20 Days of Real Estate: Days 6 to 10 in Review

Part 8. Test-Drive Your New Home
New construction doesn't necessarily guarantee high-quality workmanship. The recent U.S. building boom of new houses has left some homeowners dealing with serious construction defects.

Key Points:

• Poor insulation has been one of the most pervasive construction problems in many new homes, resulting in water intrusion and mold.
• Extended reconstruction can cost you a lot of wasted money on mortgage payments, taxes, insurance, homeowner's fees, and if it's an investment property, lost rental income.
• When buying a property directly from a builder, do your due diligence. Prudent steps include checking the builder's recent track record of quality, getting a professional home inspection before you buy, and making sure that the purchase contract protects you in case any major structural problems arise.

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Part 9. The Cost of Upkeep
The cost of homeownership involves more than simply making your mortgage payments. The ongoing expenses of maintaining real estate have a direct effect on how much property you can really afford.

Key Points:

• Broad and somewhat fixed ownership costs can include homeowner association or condo association dues, property taxes, and city or county taxes.
• More property-specific and variable costs can include utility bills, property insurance, regular maintenance and repair, and the eventual replacement of major appliances, components, and systems.
• When evaluating the size and cost of your potential home, include operating cost estimates in your calculations. Plan to set aside a reserve for major scheduled replacements.

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