John saved up for a house, only to get sandbagged by a massive repair bill
Age: 26
Location: Manitou Springs, Colo.
Profession: Public relations account executive
Like any diligent homebuyer, John Krantz got the thumbs-up from a home inspector before he bought an 80-year-old historic house in Manitou Springs, Colo., in October 2008. But not long after moving day, the drain in his basement started acting up. "Anything and everything that drained from my house started spewing from the floor drain," says the 26-year-old PR exec. "I figured it was a clogged drain, old pipes, you know." He called in the professionals, who told him he needed to replace his sewer line from the house all the way out to the street. Immediately.
Once workers started digging, they discovered that John's house needed a new water line as well. And then there was excavation work, and they had to repave the front steps. The final tally? A cool $16,800—nearly half of John's annual salary. Oh, and that home inspection? They inspected the electric, the foundation, and the indoor plumbing, John says. But he didn't think about underground lines, which inspections generally don't cover. "I just never considered that if a sewer line under a city street needed to be replaced, it would be my responsibility to pay for it."
For the first $8,500, John got a six-month, interest-free bank loan, but he wasn't sure what to do for the second half. Eventually, he cashed in some investments to cover the remainder. "I have absolutely no savings left at this point, apart from the equity in my home," he says. He's already applied for a home equity loan to cover the first bank loan when it starts accruing interest—at a mind-boggling 25 percent—in March. “I think it’s a good lesson learned for the future,” he says, noting that if he'd known the water and sewer lines were the original galvanized steel and long overdue for replacement, he might have made a different choice.
Did John do the right thing? Caught with a huge repair bill and a depleted bank account, what should he have done? What's his next move?Do you have a money quandary? A success story? A cautionary tale? We'd love to hear from you. Send an email to editors@bundle.com and include a photo.
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