Now what? You just completed the purchase of a foreclosure or short sale and you’re surveying this steal of a deal. Considering many of these transactions NEVER close, did you allow yourself to think much past the settlement date? Now you’re not only considering how to make this house livable but also how to retrofit to current efficiency standards so the utility bills won’t consume the “savings” you received buying scratch-and-dent.

You likely bought an older home and by that I’m referring to a house built before 2000, which doesn’t seem so old but it is considering modern efficiency standards and higher performance materials. According to Harvard’s Joint Center for Housing Studies (JCHS), existing homes consume one-fifth of our nations energy (i.e. just three percent less than Transportation) and, of that chunk, homes built before 1970 account for 40 percent of the residential energy consumption. Given the addition of one to two million new homes annually, the JCHS notes that the U.S. housing stock includes 130 million homes in “ongoing need of maintenance, component replacement and adjustments to meet changing preferences and lifestyles.”

What’s astounding within the latest data compiled by the U.S. Census Bureau/HUD’s American Housing Survey (AHS) is that, among all OCCUPIED homes, nearly 14 percent did not have centralized heat and 36 percent did not have central air conditioning. The U.S. Department of Energy reports households devote a full half of their usage to air heating/cooling, 20 percent for water heating and 32 percent for lighting and remaining appliances.

Given that most foreclosures and short sale properties are not lovingly cared for during default, new owners have more to consider upgrading than just aesthetics.

We recommend detailed planning with your real estate agent, ideally before you begin shopping for a foreclosed/short sale home. A home inspection is a must but, even before you make an offer, enlist the counsel of a licensed and certified professional contractor, engineer or building inspector to tour a property of interest and to help you gain clarity about your potential expense of money and time. Give consideration to both. What are you getting yourself into? And how will it affect your timing for a roof over your head? For example, we advise against moving into the home until the work is complete. There is no such thing as a dust-free construction zone and the project will take longer than it would if the home were vacant. Most people hope to avoid two moves but what’s the trade-off in cost, project time and related lifestyle hassles?

Plan around the systems first because those directly affect your comfort and monthly utility expense. The choices you make will likely impact the design, flow and function of the cosmetic and user features you desire. For example, what you select for heating and air influence unit placement and duct work, therefore affecting your lay-out and space requirements.

And finally, don’t forget to research grants, tax incentives and subsidies. One I’ll quickly mention is HUD’s Neighborhood Stabilization Program (NSP) which provides funds for the purchase and rehabilitation of foreclosed and abandoned properties, even to demolish and redevelop blighted structures. I’ll blog more about this another time.

Never dreamed you’d buy a Sixties rancher? Look at your older house as a shell, a blank canvas, in which you’ll replace the guts with custom-designed, sustainable components. In other words, rebuild brand new from the inside. Recycle your house.