Real Cost of Home Ownership – Podcast Episode & Article

Real Cost of Home Ownership – Podcast Episode & Article by Gary Boyer

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In the real estate industry, we often talk about privileges of homeownership. But owning a home also has its costs above and beyond mortgage payments and taxes.

Just as it’s a fact that if you live you will someday die, and if you buy a new car it will eventually get a door ding or window chip, the same goes for a home, at some point you will have to maintain and repair something, and it really isn’t anyone’s fault.

Obviously, you’re concerned that the home seemed fine last year, but now you feel like the whole thing is falling apart. Several things could be behind this.

First of all, new homes are typically made with materials and that don’t last as long as homes built a century ago. Clearly, homebuilders disagree, but there is a real issue around the planned obsolescence of newer  items and materials — virtually all industries manufacture items with an expiration date today.

Also, if your home was specifically staged or prepared for sale — i.e., the exterior or deck painting or tile installation — the owners or their contractors might have elected to use lower-cost/lower-quality materials. This doesn’t necessarily mean they were intentionally trying to cover up a defect in the property, it could just be that they were trying to make the home more presentable without spending a fortune.
This is the reason I generally encourage home buyers to take a repair credit and complete the actual repair themselves or via a contractor, and with materials they select, rather than asking the seller to do the repair; someone who’s leaving the house will almost never choose the same-quality materials as someone who’s about to move in.

A home warranty traditionally covers the costs of maintaining items that simply wear out or malfunction without any sort of accident, event or disaster. If you have a home warranty, it may cover your water heater or furnace if they wear out.

However, the maintenance of the particular items that are “wearing out” on your home, namely the deck and cosmetic items like paint and tile, are generally excluded from home warranty coverage policies.

Now that you are a homeowner, you will think differently about the repairs you make. You will also look at your next home with the understanding behind every one of the repairs that the seller makes.