Home Buying Tips – 7 Things Every Home Buyer Needs to Know

Should you buy a new or used home?

There is no right or wrong answer to this question. Some older homes are still in great shape and some newer homes are a disaster waiting to happen. But one thing is for sure, you need to give this question some serious thought. There are many considerations that will influence your decision. Among them are your goals and life style needs. And how will you wisely allocate your budget? Many home buyers do not have a plan in place with a list of values and goals. And newly married couples assume their marriage is so perfect that it can withstand any hardship. Well home ownership brings many challenges and hardships. And you need to ask yourself the tough questions and be honest with your answers. Make a list of your values. Do an assessment of your income potential. And define the lifestyle you would like to have. You may believe you want to live in a big and fancy home, but are you willing to pay the price of maintenance and up-keep? Are you willing to become a prisoner of your home? If you don’t answer these questions before you buy, life will answer them for you after you buy. So take these tips into consideration.

Can you afford to repair and remodel an older home?

The truth is that remodeling is expensive. And many people underestimate how much it is going to cost. You don’t want to experience the sticker shock after you have moved in.

Many older homes have been repaired or remodeled without a permit! Often by a home owner that has no idea how to build a home to modern codes. This can be an extremely expensive problem if you make the mistake of buying a home with the intention of remodeling it. You may believe it will only cost you $10,000 to upgrade and remodel a small bathroom. But home owners are often horrified to discover that the plumbing, framing, HVAC and electrical work needs to be removed and upgrading to modern building codes. Often this is not discovered until after the home owner has hired the contractor and the walls, floors and ceiling have been removed. This is a nightmare scenario for many home owners. Their contractor will tell them that the upgrades will be well in excess of the original estimate. And most contractors do not have the skill or the motivation to warn you of potential problems before you hire them. They are understandably only concerned with getting the job. They don’t want to scare you away with the possibility of hidden expenses.

So how do know if the home you want to buy can be remodeled without any ugly surprises? The truth is that you have to hire a talented and knowledgeable home inspector with experience remodeling homes. That is the only way you are going to get accurate and wise council about the home you want to buy. Yes it costs money to get an inspection. But putting your foot into a trap that you cannot escape from can affect your lifestyle and pocket book for decades to come. A home that is not right for you can result in years of hardship and heartbreak. The job of a consultant and inspector is to help home owners understand their choices and give them the information they need to make a truly wise choice.

Can you cope with a remodeling project?

Remodeling a home can be a very stressful experience. You need to think about whether you can live with the inconvenience and hassle of a remodeling project. Remodeling a home involves the following risks and hardships.

It has an inconvenient impact on the living space. You will be forced to move around building materials. You will be living in more constrained quarters while the remodeling is going on. You may need to set up a smaller alternate kitchen, bedroom or bathroom for awhile.

You will experience a dusty environment no matter how clean you or your contractor is. It will be dusty and at times downright dirty. Can you live with this?

Not all remodelers are created equal. Some are con artists. Some are just real slow. Some are very messy. Some do a poor job. And the ones that do everything right are very expensive because they need to be. So there is no escape from these hard truths. The buyer must beware and you get what you pay for. Sorry, no exceptions.

Do you have good relationship skills? You need to be honest with yourself about this one. If you are married, a remodeling project can test the best relationships. And if you are hiring contractors, you need to be able to communicate with them during times of stress that are inevitable. If you are not good with people, then a remodeling project is not for you. Narrow your home buying choices to newer homes that will require less work.

Utility costs can be much higher in an older home. Here’s why.

Older homes were not built with the same modern materials and building techniques that modern homes employ. They retain heat less efficiently and sometimes completely lack insulation altogether. Often older furnaces can be inefficient and consume a great deal of fuel and as a result cost more to heat. Older windows can be very drafty and they often lack the thermal insulating characteristics of a modern window. Between all of these considerations you can expect to pay higher heating and cooling bills. And in time you may need to add insulation like retro-foam that fills empty wall cavities. This can be very expensive. You will also need to upgrade the appliances as well. Will you need a new furnace and water heater before long? Will you save money by purchasing a new furnace right away? Is the water heater old and inefficient? Get these questions answered before you sign the purchase agreement.

Should you include the cost of repairs and remodeling in your mortgage?

This question must be answered by your realtor and mortgage consultant. But you need to keep in mind that remodeling and repair cost can be significant. Often you can’t remodel without a loan. So it is a good idea to plan for the added cost of the remodeling or repairs. You should at least figure them into the overall cost of the home.

It is easy to imagine the possibilities, but can you get permits and is it worth it to remodel?

As a remodeler, I have worked with clients that have remodeled older homes. I also purchased an older home in the Lake Minnetonka area to remodel it to my liking. So I have experienced what it is like to discover the hard truth about remodeling older homes. You must first understand that remodeling projects require a permit and the rules have become very strict and complicated. And many cities have very restricted zoning ordinances which will prevent a home owner from getting a permit because their dream addition will not fit within the setbacks. So before you buy an older home, you need to answer these questions.

Do you want to put an addition on the home? If you do, you need to visit the city and learn about restrictions and setbacks. Do your dreams for the home fall within city ordinance limitations?

Will the home require a historical permit? This can often complicate the remodeling process.

What did the home inspection reveal? Are there site conditions that will make it difficult to control water flow around the property? Cities can be difficult to work with when channeling water around a home. There are restrictions to water management in some jurisdictions. Are there structural or utilities issues that will make it mandatory to do extensive upgrades to electrical, plumbing, HVAC or structural framing?

Did the previous owners pull the necessary permits when the worked on the home? Did the inspection reveal that the home has been repaired or remodeled? These two issues must be addressed and you need to know the hard truth before you sign the purchase agreement.

New homes can be poorly built too. So how do you know?

Often times people assume a new home is very well built and will not need repairs or maintenance for years to come. This is a poor assumption that can get you into trouble. New home builders over the last twenty years have had their margins shrink because of competition from other builders. And new home buyers have been trying to get more houses for less money. Something had to give and that was building quality. The defects that a new home can have are numerous. And the cause of those defects are the result of the following considerations.

Often builders will hire the cheapest sub-contractor they can find so they can make more money or compete in a lower price market. These sub-contractors are then under a great deal of pressure to work very quickly to make a living. This results in corners getting cut and the home not being built to last.

If home buyers want more space for less money, then home builders will use cheaper materials to lower the price. This will have obvious results on building quality.

Often time’s city building inspectors are poorly paid and over scheduled. On numerous occasions I have watched city building inspectors spend a few minutes on the job site and then sign off on the permit because they have ten other inspections to get to that day. This happens more times than I would care to admit. But the truth is that many building defects just get overlooked.

State building codes are minimal requirements. And in the past the building codes have defined building methods that have had to be repealed and updated because they trapped too much moisture in the wall cavities. So don’t assume that a home that has passed a city building inspection is free from defects.

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Steven O’Connell is the owner of O’Connell Consulting and Rare Wood Remodeling LLC. He is currently inspecting homes and offering consultation services in the Minneapolis area and suburbs. He has 24 years of experience in the building trades. He has concentrated on serving high end customers with an eye for detail. His skill sets allowed him to produce some remarkably artistic and beautiful interior transformations. He achieved a mastery of several trades including framing and trim carpentry, fine wood work finishes, beautiful faux finishes and artistic murals, and also tile installation for bathrooms. He also gained expertise at conceptual Computer Aided Design. His sub-specialty was repairing defects and damage caused by water intrusion. He also ventured into the storm damage market for one summer to learn how to negotiate with insurance companies and repair roofing, siding and windows that had been damaged by severe storms and hail. He attended Kaplan professional schools to gain his certification in Home Inspections. Seeing an opportunity in what is to become a growth industry, Steven reorganized his career goals and began O’Connell Consulting. With a large number of homes for sale, and many in questionable condition, his skill sets will help home owners and investors evaluate their potential real estate purchase. O’Connell Consulting is for Home Owners, Investors and Real Estate Professionals that need a long and ongoing relationship with an experienced information resource.