Budgeting for Home Maintenance

When people decide they are ready to consider purchasing a home, one of the first things we real estate agents recommend to them is to get a pre-approval so they know what they can afford.  I’ve made it a practice to tell my buyers that their pre-approval does NOT take into account a complete picture of the cost of home ownership.  While most pre-approvals include taxes and home owner’s insurance and some even address home owner association fees, no pre-approval takes into account the cost of home maintenance.  I try to warn (especially first-time) buyers that it costs money to keep a home in good repair. The seller’s disclosure brings some of the major expenses to a buyer’s attention, like the age of the roof, HVAC system and whether there is water in the basement. These items are definitely important to budget for, but there are lots of others that don’t necessarily occur to people, like the cost of redoing a driveway (or having it plowed), the cost of landscaping and gutter cleaning and tree work (which can be very costly)?  How about interior and exterior paint? Refinishing hardwood floors? A contract with a pest control company? Then there are the things that just break and need repair like leaky pipes or backed up drains, chimney liners that require replacing, electrical problems, stone patios that start to crumble…budgeting for home repair is so important, but so frequently overlooked when buyers are figuring out what they can afford. My advice is to set aside a certain amount of money every month to be earmarked for maintenance (recommendations range from 1%-4% of the purchase price of the home). Otherwise, you will either find yourself housepoor and not able to do some of the regular activities you’re used to doing (like dining out, traveling, etc.) as you have to divert that disposable income to caring for the property or worse, if you don’t have much discretionary income, your home may fall into disrepair which affects not only its value as an asset/investment, but your enjoyment of it while you’re living there.