Don’t treat your home as a piggy bank!

Bankrate.com has an excellent article about the dangers of treating your home as a piggy bank.

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“When is a house not a home? When it’s a piggy bank.”

“Homeowners treated their houses like piggybanks or automated tellers during the housing boom years, withdrawing equity in the form of cash whenever they wanted to buy something. Many of these homeowners now owe more than their homes are worth, a condition known as having “negative equity,” or being “underwater.”

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As an REO Realtor, I see it all the time – people cash in on their home’s equity, then the market changes and they’re left with nothing.  See the full article here.

Love thy neighbor – you never know when you’ll need them

Recently, I posted about unexpected expenses–how out of the blue we were going to be out a lot of money because the main water line to the house suddenly decided to disintegrate.

For those of you who read it, the final tally was $300 for leak detection, then $1350 for the entire line to be replaced from the meter to the house.  The water bill was $602 (the water people are “reviewing” it to see if they’ll make any adjustments for us.)

We were without water for a week.  Thankfully, we have great neighbors!

We ran a water hose from their house to our back door so we could get water to flush the toilets.  We purchased jugs of water for coffee and things like brushing our teeth.  But there’s no way we could use that ice cold water to bathe.  Again, those neighbors were wonderful.  We have one of their garage door openers and were extended an invitation to “come over and shower anytime!”

When we moved to our neighborhood, we were pretty hesitant and unsure about how we would be welcomed.  Bella Vista is a bit on the rural side, and has had a reputation for being filled with grumpy people.  Little did we know that we were going to find that not only did we get a great home, we got an even greater neighborhood!

The couple across the street are always so nice to us.  We can always count on a conversation if we meet up in the yards.  I’ve been attempting for a couple of years to make it over there when she’s making salsa so she can teach me just how she makes the best stuff I’ve ever tasted (I always seem to be MIA when it is time to do so.)

I’ve already mentioned the people next door.  We’re always swapping tools from the garages or ingredients from the kitchens.  They’re a number of years older than us and we’ve never learned how to cook for only two, so we often pack up a good portion of the leftovers and take them over.  We call it meals on foot.

Recently they were on a trip and we got a call from her: “I have a suitcase full of shoes and can’t find it.  I think  Ross never put it in the car.  Can you go look and if it’s at the house overnight it to me?”  $87 and two hours later, the shoes with a combined value of about $30 (including depreciation) were on their way.  I don’t think she’s ever going to live that one down. 

On the other side of them is the Dr.  He and his wife always stop to visit if they pass by while we are in the yard.  They also host the annual neighborhood fish fry.  They provide the setting and the cookers, and the rest of the neighborhood provides side dishes.

Our street ends in a cul-de-sac with a wooded circle in the middle.  This is common in Bella Vista.  Even more common is for these wooded circles to be filled with grapevines attacking trees, trash and leaves blown in by the wind, and just look awful.  This year, the entire neighborhood showed up one day to clear it out and we all brought plants from our yards and planted them in this circle.  People donated a bench and a few yard chotchkes.  We all take turns keeping it weeded and watered so we have a common beautiful area where most have an eyesore.

None of us are nosy, but we do keep an eye out for each other.

The next three houses on the street are for sale.  All are lakefront homes.  I only hope when those sell and the new neighbors arrive, they are as surprised at the welcome gifts they will receive and as friendly as the rest of the neighborhood.

If it sounds a bit idyllic, it is.  Sometimes, you get lucky and your neighborhood is worth more than your home.

Unexpected expenses

So, yesterday I was working at home and the doorbell rang.  This is a HIGHLY unusual occurrence.  Neighbors know I work from home and don’t bother me during the day.  Friends and family know to call first.  I’m just that way.

I run upstairs, dog following behind, to find the water meter reader at my door.  This can’t be good.

Seems there is a large leak in the line from the meter to the house.  We’ve been pulling 70 gallons an hour since about the 13th of last month.

Water company won’t give us a break on the usage-bill will be over $700 (normally $65).  It’s gonna cost $300 to have someone locate the leak, and an untold amount to have a plumber repair it.

This is a perfect example of an unexpected homeowner expense.  This is also a PRIME example of why I hate to see people buy homes that have no financial reserves.  A $1200 unexpected expense can throw someone without any reserves into a financial tailspin.  We are fortunate that we have some reserves.

For those of you who are getting down payment gifts and wanting sellers to pay all your closing costs because you have no savings – are you really ready for the financial obligations that come with owning a home?  What’s going to happen when something like this happens to you?