When a dream house becomes a money pit

Any buyer knows that a dream home can become a nightmare. But most people don't expect it to happen to them.

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Any buyer knows that a dream home can become a nightmare. But most people don't expect it to happen to them.

Steven and Michelle Hicks found what looked like the perfect home: a two-story, mid-1920s Dutch colonial on three-quarters of an acre in Millburn, N.J. But months after moving into the 1,856-square-foot house, they realized just how elusive a dream home can be.

When the Hickses started their search in the suburbs a few years ago, they had been looking to leave the Upper West Side of Manhattan, where they had been living in a 1,000-square-foot rental apartment above a Japanese restaurant. It was large, but so dark that they called it "the Batcave." They wanted a home with a big yard for their growing family; they have a 2-year-old son, Jackson. Mr. Hicks, who grew up in Freehold, N.J., works for a company that does web marketing; Ms. Hicks works in television commercial production.

They focused on towns along New Jersey Transit's Midtown Direct train into Manhattan and on homes that were within walking distance of the train. They set their budget at $800,000. In a year and a half, they toured 146 houses, "and then we stopped counting," Ms. Hicks said. They made offers, but found themselves continually outbid.

When a broker urged them to look at 264 Glen Avenue in Millburn in 2012, their long search ended. "It was gorgeous," Mr. Hicks said. Bay windows let in glorious light, and French doors graced the living room. The front yard had a stream running through it with a footbridge, and the house looked out into the thick woods of the South Mountain Reservation, whose southern tip began just across the street.

They offered the seller's asking price of $650,000, and "she just took it," Mr. Hicks recalled. In retrospect, he said, "That should have told us something."

Once they moved in, problems quickly mounted. New windows had been installed in some rooms, but haphazardly, without insulation. A contractor told them that the previous owner had removed a load-bearing wall without putting a hefty beam across the ceiling to make up for the missing wall. "Nothing was shoring up the second floor," Ms. Hicks said. An electrician told them the wiring was not grounded, and that a fire could break out at any time.

The basement had a tankless water heater, a selling point for the Hickses. But shortly after they moved in, it stopped working. It was supplying water to a Rube Goldberg series of pipes that traveled all the way to the attic and then into the rooms for the radiators, looping throughout the house and covering so much distance that the water cooled by the time it got to where it was needed. During last year's often bitter winter, the radiators couldn't get the second floor warmer than 48 degrees. Ms. Hicks said she was working from home, "but with a hat on" and a space heater glowing.

The previous owner, Carol Royal, said that when she left the house, "everything was fine, as far as I was concerned." She said she has bought many homes in need of repair, and said, "first-time home buyers, they expect everything to be perfect. But it's not."

Ms. Hicks's favorite feature of the house had been the hand-laid tile on the floor of the master bath, which gave the impression of a riverbed. But by the end of their first summer, the tiles were cracking. The plywood subfloor was inadequate and incomplete; the floor was sinking.

That winter, they lost access to one of the showers when the pipes froze; the pipes ran along an outside wall over the covered porch and had not been insulated.

Some things simply seemed slipshod. When Mr. Hicks leaned against the granite countertop on the kitchen island, it slid. It had never been attached.

The Hickses had paid for an inspection, but many of the problems were hidden behind the redone walls. Mr. Hicks said he wished that he had picked up on subtle signals the inspector may have been sending. "He was a little bit more apologetic than he should have been," he said. In the basement, the inspector noticed that the beams supporting the kitchen had been notched to run wiring and pipes, reducing the load-bearing capacity. "You are not supposed to do that," he told them, "but are you going to have 40 people in the kitchen?"

They had fallen in love with the house, and the broker's account of how the previous owner had rescued it. "We got kind of fed this story about how this woman was a hero," Mr. Hicks said.

They had not known the level of deep disrepair that the previous owner, Ms. Royal, had encountered when she bought the house. They had not seen an article that ran in The New York Times in 2010, detailing her efforts to bring it back with a crew of handymen.

The charming bridge over the stream had to be replaced; the wood was untreated, and began disintegrating within a year. By last June, nearly three years after moving into the house, the Hickses moved out and contractors moved in; the family realized that they needed to tackle all of the necessary repairs at once. They were told that the repairs would take six or seven months, but it is likelier to be 11. They have stripped the walls to the bare boards to rework the electrical and plumbing systems. They have torn out siding, removed the mold and rotted wood that was found within, and laid a massive beam to support the second floor atop columns that extend through the basement.

They are also adding 1,000 square feet of new space, including a large upstairs bedroom that looks out over the footbridge. They are living in a rental townhouse nearby and hope to move back in by May. They estimate the total cost of repairs and the expansion at about half the purchase price.

Ms. Royal, who now owns the organic Strawberry Fields Farm in Sherman, Conn., with family berry picking, said in a telephone interview, "I'm really horrified that they're having all these problems."

In the three years she lived in Millburn, she insisted, she did not put in new plumbing, aside from the water heater. Her winters had been relatively mild, and when it did freeze, she kept her faucets dripping and never had a problem. The electrical work she had done was by a licensed electrician, she said, and added that she had indeed put in a beam to provide support in the absence of the removed wall. (The Hickses say that whatever Ms. Royal put in—to them and their contractor, it appeared to be simple framing—was insufficient to support the second floor.)

In an email following up the telephone call, Ms. Royal added, "I am troubled by the angst directed toward me as the seller. They bought an old house!"

Were the Hickses to offer advice to home buyers, Mr. Hicks said, "you should forge and manage your own relationship with your inspector," and make clear you want to hear the bad news. In houses that have undergone extensive renovation, he urges that buyers ensure all the necessary permits were obtained. "I don't know how I'll ever buy a house again," Ms. Hicks said. "I can't imagine trusting anyone."

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This article was written by John Schwartz from The New York Times and was licensed as an article reprint from February 19, 2016. Article copyright 2016 by The New York Times.
The statements and opinions expressed in this article are those of the author. Fidelity Investments cannot guarantee the accuracy or completeness of any statements or data.
This reprint is supplied by Fidelity Brokerage Services LLC, Member NYSE, SIPC.
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