Have you ever seen the 1986 movie The Money Pit? In it, a young couple, Walter and Anna (played by Tom Hanks and Shelley Long), purchase a seemingly gorgeous house that ends up wreaking havoc on their finances, their relationship, and their sanity.
I had seen the movie years ago, but just watched it again for the first time since starting my career in real estate. It was certainly interesting to see this movie through a Realtor's eyes! While I found it absolutely hilarious, I also couldn't resist writing down some lessons that can be learned from the couple's experiences in the wonderful world of home buying.
Get a home inspection. If Walter and Anna had only had a licensed home inspector look at the house before they purchased it, they would have avoided a world of grief by discovering the hidden defects. Even "handy" people don't always know what to look for in a house, but inspectors do.- Find an agent you trust. Walter and Anna decided to work with a felon, which may not have been the wisest decision. Make sure your agent is looking out for your best interests. Don't hesitate to ask for references; if they're good at what they do, they'll have plenty of satisfied clients.
- Don't overextend yourself. By begging and borrowing in order to purchase the house, Walter and Anna got in way over their heads. Don't make the same mistake. Take the time to talk to a mortgage professional before you write up a purchase offer; they can tell you how much you can reasonably afford without becoming "house poor".
- Find an honest contractor. Walter and Anna had to resort to using contractors who were less than professional, and it ended up costing them time and money. To look into a contractor's credentials, read my post, How to Avoid Dishonest Contractors, Thanks to New York State!
In this case, everything turned out fine. The contractors did a fantastic (albeit very slow) job, and the improvements created enough equity so that Walter and Anna didn't go broke after all. Luckily for you, though, you can learn from their mistakes! Heeding these simple tips can stop you from getting into your own "money pit".
Oh, and if you haven't seen the movie, make sure you do. It's hilarious!
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