I am blogging on behalf of Trulia, but the views expressed here are solely mine, not Trulia’s. To learn more, visit: http://on.trulia.com/postcards.
I was raised primarily on a diet of HGTV and TLC, back when TLC used to produce shows like Trading Spaces, where for $1,000 and the chance to be on TV, a stranger might give you a tasteful new living room or intentionally pour bags of sand onto your basement floor, depending on the episode. Later in life I became enamored with the endless teachings of the Sovereign Queen Goddess Martha Stewart. At some point I discovered the Internet and found all of these kooky people blogging about their home renovations online. I casually studied architecture in college. And…that’s pretty much the start and end of my qualifications to own and renovate an old house. I grew up in new construction, and aside from some things I’d picked up here and there, I had no idea what I was doing.
Now that we’re coming up on a whole year of homeownership (that just flew by, didn’t it?), the folks at Trulia asked me to take part in a series they’ve put together about the most defining home buying moments—from making compromises to finding the right neighborhood to making an offer. For me, one of the biggest moments maybe wasn’t even really a moment at all, but more a sense of panic and impending doom about how little we knew in relation to how much had to be done. Both before and after we bought the house, there was just so much we didn’t know. It was completely terrifying. I had no idea how people bought houses. I had no idea I needed a lawyer. I had no idea what a boiler was. The thing I kept having to remind myself (and keep having to remind myself a lot of the time) is that knowing that you don’t know how something works is usually way scarier than finding out. This stuff isn’t rocket science. Once the mystery is removed from so many aspects of homeownership—from financing to renovating—they generally become way more approachable and easier to handle.
With that in mind, I thought I’d put together a more comprehensive post about some of the things I’ve learned in the first year about upgrading an old house, and maybe offer up some suggestions that we’ve taken advantage of (or tried to) to make it a little less daunting both mentally and financially. We have a ton of work ahead of us and I don’t think the learning process will ever end, but the house is still standing and we aren’t completely broke (yet!), so I guess we’re doing OK. Every house is different and comes with a different challenges, but a lot of what we’ve done in this first year is pretty typical of older homes. Let’s dive right in, shall we?
BEFORE YOU BUY
Our “house-hunting” story is so short it’s laughable. We weren’t looking for a house, or even thinking about buying one. But then we found one—on a weekend away from Brooklyn while staying at a house that our friends had rented around the corner in the Hudson River Valley city of Kingston, NY—and became completely obsessed with it in a way that’s honestly hard to describe. For us, this was never about buying a house—it was about having the opportunity to take care of this house, specifically. I loved everything about it: the original layout of beautifully-proportioned rooms, and all of the original features like moldings and doors and windows and plaster walls and radiators and even a beautiful marble fireplace mantel. And, honestly, I was attracted by how much work it needed. It was split up very awkwardly into two apartments, and we felt passionate about restoring it to a single family home and renovating it in a way that would be careful, deliberate, and respectful of its history. And even though the attachment I felt to the house was completely absurd and illogical, and that we didn’t really feel like we were in any position to buy a house, we both felt like we had to at least explore the option. If we never took that first leap to find out and it had eventually sold to somebody else, I honestly believe that I’d still be obsessing over it now. And probably five years from now. Maybe ten years. Maybe forever. I was in love with the house from the second I saw it, and immediately felt responsible for it even though it wasn’t ours. I know that might sound like overly-romantic nonsense, but it’s the truth.
All of this was basically driven by insanity is what I’m saying. But with old houses, that’s kind of important. Upgrading and renovating isn’t easy—emotionally, financially, socially, you name it—and I think you need to be a little nuts and a little obsessed to feel, at the end of the day, that you’re doing the right thing. And that you need to keep doing it.
Still, we weren’t complete idiots, and it certainly wasn’t as easy as just wanting it a whole lot. We had to think carefully about whether we were up for the challenge, and whether it seemed like a sound investment. If things went horribly awry, could we put it back on the market and walk away relatively financially unscathed? Could our relationship and lives sustain such a big upheaval? We felt like the answers were yes, but at that point there was just a lot of gut-trusting, blind passion, and leaps of faith. Those types of questions don’t really come with easy or simple answers. They still don’t some days, but that’s a whole different post.
While the process of buying the house was, as usual, incredibly stressful and time-consuming and intense and full of surprises outside of anyone’s control, it actually wasn’t as horribly difficult to navigate as I thought it would be. Our real estate agent was also the seller’s agent (the “seller” was an estate, the members of which all lived elsewhere…the previous owner of our house passed away a couple of years prior). She gave us lots of support and guidance throughout the process, and was invaluable for recommending home inspectors, local contractors, local lawyers, etc., and taking us through all the steps of making an offer, securing a loan, contingencies, and all of that. This is the part of the process when you receive the most support and guidance, so use it! Ask TONS of questions about anything you’re unsure about. Agents are smart people. They know lots of things.
Aside from the expertise of your real estate agent, the most informative aspect of the pre-sale shenanigans is the inspections. You’ll probably get lots of inspections.
Because we felt very serious about the house, we hired a home inspector to come for our first walk-through.
I should note, I suppose, that all of this basically goes against traditional wisdom of home-buying. The seller’s agent, by definition, has the seller’s best interests at heart, and showing up for an initial walk-through with a home inspector basically lays all of your cards out on the table: we want this house—badly. But for us, I think it was a good thing. The seller’s agent was clearly excited about us and our evident infatuation with the house, and I truly believe that the genuine relationship we built with her really stacked the deck in our favor as we moved forward in the process.
ANYWAY—back to inspections. Typically realtors will have recommendations for a good home inspector, who will walk through the property and take note of any visible problems. Ours cost about $500. Inspectors are a great wealth of information, and should be able to answer all sorts of questions, bring up and discuss issues that they see, and even give ballpark estimates of how much certain repairs might cost. Of course, you should always verify these estimates with contractors, but it’s helpful to get a sense of whether the property is even worth pursuing further. The home inspector should prepare a detailed written report, which will not only be helpful for your own reference, but will often be essential information for insurance companies and banks. If the inspector notes things that were not disclosed or noted by the seller or seller’s agent, these might be helpful points to negotiate on the price. Based on what we gleaned from our home inspection and how long the property had been on the market, we felt comfortable submitting an offer of about 20% below asking price—which after some back and forth as various estimates came in is exactly what we ended up paying.
Assuming the home inspector’s report doesn’t leave you running away screaming, you’ll want to have a few more inspections and estimates to get an idea of what you’re looking at financially. In addition to a pest inspection to check for wood-destroying insects (which homeowners should ideally have done annually—I think it was about $100) which came up clean, we also walked through the house with both a locally licensed plumber and a locally licensed electrician. Both of these contractors should also be able to point out causes for concern, and help you formulate a list of probable repairs and upgrades you’ll need to make after closing. They should then provide written estimates for the anticipated work. For us, it was helpful to talk through best-case and worst-case scenarios with both of these contractors and get estimates for both. We also had three roofing contractors come to give estimates on replacing the faulty roof. All of this was free, and we’ve since used both the plumber and the electrician for all of our work—they’re great guys, and they’ve been with us since the beginning.
You may want to do additional inspections for radon, lead, and asbestos. This is kind of personal and kind of based on the house and location. Our house is almost 200 years old—it definitely has lead-based paint, and it does have asbestos in the typical places (like around some of the heat pipes in the basement), so testing for them was sort of a pointless expense. Both lead and asbestos do not present a hazard as long as they’re left undisturbed and intact, so there isn’t really any reason to invest in full-on lead or asbestos abatement in most cases.
Again, all houses are different, but at this point everyone should have a fairly comprehensive idea of what the house needs. You’ll have to figure out a loan and insurance and go back and forth endlessly on whether you can really afford it and there will generally be a lot of freaking out for weeks or months on end. You’ll sign a lot of things and feel like you’re throwing large amounts of money around willy-nilly and it will be insane and scary…and then you’ll get the keys. The whole team of people who helped you get to this point will give you a pat on the back and congratulations and then they’ll disappear into the ether and you have to start really figuring stuff out.
Aside from the fun and exciting cosmetic stuff that makes for entertaining blogging fodder, there were a few things that we needed to take care of ASAP:
1. Locks! If the existing locks are nice and new-ish, you can have a locksmith re-key them. We replaced all of ours with new, very secure ones. Prices obviously vary based on quality and whatnot, but our lock upgrade was about $120 per door, including the labor of the locksmith.
2. Security! While a home security system certainly isn’t mandatory, it gave us a significant amount of peace of mind to have one installed. Again, prices will vary based on what company you go with and what kind of equipment you use, but our system was about $800 in equipment, plus a monthly service bill which is about $60. Installing a central station security system and smoke detectors (meaning that if they trip, the police department or fire department are automatically called) also got us a nice discount on our homeowner’s insurance. Home security systems come in both wireless and hardwired options now, so it isn’t horribly expensive or invasive to have one installed if the house isn’t wired for it!
3. Smoke/Carbon Monoxide Detectors! Our house came with one smoke detector and one carbon monoxide detector. That’s not enough! At least in New York State, residences must have one smoke detector in each bedroom, one in each common area on every floor, and one in the basement. There also needs to be a carbon monoxide detector in the basement and on any level where there are sleeping areas. Unless you are building new construction or doing significant renovations like completely gutting a house, battery-operated or plug-in smoke/carbon detectors are OK. Nicer smoke/carbon detectors are about $50 each.
It’s often said that the roof and the foundation are the most important parts of a healthy house, and it’s true! Our roof was kind of a mess—a mix of sheet metal and metal shingles, all covered in layers of tar. The age and condition of the roof can make securing a homeowner’s insurance policy and a mortgage difficult, and basically we had to have it replaced ASAP. We got three estimates months before, but estimates are generally only valid for 1-3 months, so we had the same companies come back to give us new quotes after we closed. The new quotes were much, much higher than the original quotes, for lower quality materials no less! It was awful. I resented the companies so much that I didn’t even want to try to negotiate and work with them. I did find out some good stuff because of it, though!
1. Big-box hardware stores such as Lowe’s and Home Depot subcontract all sorts of work to local contractors (siding, windows, etc), including roofing! The difference between going through a place like Lowe’s and directly to the contractor might seem insignificant, but it isn’t: the big box store pricing is regulated, so they can’t arbitrarily jack up the price just because they think you can pay more. Even if you don’t end up hiring them, I highly recommend getting an estimate from Lowe’s, if only so that you have a baseline idea of what a fair price is for the job. The estimate is free, and I found them great to work with. I could easily dedicate an entire post to roofing (maybe I will—are you interested?), so I’ll move on…
2. Because roofing is significantly expensive, bigger roofing companies often offer financing plans for the job—so even if it’s more expensive than you were anticipating or have cash on hand for, you may be able to work something out directly through the company. Additionally, Lowe’s offers a consumer credit card with low-interest extended payment plans, and they’ll work with you to increase your credit limit to cover the cost. Roofing prices vary drastically by the size of the house, the materials, and the scope of the job, but the point is this: get lots of quotes, ask for references, and remember that you don’t necessarily need to have $10,000+ in your pocket to pay for it. Even if you have a great home loan with a comfortable renovation budget (or just a bunch of money in the bank), you still may want to consider financing stuff like this separately if you’re comfortable taking on another monthly payment, especially if you have lots of work ahead of you. Surprises (like rotted box gutters!) happen!
Admittedly, electrical issues are one of the most intimidating parts of even thinking about buying an old house. A lot of people think that they need to have every last bit of wiring removed and replaced immediately, but in general that isn’t the case at all! Knob and tube wiring is generally considered a real hazard and should be removed, but “newer” types of wiring are often in fine shape, even if they’re very old. Even if the outer casing on old wires looks cracked or frayed inside an electrical box, remember that the ends have been exposed and messed with since their original installation, and the stuff going through the walls is probably in much better condition. A good, honest electrician should be able to give you a sensible evaluation of the age and condition of your wiring, and the urgency of replacing it. The advice from our electrician was basically to replace what we could, when we could—but no hurry. Still, there are some things to know…
1. Outlets! Lots of old houses will have ungrounded two-prong outlets. Obviously the modern standard is 3-prong grounded outlets, and having two-prong outlets everywhere gets annoying really fast. Consult your electrician about upgrading the outlets—in many cases, two-prong outlets can be swapped for 3-prong simply by grounding the new outlet to the metal box, or replacing it with a GFCI receptacle. GFCI receptacles are fairly expensive (about $30 each), but a basic grounded outlet is really cheap—like $1, a bag of grounding tails is something like $7, and a receptacle tester to make sure everything is wired correctly is like $3-4. This kind of thing is within the abilities of any normal homeowner with a little research, or your electrician might charge you $10-$20 an outlet to do it for you. Not a huge deal.
2. Main Electrical Panel! Lots of old houses have scary old service panels. Both fuses and circuit breakers are pretty much equally safe when operating effectively and wired correctly, but your electrician and home inspector should know which types of panels to watch out for. Our house was split into two apartments, so there were 2 separate breaker panels. One was fairly new-ish, and the other was an old Federal Pacific panel with Stab-Lok circuit breakers—which has pretty much been a known fire hazard for about 30 years because so many of the breakers were defective. Yikes! Luckily, replacing a service panel isn’t a huge deal, either. Existing wiring can be removed from the old panel(s) and tied into a new one. Along with a few assistants, our electrician had the whole job done in less than a day, and it cost $1,400.
3. Service to the panel! A very, very typical upgrade to old houses is actually increasing the overall amount of electricity running to the house—usually from 60 or 100 amps to 200 amps. As times have changed, as have our electrical needs, so many old houses are just under-electrified and not equipped to handle all of the things that we expect to use electricity for (appliances, computers, lighting, A/C units, etc. etc.). Included in upgrading the panel was also upgrading our service from 100 amps to 200 amps—meaning that not only do we have a new huge panel with more space for new circuits than I think we could possibly ever use, but enough electricity running into the house to power it all. It all runs through a fancy new grey PVC pipe, through a new meter pan, and into the new breaker panel in the basement.
3. New Service Drop! The electrician is only allowed to work on electrical from the point of attachment (where the power line attaches to your home) downwards, however. So even after we had our panel and the wires feeding it upgraded, the wires from the pole to the house were still ollldddd. I think we were the last house on the street still rocking uninsulated triplex wire! I called the utility company to find out how to get that wiring replaced, and it only took them a couple of weeks after the electrician submitted some paperwork for them to come out and replace it. As far as I know, in most places this is a free service, assuming the utility company also deems your service drop outdated and in need of replacement.
1. We dropped about $1,300 right off the bat on fixing various plumbing issues: buying and installing a new toilet, replacing leaky valves and a large section of the waste line—that kind of thing. The house had been drained while it was vacant, but extreme temperature changes are still very hard on old plumbing, even when there isn’t water in them. Cracked sections of cast iron pipe can be patched in with new PVC. Where we’ve had to replace plumbing, in general we’ve replaced with PVC for waste lines and PEX for supply lines, which is much cheaper than copper (and, supposedly, lasts longer and is less prone to damage).
2. New Boiler! The biggest plumbing issue (and headache…) we had to deal with was the heat system. The house had a very, very old oil-powered boiler, but the oil tanks had been removed and remediated by the estate prior to sale (note: if there are oil tanks on the property, those should also be inspected for leaks prior to buying. You do NOT want to deal with remediation!). The cast iron hot water radiators seemed to be in fine shape, but they would need a new boiler to make them actually radiate heat. Because natural gas is much cheaper and cleaner than oil and natural gas boilers are more efficient, we decided that the smartest thing we could do was to convert our heat system to natural gas. Luckily, Central Hudson currently has a gas conversion program specifically for homeowners looking to convert from oil to natural gas, but do not have current gas service. Running gas from the main to the house is essentially free (you do have to pay a $500 deposit, but it gets returned after your equipment is installed), but would normally cost a few thousand dollars without the program. I’m guessing this sort of program is happening in a lot of places, though, so definitely check with your local utility company if you’re interested in doing something similar!
From there, it was a matter of installing the new boiler—which, thankfully, ended up doing double-duty as our tankless hot water heater for the whole house. It’s worked out great, by the way. This is another very expensive upgrade, but prices vary significantly based on the type of equipment used, the plumber, and the size of the system (our house is about 2,400 square feet and we have 11 radiators). Our upgrade came in at just about $12,000—which is a whole lot of money. But at least in New York, there are rebate programs in place for installing high-efficiency equipment, so we actually got about $1,500 back after our plumber submitted the paperwork.
But, again, this isn’t necessarily something you need cash on hand for. Central Hudson’s gas conversion program has its own financing, and local banks and credit unions also often offer home heating loans. Additionally, New York State has NYSERDA—the New York State Energy Research and Development Authority, which is geared in part toward helping homeowners understand and finance energy-efficient upgrades to their homes. I didn’t find out about this until it was too late (impending winter really put a deadline on the boiler replacement!) but it’s a great program: starting with a free home energy assessment, working through the program may qualify you for cashback incentives, special financing, or even grants to help pay for the upgrades. I definitely plan to get an energy assessment through NYSERDA soon, and I’m hoping it helps us make other energy-efficiency upgrades more affordable!
PHEW. I could probably go on and on and on forever, but those are the major things we’ve encountered and had to learn alllll about in our first year of homeownership! It’s not all flowers and rainbows and fun, but that’s OK. Even in moments of panic and uncertainty, I still completely love our house, I love Kingston, and I’m really happy that we’re doing this.
If you’ve bought an old house, I’d love to hear what you can add to this list! And if you’ve bought a house at all, what are some of your most memorable home buying moments? If you need to jog your memory, cheek out all the home buying moments postcards!