In September 2020, I closed on my home, a pre-Revolution, Cape Cod-style cottage. The house had certainly stood the test of time, but it needed considerable work. Floorboards moved when I walked. Water backed up into the basement. Whether the furnace worked was up for debate. I was now the proud owner of so, so many problems.
Maybe I was somewhat overconfident about my appetite for #oldhouselife, but I’d gone into my home search looking for a fixer-upper. I was about as ready as one can be for a home that would be relatively cheap to buy but expensive to own.
Buyers of newer homes can face unexpected costs too, and when you’ve just closed, finding money to pay for them can be tough. A home equity loan, home equity line of credit or cash-out refinance are standard suggestions when it comes to funding home improvements. But when you’ve just bought a house, you rarely have enough home equity to borrow against. Planning ahead for how you’ll pay for expected (and unexpected) improvements can reduce stress and save you money.
Why you might be making repairs sooner than you think
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Sure, my nearly 300-year-old home is an outlier, but it’s true that younger buyers — who are also more likely to be first-time home buyers — tend to buy older homes, according to 2020 data from the National Association of Realtors. Buyers ages 22 to 30 are also the most likely to compromise on their home’s condition and spend the least on their actual purchase, per the NAR.
This also continues to be a tough market for buyers, period. Forget negotiating repairs with the seller — in many parts of the country, buyers have been making offers that waive the inspection contingency altogether. That leaves buyers less prepared for systems that might need maintenance or are near the end of their expected lifetimes, not to mention smaller problems that can crop up (sometimes literally small, like the mice that woke me up when they got into my house’s ductwork).
It’s smart to have a strategy for paying for repairs and emergencies, in addition to all the fun stuff. Feathering your new nest is delightful, but projects that are significantly less sexy than a kitchen update have a way of getting to the top of your to-do list. Data from the Harvard Joint Center for Housing Studies shows that recent home buyers spend roughly 35% more on improvements than people who’ve owned their homes for three years or more.
Of course, some of that’s probably giving the walls a fresh coat of paint or upgrading an appliance or two — but I’d be willing to wager that a good chunk of that change goes to dealing with new house headaches. Here’s how I handled …….