We parked across the street from the older house on a Sunday evening with the engine off, and Tyler squinted at the roof for a long minute. "Those shingles are curling," he said. "See how the edges lift?" I couldn't see it, but I wrote it down anyway. It turned out to matter more than almost anything else about that house.
We're not buying yet. We meet with the loan officer next week to get pre-approved, and we'd like to stay under $150,000. But we've been watching listings for well over a year, and I didn't want homeowners insurance to be a surprise in the middle of a closing. So I asked our agent in Moberly to quote two houses we'd been looking at. Agents do this for buyers all the time, it turns out. It took one phone call and two days.
The two houses
The first is an older two-story near downtown, built in 1925 and listed at $118,000. It has a big front porch, original woodwork and, according to the listing, a roof that's about 19 years old. The second is a 1998 ranch on the edge of town, listed at $142,000, with a roof put on six years ago.
Our agent quoted both through two companies: the smaller regional company we already use for our cars and renters insurance, and a big national company. Here's what came back:
| Older house (1925) | Newer house (1998) | |
|---|---|---|
| List price | $118,000 | $142,000 |
| Roof age | About 19 years | 6 years |
| Estimated cost to rebuild | $212,000 | $186,000 |
| Regional company, per year | $1,940 | $1,320 |
| National company, per year | Wouldn't quote | $1,460 |
The cheaper house costs more to insure: $1,940 against $1,320, a difference of $620 a year, or about $52 a month. And one company wouldn't touch it at all.
What changed the price
The cost to rebuild, not the price. This one surprised me most. As our agent explained it, homeowners insurance is mostly priced on what it would cost to rebuild the house, not what you pay to buy it. A 1925 house with plaster walls, tall ceilings and all that woodwork would cost far more to rebuild than it sells for in Macon. The estimate was $212,000 to rebuild a house listed at $118,000. The ranch is smaller and simpler, so its rebuild number came in lower, even though it costs more to buy.
The roof. In this part of Missouri, hail is a big deal, and roofs are where hail claims land. Our agent said companies treat older roofs differently. Some won't write a policy on a roof past a certain age, and others pay only actual cash value for roof damage, meaning they subtract for years of wear. The regional company's quote on the older house paid the roof at actual cash value. If hail tore up a 19-year-old roof, the check might cover a fraction of a new one. Tyler's curling shingles were the insurance company's curling shingles too.
Both quotes also had a separate wind and hail deductible of 1% of the dwelling coverage, instead of the regular $1,000 deductible. On the older house that's $2,120. On the newer one it's $1,860. I'd never heard of a percentage deductible before. I won't forget it now.
The surprise about the wiring
The listing for the older house said "some original wiring remains upstairs." I read that as charm. Our agent read it as a problem. Some houses that old still have knob-and-tube wiring, an early system with no ground wire that was never meant for a modern load of appliances. The national company declined to quote the house because of it. The regional company would quote it, but only with an electrician's inspection before closing, and the quote assumed any old wiring gets replaced soon after we move in.
Tyler did that math before I could. An electrician he knows from the plant guessed that rewiring the upstairs could run $6,000 to $10,000, more with plaster walls. Add a new roof in the next few years at maybe $9,000 to $12,000, and the house that's $24,000 cheaper isn't looking cheap anymore.
None of this decided anything. We haven't been inside either house, and we're still looking. But it changed how I read listings. Now when I see "charm," I look for the roof year and anything about the wiring. Both got their own columns in the sheet.
One more thing to plan for: the lender will probably collect the insurance monthly with the mortgage payment, along with property taxes, in what's called escrow. For the ranch, $1,320 divided by 12 is $110 a month. For the older house, $1,940 is about $162. Our renters insurance is $14 a month right now, so either way, that line in the budget is about to grow.
I can't tell anybody which house or which company to pick. I'd just suggest asking an agent to quote a house before you make an offer on it. It's free, and I'd much rather know now.
