REAL ESTATE REPORT
(Sept. 28, 2012) When searching for a home, most buyers look primarily at the purchase price — but there are many other important factors to consider that will affect your buying capability. Lenders take into account both your principal and interest payment, plus the variety of factors below that could increase your monthly payment.
Here’s a list of examples you should consider when looking at homes:
¦ Taxes: As Benjamin Franklin said, “In this world nothing can be said to be certain, except death and taxes.” And, taxes are definitely certain in the world of real estate. Homeowners will have county and state taxes, but if the house is within city limits, you may also have to pay city taxes. Positives to having the house within city limits and paying the city tax though is that it usually provides public water/sewer and trash removal; however, the water/wastewater carries an additional price tag that is billed monthly or quarterly.
¦ Well and septic versus public water: As mentioned above, another consideration is whether a house has private or public water and sewer. If a house is on well and septic, this can help to make the house more affordable upfront, as there would be no water/wastewater bills from a municipality. But, it’s important to understand that the replacement of both well and septic systems are quite costly, so purchasers should have a good understanding of the expected lifespan of the existing systems.
¦ Homeowner/condo fees: Condos, townhomes and singlefamily homes can all have homeowner or condo associations that will require additional annual expenditures. Be sure to understand how much the associations charge, the likelihood of any upcoming special assessments that may be charged to owners, and what your dues cover. n Homeowners insurance: Homeowners obtaining a mortgage will be required to secure a hazard policy on a home that will cover losses in the event of a fire, etc. If homes have swimming pools, or are located in certain areas, it might be harder to obtain coverage. n Flood insurance: Finding out if a home will require flood insurance is very important. It requires running what’s called a “flood zone determination” on the home’s address, and with FEMA having just updated the flood maps, this should be double-checked. If an existing homeowner doesn’t carry flood insurance, but the home’s location now requires a flood policy for a new buyer obtaining a mortgage, then a buyer may have to include the cost of obtaining an elevation certificate from a licensed surveyor, which is needed for insurance companies to be able to quote a new flood policy.
— Lauren Bunting is a member of the Coastal Association of Realtors and a licensed REALTOR® with Bunting Realty, Inc. in Berlin.