Money pit?

A good friend of mine, a developer of fine homes and regular reader of the blog, counseled me when I bought our current abode in 2003: "Those old houses can become money pits," quoth he. We put some money into it, but it never really got bad.

Until now, when we're trying to get out of the durned thing. Having been built in 1913, it had knob and tube wiring. Most of that stuff got taken out, but there's still some up on the third floor and going to the 2nd. On our disclosure form I dutifully checked the box "Has knob and tube."

Now, back when we bought, I was concerned about insuring the house with this wiring, but it turned out I had to pay something like $300-400 more because of it. In the interim, turns out, many, if not all, insurance companies have decided they don't want to write coverage on it at all.

So the ground shifted beneath our feet, just as it did in 2001 when we found that Princeton Boro, which had granted us an onstreet parking permit at our prior home, had revoked it, claiming it had been "issued in error" years before. This cut the value of our home. The moral to this story is that there is regulatory risk inherent in house transactions, particularly in densely populated areas where the involvement of pooled interests (govts, insurance companies) in markets is high. These factors may move against you, but they are unlikely to move for you.

How will this all turn out? Stay tuned, fair reader, and remind me if I don't get back to it. There should be more chapters to this tale.