March 4, 2019
By Carlo Versano
Nearly two in three millennial first-time homebuyers say they have regrets about their purchase, according to a new poll from Bankrate. That’s the highest share of any generation polled, according to Bankrate analyst Deborah Kearns, who worked on conducting the survey.
The single biggest reason for regret? Almost a quarter of those surveyed pointed to “unexpected maintenance and repair costs”, Kearns said.
Many first-time homebuyers, used to living with their parents or renting, are not prepared for when something needs repair and there’s no one on the hook to fix it, Kearns said. “It can be really difficult to anticipate all those extra costs that come with buying a home.”
For new homebuyers, regardless of generation, the period after closing on a home is typically one of frugality given the cash needed for the down payment and closing costs. But unfortunately, furnaces, dishwashers, roofs and air conditioners don’t take that into account when they decide to leak, overheat or just stop working.
One way to avoid those repairs, at least in the beginning, is to be sure to spring for a home inspection pre-close. “That is going to uncover the big red flags with your property”, she said. And never waive the right to walk away if the inspection finds something unforeseen.
Of course, things still break – and usually at the wrong time. That is why Kearns recommends that first time home buyers, in addition to all their other cash outlays, set aside one percent of the purchase price of the home for home repairs. That is in addition to a regular emergency fund.