develop a comprehensive list. Frankly, there are simply far too many.  The list represents what a group of experienced home buyers believe are key First Home Considerations. If you would like to add to my list please email using the contact form on the right border. 

if you enjoyed my post may I suggest my prior post: The Best Financial Advice I Ever Received

How I Learned About Personal Finance

Raymond Mills, M.B.A., M.S. has spent over 30 years of his career as a Controller and Investment Bank and Credit Card Technical Auditor.  He now spends his time writing his blog, short stories and running his boutique Microsoft Office software customization business.

You can contact Ray @ by emailing him Here or by using the contact form in the right border.

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