You might be ready to buy a home, but are you armed with the knowledge you need to be sure? That house may seem like everything you’ve ever wanted, but before you make an offer, take some time to think about a few things beyond the size, style, and price.
1. Intrinsic Qualities or Intrinsic Problems?
Does the property have intrinsic qualities? Such as…
- Located near your work
- Has easy access
- Close to shopping and good schools
- In a good neighborhood
- Good neighbors live nearby
- Good views
- Good sunlight
- Areas for an easily accessible garden
These qualities are important “givens,” because no matter what you do, you can’t create these qualities – they either come with the property, or they don’t. These qualities can make the difference between being happy and staying a longtime, or moving on in search of something better later.
2. Good Bones
Is the structure solid and well built?
Are the floors level and the walls plumb?
Has the place been well maintained?
Has it had only a few owners? (Not owned or occupied by multiple owners or tenants.)
Is the basic layout rational? (Not chopped up and confusing.)
The more “yes” answers, the less money and effort will be required to improve the home. Where you answered, “no,” you can expect surprises, headaches and extra costs.
3. Good Value
Don’t buy the best house in the worst neighborhood. Buy the worst house in the best neighborhood. Improving the former may result in overinvesting beyond the home’s market value. Improving the latter will likely be a good investment, offering a good return someday. Properties in good neighborhoods are always in demand and, therefore, hold their value. There is more room to invest funds to make improvements without getting outside the local market place.
4. Are You Ready for a Project?
Since it usually takes a year to plan and a year or more to build, if you’re considering building new or doing a major remodel, ask yourself if you’re ready for a long-term distraction from your normal life, family and business. If you’re the patient and goal driven type, fine. If you’re in a hurry, or too busy to take on a major project, it may be best to find something closer to your needs without making major changes. Designing one’s own space can be a thrilling and creative experience, but it takes a significant personal commitment of time and energy to make it happen.
5. Watch out for Site Work
People often overlook the difficulty and expense of site work – improving the areas around the house. Roads, driveways, utility service lines, patios, steps and walkways, retaining walls and landscaping are all expensive. Homes on uphill lots, where the house is approached from the street below, are generally more expensive to access than downhill lots. Watch out for sites requiring putting in a long and/or steep driveway, because there may be a good reason why these properties cost less than lots that are flatter or approached from above. If you have a vacant lot with no improvements, better add another 20 to 25% or more to your house budget for funding improvements outside the house.
6. Like More Than You Dislike
Obviously, buying a home that is closer to your liking will require fewer changes and less money to meet your needs. It is more difficult and expensive to change the basic look and layout of a place than just fine-tuning what already exists. Choose a house with an architectural style that is a close match to designs you like. Pushing something in the direction in which it is already headed, takes less force and effort.
7. Check the Records
Go to the Town or County where your property is located and ask to see the records on file. Read them through and you’ll likely learn a lot about the property. Speak with a planner about what you have in mind, because their insight could be helpful. If you want to expand a home or add additional floor area, check first to see if additional entitlements remain. Small lots have their limitations, often leaving little room to grow and making improvements difficult, if not impossible. Compare such limitations to your goals to insure a good fit before you buy.
8. Check the Costs
Check the comps in the neighborhood to be sure you’re not overpaying. Add the purchase price to the estimated cost of improvements to be sure you won’t be overinvesting beyond the market place. Know that the costs to improve property are always more than you think. Add the “hard” costs, which are your construction costs for buildings and site work, to the “soft” costs for your professional services and government fees and assessments. Soft costs are usually 20 to 25% of your construction costs. Then add a contingency for cost overruns, from 10%, up to 30% of what you initially budget. Pay too much for the land, and there will be less available to fund improvements, and you’ll risk spending more than the finished place is worth.
9. Get Another Opinion
When making any major decision, it is always good to get other opinions. In the case of buying property, ask experts in that field. Ask more than one, before you buy. Ask realtors about the current market, in general and within the neighborhood. Ask a few architects about what is feasible from a design point of view. Ask a couple of contractors about probable costs. Ask both architects and contractors about project timing. Talk doesn’t cost much and you’ll learn a lot; information that will help you make a sound decision.
10. Go With Your Gut Feeling
When you see it, you’ll know. When you find the right place, you’ll be excited about your good fortune. But, if the “little birdie” is chirping in your ear, listen to it. If something doesn’t feel right, it probably isn’t. When in doubt, sleep on it! Be patient. Keep looking. There is too much at stake – your future, your money, and your happiness.
Remember: When buying a home or vacant property, it is easy to let your emotions get in the way of reality, or develop sudden amnesia about factors that might make a difference. Whether you are a first-time buyer, or an experienced owner, keep these ideas firmly in mind and you may find this is a perfect time to make your purchase.