About the Home Location
You hear about location - location - location
This is extremely important when considering where to buy or rent your home. Make sure your location is in an area that that is safe and that will increase in value over time.
Home Search Considerations
Some "consideration points" when searching a home:
- the lot should have rear and side privacy
- the home and lot should be situated where the lowest drainage
point is above the sewer line
- the home location should be situated in a low-traffic area
- the lot should have good firm soil
- the lot should have good drainage
- the home location should not be located in a flood plain
- the home's surrounding should be quiet and safe
- the lot should have plenty of trees, if possible
- the home location should have defined boundaries that will not be disturbed
- the home location should have attractive surroundings with easy access to major highways and community services
- the home location should be located within good school districts
- the home location should have privacy trees or room for privacy hedges and other
Some caution points to avoid when searching your home:
- the home is located on a major thoroughfare with yellow or white lines down the middle and a speed limit over 35 mph
- the lot's soil is sandy or can shift or shrink
- the lot has poor drainage or gullies where water collects
- the home is located near major power lines, air traffic, rail ways, radio towers, or other hazardous areas
- the lot has a steep slope that make is difficult to mow
or drive up on icy pathways
- the home is situated in a flood plain
- the home is situated in a declining neighborhood
About Location - Location - Location
Location is a key ingredient when selecting your home.
Selecting the right location can save you from a potential home devaluation from an unfavorable event due to growth or zoning changes. Investigate the neighborhood and surrounding area before settling on a particular house.
Pick a community setting that matches your own taste:
Finding similar communities to your current community that fits your lifestyle:
Determine your kind of setting:
Urban, suburban, or rural: see topic below
Scout those neighborhoods that you can afford:
Check the commuting time from your new home to work:
How important is your commute and how much time are you willing to spend on the road? Will it change significantly if you move to your new home? You should route your new commute and analyze how it will change.
Likewise, track current traffic conditions over multiple days for both the morning and evening commute to determine how current traffic conditions will impact your commute.
Also investigate what might happen if you change your current job. If you are planning a job change within a few years, you might at least consider the location of your new home to the area's job market.
Map your commute:
Check current traffic conditions:
Check your local transportation options:
Check the Schools:
Regardless of whether or not you have children, check the quality of schools in the community. Any resale value of your home may depend on the quality of schools in your area, particularly elementary schools.
Investigate the average class size, the facilities, and the method of transportation. Evaluate the overall quality of the public school system.
Let's Do Some Shopping:
Check the area for local shops, grocery stores, restaurants, and shopping centers. Can you buy a loaf of bread quickly, or must you travel long distances for basic items? Could the neighborhood sustain increased traffic to these centers if new subdivisions were developed?
Further evaluate the quality of merchandise being sold in the stores. Quality merchandise indicate a more stable and upscale market.
Search your local market:
Locate Community Services:
Locate community facilities such as police, emergency response units, parks, libraries, and hospitals. Estimate the distance of these services from your new home. What is your comfort level if a library or park is several miles from your home?
See what's nearby:
Walk the Neighborhood:
Schedule time to explore the neighborhood within a 12 block area. Pay particular attention to the neighborhood's boundaries such as a highway, park, campus, or other fixed structures. If there are any unsecured boundaries; future changes can occur in and around the neighborhood that can increase or decrease your home's value.
Check the appraised values of the homes in the neighborhood in which you wish to buy. Surrounding homes of equal size should appraise for the same value as your home.
Check to see if the homes in the neighborhood are increasing or decreasing in value. It is a good idea to determine the demand for homes in the neighborhood. Too many "For Sale" signs are a good indication that something is happening.
Check the Housing Fees:
What is the tax rate for the area? What municipal services are available and how much will they average? You may find the right home, but high taxes and municipal service fees can turn your home into a negative.
Lookup county and city governments:
City cost comparison:
Are there any active neighborhood organizations working to maintain and improve the area? If you choose to move into the neighborhood, is there a homeowners' association in which your membership is mandatory?
Homeowners have mixed feelings about such associations. While they certainly help to maintain the quality of the neighborhood and its property values, and maintain its safety as well, they do require membership fees. Find out what they are you might be surprised.
Will you face any deed restrictions? What are they, and how sternly are they enforced?
Check the Negatives:
Any one negative in the neighborhood can counteract two or three positives. Check for all current and future negatives that could potentially devalue your home.
- Rising neighborhood crime. How effective is the crime watch programs in the neighborhood?
Check crime statistics:
- Heavy traffic in and around the neighborhood. Evaluate how traffic patterns can increase with potential growth or changes in any underdeveloped areas surrounding the neighborhood.
- Loud sounds, such as airline traffic, nearby factories, major throughways, and ball parks.
- Visual pollution, such as power lines, radio and television towers, auto and bus fleet parking lots, ball fields that play night games, and salvage yards.
- Smells such as bakeries, food processing plants, and factories. These units may be miles away, but a down drift could affect the quality of air in the neighborhood. You might want to visit the neighborhood several times during the day to check out the smells and noises.
- Come back during the evening hours. Find out who frequents the neighborhood and when. Some neighborhoods have multiple personalities and attract a different crowd at night. Talk to your Realtor, then talk to prospective neighbors. Drive around, and do your own research.
Pick the best home in the neighborhood:
Look for the streets' boundaries where your new home is located. Any dead-end street can be turned into a major throughway. Homes that have defined boundaries can protect you from potential neighborhood changes.
Homes in a cu-de-sac have a higher resale value than homes situated on busy streets. Also consider and potential construction that can turn a quiet street into a busy street later on.
Look around the properties of the surrounding homes in the neighborhood. Homes in landscaped neighborhoods can demand a higher premium and keep the resale value high.
Examine the property's lot for drainage, soil composition, physical dimensions, and privacy. An extensive review can save you dollars in structural repair.
Estimating the neighborhood value
What's it worth?
sample property reports:
- complete property valuation
- recent sales report
- comparable sales
- subject property report
view sample reports:
What is Your Home Setting
There are pluses and minuses to different home settings.
An urban setting might place you closer to city-like services and amenities, but the encroachment of other urban settings can devalue your home over time. A rural setting offers romantic evenings, but life on the farm can be too slow for some people. Some pointers to consider:
Expect more established neighborhoods with large trees and sidewalks in an urban setting. You will be closer to the city and its amenities, such as restaurants, recreational areas, and parks.
The schools may be less desirable, however, depending on the area. Private schools are an option, but their expense will add to your monthly cost.
The economic strength of the city is an important consideration because unstable communities can bring higher taxes, devalued properties, and flight of good jobs to the suburbs.
Suburban settings offer newer homes in subdivisions and associations. The homes may be similar in style and appearance, and the landscaping may be less distinctive with its young trees and shrubs.
It is not uncommon for suburban subdivisions to lack certain features like sidewalks and streetlights. The addition of these items may come later, thus increasing your property tax.
Many suburban homes are located near shopping centers and other amenities. Be aware if a suburban community is fairly new. The ongoing construction can bring overcrowding and heavy traffic.
Rural homes offer private settings and large acreage. If the rural area is near suburban settings, you can have the benefits of both the rural and suburban life.
Beware, however, a few years could bring additional subdivision construction that could alter your rural landscape. Note the many rural areas do not offer basic services such as sewer, water, and mail delivery.
Further, depending on the location, some areas lack zoning restrictions, thus allowing any type of structure to be built closely which could potentially devalue your property.
|Calculate Your Housing Ratio
The "housing ratio" is calculated by dividing monthly housing expenses by your gross monthly income. The housing ratio should not exceed 28%.
|Calculate Your Debt Ratio
The debt-to-income ratio is calculated by: dividing your fixed monthly debt expenses by your gross monthly income.