Are You Living in a Money Pit?

20 November 2018
Blog

How to Avoid Buying a Problem House

First, it's an $800 replacement water heater; then a nest of roof rats in the attic that need an exterminator's attention. Next you hire a termite expert to check out the mud tubes on the foundations of your house. Then the kitchen needs a new dishwasher, and the bathrooms need new faucets.

Maybe the words "money pit" come to mind. That's when a house can seem a little bit like the infamous mansion in the 30-year-old Tom Hanks-Shelley Long film comedy, "The Money Pit." If you've never seen "Money Pit," rent it on Netflix or check out film clips online.Rosie on the House Money Pit

Hanks and Long play a couple who buy an aging Long Island mansion in a distress sale for what seems like next-to-nothing – $200,000 for a house that could be worth $1 million. An 80 percent markdown! It's a real live fixer upper, of course. But since they're being kicked out of their apartment, they're in a panic about finding a new home. Of course, they fail to hire a home inspector to check out what all the house needs to be fixed.

Things get crazy-expensive from the moment they open the palatial front door of their "bargain." The door plus the frame around it collapses. Then there's the failure of the banister and staircase leading to the second story. The upstairs bathtub crashes through the floor into the downstairs area. Hanks gets trapped when he falls into a hole in the floor of the den. Serious electrical explosions in the kitchen turn into fires.

Rosie on the House Inspector

But in spite of serious accidents, Hanks and Long escape unscathed and there's a sort of happy ending. The only serious damage is done to their bank account. A mob of contractors invade the house to fix the mess – all of them looking for serious advance payments.

Although the aging mansion in the movie was real, the destructive scenes were staged in a movie studio, not in the mansion.

If you've never bought a house before or you're looking for a new house, the film raises some red flags to watch for when house hunting – things that could lead to serious problems:

1 | Lack of Permits

If it's an older home being sold by a flipper or do-it-yourselfer who made quickie repairs, check to see that any changes were done with the right permits from the city or county. You don't want to go back later to the city to apply for a permit and make fixes.

2 | No Inspection

Rosie on the House termite damage

Pay for a visit by a home inspector, who can find strange wiring connections in the electrical box or bumps and puckers in walls that might mean there are serious leaks in the laundry room, bathroom or kitchen. A good inspector might have found the leak that led to the bathtub mess in Tom Hanks' house.

3 | Roof Problems

Check out the roof even if your dream house is practically new. Sometimes builders don't always do a perfect job on the roof.

4 | Termites

Be sure to have a termite inspection. An inspector can spot mud tubes that pop up on foundations and drop down from ceilings. You might want to do a little visual inspection yourself. Probably it was termites that caused the floors, doors and staircases to collapse in Tom and Shelley's house.

Rosie on the House wiring damage

5 | Electrical Issues

Make sure that there are plenty of GFIC (ground fault interceptor circuits) to protect against electrocution and fires caused by faulty appliances in the kitchen and bath. Have the inspector check them out to be sure these outlets work.

6 | Foundation Faults

Check for foundation faults, too, that may have caused cracks in interior or exterior walls and flooring.
As one of the contractors tells Tom and Shelley: "If the foundation is good, then everything else can be fixed."

What It Would Cost to Fix the 'Money Pit' House Today

The supposed value of the house in the movie "Money Pit" was $1 million in 1986; that would amount to $2.65 million in today's market and today's dollars.

  • If the couple paid $200,000 in 1986, that would equal $530,000 in 2018 dollars.Rosie on the House money pit house
  • Assuming you did a complete high-end remodel of the house today, it would be easy to spend $500 - $600 a square foot.
  • That would amount to about $7 - $8.4 million today to do a total gut job. In 1986 dollars that would be $3 - $3.6 million for the 14,000 square foot house.

The real life "Money Pit" house was very luxurious. In 2002, it sold for $2.125 million and was then remodeled over four years. It now has ebony hardwood floors, a chef's grade kitchen with a mahogany island and 10-burner stove. It's valued at about $6 million today.

Estimates made by Alexander Pajic, project manager for Rosie on the House Remodeling.

Tune In This Saturday 11/24Wrapping up our month on Finance, Rosie On The House reviews the classic film Money Pit

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