Q: We purchased a large home last year. The property overall was in good condition, with the home being only 10 years old. Now that winter is here, we are finding many areas of exterior paint flaking off; a large wood deck that was painted is now rotting and lifting; and numerous interior floor tiles are cracked and lifting. Should we call our insurance company or just own up to the cost of homeownership? –Paul
A: In the real estate industry, we often tout the privileges of homeownership. But owning a home also has its costs above and beyond mortgage payments and taxes, and you’re more mature than the average new homeowner to acknowledge as much.
Just as it’s a fact that if you live you will someday die, and if you buy a new car it will eventually get a door ding or window chip, it is the God’s honest truth that if you own a home, at some point you will have to maintain and repair something, and it’s not necessarily anyone’s fault.
Obviously, you’re concerned that the home seemed fine last year, but now has a number of items that are falling into disrepair. Several things could be behind this.
First of all, many people believe that new homes are often made with materials and methods less long-lasting than homes built a century ago were. Clearly, homebuilders disagree, but there is a real issue around the planned obsolescence of recently manufactured items and materials — virtually all industries manufacture items to last only so long these days.
My favorite home inspector used to say that if your water heater was 5 years old, it might only have five years left on it, because recent water heater models are built to last roughly 10 years. If it was 20 years old, though, it could have another 20 to go — back then, things were not built with a planned life span — they were built to last!
Also, if your home was specifically staged or prepared for sale — i.e., the exterior or deck painting or tile installation — the owners or their contractors might have elected to use lower-cost/lower-quality materials. This doesn’t necessarily mean they were intentionally trying to cover up a defect in the property (although I have seen this happen, too).
If you were preparing to sell a home and wanted to show it in its best light, but weren’t concerned with the paint lasting for the next 10 years, you would likely not select the most expensive, highest-quality materials, either.
This is the same reason I generally encourage homebuyers to take a repair credit and complete the actual repair themselves or via a contractor, and with materials they select, rather than asking the seller to do the repair; someone who’s leaving the house will almost never choose the same-quality materials as someone who’s about to move in.
Now, to your specific question of whether to call the insurance company or eat the costs, from what you’ve told me I’d say you’ll probably have to dig into your own home maintenance fund (if you even have one) to cover the costs.
Think of the difference between the insurance you carry on your car, and a new car’s warranty. Insurance generally covers the cost of repairing your car (and your home) after a traumatic event or disaster. In the case of your home, it could be a plumbing disaster that ruins the flooring or drywall, a burglary, or some natural disaster.
A warranty, on the other hand, covers the costs of maintaining items that simply wear out or malfunction without any sort of accident, event or disaster. If you have a home warranty, it may cover your water heater or furnace if they wear out.
However, the maintenance of the particular items that are "wearing out" on your home, namely the deck and cosmetic items like paint and tile, are generally excluded from home warranty coverage policies, in my experience.
Flip through your home warranty policy or even give the warranty provider’s toll-free line a call to make sure you don’t lose out on coverage you have, but chances are good that you’re going to need to put a plan (and a budget) in place for repairing the tile, replacing the deck and repainting the house.
The upside? This time, you’ll choose top-quality materials and you may not have to do these items again for a very, very long time — if ever.
