June 3rd, 2017 1:30 PM by Jackie A. Graves, President
How not to make money mistakes as a
negotiations are over. Your mortgage is settled. The keys to your first home
are in hand.
Finally, you can install your
You can paint the walls without
losing your security deposit.
you could knock out a wall. You’re soooo ready to be a homeowner.
So ready in fact, you’re about to make some costly mistakes.
“You have to rein it in and be
smart,” says Daniel Kanter, a homeowner with five years under his belt. Especially
in your first year, when your happiness, eagerness (and sometimes ignorance)
might convince you to make one of these eight mistakes:
The sounds your HVAC system is
making clearly require the knowledge of a professional (or perhaps an
But you’ve been smart and
gotten three contractor bids, so why not go with the lowest price?
might want to check out this story from a Michigan
couple. Rather than going with a remodeler who’d delivered good work
in the past, they hired a contractor offering to complete the work for less
than half the cost, in less time.
A year later, their house was
still a construction zone. You don’t want to be in the same spot.
What to do: Double-check that all bids include the same
project scope — sometimes one is cheaper because it doesn’t include all the
actual costs and details of the project. The contractor may lack the
experience to know of additional steps and costs.
#2 Submitting Small Insurance Claims
Insurance is there to cover damage to your property, so why not
Because the maddening reality is that filing a claim or two,
especially in a relatively short period, can trigger an increase in your
premium. “As a consumer advocate, I hate telling people not to use something
they paid for,” says Amy Bach, executive director of nonprofit United
Policyholders, which works to empower consumers. But, it’s better to pay out of
pocket than submit claims that are less than your deductible.
Save your insurance for the catastrophic stuff. “You want the
cleanest record possible,” Bach says. “You want to be seen as the lowest risk.
It’s like a driving record — the more tickets you have, the more your insurance.”
Some insurance groups, like the Insurance
Information Institute and National Association
of Insurance Commissioners, say it’s hard to
generalize about premium increases because states’ and providers’
rules differ. But this stat from a report by UP and the Rutgers Center for Risk
and Responsibility at Rutgers Law School is pretty sobering: Only two states —
Rhode Island and Texas — got top marks for protecting consumers “from improper
rate increases and non-renewals” just for making:
An inquiry about a claim
A claim that isn’t paid because it was less than the deductible
A single claim
best protection? Maintaining your home so small claims don’t even
Brandon Hedges, a
REALTOR® in Minneapolis-St. Paul, recalls a couple who, though only
planning to stay in their home for a few years, quickly replaced all their
windows. When the time came to sell, he had to deliver the crushing news that
they wouldn’t get back their full investment — more than $30,000.
New windows can be a great
investment if you’re sticking around for awhile, especially if windows are
beyond repair, and you want to save on energy bills.
because you might personally value an upgrade doesn’t mean the
market will. “It’s easy to build yourself out of your neighborhood” and invest
more than you can recoup at resale, says Linda Sowell, a REALTOR® in Memphis,
What to do: Before you pick up a sledgehammer, check
with an agent or appraiser, who usually are happy to share their knowledge
about how much moola an improvement will eventually deliver.
When you enter homeownership
with an apartment’s worth of furnishings, entire rooms in your new home are
depressingly sparse. You want to feel settled. You want guests at your
housewarming party to be able to sit on real furniture.
But try to exercise some
retailing willpower. Investing in high-quality furniture over time is just
smarter than blowing your budget on a whole house worth of particleboard
discount items all at once.
What to do: Live in your home for a while, and you’ll
get to know your space. Your living room may really need two full couches, not
the love seat and a recliner you pictured there.
Shortly after moving in, your
sump pump dies. You begrudgingly pay for a new one and try to forget about the
cash you just dropped. But don’t! When it comes time to sell, improvements as
small as this are like a resume-builder for your home that can boost its price.
And, if problems arise down the road, warranty information for something like a
new furnace could save you hundreds.
What to do: Stow paperwork like receipts, contracts,
and manuals in a three-ring binder with clear plastic sleeves, or photograph
your documents and upload them to cloud storage.
your inspection report as your very first home to-do list — even before you
start perusing paint colors. Minor issues that helped take a chunk of change
off the sale price can cause cumulative (and sometimes hazardous) damage. Over
time, loose gutters could yield thousands in foundation damage. Uninsulated
pipes? You could pay hundreds to a plumber when they crack in freezing
temperatures. And a single faulty electric outlet could indicate dangerous ungrounded
What to do: Get the opinion and estimate of a
contractor (usually at no charge), and then you can make an informed decision.
But remember #1 above.
No one wants to be a Negative
Nancy, but there’s a benefit to knowing the worst-case scenario.
Homeowner Kanter tells the time
he hired roofers to remove box gutters from his 1880s home. Little did he know,
more often than not aged box gutters come with more extensive rot damage, which
his roofers weren’t qualified to handle.
“We had to have four different
contractors come in and close stuff up for the winter,” he says. Had he
researched the problem, he could have saved money and anxiety by hiring a
specialist from the start, he says.
What to do: Before beginning a project, thoroughly
research it. Ask neighbors. Ask detailed questions of contractors so you can
get your timing, budget, and expectations in line.
You need some basic tools for
your first home — a hammer, screwdriver set, a ladder, maybe a mower.
But if you pick up a “novelty”
kit (like those cute pink ones) or inexpensive off-brand items, don’t be
surprised if they break right away, or if components like batteries have to be
What to do: For a budget-friendly start, buy used tools
from known quality brands (check online auctions or local estate sales) that
the pros themselves use.
By Amy Howell Hirt - To view the original article click here