When buyers are on the
hunt for a new home, they're usually very focused on one thing: the house.
Buyers can lose objectivity if they fall in love with one, and the thought
process becomes akin to one of those romantic photos with fuzzy edges—the only
thing in focus is the house.
What those fuzzy edges
obscure, however, is just as important as what's in focus. So, be sure to
identify the impractical features of a home you love—not only for your own comfort
and enjoyment, but for the home's future value as well.
"Location, location,
location" isn't just a silly real estate mantra—it's a warning. Pay heed
to the neighborhood and surroundings if you want to avoid losing money when you
sell the home.
1. School District
Not everyone can afford
the higher cost of homes in a quality school district, but we can avoid
purchasing a home in a district that will make it difficult to sell in the
future. Even homebuyers without children should look into the area's schools
before signing on the dotted line.
For homebuyers with
children, good schools are at the top of the list, according to Realtor.com,
and many are willing to go over budget to purchase such a home.
Experts agree that homes
are worth more in good school districts. What they can't seem to agree on,
however, is how much more. One study claims that the added value is $16,000 on average. Another
study, from the Brookings
Institute, says homes in quality
school districts may fetch up to $205,000 more than those in a low-scoring
district. Finally, another expert says to simply slap a 23 percent premium onto a home in a good school district.
Whatever the amount,
savvy buyers know that an area's schools will have an impact on a home's future
value.
2. Vacant Land
Being surrounded by open
space is lovely, isn't it? The peace, tranquil views and that feeling of
seclusion one derives from living in such a location is worth paying more
for—or is it?
Nearby government
set-asides of open space are in demand for homebuyers. Privately owned vacant
parcels, however, should raise red flags.
Even current zoning of
parcels isn't set in stone, as
neighbors in a Minneapolis suburb learned last year.Most homeowners in a 25-year old subdivision there purchased
their homes because the area was surrounded by open space. What they failed to
realize, however, was that the surrounding parcels were zoned for commercial
development. In fact, many of the newer homeowners were shocked when they
learned of the city's plans to approve the construction of a 24-hour superstore
right across the street. Their lovely, wooded neighborhood would now be
expected to handle three times the vehicular traffic, round-the-clock hustle
and bustle, and late-night deliveries to the back of the store, which happens
to face the neighborhood.
Before you decide to
purchase any home that has vacant parcels of land nearby, it would be wise to
check the neighboring property's zoning.
3. Neighboring Homes
It's easy to become
smitten with the cutest house on the block, but if that house is the only cute
one in the neighborhood, you may want to consider your purchase more carefully.
Foreclosed homes, certain
commercial concerns (funeral homes and power plants, for example), messy,
neglected yards, and a sex offender in the area can all drag down the value of
nearby property, according to the Appraisal
Institute. That reduction may be
as much as 15 percent.
Experts with the
Appraisal Institute suggest taking a leisurely tour of the neighborhood.
Something as simple as shoddy landscaping or peeling paint on a building can
knock 5 to 10 percent off the value of nearby homes, the Appraisal Institute's
president, Joe Magdziarz, told MSN
Money.
Folks in the real estate
industry are quite diligent when it comes to recommending various inspections
and tests of structural elements to buyers. Many agents, however, may neglect
to counsel their clients on the financial aspects of the purchase.
Your home is also an
investment and requires due diligence to ensure that it's a viable one. Do your
homework, beyond admiring the snazzy kitchen and dreamy master bedroom, and
you'll sleep well knowing you made an informed investment.
No comments:
Post a Comment