Don’t Get Stuck With a Money Pit

Dear Rich Lifer,

Whether you’re a bright-eyed youngster just beginning the walk of adulthood, or a seasoned veteran of the world, basking in the joys of retirement, the home-buying process can be daunting.

Buying a home, even if you have done it in the past, requires an incredible amount of work.

Selecting a location, finding a house, filing all the appropriate paperwork with what feels like a dozen different agencies, selling your current house… It can be quite a chore.

Once you find a place that you find appealing, it’s easy to get so bogged down in numbers and paperwork that you never adequately look at the home you are consenting to purchase and take full responsibility for.

I’ll go over the small, but critical details you need to take notice of before you sit down and sign the bottom line and commit yourself to ownership of a new home.

Try It Before You Buy It

Many people feel uncomfortable getting down and dirty with a home during a walkthrough or open-house.

Don’t be!

If you are looking to purchase a home, you must explore every nook and cranny, even if it makes you feel or look a little odd to your realtor or other potential homebuyers. Buying a home is a commitment of unlike any other, and you need to make an educated decision and learn as much about the home as you can.

If you’ve ever watched the movie, “The Money Pit”, you’ll understand why! If you’ve never seen it and, and you want a good laugh, I would recommend renting it. Alright back to business.

Here are my top 5 suggestions for what to explore when walking through your potential new home:

The Outlet Test

Bring a small nightlight with you when touring a home that strikes your fancy.

Plug it in and test each and every outlet you can find. This will alert you of potential (and costly) electrical issues right off the bat! No one wants to go through the work of purchasing a home, unloading a ton of boxes, and committing to a new life, only to find out you can’t plug in your lamps or television.

While you’re at it, the outlet test is a great way to help you figure out if the home even has enough outlets, or if they are appropriately placed for your needs. Having too few outlets in a room can quickly determine that there is little option for creativity in the way you lay out your furniture.

Get Acquainted with Windows

It might seem odd to walk into a home that is not yet your own and open up and inspect all of the windows, but this is actually a key part to discovering the energy-efficiency of your (potential) new home.

Are windows completely stuck or difficult to open? Is there any damage to panes, screens, or casings? Do the windows close and lock securely?

Arguably most importantly, with the windows closed, can you feel a draft? Shockingly, windows are responsible for upwards of 30% of heating and cooling waste.

Obviously, energy inefficient windows waste energy. Energy wasted is money lost.

If you do notice that the windows are drafty or stick, it’s not the end of the world, but it’s certainly something that you should use in your negotiations before you sign on the dotted line.

Check out the Terrain

I strongly recommend walking the outside of the property, regardless of the weather. While it may be miserable, the rainier, the better for a home tour!

If it’s raining while you explore a potential new property, this will alert you of flooding or puddling concerns near the home. Even if you don’t specifically see any areas of concern, you should still ask your agent about flood or water damage history to the home.

Flood damage can be devastating and costly! While you’re looking at the property, take notice of the land you would have to maintain. Is it realistic for you to mow, or will you need to consider a lawn care service?

Will you be up to the task of shoveling driveways and sidewalks should you be moving to an area that experiences heavy snowfall?

Consider the Neighborhood

When you were young, and worried about raising a family, moving to a neighborhood filled with children may have been perfect for you! However, if you’re in search of your retirement home, the sounds that inevitably come with a child-filled neighborhood may not be music to your ears.

Consider what you’re looking for in a new neighborhood. Your neighbors, could have a big impact on your life in your new home, so don’t forget to think about them, even if you find yourself face-to-face with your dream home.

Consider your Timeline

Maybe you’ve always dreamed about owning a multi-level home with a gorgeous winding staircase. But if you’re looking at living in a home as long as your body allows you to, will those stairs still be practical down the road?

While many of us would rather ignore the future and enjoy living in the now, this is certainly not the best practice when it comes to purchasing a home.

Consider how long you’re realistically looking to live in the home. Consider your health and capabilities – it may be disheartening, but it is best to be practical when making such an expensive commitment.

Should An Inspector Take Care of All That?

You may be asking yourself: Doesn’t a home inspector take responsibility for finding problems with a house? Yes and no. You shouldn’t rely on a home inspector to locate all areas of concern.

Think about it: if you go to the doctor with a concern about pain, who is more invested in finding a cure? The doctor, who honestly doesn’t know how you feel, or you, the patient actually experiencing the pain?

Look, it may sound cynical, but when buying a home, you need to protect yourself. A home inspector is not committing themselves to living in your home: you are!

While an inspector will check out the basics and make sure appearances are up to snuff, most will only do a visual inspection. So before you have an inspector visit the home, you should have looked into everything yourself and if you notice anything or you have concerns you can point them out so the inspector, and they can inspect them with an expert eye.

So be sure to protect yourself: do as much research and ask as many questions as you can to make an informed decision about the place you plan on spending your golden years.

To a richer life,

Nilus Mattive

Nilus Mattive

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Nilus Mattive

Nilus is the editor for the daily e-letter The Rich Life Roadmap and a Paradigm Press analyst.

Nilus began his professional career at Jono Steinberg’s Individual Investor Group, where he published his original research through a regular investment column. Later, he worked for a private equity business and spent five years editing Standard and Poor’s...

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