Whether you are looking to buy an older home because you want a fixer-upper or you just prefer a more vintage style, there are some things you will want to consider before your purchase.
While a home might seem fine at first glance, there could be underlying issues. Even if a home is brand new, it's always critical to have an inspection, but that goes double for an older place. According to a report from the research firm RealtyTrac, 71 percent of the single-family homes in the U.S. were built before 1990. Depending on the area, that number could reach as high as 80 percent, like in the Northeast.
The RealtyTrac report noted average pre-1990 homes sold for 9 percent less when compared to new homes in the same area. While some Americans might prefer the retro feel of a home, others could be looking to save money, making an older home an appealing option. However, that's not a guarantee. According to the National Association of Home Builders, the cost of owning a home in the first year is 23 percent higher in properties that were built before 1960.
You should always remain cautious and stay informed when assessing a property that has been around for awhile. Keeping a close eye out at an open house or talking to a neighbor might help you learn more about the place. Getting as much information as possible is the best practice for making an informed decision.
Here are some other tips to follow when looking to purchase an older property:
- Know when it's not worth it: While this can be one of the trickiest parts of buying an older home, you have to know when to walk away. Signs of mold or significant water damage might make the home a nightmare to renovate, much less live in. Major repairs could soon add up, making a home not worth its initial price.
- Get it inspected: Once you have decided on a home you are interested in buying, have it inspected. When it comes to any property, a home inspection is the ideal tool to learning about every square inch of a house. From the foundation to the roof, a home inspection will give you detailed report, assessing a home's overall condition. It's also best to choose inspectors with a lot of experience who are willing to help you through the process. Doing a walk-through with a trusted home inspector can help you learn about the various systems in the home, not to mention any red flags you might have to deal with once you buy it. Their knowledge is valuable to any homebuyer and when it comes to a older place, it's vital.
- Have some money saved for repairs: No home is perfect and that is more likely to be the case for an older place. Even if you are not buying the house to fix it up, it's still a good idea to have money saved for potential repairs. While many homebuyers plan for their down payment and mortgage, they don't factor in the general costs of being a homeowner. A home that is two decades old might need some work done, be that as simple as new carpeting or as major as a furnace replacement. Therefore, it's important you prepare for these unexpected expenses.
- Don't forget upgrades for energy efficiency: Other costs you might want to plan for include energy-efficiency upgrades. Adding more insulation to a home or recaulking siding will likely pay for itself down the road as it will help save on energy bills. And if the home is older, it's more likely to need these improvements.
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