Home Buying I Spent a Week Learning About Homeownership

by Ari Bendersky | October 16, 2018

As a homeowner of some 13 years, I know all too well the excitement — and anxiety — around buying and maintaining your first home.

Back in 2005, my husband and I bought our place in Chicago with no money down and used that down payment money to renovate the kitchen and master bathroom — two areas that can increase a home’s resale value. That was a smart move for us rookie homeowners. But there would be plenty of mistakes and lessons learned the hard way in the years to come.

Now, with friends and family coming to me for homeownership tips, I decided to brush up. Here's what I learned — both from the experts and from experience — that every new homeowner should keep top of mind.

Get a home warranty 

Appliances are big expenses. If yours are older, you may request the seller to buy a home warranty before you close or get one yourself. A home warranty will cost approximately $500 and have a deductible, usually $100 per claim, but when you’re talking about replacing a $4,000 furnace, an $1,800 refrigerator or a $2,000 oven, a home warranty makes sense.

“Let’s say you just move in and your furnace goes down, you don’t want to put out $3,500 for a new one,” says Chris Krogmeier, broker and owner of Lake Country Home Realty in Wisconsin. “If you have a home warranty, you just pay a deductible and you get a new furnace.”

I learned from experience why home warranties are worth it when, on one of the coldest days one winter, we discovered that our furnace wasn't turning on. This of course happened on a Friday, so we couldn't get a new one installed until after the weekend. But, with a claim made on the home warranty, by Monday afternoon we had a new furnace and the heat was pumping.

Asian woman and Asian man walk into the door of a house holding hands

Change the locks — right away!

This was one of the first pieces of advice I got after being handed the keys. Changing your locks is essential for peace of mind. “You don’t know what keys are floating around,” says Krogmeier. “If you have contractors coming in, put out a lock box and don’t give out keys.”

Krogmeier also suggests installing an alarm system that alerts your smart phone and adding motion sensors with lighting for added security.

Make building equity a priority

Equity represents the portion of your home you own and can take out when you sell your place or open a home equity loan or line of credit. “Equity creates flexibility and liquidity,” explains Keith Robinson, chief strategy officer for Pleasanton, CA-based realty company NextHome, Inc. “Equity creates tremendous freedom, not just to move…It creates the ability to have a nest egg to unlock new things.”

I found out that, in addition to paying your home loan’s principal plus interest each month, you can accelerate the pace you build equity in your home by making an additional full payment each year, divided out over 12 months. That said, not everyone can afford to pay down their loan faster; simply keeping up your home and doing the right renovations are other ways you can maintain and appreciate your home’s value.

Equity creates tremendous freedom, not just to move…It creates the ability to have a nest egg to unlock new things.
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Stay on top of annual maintenance

After I parted ways with a landlord, I suddenly realized that all repairs were now my responsibility. That meant staying on top of appliance repairs, HVAC system, roof repairs, sewer rodding and general aesthetic upkeep. Home maintenance falls into an annual set of tasks: gutter cleaning (spring and fall); draining your hot water heater (one to two times); changing furnace air filters (quarterly).

My condo building does a spring and fall cleanup to keep the basement and area outside the building tidy. We connect hoses in the spring and put out shovels and salt buckets in the winter. It's work, but it's helped me to enjoy my home more, and experts told me it will help to hold value if I decide to sell.

As for cost? “The rule of thumb is 1% to 4% of your home purchase price is a good number to budget for annual maintenance and repairs,” says John Bodrozic, co-founder, HomeZada, a digital home management app. And that goes both for condos and single-family homes.

Plan ahead for renovations

“The best way to stay on budget is to plan ahead,” says Erin Boone, principal of Boone Interiors in Chicago. “Have a road map and know what you want to do before you start.”

Boone says to select your own finishes before you find a contractor so you’ll know your budget for things like tiles, flooring and bathroom fixtures — and DIY where possible. She recommends design websites as a great source for ideas and suggests repurposing or salvaging where possible, like keeping the shelves and cabinets but replacing doors and hardware in the kitchen. When it comes to electrical, plumbing or structural work, it may cost more, but leave that to the professionals.

The best way to stay on budget is to plan ahead.

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Be strategic about renovations

The younger you are, the more likely you’ll eventually move to another place — and you’ll want to retain resale value. For example, “Don’t decrease bedrooms unless it’s totally unlivable,” says Kate Ziegler, a realtor with Arborview Realty in Boston. “You’ll lose value and you won’t get it back.”

Ziegler suggests using your inspection report as a punch list to fix things up, but she also strongly advises not to save making updates until you’re ready to sell. And don’t get super trendy with decorating. “If you look too much at cutting-edge design, you end up with things that will look dated in three to five years,” she cautions.

If you have a basement, don’t ignore it. Tour it occasionally to watch for any new cracks or damp spots. “They can be minor issues, but will set off alarms for people," says Ziegler.

Carefully vet all contractors

“There are a lot of online curated platforms like HomeAdvisor.com and Angie’s List,” Bodrozic says. “Or turn to a source like NextDoor.com or a real estate agent or insurance agent.”

Before you hire a contractor, make sure they’re licensed and insured — get a detailed budget with progress payment deadlines. “It sounds elementary, but that’s to ensure the job stays on budget and deadline and that work is getting completed to your satisfaction,” Boone adds.

We had a payment plan in place, but I wish we had resources like the ones listed above. Otherwise, we may not have hired someone who, after taking our third payment, quickly deposited it and was never heard from again.

Overhead shot of trendy couple walking through a set of french doors

Make nice with the neighbors

Chances are you’ll have some sort of conflict with one of your neighbors at some point. I've learned to try to smooth things out quickly so they don’t escalate.

“Issues that fester and go unresolved often result in litigation,” says Aaron J. Polak, Esq., a seasoned transactional attorney in Philadelphia. Polak, who also serves as the board president of his local homeowners’ association, says while an HOA can get involved, things “generally are not the association’s problem and the HOA is better off not taking sides.” So learn to handle conflicts like an adult — just like homeownership overall.

Ari Bendersky

is still learning the ropes of homeownership, even after 13 years. The Chicago native has written for the New York Times, WSJ magazine, Men's Journal, Departures, Wine Enthusiast and Crain's Chicago Business.