The 'right' home should suit you for several years

STARTING OUT

March 20, 1994|By Dian Hymer

How will I know a good house when I see it?

A good house is one that suits your needs, is well-located, priced right and has good resale potential.

You should select a house that not only suits your present needs but one that will serve your anticipated needs over several years. But before you even start looking at homes, sit down and make a list of the features you want in a home. Keep in mind that the perfect house doesn't exist, so you'll have to make compromises. To help in the selection, divide your list into features you need to have and those you'd like to have.

It's often said that location is the most important variable determining the value of real estate. While the most desirable neighborhoods may be out of your price range, you should plan to buy in the best neighborhood you can afford. Neighborhoods adjacent to ones that have already experienced healthy appreciation are often good investments.

A house that's priced right is one that represents a good value in comparison to similar houses that have sold in the area recently. A property's market value constantly changes, based on supply and demand. A house will be worth more when it's in short supply and there are a surplus of willing and able buyers. It will be worth less when there are few buyers and a surplus of similar houses for sale.

Investigate plans for future development in the area where you're considering buying. The best investments will be in areas with growth restrictions. This will help you because it will limit future supply.

No matter how well-priced a home might be relative to the current market, if it's out of your price range, it's not a good house for you. This is why it's important to consider the property's condition in relationship to its price. A house that's at the top of what you can afford, and that's in mint condition, is a good buy. On the other hand, a house at the top of your price range is over-priced if it needs a new roof, foundation work and a new furnace.

FIRST-TIME TIP: It's a good idea to consider a property's resale value before you buy it. Find out how long the property has been on the market. If it has been on the market for months with no offers, find out why. Perhaps the market is soft and all houses are taking long to sell. Or maybe the sellers are unreasonable about their price.

A house that's taking a long time to sell could have a defect that impedes its salability, such as being located on a busy street or next to a freeway. If this is the case, you may have difficulty selling later. You should negotiate a price discount to compensate for such a defect.

If you're buying in a new development, find out how many homes have sold and how long it took to sell them. Which models are most in demand? Some models, and locations within a complex, are more popular than others. Ideally, you want to buy one of these.

Judging what is a good house is somewhat personal, based on individual needs and affordability. But houses that have a broad-based appeal will be easier to sell than ones that are specialized or that have a defect such as traffic noise.

Dian Hymer's column is syndicated through Inman News Features. Send questions and comments care of Inman News Features, 5335 College Ave., No. 25, Oakland, Calif., 94618.

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