Awesome.  It's a dream come true.  You have the keys to your first home in your hand.

Oh, boy, oh boy.  Now it's time to make it absolutely what you want it to be.  New flooring.  New paint.  New furnishings...

Whoa, doggies.  Slow down.  Don't fall into the trap which snares so many new home owners.  There may be things you don't know yet.  Things, which done, can never be undone!  

New homeowners often make costly mistakes in the first year.  But it doesn't have to be you, if you heed a little advice.

So, never, never, NEVER:

ONE:   Go With the Low Bid.

Okay, so the HVAC system blows the same tepid air no matter what control you set.  You call three contractors.  They each give you a bid.  You go with the lowest one, right?

Maybe not.

What to do: Double-check that all bids include the same project scope — sometimes one is cheaper because it doesn’t include all the actual costs and details of the project. 

Check references on sites like Yelp!.  Ask friends.  It's always best to go with someone with a firm reputation.


TWO:  Submit Small Insurance Claims.

Insurance is there to cover damage to your property, right?  Right?

Well, no.   Filing a claim can increase your premium. It’s better to pay out of pocket than submit claims totalling less than your deductible.

In fact, it's better to save your insurance for the catastrophic stuff.  A report by UP and the Rutgers Center for Risk and Responsibility at Rutgers Law School is scary:  Only two states — Rhode Island and Texas — got top marks for protecting consumers “from improper rate increases and non-renewals” just for making:

  • A simple inquiry about a possible claim
  • A claim that isn’t paid because it was less than the deductible
  • O claim

Your best protection is maintaining your home so problems don't arise.  And then consider that filing a claim dings your homeowner's insurance like a speeding ticket dings your car insurance.

I hate insurance, don't you?

THREE:  Make Improvements Without Knowing How it Affects the Value of Your Home.

Just because you might personally value an upgrade doesn’t mean the future buying market will.  Let's say you add a pool.  You pay a lot for it, and you love it!  When you sell your home, you will have less buyers vying for your it.  Not everyone wants the bother and expense of a pool.  

It's also easy to over-improve your home.  Let's say you buy a small starter home in a modest neighborhood.  It becomes too small after Bently and Bradley are born.  So you add another story on.  And you remodel the bathrooms and kitchen while you are at it.  And now you decide to sell.

But none of your neighbors have remodeled or expanded.   So when you price your home, it sticks out like a sore thumb.  Anyone who can afford the cost of your improved home will want to buy in a neighborhood where all the homes are really nice.

What to do: Before you change or upgrade anything check with your Realtor who should be happy to share knowledge about how an improvement will affect value.

FOUR:  Go Nuts in Ikea

When you enter home ownership with a small apartment’s worth of furnishings, entire rooms in your new home will be bare. I understand,  You want to feel settled. You want your family and friends at your housewarming party to be able to sit on real furniture.

But investing in high-quality furniture over time is simply smarter than emptying your bank account on a house-full worth of particleboard discount items all at once.

What to do: Live in your home for a while. Get to know the flow of your space. You will see what furniture the room needs, which may be very different from what you imagined.

And don't forget there are always people moving...people with wonderful furniture who need to move.  Check out Craigslist and local garage sales.  Over time you will find incredible items for amazing value.

Oh, and have your Housewarming the moment you move in.  People can sit on unpacked cartons.  (Those same cartons are harder to explain away three months later).   Turn up the volume and the frequency of drinks and it will be a blast!

FIVE:   Ignore Receipts and Paperwork

Shortly after moving in, water heater implodes, belching rusty water over the entire . Who wanted to buy a new water heater when there are so many fun things on Amazon.com?  But cheer up.  When it comes time to sell your home repairs and improvements such as this add up to an "A Plus" report card for your home to increase its value. If problems arise down the road warranty information affords you protection and could save you money.

What to do:  Keep all paperwork (receipts, contracts or manuals) in a three-ring binder with clear plastic sleeves, or scan/photograph your documents and upload them to cloud storage.

SIX:   Do the Fun Stuff and Forget the Small Items on Your Inspection Report

The home inspection report from your purchase is your  first home to-do list as a homeowner.  Minor issues ignored become serious damage over time.  Exterior stucco cracks can allow moisture penetration.  A dripping faucet can cause widespread mold populations. A single faulty electric outlet could indicate dangerous wiring issues.

What to do:  Get the opinion and estimate of a contractor or handyperson (usually at no charge), and then you can make an informed decision. Do remember what you learned in item ONE above!

SEVEN:   Remodel Without Doing the Research

Sometimes projects which seem simple can be trickier than you know.  I once wanted a new light fixture.  Simple, right?  Probably DIY stuff.

Wrong.

I wanted it hung from the ceiling in a place which had insufficient framing to support it and no power leading to it.  Several hundreds of dollars later...

What to do: Before beginning a project, thoroughly research it. Ask contractors detailed questions to get accurate timing, budget and expectationse.

EIGHT:  Buy Cheap Tools

You always need basic tools for your first home — a hammer, screwdriver set, a ladder, maybe a mower.  And a hose.  You always need a hose.  Maybe more than one.

Don't buy cute kits (Pink or Glitter or Hello Kitty) or inexpensive off-brand items. Eough said.

What to do: Buy used tools from known quality brands (check online auctions or local estate sales) that the pros themselves use.  A little effort will save you a lot of money.

Having a new home is a wonderful thing.  I wish you every joy, and hope these tips save you money and help you avoid stress.

It's a good life.