It is recommended that homeowners keep at least $5,000 in easy-toliquidate assets, to cover emergency repairs or replacement costs.
It is recommended that homeowners keep at least $5,000 in easy-toliquidate assets, to cover emergency repairs or replacement costs.
Photograph by: Thinkstock, Postmedia News
In a recent article, I wrote that an expert recommended homeowners keep at least $5,000 in easy-to-liquidate assets, to cover emergency repairs or replacement costs.
Although no one objected to that number -the expert said it was a minimum, and more like $10,000 in the bank would be better -I assume that very few people, especially those on fixed incomes or who have children in college, have even $5,000 to set aside for emergencies these days.
With the economy still in disarray, there is a tendency to postpone repairs if they don't disrupt day-today living. If a pipe bursts, you shut off the water and call the plumber immediately.
But if the faucet in the bathroom sink drips a bit, you try not to think about it, even though you're wasting lots of water and probably adding to your monthly bill.
Sometimes, even if there is enough money to pay for the minor repair, you postpone it -learning to live with the situation, as real estate agent Marilou Buffum put it, until it becomes so much a part of your life you forget about it. Until you list your house for sale, that is.
In a market where there are still too few home buyers, sellers are less likely than ever to find someone as tolerant of a dripping bathroom faucet as they are, Buffum said. A few weeks back, I wrote about a five-bedroom Colonial for sale for $234,900 that prospective buyers described as "too blah," and that even the agent had considered "boring."
The owners had spent a lot of money trying to make the house, built and purchased in 1971, look appealing, but it spent the winter sitting empty.
Finally, an agreement of sale was negotiated with first-time buyers for $225,000, with a $5,000 sellers' assist at the settlement table.
The subsequent home inspection uncovered needed plumbing and electrical repairs, including bringing the septic system up to code.
Then, there was the water pressure, which the owners said had always been problematically low, though the family of nine had managed to get by on it for three decades.
The repairs were not that expensive, but the angst created by the inspector's report was high, as was the concern that the best opportunity for selling the house might be lost to things that were known and left uncorrected because its owners had learned to live with them.
Noelle Barbone, broker manager of Weichert Realtors, in Media, Pennsylvania, recently sold in just two weeks her parents' home of 40 years. Sure, they gave each room a coat of paint, but her father also had the roof replaced. Because they knew the house would have to pass the township's use-andoccupancy inspection, "we had everything taken care of from that checklist," Barbone said.
In preparing the colonial for sale, however, the owners of that house focused on cosmetics rather than on the systems, which were in greater need of attention.
Items that are not on most buyers' lists of desirable features are roofs in need of replacement and major plumbing and electrical issues. They want those fixed, or there's no sale.
Best advice: Deal with deferred-maintenance issues before you list your house for sale.
If you can't remember what they are, start at the bathroom sink.
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