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Dabl At Home Dec 2020
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Dabl at Home

Is The House Of Your Dreams Too Good To Be True?

Here are 5 things you might not think to look for when searching for your next home!

Picture this: You’ve been house hunting with your real estate agent and you’ve finally found the perfect house! You walk in the front door and instantly feel at home. You just know in your heart that this home is meant to be yours. You can’t find a single thing you don’t like. But is everything really as good as it seems? 

If you’ve found a house that truly checks all the boxes and your offer is accepted, congratulations! Sometimes it all really is meant to be! However, you also have to be wary when things seem too good to be true. There might be hidden fees, conditions, or plans for the neighborhood that you don’t know about that could make your intended home less than desirable. 

You’ll ultimately have to decide if the pros outweigh the cons, or if it would be better to keep house hunting. But by doing your research in advance and working with a knowledgeable realtor, you’ll be intelligent homebuyers who know to ask questions that people don’t necessarily think about. Here are 5 such things to look into before you fully commit to your next home. 

Development In The Area: 

Research future development that is in the works for your desired area. Sometimes, development in your neighborhood means you’re making a great investment. Depending on what is being built, your proximity to new entertainment, culture, shopping, or other desirable locations means your home will increase in value once construction is completed. 

On the flip side, you may find that future plans for your neighborhood might have a negative impact on your life or the value of your home. For example, your home might have the beautiful view you’ve always wanted. But you might not know that there are plans in the works to turn your perfect view into a high-rise building that holds apartments or offices. Your real estate agent and a phone call to your city council representative should be able to tell you about development plans for your area, allowing you to make an informed decision. 

Land Lease Vs. Eminent Domain: 

In the most traditional form of homeownership, the homeowner owns the house and the land that the home is on. But in some situations, the home you’re interested in could be on “land leased” property. A trained eye, such as that of an experienced real estate agent, will be able to identify land leased properties by phrases like "manufactured home" and "leasehold interest” in the home’s listing. However, sometimes the fact that a home is affected by a land lease is kept out of real estate listings either due to sloppiness, human error, or a desire to hide that information. 

Buying a property with a land lease is a risky investment. While you would own your home, you do not own the land your home sits on. If the land lease runs out while you still plan to be living in your home, you’ll need to negotiate to renew your lease. But if you can’t renew your lease for any reason, you risk losing all your equity at lease expiration and could lose your home

That said, buying a home with a land lease can come with lots of community amenities and desirable features. Usually, the home’s purchase price and your mortgage will be lower than that of a traditional home. And if the home still has a long lease term, it would be easier to resell the home in the future and your finances will likely be safe for the remainder of your time in the home or your lifetime. 

You can find land leased properties anywhere, so you should always keep your eyes peeled. For example, you can purchase homes located on leased land inside of Native American reservations in Palm Springs, California. In Hawaii and Delaware, leasehold condos are quite popular. Meanwhile, there are a number of land-leased retirement communities located in places like Florida and Arizona. Be aware that rules and terms can vary by state and region, so always consult with local experts and a knowledgeable real estate agent before investing in a land leased property to be sure that you are making a smart decision. 

Land leases should also not be confused with eminent domain. Eminent domain is when the government chooses to seize your private property for public use. For example, the government could seize someone’s land to build a new bridge or highway. The property can be seized by the government, even if the homeowner objects, as long as it is being used for the public good and the owner is fairly compensated. Unlike land leases, eminent domain can happen to any homeowner at any time. But when you buy a home with a land lease, you purchase the house knowing that your days owning the property are limited if you can’t renew your lease. 

Easements: 

Have you ever heard of easements before? If you haven’t,  easements are defined as “a legal interest in real property that gives you the right to use another person's property.” Easements are not necessarily a bad thing, but they can be when an “easement gives another party the right to access your property without your permission and in ways you don’t necessarily agree with.” Easements don’t go away when the house is sold or changes hands, so it’s important you know what they are and how they impact your rights as a property owner if the house you are intending to buy is encumbered with an easement. 

Examples of easements include any reason someone would legitimately need to enter your property. For example, many utility companies have easements in place in order to access power lines and sewer systems. This would be called a utility easement and is generally very practical. Another example would be a neighbor who has to cross your property in order to reach their own. This would be called an easement of necessity. 

As the homeowner, you can also grant or sell private easements to other individuals in certain circumstances. For example, you could grant or deny a neighbor’s request to access your property in order to install solar panels. If you granted the request, you would be granting a private easement. 

Since easements are usually only in place for practical reasons, they aren’t necessarily a bad thing and most people don’t mind them. But depending on what easements are in place and how the terms impact what you can and can’t do with your property, you might not be happy living in a particular home. Therefore, it’s important to find out what easements are in place (if any are) and how they’ll affect you if you proceed to buy the property. 

Surprise Taxes: 

It’s very important that you make sure to purchase a home that you can afford. Part of this means accounting for hidden or unexpected fees or taxes. For example, areas in California, known as Mello-Roos districts, impose a special tax on property owners. Known as Mello-Roos taxes, these taxes are meant to help the community finance local infrastructure, services, and improvements. California homebuyers who are looking at properties located within Mello-Roos districts will need to decide if the extra taxes are worth the benefits they will receive from living in those communities. Since every state, city, and community is different, you should make sure to check for unexpected taxes or fees in your neighborhoods of interest. 

Hidden Foundation Issues: 

Your dream home could have issues with its foundation that aren’t obvious. Although many people do live in homes with foundational problems and are sometimes unaware there is a problem at all, missing these sneaky foundational problems could come back to haunt you later. It often takes years for a foundational problem to become a safety risk. But once the issue has reached that point, it costs significantly more money, time, and stress to resolve. 

The most serious foundation issues can actually cause a house to collapse, although that is not super common.  When touring a home, you’ll know it has foundational issues if you see cracks in the walls or floors, notice that the floors are uneven, doors don’t latch properly, nails are popping out of the drywall, or you see walls that look like they are pulling away or bowing. 

Whether you notice these signs or not, you should always bring in a trained home inspector who can identify potential foundational issues if you decide to enter into escrow on a home. If issues are discovered, you can also request additional inspections and get quotes from contractors to get a clear understanding of how serious the issue is and how much it would cost to fix. You could then decide if this is still the right home for you and potentially renegotiate the purchase price with the seller. 

Learn more tips and tricks for buying or selling homes at the Dabl Real Estate Hub!

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