If you have just bought your first Silicon Valley home, you may feel very relieved to have survived the contracts, negotiations, the disclosures, the appraisal and the escrow and made it all the way to closing. You are a successful home buyer! You move in, unpack and then…. what? What do you do?
I have a few suggestions.
First, while it’s fresh in your memory, pull out the disclosures and inspection reports and (if you haven’t done this already) make a list of the items you must do and want to do. I suggest you include at least 3 categories:
- Health & safety items
- Protecting the house from damage
- Lower level items with aesthetic value (decorating and in some cases remodeling)
- Ongoing projects you want to remember to do periodically around the house and yard such as changing the smoke detector batteries, cleaning out the rain gutters, doing a “walk around the house” to check for any issues with vent screens, roof tiles etc. (If you have bought a condo or townhouse, this is still important.)
It is too easy to focus on updating to dual pane windows (gratifying since they look nice) and ignoring foundation cracks, electrical problems and termites, so making this type of list will help you to keep on track with the better priorities (1 and 2 as opposed to 3).
Second, pull together all of the expenses you laid out in purchasing your home. Create a file with a spreadsheet of your costs and the receipts that go with it (include a copy of your HUD 1). This will be helpful in establishing your tax basis and may protect you when you eventually sell the house from paying more taxes than you’re legally required to do. Go over it with your CPA or Enrolled Agent or Tax Professional as some of them may be deductible on your taxes this year and some may not qualify as related to your tax basis.
Third, if you haven’t already worked up a reasonable household budget, do it now and plan in both a reserve account and a plan on what repairs and improvements to do and in what order. The reserve account is important because some expenses can come unexpectedly (fences blow down, water heaters die, water or sewer pipes can burst without warning).
Fourth, make sure that your insurance is up to date. I advise making a list of major items in the house – a walk through with a video camera is a good idea too. When you complete major projects, update the list. Keep one paper copy somewhere safe and another copy either “in the cloud” or with a trusted friend or relative, ideally outside of Santa Clara County in case the reason for the need is an area wide problem. Should your house ever burn down, you would need proof of your possessions for insurance purposes.
Lastly, now that you have a major asset (your house or home), you might consider creating a will & trust with the help of a good attorney.