Location is everything when you’re searching for a home. Finding your dream neighborhood may seem like the easiest part, but once you factor in budget, non-negotiable home features, and proximity to the things you can’t live without, it may be less obvious where you should live. When it comes to searching for a new neighborhood, here’s what you need to know. Property TaxesProperty taxes can play a huge role in your overall cost of living. To get a sense of what your property taxes might look like in a particular county, check out this simple property tax map. Also, property taxes for specific homes are typically included in online property listings. What to consider: How much will my property taxes be? Safety and CrimeBefore you sign on the dotted line, search sites like City-Data.com and CrimeReports to get a sense of the safety level of a particular neighborhood. As with all homebuying decisions, determining what level of crime you feel safe with is all part of the process of choosing a neighborhood.Your real estate agent can guide you to various resources to help you answer questions about the neighborhood, but can’t voice an opinion about it per the Fair Housing Act. The act aims to provide equal access to housing for all groups of people and to protect against discrimination.What to consider:• What is the crime rate in this particular neighborhood? How about the neighborhood next door?• What level of crime do I feel comfortable with? Topography and GeographyLand geography can play a role in costs — especially if you’re overlooking a scenic vista or you’re right by the water. On the flipside, look out for flood zones or other danger-prone areas when making a decision.What to consider: • Do I need special insurance in addition to homeowners insurance? • Is this property in a flood zone?Property ValueIf there have been some sales recently, then you can get a better idea of the potential value of the homes in the neighborhood. Typically, homes of the same type in the same location will sell within a few thousand dollars of each other. When looking at homes, your agent will pull listings of comparable properties, or comps, to see what other similar homes sold for so you can see if the home you’re interested in is priced correctly. Question(s) to ask:• What are the comps in this area? • What’s the projected growth rate for this area? School ZonesSchool zones come to mind when thinking of location, especially if you have children (or plan to have them soon), as they tend to affect home values. If schools are important to you, evaluate the schools in your neighborhood and which homes fall into which district. Additionally, there may be community centers or parks that increase the value of the neighborhood.What to consider:• What school would my child attend if we moved here?• Are there parks or community centers in this area?Using these factors as a guide for finding the right neighborhood can help you evaluate what you care about and make the decision that’s right for you
The negotiations are over. Your mortgage is settled. The keys to your first home are in hand.
Finally, you can install your dream patio.
You can paint the walls without losing your security deposit.
Heck, 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.
Wait, whaaat?
“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:
#1 Going With the Lowest Bid
The sounds your HVAC system is making clearly require the knowledge of a professional (or perhaps an exorcist?).
But you’ve been smart and gotten three contractor bids, so why not go with the lowest price?
You 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 use it?
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
Your best protection? Maintaining your home so small claims don’t even materialize.
#3 Making Improvements Without Checking the ROI
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.
Just 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, Tenn.
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.
#4 Going on a Furnishing Spree
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.
#5 Throwing Away Receipts and Paperwork
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.
#6 Ignoring Small Items on Your Inspection Report
Use 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 electricity.
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.
#7 Remodeling Without Doing the Research
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.
#8 Buying Cheap Tools
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 replaced frequently.
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.
You’ve finally settled into your new home.
You’re hanging pictures and pinning ideas for your favorite bath.
But in all your excitement, are you missing something? Now that you’re a bonafide homeowner are there things you should know that you don’t?
Probably so. Here are six mistakes new homeowners often make, and why they’re critically important to avoid.
#1 Not Knowing Where the Main Water Shutoff Valve Is
Water from a burst or broken plumbing pipe can spew dozens of gallons into your home’s interior in a matter of minutes, soaking everything in sight — including drywall, flooring, and valuables. In fact, water damage is one of the most common of all household insurance claims.
Quick-twitch reaction is needed to stave off a major bummer. Before disaster hits, find your water shutoff valve, which will be located where a water main enters your house. Make sure everyone knows where it’s located and how to close the valve. A little penetrating oil on the valve stem makes sure it’ll work when you need it to.
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#2 Not Calling 811 Before Digging a Hole
Ah, spring! You’re so ready to dig into your new yard and plant bushes and build that fence. But don’t — not until you’ve dialed 811, the national dig-safely hotline. The hotline will contact all your local utilities who will then come to your property — often within a day — to mark the location of underground pipes, cables, and wires.
This free service keeps you safe and helps avoid costly repairs. In many states, calling 811 is the law, so you’ll also avoid fines.
#3 Not Checking the Slope of Foundation Soil
The ground around your foundation should slope away from your house at least 6 inches over 10 feet. Why? To make sure that water from rain and melting snow doesn’t soak the soil around your foundation walls, building up pressure that can cause leaks and crack your foundation, leading to mega-expensive repairs.
This kind of water damage doesn’t happen overnight — it’s accumulative — so the sooner you get after it, the better (and smarter) you’ll be. While you’re at it, make sure downspouts extend at least 5 feet away from your house.
#4 Not Knowing the Depth of Attic Insulation
This goes hand-in-hand with not knowing where your attic access is located, so let’s start there. Find the ceiling hatch, typically a square area framed with molding in a hallway or closet ceiling. Push the hatch cover straight up. Get a ladder and check out the depth of the insulation. If you can see the tops of joists, you definitely don’t have enough.
The recommended insulation for most attics is about R-38 or 10 to 14 inches deep, depending on the type of insulation you choose. BTW, is your hatch insulated, too? Use 4-inch-thick foam board glued to the top.
#5 Carelessly Drilling into Walls
Hanging shelves, closet systems, and artwork means drilling into your walls — but do you know what’s back there? Hidden inside your walls are plumbing pipes, ductwork, wires, and cables.
You can check for some stuff with a stud sensor — a $25 battery-operated tool that detects changes in density to sniff out studs, cables, and ducts.
But stud sensors aren’t foolproof. Protect yourself by drilling only 1¼ inches deep max — enough to clear drywall and plaster but not deep enough to reach most wires and pipes.
Household wiring runs horizontally from outlet to outlet about 8 inches to 2 feet from the floor, so that’s a no-drill zone. Stay clear of vertical locations above and below wall switches — wiring runs along studs to reach switches.
#6 Cutting Down a Tree
The risk isn’t worth it. Even small trees can fall awkwardly, damaging your house, property, or your neighbor’s property. In some locales, you have to obtain a permit first. Cutting down a tree is an art that’s best left to a professional tree service.
Plus, trees help preserve property values and provide shade that cuts energy bills.
