For many years as home improvement contractor, I have had the chance to work with new home owners that bought their first dream home. I was hired as a contractor to renovate, build, install, and modify different parts of their home. As you know, the occasion of buying a home is a very special and happy one if you have found something you really love. There is excitement in the air as soon as you move to your beautifully renovated home. During these years, I have watched new homeowners get into a new home with a lot of financial commitments and 30 year mortgages. I saw over and over that these new homeowners were buried with the amount of expenses and repairs of their dream home.
Your house might have bought you if you have unexpected expensive items that need repair and renovation and will take a long time for you to pay off.
YOUR INCOME=YOUR TIME=YOUR LIFE
You commit to pay (spend your time) at work creating income that will be dedicated to the repair of your home.
You bought your new home, you have a list of changes to be made, and then usually your expected renovation or repair expenses double, if not more. This is not because, I as a contractor, am looking to up-sell or squeeze more money ( I am not this type of contractor). Most of the time, these new homeowners were not fully aware of the problems within the home and the real and necessary expenses required for their taste. What occurs is that new home buyers received an inspection from a home inspections company with a general list of items which you then negotiate with the seller, and then you meet somewhere in the middle with the seller. But as more time is spent in the home, there is an understanding that more things need to be repaired and modified according to their standards. The result is a cost much higher than initially anticipated.
Homeowners tend to spend between $10-$20k for renovations to a new home. Depending on the amount of work, renovations can go as high as even $100k. Planning a $20k renovation can easily change to $40k and up due to additional repairs and modifications. I have seen the frustration and disappointment from some of the new homeowners. Some had a very limited budget to start with.
If you are going through renovations within your home, kitchen, roof repair, bathroom, or foundations and more, these will be very expensive regardless of planning. In some cases I have seen new homeowners that did not do their homework and unfortunately, the house ended up buying them. The house consumed the next 10-15 years of hard work due to unexpected extra costs and repairs.
As a highly referred contractor and friend, I try to give the best advice and feel sympathy for their circumstances. Still, some items within a home, such as kitchen renovations, are big ticket items to put together. These are items that you need to keep an eye out for before buying the property.
The following is some advice that if followed, will help you avoid digging yourself into an unexpected hole of expenses when buying your new home. Feel free to do research online and talk with professionals. Getting a thorough image of your home, however, is the real trick of meeting and keeping your budget after ownership.
- Never look at or inspect the home in the dark. A house is like a marriage – you will be staying with it for a long time. Make sure to take a look in the light and not the dark. Walk into the house in the daytime and open the doors and windows, look in the attic, ceiling, and basement. You do not need to be an inspector to notice cracks in the wall. Just look and see that visually everything looks right. If things are not visually right, you need to do further research.
- If you get an inspection company to inspect your new home, you only did half the job because they may be disconnected from reality. Get a real guy that’s out in the field to give you an exact dollar amount estimate. This can only be done by a real remodeling contractor or any general home improvement contractor. The contractor will look at the items and be able to tell you how much he will be able to fix it for you. Take this list and add 15% to 30% extra because you cannot foresee everything within a few visits. By nature, you will find other things later on and if not, that’s wonderful!
- Get your wife, or your spouse, to have their own list of changes. Most of the time, these come later on as surprises. If you can get an opinion of what you like after looking at the catalogs, you will be able to choose your budget wisely. In other words, you must have a list written down that you work with from the beginning with a specific dollar amount to each item needing repair or renovation.
- Pay attention to the seller’s words and objectives. See what he is easygoing with, and where he is hard to work with. If you are negotiating repair or renovation with items such as a furnace, in-ground pool, hot water heater furnace, see where and when he meets you in the middle and where he is unwilling to repair. These items may require change. For instance, an air conditioning or heating system temperature can only be checked when you live within the house. Pay attention to these things.
- Don’t let your attorney or realtor negotiate the list for you. They are professionals within their fields, but you need your own reliable contractor for advice. Do not go with a legal professional to negotiate repair items. Take the right soldier for the right battle. Try to communicate directly with the seller. Don’t let people with the wrong knowledge get between you and the seller.
- Try to negotiate a warranty for certain items for at least 30 days. Sometimes you can get away with 1 or 2 items and get extra security just in case they break down.
- This advice you will not read elsewhere. When you meet a seller and his spouse, or the family, look at them as people too. Judge them according to whether you would like to have them as neighbors. Certain people create certain environments. They may be good or bad, but listen to your guts. Good, normal people do not neglect their own home. Some people will let you believe that they are selling you a good house but behind the walls, there are a lot of patches and illegal repairs that can cause you a lot of headache and money. Look at the people and listen to your guts. They have lived in the home longer than you and if you feel comfortable with them, it could be a very good deal. I bought my own home this way. The first day I received my keys, I did not have to change my lock. The sellers were honest and pleasant people.
- Hire an excellent contractor. Your house is one of the most important investments in your life. You want an excellent contractor behind you taking care of your home. This can save you a lot of money but will also give you piece of mind and keep your home systems running with little maintenance. This you can do only with the right contractor.
- How you choose the right contractor is another story, but I will keep you posted. It’s not what you think.