September 30, 2022

The Pros and Cons of Buying an Older Home

4 min read
The Pros and Cons of Buying an Older Home

Brian Sanders, 47, co-owner of a McMinnville, Ore., car dealership, and his wife, Heather, 29, didn’t set out to purchase a 90-year-old home, but when they began their search last year, the options were limited. They wanted to be close to their children’s schools and few homes were on the market. So the couple purchased a six-bedroom home in Vancouver, Wash., last summer for $2.95 million. The Old Portland-style home, which was extensively remodeled, has a sitting room, formal living and dining rooms, hardwood floors and a $250,000 home theater. He loves it, even though two bathrooms need remodeling and his four air-conditioning units and four furnaces may need replacement soon. “The wainscoting has character, and the quality of the craftsmanship is phenomenal,” he said. 

Whether it is because of a preference for the charm and character of a historic property, a lack of inventory, or rapidly rising home prices, Americans are increasingly purchasing older homes. 

According to property-data firm ATTOM, the median age of a home purchased in 2000 was 20 years. That number increased to 24 in 2010 and 33 in 2020. In 2021, through the third quarter, the median age of a home sold was 36 years. This data includes single-family home and condo sales.

Homes built more than 30 years ago often offer unique architecture, mature landscaping and, often, lower purchase prices and better craftsmanship, but the roof and windows may need to be replaced, the foundation may require repair or the bathrooms, kitchen and appliances may need updating. Ongoing maintenance costs are often higher as well. 

Elizabeth Gomez, co-owner of Bridge City Contracting, a building and remodeling firm in Vancouver, Wash., said every buyer of an older home faces issues caused by the age of that home and that the cost of repair increases with age. The buyer of a 30-year-old home might face problems with the roof, HVAC system, windows, chimney and crawl space, and many homes that age are also built with vinyl siding, which can be susceptible to moisture problems, warping, cracking and fading, she said.  

With a 50- to 100-year-old home, the foundation may be starting to fail, requiring the home to be lifted on jacks to repair or replace it, Ms. Gomez said. The HVAC ducts may need replacement, and there could be asbestos, lead paint or mold issues, all of which are expensive to remediate.

Liz Hogan, vice president of luxury sales for Compass Florida, said that cast-iron pipes are a big issue in older homes in South Florida. “These pipes have a lifespan of about 50 years, and many are now rusting out and deteriorating to the point where they need to be fixed,” she said. The typical cost to repair or replace: $30,000 to $50,000, depending on the size of the home, although less-pricey alternatives exist, such as inserting a sleeve into the pipes to avoid drilling and rerouting the piping to the exterior of the home, she said. 

Still, there are those who love the character of older homes and are willing to deal with the hassles to get unique architecture and better craftsmanship.

Here are some things to consider if you’re thinking about buying an older home. 

Prepare for unexpected expenses. Buyers who may have exceeded their budgets after engaging in a successful bidding war may be in for a surprise if they purchase an older home. Ms. Hogan said that even if a home inspector gives her buyer clients a cost estimate for repairs, she tells them to plan on doubling or tripling that number. She recently worked with buyers who purchased a 20-year-old home where the inspector quoted them $8,000 to fix an air-conditioning unit that leaked and caused mold. After opening the wall, they discovered a much bigger problem that ended up costing $16,000 to remediate. You may be required to bring the house up to code if you remodel. 

Be wary of historic properties. Buyers of older homes with historic designations may find that the alterations they hope to do may be prohibited or that it may take months or more to have their proposed alterations approved by a historic district design review board. Make sure you understand what historic restrictions apply to a home before you purchase it. 

Secure homeowners insurance early. According to Loretta Worters, a vice president of the Insurance Information Institute, an industry trade group, insuring an older home can be challenging. These homes often have unique architectural details, such as original plaster walls or moldings, that are not covered by a typical homeowners policy, although some insurers may offer replacement-cost coverage at a higher premium or a historic-home policy that includes restoration coverage, Ms. Worters said. If a home’s roof is nearing the end of its useful life, or an electrical box isn’t up to code, an insurance company may require replacement before it will cover the home, she added. In addition, due to the increased risk of fire from old wiring, or flood and mold from deteriorating pipes, the cost to obtain insurance may be higher for an older home as well. 

Copyright ©2022 Dow Jones & Company, Inc. All Rights Reserved. 87990cbe856818d5eddac44c7b1cdeb8

https://www.wsj.com/articles/the-pros-and-cons-of-buying-an-older-home-11643808428