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New Homeowners Surprised by Unexpected Costs

New research and survey data from Thumbtack and Zillow finds a typical for-sale home could need close to $30,000 of work, which could come as a surprise to a majority (65%) of active home shoppers who are not seeking a fixer-upper. More and more are taking advantage of record-low rates to land in the home of their dreams, as just last week, Freddie Mac reported the 30-year fixed-rate mortgage (FRM) sliding down to 2.90%.

To help first-time homebuyers prepare for their journey, Zillow compiled a list of the most common projects its teams tackle after purchasing homes through Zillow Offers. Using that list of common repairs, Thumbtack calculated the national average costs to complete each project.

According to the new survey of 1,000 homebuyers, the average millennial expects to pay between $10,000 and $15,000 to make a home move-in ready, when in reality, the study found that homeowners should actually expect to spend approximately $26,900 on these projects. In terms of price breakdown, evaluating, repairing, or replacing HVAC systems is the most expensive move-in project, costing $3,615 on average nationwide.

“This research suggests first-time homebuyers typically underestimate the costs of the unsexy projects they may have to tackle before they even move in,” said Amanda Pendleton, Zillow Home Trends Expert. “That sticker shock may be increasingly common in a competitive market where buyers are dropping inspection contingencies as a strategy to win a bidding war.”

Homebuyers said they were most excited about improvement projects that allow them to express their personal style and make a home feel like their own: interior painting ($385/room), followed closely by wallpaper installation ($530/room), and kitchen updates like remodels and renovations ($7,445).

“We know homebuyers are most concerned about the hassle of home maintenance and repairs. It feels overwhelming to know where to begin, but also, who to entrust with your most valuable possession,” said David Steckel, Thumbtack’s Home Expert.

Homebuyers are least excited about making roofing repairs, which cost an average of $800 to evaluate and complete. This is followed by general plumbing repairs ($335), painting the entire home exterior ($2,415), and repairing damaged floors ($315-$1,245, depending on the type of floor). These projects tend to be more time consuming or require a deeper level of expertise to complete, which can make homeowners feel out of their comfort zone.

 

About Author: Eric C. Peck

Eric C. Peck has 20-plus years’ experience covering the mortgage industry, he most recently served as Editor-in-Chief for The Mortgage Press and National Mortgage Professional Magazine. Peck graduated from the New York Institute of Technology where he received his B.A. in Communication Arts/Media. After graduating, he began his professional career with Videography Magazine before landing in the mortgage space. Peck has edited three published books and has served as Copy Editor for Entrepreneur.com.
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