When buying a new home, there is much to consider. You have the stress of knowing that this is one of the most important purchases you will ever make, but also have a lot of other things to think about. How important is a big yard? Are there good schools nearby? These are just a few of the important decisions to make, but another big one is if you’re looking for a newer or older home.

Newer and older homes have their own negative and positive attributes. A new home has got clean carpet, fresh paint, its move-in ready and has that new house smell. However, these homes often come with a hefty price tag.

Fixer-uppers on the other hand, are older homes. People have lived there and used the home for a long time. They often have more character but could require their new owners to launch a few do-it-yourself projects.

A home like this could still have old style shag carpeting, not to mention other outdated features like the cabinets in the kitchen. A good way to think about it is that you have an opportunity to style the home according to your own taste. The price of a fixer-upper is typically lower than newer homes, and the square footage is usually higher. Keep in mind that these homes will require you to put in significant labor – don’t underestimate what it will take to complete.

When considering purchasing a fixer-upper home, remember to follow these important steps:

Take the time to do the research that is needed to get a full understanding of how much labor the home will require. Things like painting and installing new carpet won’t take long, and are relatively inexpensive. However, when there are significant problems with the foundation or the plumbing in the home, it could me many thousands of dollars to complete.

The structure of the house should be sound in order to make it a worthwhile investment. Steer clear of houses with structural damage, water damage, pests, and outdated wiring or plumbing. These problems can cost you.

In order to figure out insurance costs and keep track of needed repairs, keep a note pad with you while you check out homes and write it all down. Your lender will require you to purchase homeowners insurance if you are buying a home.

In most cases, it will be more costly to insure an older home. Home insurance carriers pay special attention to the age of the roof, electrical and plumbing fixtures, and heating and air conditioning systems. Here’s why:

Structural weakness and leaks are more likely to occur in an older roof. Older plumbing is subject to leaks that can lead to long-term water damage. Older electrical systems that use ungrounded power outlets and fuse boxes especially carry a significant fire hazard.

If the home you are thinking about purchasing has some of these problematic issues, talk to your home insurance provider so you can estimate what it will cost to insure. Remember, you’ll need to include those premiums – as well as renovation costs – as part of your overall budget for your home purchase. Another thing to consider: Once you renovate the home, the risk will be lower but the replacement value will be higher. Your insurance provider must be informed about your renovation and repair plans so that your coverage will be sufficient.

Do not make an offer on a home before you have had a home inspection, even if the home appears to be everything you’ve always wanted. A home inspector will be able to see damage that is concealed or otherwise hard to find, and this will protect you from moving in and then finding that the structural damage to your home is severe because of termites or something else that you didn’t notice yourself.

See Square One for a home insurance policy that can be truly tailored to your needs. Get a quote and buy a policy online or by phone. Or have a quick look at our home insurance video.