The Fed could begin tapering soon, adding momentum to market forces that have been pushing mortgage rates up in recent weeks…
Overlooked Questions To Ask Before Buying A Property
While buyers often get enticed by quartz counters, wood floors or a pretty backsplash, there are more serious factors that consumers should consider before investing in a home: Is a freeway or major development planned? Is the infrastructure good? Is it prone to tornados or other serious weather conditions?
Like many first-time home buyers, Arthee Jahangir and her partner Alex Merchant knew what they wanted: big windows with plenty of light for their plants and a walkable neighborhood. The couple, in their early 30s, both work at New York University and recently purchased a home in Brooklyn Heights.
“We saw lots of listings on different websites, but we wanted to know more about everything from safety ratings to subway lines to whether there was a park with a basketball court,” says Jahangir.
With the help of a new site called Localize, currently available in New York and Chicago, Jahangir and Merchant developed a longer list of items that could impact their happiness in a new home, such as the number of complaints about a building, whether the subway line was about to close for renovations and how often the elevator broke down. The couple purchased a 500-square-foot studio with a loft and floor-to-ceiling windows within their $450,000 to $500,000 price range.
While buyers often get enticed by quartz counters, wood floors or a pretty backsplash, there are more serious factors that consumers should consider before investing in a home, says Lynn Ikle, a real estate agent with Redfin in Howard County, Md.
“Buyers always need to think about resale and not get sucked in by pretty photos,” Ikle says. “Maybe there’s a nice empty space next door, but you need to know if that’s zoned for a Walmart. Or you love the yard but need a fence for your dog, but the homeowner’s association won’t allow it. You may not care about a busy road, but busy roads usually get busier and that could make it tough to find a buyer. These are all things buyers should pay attention to before they make an offer.”
Here’s how you can find out about everything from noise levels, to future development plans for the neighborhood to the home’s infrastructure before you buy:
Will my new place be noisy?
While it may be obvious that you’ll hear noise if you buy a home next to a highway used by trucks, what you’ll hear and when is not always clear.
“When you visit a home in the daytime, you may not be aware what it’s like at night, particularly in a city environment,” says Omer Granot, president and chief operating officer of Localize in New York.
Localize mapped all the subway routes in New York to see which buildings have a subway traveling underneath.
“We can tell you where you’re likely to feel the vibration of the train and how many times a day that will happen,” Granot says.
Roads, rail schedules and flight paths are publicly mapped and can be included on some property reports, says Todd Teta, chief product and technology officer for ATTOM Data Solutions, a property data analytics supplier in Irvine, Calif., that provides free home disclosure reports for individual properties.
You may also want to check community rules if you’re concerned about noise from your neighbors, such as limits on how late parties can be held, whether hard surface floors need to be covered in a high-rise and whether contractors or landscapers must abide by specific working hours.
Am I at risk for floods and fires or from previous uses of this property?
Mortgage lenders typically check FEMA maps to determine whether flood insurance is required for a property, but you can find out far more about risks from natural hazards and climate change from several sites. For example, ClimateCheck provides ratings for counties, cities, neighborhoods and Zip codes that show their risk for fire, heat, drought and storms now and in the future. Consumers can go directly to ClimateCheck and enter an address. In addition, some real estate brokerages include a ClimateCheck rating on their listings.
“Climate change can have an impact on your lifestyle, your insurance and utility costs and your quality of life,” says Cal Inman, CEO of ClimateCheck. “Access to this information and a risk assessment is the first step for buyers. We also provide a page of information about risk mitigation and a full report for people who want to dive more deeply into the science.”
A Flood Factor score, which assesses the likelihood of a flood on a scale of one to 10, is available on Redfin listings and directly from First Street Foundation, which produced the score. Consumers can check Free Home Risk for an assessment of both natural and manmade property risks or a free Home Disclosure Report to check for environmental issues such as whether the area was used as a landfill, there was an oil spill nearby or if the property was used for a meth lab, says Teta.
“The point of these reports is to know whether you’ll have long-term maintenance issues, whether the property is insurable and whether the home value will be impacted by these issues before you make an offer,” says Teta.
Is this a safe neighborhood with good schools?
The U.S. Fair Housing Act of 1968 prohibits real estate agents from sharing information about crime and schools or making statements about a neighborhood or a school being “good” or “bad.” In the past, such information was used to steer White buyers from Black neighborhoods and vice versa. Agents can direct buyers to sources for that information, such as school system websites or ratings sites such as GreatSchools.org.
“I always suggest people review county websites for potential school redistricting plans because school assignment boundaries can change,” says Ikle.
Consumers can also buy an iHomeReport from Kukun, which costs $39.95 per report and contains a variety of information, including community safety information and maps with the nearest schools and their ratings.
“We created iHomeReport to help buyers get the information they need in one consumable bite,” says Raf Howery, CEO and founder of Kukun. “We’re like CarFax for a home in that we provide information about permits for past renovations so you can follow up with contractors who worked on your home before, but we also include everything about the community, including how far it is to walk to a grocery store and a hardware store and where the nearest hospital is. We want people to get a feeling for what it’s like to live somewhere.”
Will my view change?
Newly built communities typically have a map outlining plans for retail sites, schools and amenities, but for an established community or a regional perspective, buyers can ask their real estate agents for insight. Buyers may also want to check county websites for planning updates and to see whether open land is publicly or privately owned, says Ikle.
“You don’t want to buy a house because of the wooded view and discover two years later that the site is being developed into a shopping center,” she says.
Construction permits and zoning information are part of Localize’s reports that can indicate whether the view and light in a condo might be impacted by new development. The iHomeReport also includes research about a neighborhood that can be used to evaluate future price appreciation, including economic and physical changes in the community.
How soon will my appliances and systems need maintenance?
While some buyers waive their right to a home inspection in order to make a more competitive offer, real estate agents recommend having at least an informational inspection even if you don’t plan to ask the sellers to make repairs.
“The best way to find out about the condition of big-ticket items such as the age of the roof and the heating and air conditioning system is to ask an inspector to estimate maintenance costs and when you might need to replace things,” says Ikle. “If everything has recently been replaced, that can mean you won’t have any of these major expenses in the next 15 years or so.”
You can also request information from the sellers and their real estate agent about the age of their appliances and the home’s condition. Depending on state laws, sellers are required to disclose known defects or sign a waiver that they don’t have any knowledge of issues with the property.
How much do utilities cost?
Whether you’re moving from a home where utilities are included or significantly increasing your living space, you need to consider utility costs in your housing budget.
Some jurisdictions require sellers to provide information to buyers about their utility bills, says Ikle. In other areas, buyers can call the utility company to ask for the 12-month average of electric, water and gas bills.
“But you need to think about different levels of usage,” says Ikle. “For example, if a home is heated with propane oil, you can ask how often the tank is refilled and how much that costs. But the sellers may keep their heat at 68 degrees all winter and you may prefer to keep your home at 72 degrees. Still, an estimate is helpful.”
If you’re buying a home with solar panels, ask the sellers whether the panels are leased or owned, says Ikle. You may be taking over a lease that will incur monthly costs.
What rules, regulations and fees come with living in an HOA or condo?
Homeowner or condo association fees should be included with the listing information on a property or you can ask the listing agent or seller for that information.
“You need to know the specifics of what’s covered by the fee, such as your water and sewer bill, any community amenities and common area maintenance,” says Ikle. “You need to know, for example, if snow removal just refers to the road or if it covers your walkway or patio.”
Buyers should review association documents to see if a reserve fund has enough money to avoid special assessments, which could be hundreds or thousands of dollars if a major repair is needed.
Buyers can ask to see an HOA or condo association’s reserve study, which should show the strength of the association funds for future maintenance and projects, says Robert Nordlund, CEO of Association Reserves, which provides reserve studies for a variety of property owner associations.
“The bottom line is that there is a high risk of a special assessment when the percent funded, reported in the recent reserve study, is between zero and 30 percent,” says Nordlund. “There is a low risk of a special assessment when the percent funded is above 70 percent.”
Association rules are also important to review for items such as whether you can park an RV or boat on the property, run a home-based business or change your paint color.
“Some associations are very strict and some are not, so you can ask your real estate agent to find out for you,” says Ikle.
Can I rent my home to short- or long-term tenants?
When reviewing association documents, check to see if there are any restrictions on renting your home for short periods or with an annual lease. Some buildings cap the percentage of units that can be rented at any time and some prohibit offering a home as an Airbnb, says Ikle.
You can also check local jurisdictions for their rules about property rentals. Some locations ban short-term rentals entirely or only allow them if the homeowner is in residence.