According to the most recent U.S. Census Bureau's data, an American's median net worth at age 70 is $225,000, but excluding home equity that number drops to $69,000. As the graph shows, Home Equity is, by far, the largest contributor to our net worth across all age categories.
This is why Buying, Selling and Maintaining a home are the most important financial decisions we make in our lifetime.
A house is a sanctuary and can also be a vehicle to real wealth if we take care of it. Unfortunately homes with undiscovered issues can lead to financial calamity. For example, un-checked water penetration and structural issues in a finished basement can lead to repairs in the 6 figures (quite common in our area). These costs could wipe out a homeowner's entire retirement savings.
Beyond considering location, valuation, timing, and cash flow Americans should consider the 3 Don'ts of Real Estate to enjoy the full financial benefits of home-ownership and minimize risks:
The 3 Don'ts of Real Estate:
Before buying or selling a home, or letting another year go by without a maintenance inspection, a home owner should hire a qualified Home Inspector to prevent and anticipate expensive issues When it comes to an objective and knowledgeable evaluation of a house, the independent Home Inspector is the homeowners best ally. Not all home inspectors are the same-- a good home inspector has real renovation and construction estimation experience and can recognize the difference between easy fixes and costly repairs.
Once defects are discovered, the home owner should work with a qualified general contractor to help prioritize, budget and to generate a repair plan.
It's hard to put a price tag on the enjoyment we get from our home but statistics also show that more than any other asset class every dollar and drop of sweat invested in our homes will pay us huge dividends later in life, especially for those that buy, maintain and sell well.