The housing market in Wildwood seems to be tightening up a bit with far less houses coming on the market and the ones that are going on the market are selling faster and closer to list price.

A unique house came on the market on Magnolia Ave in Wildwood and listed at 250K. The has a very cool folk Victorian look with lots of nice features such as 2nd story porches, all original windows and roof, and wood siding. The house also needs a ton of work with siding falling off, roof leaks/missing shingles, and a non-functioning furnace.

The house looks like it will be a handful, but also has some potential and is very unique so I decided to put an offer in. The seller seems lukewarm on selling so I wasn't expected a definite sale. 

One of the tricky things I've found with old houses is trying to catalog the costs of ownership. Unless you are going to buy with cash, once you go for a mortgage you then have to deal the mortgage company approving the condition of the house and also have to carry insurance. Since Wildwood is in a flood zone, you need flood insurance in addition to homeowner's insurance.

The flood insurance costs have always been tricky to get. When you ask for an estimate on a house, the first thing most places will ask for is an elevation cert. This cert is prepared by a surveyor and costs about 300-500 bucks. If you are buying a house from an old-timer, typically they won't have an elevation cert and probably won't have flood insurance. With no elevation cert, the agency will give you a quote using the worst possible rates. 

After you get over the sticker shock of flood insurance, next you need to get a quote for homeowner's insurance. Initially my dream was to pick up a rundown house and then leisurely repair it, until I sent pictures of the house to the insurance agency. Once they saw the broken siding and missing shingles, they said the house would not be certified as fit to occupy. They would have to insure it as a vacant building which jacks up the premium majorly. To lower the premium, I'd have to get the issues fixed - so much for leisurely repairing the house!

Then of course there's property taxes and utilities which in Wildwood are a pretty high. All of New Jersey has high property taxes so that's a given and for water and sewer bills, Wildwood charges you based on your usage during the summer months. As a seasonal town, of course the summer usage will be way higher than the other 9 months out of the year.

Finally, not a hidden cost, but a roadblock to buying an old home in need of repair is getting the mortgage to sign off on the house when there's visible damage. Since this house has falling off siding and missing roof shingles, they were dubious about giving a conventional mortgage and instead wanted to do a 203K or Homestyle mortgage to bundle in the costs of renovation. The problem is you need to partner with a contractor to do the repairs and there's lots more paperwork to deal with. Also, I can't imagine the contractor who is trying to knock out this renovation to please the bank is going to want to do a loving restoration - they'll want to slap on vinyl siding and be done with it.

After I put the offer in and started looking into all these other issues, I started having second thoughts.