(MONEY Magazine) — Lean times call for budgetary triage. But while you should clearly opt for orthodontics before Disneyland, the choice is tougher when it comes to home maintenance.

Should you get a paint job or a new furnace? “There’s no homeowner’s manual that tells you when to do what,” says Naperville, Ill., home inspector and structural engineer Mark Waldman.

Emergencies aside, the project that could cause the most damage and expense if left unfixed is the priority. Below, the order in which to tackle your biggest repair needs.

Wiring problems claim the No. 1 spot for good reason: They can lead to fires and electrocution. “That trumps everything,” says Waldman.

Danger signs: Circuit breakers that trip frequently, lights that dim when you turn on the vacuum or outlets that are loose, hot, or accept only two-prong plugs.

How to check: Spend $300 to $500 for a licensed electrician to open up your main panel to look for trouble and to tighten any loose connections. He’ll also spot-check switches, outlets and light fixtures to ensure that the wiring is in safe working order.

Replacement cost: $4,000 to $10,000 to rewire the house.

Prolong its life: Flip every circuit breaker off and on again once a year to prevent corrosion. Add new circuits ($100 to $500 each) to take the heaviest electrical loads, like window air conditioners, off the old wires.

Structural problems downstairs mean shifting and cracking upstairs — at the very least — so there’s little point in doing other repairs until you’ve fixed the building’s foundation.

Danger signs: Bowed or split beams, rotted posts, piles of sawdust (evidence of wood-boring insects), tiny mud trails (indications of termites), or large cracks in the masonry foundation — especially if the cracks are horizontal, which tends to indicate a bigger problem.

How to check: A contractor will usually take a look free of charge. If he recommends significant repairs, hire a home inspection engineer (find one at nabie.org) to investigate ($350 to $500).

Replacement cost: Major foundation work can cost $3,500 to $8,000; new posts or beams could run $1,200 to $2,500.

Prolong its life: Water is the cause of cracked concrete, rotten timbers and wood-eating pests. So keep your basement dry by making sure the landscape slopes away from the house and maintaining the next two items on the list: the roof and gutters.

Water leaking into your home from above can lead to a host of pricey problems: rot, insects, electrical shorts and mold.

Danger signs: Dampness or stains on ceilings; curling, missing, or broken shingles; smooth spots where the granules have worn away; green algae growth.

How to check: Have a roofer inspect your home. This is typically free, but the pro, of course, is looking for business. So check the company’s reputation at angieslist.com ($5 a month).

Replacement cost: $5,000 to $15,000

Prolong its life: Prune tree limbs so they’re at least 10 feet from the roof to keep squirrels away and to let moisture evaporate quickly after storms. If shingles blow off, replace them immediately, and repair small leaks promptly.

Your gutters are just as important as the roof. The only reason they’re lower on this list is that if you replace gutters first, they’re likely to get damaged when you reroof later. So if you need a roof too, it’s better to wait — or do both projects at the same time.

Danger signs: Dented or disconnected gutters, pooled water around your home’s foundation, or basement flooding near the downspouts.

How to check: Head outside during a rainstorm and watch the gutters in action, says Caitlin Corkins, stewardship manager for Historic New England, which maintains dozens of historic properties. “The best time to see clogs and overflows is when the system is working,” she says.

Replacement cost: $1,500 to $3,000

Prolong its life: Hire a gutter company to clean, check, and repair your gutters ($100 to $200) at least once a year — two or three times if you’re in a wooded area. And have someone clear the eaves of deep snow to prevent icing, which can split open gutters or rip them right off the house.

“People think paint is just a decorative element, so they let it go,” says Robert Niemeyer, a Winston-Salem, N.C., handyman, contractor, and electrician. But without a weather-tight seal, water can infiltrate the siding, causing rot and attracting wood-damaging insects. Still, leaks from a vertical surface generally aren’t as quick or lethal as ones from a roof and gutter.

Danger signs: Paint that’s peeling, cracking or blistering

Replacement cost: $4,000 to $10,000; make sure the painters replace loose putty around the window glass and caulking gaps around molding.

Prolong its life: Hire a pro to do touchups every year. Trim foliage so it’s at least a foot from the house, and kill any mildew growth with a bleach-and-water solution.

An old heating or cooling system is costly to operate — and the risk of a breakdown increases with age. But as long as your old furnace, boiler, or AC is operating safely, there’s no rush to upgrade.

Danger signs: The system cycles on and off frequently to hold your thermostat setting; you spot corrosion on the vent pipe; the natural-gas flames are yellow or orange instead of pure blue.

How to check: Get a repair estimate: if it’s more than a third of the replacement cost, spring for a new machine, says Indianapolis plumber Larry Howald.

Replacement cost: Typically $2,000 to $4,000 for a furnace (forced air); $4,000 to $8,000 for a boiler (hot water); $1,000 to $3,000 for a water heater; $6,000 to $10,000 for an air conditioner.

Prolong its life: Have your systems cleaned and tuned annually, including flushing the water heater to remove sludge, replacing all filters and lubricating any pumps.

MONEY magazine is researching an article on ways to reduce the financial pain of college. We’re looking for families that can talk about new and creative ways that they’re raising cash for college and cutting costs while they’re there. Sound like you? Tell us your story and you might even get your picture in the magazine! E-mail Beth_Braverman@moneymail.com.

RICHMOND, Va. , Dec. 12, 2011 /PRNewswire/ — With the chill of winter in the air, now is the perfect time to begin winterizing your home to increase its energy efficiency and your comfort.

As with all projects, the best first step is to develop a good plan. One of the best places to begin is with Dominion Virginia Power’s free online energy calculators at http://www.dom.com/calculators.

The online home and business energy calculators can help you quickly identify the necessary steps and potential savings, whether it is placing more insulation in the attic or installing energy-saving CFL bulbs. For best results, have your electricity bill handy so you can enter your specific energy-use information.

“We encourage our customers to use energy wisely and find ways to remain comfortable while saving money,” said Ken Barker , Dominion vice president of customer solutions and energy conservation. “Dominion’s website offers a wide selection of information to help our customers find the projects that are best suited to their particular homes.”

To prepare your house for winter, some important steps you should take include:

• Replace or clean filters of forced air furnaces monthly.
• Have your heating system inspected annually by a qualified professional.
• Make sure you are not losing heated air through loose or faulty connections in your home’s ductwork.
• Seal windows and doors with weather stripping or caulk.

In addition to the energy calculators, the Dominion Virginia Power Web site has extensive information about saving energy.

• For 10 important conservation measures, including short instructional videos, to help you save energy this winter, visit: http://www.dom.com/about/conservation/winter-tips.jsp
• Simple, easy energy-saving ideas are available at: http://www.dom.com/tips.
• Join an ongoing conversation about saving energy and helping the environment on the Dominion Energy Conservation blog at: http://e-conserve.blogspot.com/

Helpful information also can be found at ENERGY STAR^® sites run by the U.S. Department of Energy and the U.S. Environmental Protection Agency.  Here are several:

• EPA Guide to Sealing and Insulating
• Federal Tax Credits for Energy Efficiency
• Heating and Cooling Efficiently

With winter coming, Dominion also asks everyone to consider making a contribution to EnergyShare, a program that helps those in need keep their homes warm during the winter and cool in the summer after all other forms of assistance have been exhausted.

Customers can contribute to EnergyShare by adding an extra $1 , $2 , $5 , $10 , $20 , $25 or $35 monthly to their Dominion Virginia Power bills or by including a separate check for any amount with their payments. All contributions are tax deductible in accordance with Internal Revenue Service regulations and can be mailed to EnergyShare, P.O. Box 11186, Richmond, VA 23230-1186.

Dominion is one of the nation’s largest producers and transporters of energy, with a portfolio of approximately 28,200 megawatts of generation. Dominion operates the nation’s largest natural gas storage system and serves retail energy customers in 15 states. For more information about Dominion, visit the company’s Web site at www.dom.com.

Many homesellers want to get the most for their money at the closing table.

Whether you’re looking to sell right away or in a few years, several sound renovation investments are worth the money.

Here are some renovation suggestions:

Low-budget options
Don’t have time or a ton of money for major renovations? A clutter-free home goes a long way for many buyers, that’s definitely ”Bang for Your Buck.”

Here are more tips:

Today’s experts spout off the latest statistics about long-term wealth, home values, and interest rates, yet there’s a much more sentimental side to homeownership. In fact, many home buyers are drawn to homeownership for these warm and fuzzy reasons.

Owning a home allows you to put down roots, both figuratively and literally. On one hand you become part of a neighborhood and community. When you rent, neighbors come and go as quickly as leases renew. Homeowners, however, tend to stay put longer.

What does this mean for you? You can develop, many times, lifelong relationships. This also means your home will see you through many of life’s important milestones.

It makes sense. Many people enter the realm of homeownership as young couples looking to build a nest. They plan on starting their own family and need room to expand and grow. These family homes will see many firsts and will be the container of countless memories. Additionally, homeownership gives families more room to entertain and this means extended family will also share in building memories.

It’s not just young families, though, that seek homeownership. Families with teenagers seek larger homes to room their growing brood. Retiring adults may wish to start a new phase and new memories, seeking out warmer climates or smaller, more manageable homes.

These little moments are what life is all about. Memories from Christmas mornings and summer vacations will fill minds for years to come.

On the other hand you literally can put down roots by planting trees and shrubs! Renters are rarely afforded the luxury of gardening. In fact, digging up the landlord’s yard is frowned upon. As a homeowner you are able to create your own green oasis, including trees that will mature alongside your children and gardens that will feed your hungry pack.

There is a certain pride that comes with homeownership. This little piece of property and land is yours. There’s no one that can evict you or take it away. This security allows people to form deep attachments to both the land and home.

This pride of ownership spurs many owners to make improvements and additions, both to keep the home in working order and to make it more comfortable and usable, which in turns improves neighborhood values and overall curb appeal.

Why do people buy? They may be initially motivated by changes in circumstance, such as a new job or a new family, but they buy based on emotional responses. People want a house that can become their home, where they’ll fill it with good times and memories. Be sure to remember this sentimental side of homeownership the next time you read about stocks, bonds, and housing woes.

Have you heard about the government’s “green” homeowners incentives? Take a moment to see how you can upgrade your home and get money back!

There are two basic tax credits available for those interested in making energy efficient improvements to their homes.

First, the Wind, Solar, Geothermal and Fuel Cell Tax Credit. It’s good for both existing homes and new construction, when used for a homeowner’s principal residence.

Homeowners will received a credit totaling 30 percent of their cost for improvements put into service between January 1, 2011 and December 31, 2011.

Here’s a list of what can qualify:

• Geothermal Heat Pumps  
• Solar Panels  
• Solar Water Heaters  
• Small Wind Energy Systems  
• Fuel Cells (on this item the credit may not exceed $500 for each 0.5 kilowatt capacity; other limits apply in the case of joint occupancy)

The second notable credit is for Qualified Energy Efficiency Improvements, which gives a 10 percent credit for purchases that were “placed in service” this year.

This particular credit does have a limit, with “the maximum credit for a taxpayer for all taxable years being $500, and no more than $200 of such credit may be attributable to expenditures on windows. This rule means that taxpayers who have claimed $500 or more of this tax credit in prior years, particularly 2009 and 2010, can no longer participate in the program.” (NAHB)

Let’s take a look at what qualifies, according to the National Association of Home Builders an item qualifies if it:

• meets or exceeds the prescriptive criteria for such a component established by the 2009 International Energy Conservation Code as such Code (including supplements) (or, in the case of windows, skylights and doors, and metal roofs with appropriate pigmented coatings or asphalt roofs with appropriate cooling granules, meets the Energy Star program requirements); 
• is installed in or on a dwelling located in the United States and owned and used by the taxpayer as the taxpayer’s principal residence; 
• the original use of which commences with the taxpayer; and 
• that reasonably can be expected to remain in use for at least five years.

These items can include building envelope component, insulation materials or systems, exterior windows, skylights, doors, storm windows and storm doors, metal or asphalt roofs, advanced main air circulating fans, and qualified natural gas, propane, or oil furnaces or hot water boilers.  

Perhaps most important is how one goes about filing these claims. First, keep every single receipt, along with make, manufacturer, and model number on items. You can file these credits alongside your taxes using Form 5695. If you have lots of credits and deductions to take, it might be wise to enlist the help of a tax professional. Also check out energystar.gov/taxcredits for more information!

If you’re currently renting and have dreamed of owning a home, now may be the perfect time. Trulia.com is reporting that during the month of July, buying was cheaper than renting in 74% of the country’s 50 largest cities.

However, in 12% of the cities, such as New York, Seattle, and San Francisco, you could rent a place for less than you could buy one. And in the rest of the cities (14%), it was about even, with renting being only slightly less than the cost of buying.

What’s tipping the scale to make buying cheaper than renting? Of course, it’s the declining home prices and historically low interest rates are also helping to encourage home buying. Recently, interest rates for 30-year and 15-year fixed have been hovering near 4%. Also, the increased demand for rental units is pushing rents up, making now a good time to buy as purchasing a home is cheaper than renting one in most major U.S. cities.

This is making purchasing a home enticing for those who are planning to stay for several years and have the ability to put down a downpayment of about 20 percent.

Where are the hot buying markets? Las Vegas tops the list. The S&P/Case-Shiller home price index, as reported by CNNMoney.com, shows that prices “have plunged more than 59% from their August 2006 peak.”

Other markets where buying beats renting include Detroit, Michigan; Mesa, Arizona; and Fresno, California. All of these are places where the cost of a median price condo/townhouse is approximately seven times annual rent.

And as reported by CNNMoney.com, Arlington, Texas; Sacramento, California; Phoenix, Arizona; and Jacksonville, Florida, “all had buy-rent ratios of eight,” according to Trulia.

New York is the highest city to rent a home (of the 50 markets surveyed). And to buy in that city would cost about 36 times as much, pushing the purchase price to about a million dollars.

If you’re renting now and wondering is this the right time, it really depends on your particular circumstances. Timing the real estate market is never a perfect science. However, the indicators are strong that if you can afford to buy, today’s market certainly offers many good opportunities.

Here are a few things to consider to help you make your decision.

The first is the length of time you’ll stay in the home. Moves are costly and purchasing a home requires extra cash for commissions and closing costs. So, if you’re not sure you can stay for a while, postponing buying might be the right choice. However, if you’ve been in your rental for a long time and have roots in your city, there are great deals on homes. It might be the right time for you to start paying your own mortgage instead of paying your landlord’s mortgage.

How much downpayment? This is a critical concern. With stricter lending requirements, having cash to put down is a make-or-break factor in purchasing a home. Buyers often have to come up with 20% and that can be a big chunk (or even all) of a person’s savings. Also, note that the money usually has to be “seasoned”. In other words, the downpayment money can’t just suddenly appear in your savings account only days before you decide to buy a home. Ask your real estate agent and loan officer for more details.

The cost of owning a home. Part of the thrill of owning a home is the fact that you own it. That means you’re responsible for everything inside and out. Of course, planned developments and Homeowner’s Associations may cover some of the outside maintenance but then you’ll be paying monthly fees. When considering whether to buy or rent, one of the things many first-time buyers neglect to think about is the cost of maintenance. When appliances break; you, the homeowner, will pay to fix them. No more landlord or apartment manager to the rescue. So, if you think things through and weigh the cost of rent versus the cost of buying, you may find the cost and the increased responsibility are well worth it because along with homeownership comes the pride of making your home yours exactly as you like it.

Both home buyers and home sellers rated RE/MAX highest in J.D. Power’s customer satisfaction report, but not by much, thanks to stiff buyers’ market competition.

Overall, home buyers indicated they were less satisfied this year with real estate company services compared to last year. Sellers, on the other hand, were more satisfied. Again, however, the year-to-year differences were marginal.

“Although the current real estate market creates the perception of a buyers’ market, there are still traditional barriers to purchase in place, which could be negatively affecting buyer satisfaction with their agent,” said Jim Howland, senior director of the real estate and construction practice at J.D. Power and Associates.

Real estate “agents who properly manage client expectations around the home buying process and communicate with clients about potential challenges — such as higher requirements for down payments, tighter loan standards and additional costs on top of the monthly mortgage — may be better able to keep clients satisfied,” Howland advised.

The study, now in its fourth year, measures customer satisfaction of home buyers and sellers with the largest national real estate companies.

Overall satisfaction is based on three factors in the home-buying experience: agent/salesperson; office; and variety of additional services.

In the home-selling experience, the survey considers four factors: agent/salesperson; marketing; office; and variety of additional services.

The highest possible score is a perfect 1,000.

In the home-buyer segment, the highest ranked companies and their scores were RE/MAX (805), Coldwell Banker (802), Better Homes & Gardens (801), and Keller Williams (799), with only six points separating RE/MAX from Keller Williams. Even runners up, Prudential (797) and Century 21 (796) were only 8 and 9 points behind the leader. At the bottom of the heap were ERA (773) and GMAC/Real Living (743), notable 32 and 62 points less than the best.

Overall satisfaction among home buyers averaged 797 in 2011, down six points from 2010.

J.D. Power attributed the decrease to lower satisfaction with the agent/salesperson, the most influential aspect of buyer satisfaction with the real estate company. Agent/salesperson satisfaction averages 814 in 2011, compared with 828 in 2010.

Sellers were tougher to satisfy, but the point spread between the top and the bottom (46) was smaller than it was among buyers. RE/MAX came in on top again, with a 791 score, followed by Prudential (786) and Century 21 (785) in the upper tier. Better Homes & Gardens (778), Coldwell Banker (763) and Keller Williams (745) were in the lower tier.

Overall satisfaction among home sellers improved substantially from an average 742 in 2010 to 779 in 2011. Satisfaction with all factors improved from 2010 to 2011 but the greatest gain was in marketing factor, as real estate companies pulled out the stops to increase marketing satisfaction by 62 points year-over-year.

The survey also found:

• Agents are cashing in on word-of-mouth about their good work. In 2011, 60 percent of buyers and sellers say their agent asked for a referral or recommendation, up from 47 percent in 2010.

• Apparently agents are doing a better job at matching buyers and homes. The average number of homes that buyers were shown prior to making a purchase was 9 in 2011, down from 17.5 in 2010.

• Also, the average number of home showings before sale in 2011 was 8.6, down considerably from an average of 12.1 showings in 2010.

• Unexpectedly only 58 percent of sellers used a website listing to market their home, way off the 82 percent in 2010.

Borrowers in distress often contact many lenders hoping to find one who will approve them. For this reason, multiple inquiries can have a negative impact on a consumer’s credit score. But multiple inquiries can also result from loan applicants shopping for the best deal. The challenge to the scoring system is to distinguish borrowers in shopping mode from borrowers in distress mode.

Hard inquiries vs. soft inquiries

Consumers need not be concerned about inquiries they make, such as ordering a credit report. Self inquiries don’t affect the credit score. Neither do inquiries from your existing creditors, potential employers, or businesses considering whether or not to solicit you. These are sometimes called “soft inquiries.”

The inquiries that may affect your credit score are those by new credit grantors to whom you have given your Social Security number along with explicit authorization to check your credit. These are “hard inquiries.”

Distinguishing borrowers in shopping mode from those in distress: The ignore rule

Two credit-scoring rules developed by Fair Isaac Corp., which pioneered the development of credit-scoring models, are designed to protect the scores of borrowers who shop multiple lenders for the best deal. The quotes below are from www.FICO.com.

The “ignore rule” is that “the score ignores mortgage, auto, and student loan inquiries made in the 30 days prior to scoring.”

The 30 days includes the day of the score, which is not evident from the wording. It is a good rule, but borrowers are not warned about other types of credit that arenot ignored. A very important one is credit cards. Because I happened to need a new business card while researching this article, I decided to see what impact my card shopping would have on my score.

I had a mortgage lender friend make a credit inquiry to obtain my score, then I shopped two card issuers and had my friend inquire again. My score had dropped 13 points. All credit card inquiries are treated as indicators of distress.

Mortgage borrowers today face the hazard that the 30-day period can expire while their loan is still being processed. If the lender decides to recheck the borrower’s credit, which some do as a standard practice, the mortgage inquiries that had previously been ignored will then hit the score.

Distinguishing borrowers in shopping mode from those in distress: The consolidation rule

The “consolidation rule” is that “the score looks on your credit report for mortgage, auto, and student loan inquiries older than 30 days. If it finds some, it counts those inquiries that fall in a typical shopping period as just one inquiry when determining your score.”

The consolidation rule is expressed in such a way that most readers interpret it to mean that mortgage, auto and student loans are consolidated together. That is how I read it originally. In fact, what it means is that all mortgage loans are consolidated, all auto loans are consolidated, and all student loans are consolidated. If you shop for one of each type, they constitute three inquiries.

The shopping period during which inquiries are consolidated is 15 days in one version of the scoring model and 45 days in another. Because borrowers don’t know which model is being used by their credit grantor, they should assume the period is 15 days.

But the most serious concern about the consolidation rule is whether the scorers can accurately associate inquiries with the correct loan type, especially in the case of mortgages.

Does consolidation always work?

One of the motivations for this article was a claim made to me by Jack Pritchard, a long-term mortgage veteran, that mortgage inquiries were not always consolidated because the reporting system did not always identify them accurately.

I posed this issue to Fair Isaac Corp. and was told that “the credit reporting system is a voluntary one and … lenders report what they choose to report to the bureaus, and each bureau represents that information a little differently on its credit reports.”

While this reply confirmed that proper identification could be an issue, Fair Isaac claims that their systems work around this problem by giving the borrower the benefit of any doubt. If the system is not sure, it consolidates.

But this leaves open the possibility that the system has no doubt but is wrong. Pritchard pointed to mortgage inquiries from credit unions and finance companies as particularly prone to misclassification because other types of loans are originated out of the same offices. At his suggestion, I asked Fair Isaac what would happen if a mortgage shopper generated an inquiry from a credit union and a finance company?

The reply was that “the credit inquiries would in all likelihood be de-duplicated by the FICO scoring algorithm. Inquiries from both credit unions and finance companies are eligible for de-duplication.” The italics are mine, and clearly suggest that there is no assurance that “de-duplication” (Fair-Isaac-speak for consolidation) will occur.

Bottom line for now

A case can be made that loan inquiries should be added to the list of borrower characteristics, such as sex, race and ethnicity, that, as a matter of public policy, can’t be used in developing credit scores. The information could continue to be compiled and provided to lenders, but could not be used by the credit-scoring algorithm.

Meanwhile, borrowers shopping for credit should minimize the number of hard inquiries by ordering their own score, which does not count as an inquiry, providing that score to all the vendors they shop. You tell them that they can check your credit when you are ready to authorize it. This will reduce the number of hard inquiries to one, from the vendor you finally select. And do not seek new credit cards during the period you are shopping for a loan.

The writer is professor of finance emeritus at the Wharton School of the University of Pennsylvania. Comments and questions can be left at www.mtgprofessor.com.