5 Points to Ponder About the Location of a Home

Have you been enamored by all the pretty pictures of homes online?

Make sure that you consider these 5 Points to Ponder About a Home’s Location before deciding to buy that Minnesota home. Adapted from Buyers Beware: 3 Points to Ponder About a Home’s Location
Real Estate Location Considerations
Buyers (especially first time buyers and buyers new to an area) can lose objectivity if they fall in love with one house, 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. [See Location Issues That Make It Hard To Sell]


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.


4. Commute/Distance to local services

The cost of commuting can often be quickly forgotten about when you are standing in awe of breathtaking country views or when you see that “ideal home” just outside of your desired search area. By cost, we are not just referring to fuel costs but also the cost of time. How long does each trip take you to work? The grocery store? Family/friends? Hobbies? This can get old quickly. Also, there is more and more focus on “walkability scores” and “convenience scores” when it comes to value for many demographics. Finally, history tells us that outlying areas have a harder time bouncing back from economic recessions.


5. Land Expenses

Well, you know the saying: Two things are certain – death and taxes. Taxes are heavily affected by the value of the property (this is most often overlooked when buying new construction) and things like lake frontage add substantial tax burden… and even corner lots and gravel roads can be susceptible to higher taxes when it comes to road assessments. Also, the more land you have often the more maintenance it will need, especially in MN… think watering, mowing, raking, plowing, fencing…

BONUS TIP: If you want to build a fence, add an outbuilding, store your boat… be sure to look into local municipality restrictions before your purchase!

Real estate agents (and even HUD) are quite diligent when it comes to recommending various inspections and tests to buyers. Many agents, however, may neglect to counsel their clients on the location 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.

 

BONUS TIP: If you want to build a fence, add an outbuilding, store your boat… be sure to look into local municipality restrictions before your purchase!

 

Want to talk more about your desired locations? I am always here to talk it through! Call me!

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