Costly Mistakes First Time Homebuyers Make

 
First Time Homebuyer

Getting the keys to your dream home may seem like the finish line, and in many ways it is. The house hunt is over, there's no more showings, the inspections have been completed… But in so many others, it is only the beginning.

It's the beginning of a whole new chapter of opportunities (and responsibilities). You no longer need to ask your landlord or parents for permission to paint a room or change out light fixtures. This house is all yours and remodels, whether big or small, are entirely up to you. How exciting is that?

After you get moved in and settled, but before you start remodeling projects, here are a few potentially costly mistakes that first time homebuyers often make! Were you close to making one of these?

Not getting enough insurance coverage

Did you consult with a local insurance agent that made sure you were properly and adequately covered in the event that something should happen? Do you know if you have Actual Cash Value or Replacement Cost coverage? Do you fully understand your insurance policy?

Not to worry if you don't, now's the time to double check your insurance policy to ensure that you are adequately covered for the unexpected parts of life that insurance is intended to protect you from.

Here are a few questions to ask your insurance agent:
• Do I have enough insurance coverage to rebuild my house?
• Is depreciation recoverable (Does the policy cover replacement costs)?
• Am I covered for any improvements made? Do I need to adjust the value of my home through my agent as I make improvements to the home?

• Do I need life insurance? Will your significant other have the financial means to keep the house in the event something should happen to you?

Ignoring small items on your inspection report

You hired an inspector to look through your home before you bought it and point out any potential issues that they may have seen, but once you got the keys you likely forgot all about that report they put together for you. Don't! The inspector's report should be treated as your first To-Do List. Addressing these potential issues early could save you a lot of money down the line.

Even things you may consider minor issues could add up to thousands of dollars if left unaddressed. Uninsulated pipes could be taken care of over a weekend for a couple hundred dollars, but if they're allowed to freeze and crack could result in thousands of dollars in Water Damage and Repairs. Did your inspector point out trees or shrubs that were touching your house? There's a reason for his concern, as if trees are not trimmed away from the house, they could allow moisture to collect against your house or critters to get inside. Unhealthy branches or trees could even fall on your roof!

Making snap remodeling decisions

Believe me, we've all been there. Moving in to your own home is exciting and the potential to make it your own is a bit overwhelming. It's easy to go from "a new coat of paint" to "let's take down this wall", but it's important to take a step back to ensure that each project makes sense (particularly the big ones).

Is that wall load bearing? Is the floor on both sides of the wall at the same level? Do you plan on replacing the floor (flooring generally doesn't go under the wall)? Is there another project that's more time sensitive?

Before beginning a large project, take a moment to reflect on what will be involved in the project and what potentially unforeseen steps may become necessary. Feel free to consult with a professional who will likely think of things that wouldn't occur to the average homeowner and who is able to take steps to minimize potential surprises. That's what professionals are here for, and involving one early can save a lot of headache later.

Going with the lowest bid

So, you've settled on a project and you've started getting estimates. That's great!

You took your time and went over everything you wanted done with each contractor and expect that all of their estimates should reflect the same work, right? Maybe, maybe not. While often the deciding factor in choosing a contractor is price, there generally is a reason that contractor's bid came in the lowest.

Were any steps detailed in the other bids left out of the lowest bid? Does the contractor have a web presence with reviews from customers? Is the work for which the contractor is bidding work that they regularly perform and advertise?

Most commonly, we see "low bids" that leave out necessary steps or tasks of the project. Often contractors will claim that these tasks are included in other tasks or line items. This should not be acceptable. Any task should be clearly broken out in the estimate or proposal so it is clear what you are getting. This is particularly common with specialized services such as Mold Remediation and Asbestos Abatement, where leaving out these tasks implies steps that a contractor doesn't realize need to be taken. If a remodeling contractor is performing work in a bathroom with a mold issue, but is not properly addressing the mold contamination, especially mold spores in the air, additional cross contamination to other areas of the home and further damage could result. Only indoor environmental firms specialized in mold remediation should perform such work.

Sometimes the differences between bids can be more subtle, such as lower quality finishes or even plumbing components. One contractor may be installing more efficient rock wool insulation, while another may be installing cheaper fiberglass insulation. If you're unsure what your contractor is bidding for, don't hesitate to ask. These are questions they get all the time and you shouldn't be hesitant to get clarification and get it in writing. It's your home, and your project, you should have it completed the way you want.

Completing projects without checking the Return on Investment (ROI)

Maybe you want to convert a bedroom to a large walk-in closet, or choose high end finishes like granite countertops in your kitchen. We're sure they will be lovely improvements to your home, but it's important to understand that they may not be valuable additions to future owners in the event that you sell. While walk-in closets are great, reducing the number of bedrooms in your home is not, and may negatively impact the resale value of your home.

While return on investment isn't the end all when planning a project, it is a common consideration that first time homebuyers forget amidst the excitement of making something their own. While it shouldn't stop you from planning out a project that you will love, it's important to keep in mind that not all home remodels are created equal when it comes to ROI.

Furnishing the house all at once

When you had your apartment it probably felt like you had a lot of furniture, but moving that into a house usually makes it clear how few things you really had! As a new homeowner, you're likely very eager to fill up those empty spaces, but before you do, take some time to think about what you really need. It's far more cost effective to purchase a couple of high quality pieces at a time that will last than to purchase a ton of lower end pieces that you will need to replace in a few years.

In addition, after living in a home for a while, you'll have a far better feeling for what you would like where. Though you may have initially envisioned a large 8 person dining room table, you may find that a 6 person table and china cabinet better suits your needs.

Throwing away receipts and paperwork

Did you replace your hot water heater? Have a Radon Mitigation System installed? Upgraded plumbing or electrical? These are all great things to be able to show potential buyers should you decide to sell in the future! Not only does this support the upgrades that you've made during the time you've lived in the house, but it shows that the house was cared for and not neglected, which is definitely something home buyers like to see.

In addition, saving these documents, including warranty information, can save you hundreds of dollars in the event that you ever have a warranty claim on that hot water heater, sump pump, or appliance!

Buying cheap tools

As a renter, the list of tools you need is pretty short. Upon moving into a home however, it's easy to be overwhelmed by the number of tools that you find yourself needing. Hammers, drills, circular saws, and the list goes on. Given how many things you'll need, it's easy to be tempted to purchase cheap tools, but ignore such temptations. It's far more cost effective (and in some cases safer) to purchase better quality tools as you need them than cheaper kits that include tools you may never use or may break after a year.

If you're doing work yourself, be sure to carefully evaluate what tools you may need and do research into the quality of the brands you're looking at.

We wish you many wonderful memories in your new home and hope that you avoid all of these common first time homebuyer mistakes! Should you find that you need assistance with your project, or discover Water Damage, Mold, Radon, or Asbestos, please do not hesitate to Contact Our Offices! That's what we're here for!

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