Owning a home has always been a major component of the American dream. However, many prospective homebuyers go into the process without a clear understanding of some of the possible pitfalls. As a credit union, providing this information can be mutually beneficial.
Accessing the data you need can help your clients decide whether they can truly afford the long-term costs for upkeep associated with a particular home. You can also avoid offering loans to homebuyers who may subsequently default on those loans due to a major repair or renovation down the line.
Air Conditioner Costs
In much of the country, air conditioning is a must for enduring the hot summer months. However, costs to install a new AC unit range from $500 to $4,000. Labor costs must also be considered along with the unit itself. Because AC units use refrigerants, installing a central AC unit is not a DIY job. Homeowners must also account for possible replacement or additional ductwork and chemical coolant. Additional insulation may also be needed to minimize waste that can drive up utility bills.
The life of an AC unit is only about 10 or 11 years, and repairing existing AC units can be costly as well. For example, to repair an AC unit located on the roof of the home, the homeowner will have to pay to rent a crane to replace it. Real estate listing data includes a wealth of information on characteristics that can reveal potential costs associated with a property, such as an older AC unit, that homeowners might have not budgeted for.
Homebuyers looking into an older home often fail to consider critical aspects that can require significant financial investment. For instance, many older homes have corroded pipes or lead pipes that must be replaced with galvanized steel or PVC. Both supply pipes and drain lines may require repairs and upgrades, and the costs can be substantial. For instance, replacing the pipes in a modest 1,500-square-foot home with two bathrooms can cost between $4,000 and $10,000, in part because the process requires cutting walls and floors open.
DataTree’s Property Characteristic Filter can give prospective homebuyers helpful insight on what the future repairs might look like on a home that that they’re considering purchasing. With this information, homebuyers can make more informed buying decisions — and you can make more informed lending decisions.
Sporadic Roof Leaks
Without a sound roof, a home quickly becomes uninhabitable. Costs for roof repairs vary widely depending on the roofing material, the extent of the damage and labor costs in your area of the country. At the low end, roof repairs cost about $150, while on the high end, repairs can run up to $4300. A typical range for roof repairs is $335 to $1225, with a national average of $775.
Several things can cause sporadic or even chronic leaks. High winds can tear away shingles while corroded flash piping or failing sealant can allow moisture to seep through your roof and into your home. Cracked or leaky skylights are also a common culprit for roof leaks. Ice dams form when snow refreezes on your roof. These formations prevent runoff from reaching your gutters, leaving it to damage your roof and produce leaks.
Homes with low slope or inadequate pitch pose their own roof leaking issues. They are nearly as susceptible to damage as flat roofs. And like flat roofs, they often provide poor runoff, which makes them undesirable in areas that receive a lot of rain.
Few activities are more enjoyable than splashing around in a pool on a hot summer day. A home with a pool in the backyard often becomes the neighborhood gathering spot. However, depending on the type of pool and the repairs that are needed, homeowners can be on the hook for hundreds or even thousands of dollars.
In-ground pools can suffer tears in vinyl linings or cracks in fiberglass linings. Concrete pools may also crack or develop hollow spots that require refinishing the surface of the pool. Above ground pools can collapse in high winds. Repair costs can range from $20 for a small tear in a vinyl lining to $300 to repair failures in a fiberglass lined pool to $1,000 to refill hollow spots in a cement pools. Replacing a collapsed wall in an above ground pool can cost from between $1,300 to $1,700. If a pool is beyond repair, replacement costs can soar well into five figures.
Protecting Homebuyers and Lenders
Many homeowners go into the process with little or no insight into the actual investment involved. DataTree’s Property Characteristics Filter can expose potentially expensive repairs that can quickly escalate the cost of a home beyond its asking price. This insight can protect homebuyers by helping them avoid purchasing a money pit while shielding lenders from making high-risk loans to homeowners on properties they cannot afford to maintain.