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homes

Purchasing a home is one of the most rewarding times in many people’s lives. It can also be one of the most stressfull. The build up to buying a house is huge, you have to scrape and save to get the money together for the down payment. The search then starts for the best rates on your impending mortgage and figuring out what you will qualify for.   Then you enter the hunt for the perfect house, the home to meet all of your wants and needs. Buying my first place was probably the proudest moment, aside from the birth of my sons, in my entire life.  I had achieved something no other child in my family had, I bought a house. At the age of 23 I was now a home owner to say it was amazing was an understatement.

Once I closed escrow and took ownership the fun started. You move in and start to arrange furniture the way you want and get things situated exactly right. Then once the couch is perfectly positioned you go to plug in the cable box only to realize there isn’t a cable, there is no wall plate, and all you have is black box that flickers. This is when the sleeper costs start to really add up. Something has to be done to get your perfect TV,  in the perfect place, in your perfect house. Guess what that is going to cost you money. If you do it it won’t be that bad but to pay the Crapcast guy to do it you are out like $100. This is just an example of the sleeper costs that you don’t think about or take into consideration before you buy a home, here are a few more.

  • Cable/Phone Installation – If you are buying a new home you are going to have to pay to have the cable hookup’s initially run from the street to your home. They generally don’t wave this fee, even if they will wave other installation fees. The fact is the cables aren’t buried to your house, just out by the street. In some cases they have to hire a contractor to bore under the road to your yard, that costs them and they pass it on to you. Used homes can sometimes get away without it as it is already “connected”.
  • Utility Connect Fees – Similar to cable if the home has never had electric, gas, or water service you may have to pay an initial connect fee. The same fee applies if you fail to transfer over utilities from a previous owner. Make sure you coordinate with the sellers so utility responsibility transfers on the day you close escrow so you avoid unnecessary fees.
  • Home Owners Associations – Commonly referred to as the busy body club, the HOA is usually responsible for upkeep of the neighborhood entrance and generally causing disdain amongst neighbors. Hopefully you were made aware of any HOA fees prior to purchasing your home. In some unfinished developments there may not be a fee until the developer actually completes the hood and turns it over. Watch out for situations like this because they could cost you in the end.
  • Paint – My first house was 1100 sq ft. I think it took me all of 3 gallons of paint to make it my own. That was a lot more than I expected. My current house is 3044 sq ft. and painting it is going to bankrupt me. Paint ain’t cheap and don’t pretend it is. If you get the cheap stuff it will probably take you ten times the coats to make it look decent and it will even out with the expensive stuff. Builder beige is only good for so long.
  • Landscaping – The Jones’ are some mean SOB’s. Their lawn is always greener, their bushes are always thicker, and their flowers are always prettier. Keeping your yard from looking like that creepy house from The Burbs costs cash. You are going to need at least three things; a lawn mower, a weed eater, and a blower. Without these essential lawn maintenance tools you will quickly be known as “that guy.”
  • Utility Bills – The amount you are going to spend on utilities is directly proportionate to the age and size of the home you are buying. The older and bigger the home the more it is going to cost you to heat and cool it. Don’t discount the number of people who are showering either. All of these factors contribute to higher utility bills. If you can I would ask to see a sample utility bill for the home you are purchasing.
  • Tax Increases – The amount you pay into escrow correlates to the amount of taxes and insurance you are required to pay on your home. If the taxes on your property haven’t been reassessed in several years you can almost count on the county/city coming out and doing an assessment. They generally disregard the actual real estate market so you can expect your property taxes to go up.
  • Air Filters – No one ever thinks about an air filter when they are buying a house but these things can be pretty damn expensive. Both my oldest son and I have sensitive allergies and require pretty clean indoor air. What this means is we have to be diligent about replacing our furnaces’ air filters regularly. When we replace them we use high quality low allergen filters. These things are freaking expensive, I am talking around $20+ a piece and I need three.
  • Light Bulbs – Yes I really said light bulbs. It would seem there are thousands of these things in my home and they were forever burning out. We have since replaced most of the incandescent bulbs with flourescent. The rule of thumb is that if it is a oddly shaped expensive bulb it lasts 1/1000th the time as a regular 60 watt bulb. In my house this stands for any bulb that requires an extension ladder to change.

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house

In these times everyone is worried about the value of their homes. Home values have fallen 21.8 percent since the housing market peaked back in 2006. The problems with the housing market are painfully obvious to me, the house across the street from me has been abandoned and there are around four houses for sale some of which have been on the market for more than a year. The biggest hit we have taken so far was a house of comparable size which was purchased for $248,115 and three years later sold for $199,900. When something like that happens you immediately think about how it affects you and the value of your home. According to Zillow.com 1 in every 5 houses sold in a 12 month period was a foreclosed home, my sister is trying to buy a short sale house right now.

I really don’t believe home prices are going to start to stabilize and get back on the up and up until the massive inventory of foreclosures gets snapped up, and people get back to buying homes they can afford. If you are looking to sell your home soon you should probably take a look around and see what values in your area really are. You aren’t going to get anywhere if you list your house for what you want to get when homes in the area are consistently selling for $20k to $30k less. One of the homes in our neighborhood had chosen to list their house for $282,000 in a neighborhood where a house hasn’t sold for $260,000 since 2006, and it was theirs.

There are several ways to keep up with the value of your home and what homes in your area are selling/sold for I looked at a few and looked up the value (according to them) of my home.

1.) Zillow.com – $236,000

Zillow is probably one of the best known sites for estimating your home value. They include an aerial photo of the property, they show my house two houses down the street, so I wouldn’t rely too much on it. Additionally they provide home details such as square footage, bedrooms, bathrooms, and previous home sales data. The below chart show my homes value (Dark Green), US Home Values (Blue), Zip code Home values (Light Green), County Home Values (Orange), and State (Light Blue).

Zillow_Chart

2.) Cyberhomes.com – $229,482

Cyberhomes has much the same data included in their reports as Zillow but they seem a little low on their value and that makes me sad. The stats for the home were also off, they listed the house a 3 bedroom 2 bath and it is really a 4 bedroom 2.5 bath. The real kicker is they list my neighbors house at $244,900 he has the exact same house/layout just has a no longer screened in porch out back.  They do have a nice comparison chart, see below, that lists your homes value (dark blue), the zip code value (grey), the city value (light blue), and the state value (Orange). They didn’t have an option to add on the US Values which I really liked at Zillow.

CyberHomes_Chart

3.) Eppraisal.com – $242,082

Again this site is kind of like Zillow and Cyberhomes but their data is even less complete. Where the other two sites listed the original sale price of the home, this site does not. Additionally they also pointed me to the wrong house in the picture and listed my house as a three bedroom home instead of four. Maybe I really have a three bedroom and the fourth bedroom is supposed to be something else. I liked that it shows the median age, income, and population for our zip code.

4.) Your Local County Appraisal – $241,700

I use my local counties online GIS system to get data about homes in our neighborhood, it lists the sale prices of the properties as well as tax appraisal and amounts due for each property. While not my county you can see an example of this type of system at Union County, NC’s website. I think the appraisal listed is wrong, we recently got a new one in the mail from the county listing our house at $261,000, which is pretty ridiculous considering the housing market right now.

5.) Pay an Appraiser – $258,000

This is a little bit extreme, considering you will be dropping between $400 and $500 to find it out. If you are going to be refinancing your mortgage though this is a requirement. The appraiser who did my home was a pretty a cool guy and did a thorough job of the assessment. I was happy with the result, since it got me qualified for my refi, but now I think it sucks. Because I had this appraisal done right at the same time I got my new county appraisal I don’t have much to stand on to try to dispute their appraisal. I am just going to have to suck it up and pay the increased taxes even though there is a 0% chance of me selling my house for even $258,000.

There you have it, this list isn’t all inclusive so let me know if you have something or somewhere better to check for this kind of thing. I hate it that my home value keeps dropping but at least I am in it for the long haul so eventually things will turn for the better.

Photo: (fivedollarones)

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