Choosing a Location

Choosing the location for your home will be as important as choosing the home itself.  Location should conform within your desired needs, pertaining to schools, shopping, recreation, and your place of employment.  It should also maximize your investment potential if you decide to sell your home in the future. Most people will find a home they truly love and will accept the location unconditionally to guarantee acquisition of their desired home.  Such individuals who opt to settle on the location of their idealized home may not recognize the errors in their decision until it is too late.  It is only after purchasing and residing in the home that you notice the real issues created by choosing the wrong location.  Here are a few considerations to review before you decide to settle:

First and foremost, you need to familiarize yourself with the amenities you expect to have and their proximity to where you will live.  As previously addressed, you should consider the needs of yourself and your family before finalizing a decision on the location.  I want to navigate you through a few location issues not yet considered, but first let’s cover some basic facts. 

Most people will consider the quality of schools, the convenience of shopping and recreation, and the distance traveled to and from work, before making any location decisions.  These fundamental necessities are seldom overlooked, but should be reevaluated.  For instance, if you have children, part of your criteria in the location of your home will be the schools in the area, and their quality in education.  An awareness of how the school district performs academically, or the student-to-teacher ratio, can impact your choice in a location.  Shopping and recreation can follow similar scrutiny, depending on what your spouse may say--forgive my small attempt at humor.

Naturally, having these amenities nearby is beneficial to you and your family.  Most social activities will take place within or in close proximity to the home you choose.  The distance your home is from your workplace will influence a location decision. The majority of us have to commute to work on a routine basis, and if your home location results in an unreasonably long commute, or if the commute involves poorly paved routes, it may place unnecessary strain on your life, which may then prompt you to relocate; and relocation could have a significant cost. 

Let’s now take a moment to review location issues often overlooked and not comprehended until at the point of no return.

When choosing a location consider how close the home is to local utility services such as power lines, sewer treatment facilities, water towers, power stations, and garbage disposal sites.  All of these services, while important, can create major barriers for you in the future, when you try to sell your home.  You might be thinking “well, that’s obvious”, and most of what we discuss here is obvious, but you might be amazed at how often people overlook the obvious. 

Here is a real life example of how the seemingly obvious can be overlooked.  Just east of town a major subdivision was being constructed to promote recreational living for the avid golf player.  Builders began to sell properties located on the golf course as soon as the lots were developed.  In order to support the ongoing growth, a sewer treatment facility was built.  The facility was located out of view, but on a warm, windy day the foul odor emanated from the treatment facility plant to the homes located on the golf course.  The issue became so overwhelming that a lawsuit was filed against the builders.  The homeowners in this case argued that when they viewed the home and made the decision to buy, it took place on days when odor issues from the plant were not as obvious.  The position of the builders on this issue was that full disclosure had been made and the homeowners should have considered it before choosing their lots.  Most people do not see the wide scope of things until after the fact, and homeowners soon recognize they would have been better off had they done their research at the start.    

In order to capitalize on your investment in a home, it is important that you not live in the most expensive home in your general location.  A home that is valued above all other homes will face certain issues the other homes will not face.  However, having the highest priced house on the block is not completely detrimental.  For example, if you were to look at homes within the same price range and in an area known to have higher average prices, you would be able to see that price will impact the quality of the home.  Although there will be advantages, the disadvantages will more than likely eclipse them in this particular scenario.  Typically, two homes having similar price points will appreciate differently, depending on its location.  Assuming that everything is equal, a home located in an area where average home prices are higher will appreciate faster than the same priced home located in an area that has a lowered average home prices.  Another issue concerns the average number of days before the home is sold.  High priced homes located in low priced locations have a tendency to remain on the market longer, making them more difficult to sell.  One final issue is that lenders will be more uncompromising with their underwriting guidelines when attempting to refinance this home into a new loan.  As you may already know, home loan refinances require appraisals to assess current market value.  In order to assess value, the appraiser must show comparable homes in close proximity to the subject property to ascertain their opinion of value on the home.  If every home located in the general area is established with a lesser value, the lender may condense the actual value of the home, which would make the process of qualifying for your refinance strenuous.

Here are some additional precautions to consider when choosing a location.  Avoid homes located on or near a busy street, because a busy street will produce consequences if you select that location.  It does not make a considerable difference on where the busy street is as it relates to the home itself.  For example a busy street can be located at the front of the house, back of the house, or even to one side or the other, and still create major inconveniences for the homeowner.  Busy streets can discourage people from buying, and for this reason these homes are more difficult to sell, and invariably stay on the market longer than similar homes located further away.  Homeowners determined to sell a home located near a busy street must lower their price in order to remain competitive. 

Another precaution to consider involves looking at the homes located on the street where you want to buy.  How do these homes appear to you at first glance?  Do you see poorly managed landscaping, weathering issues, dead trees, cracked driveways, loose trash, children or dogs running around unattended?  Any one of these components can pose a real threat to the value of your home in the future.  Even worse, these factors may be caused by forces outside the control of the neighborhood.  For example, water restrictions in an area can hinder landscaping opportunities.  Maybe an environmental issue is destroying vegetation in that area.  Regardless of the potential hazard, you should take everything into consideration and draw your own conclusions on how it influences your decision about the location.    

The location you choose for yourself and your family should be just as important as the home itself.  With research and preparation in the selection of the right location, you can expand on your home investment without jeopardizing your desires.