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Right on Your Money
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| Found your dream home? Congratulations! Just one note of caution: Don’t sign anything before answering these questions. |
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(Photo: Hutker Architects/Brian Vanden Brink)
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Text by Allen B. Bunting
1. Do I know the property and the community?
Before making a big investment, potential buyers should reserve a seasonal rental in the area and get to know the community as a resident, not a visitor, says Downeast Properties broker Jeffery Allen in Blue Hill, Maine. As for the house, your real estate agent can provide information about property lines and surveys, prior sale prices and mortgage rates, tax assessments, even neighborhood life. Or, request the property’s public real estate records, which are often available online for a fee (visit homeinfomax.com). Here’s what to consider: Is a bordering beach public or private? Is there public access, and where? Does the shorefront property line run along the low tide or high tide mark? Remember: If local law sets riparian rights (property extends to the low tide mark), make sure they are stated in the deed.
2. How do I protect my investment?
Understand your homeowner’s insurance. Many policies (especially on the coast) exclude damage from factors such as wind, earthquakes, and mold. Discuss your needs with an agent and purchase additional coverage if necessary. Remember that homeowner’s insurance does not cover flood damage. For that protection, you must buy a separate, federally regulated policy that’s priced according to risk. 3. What are the hidden costs?
Many neighborhoods require fees for landscape, road, and walkway maintenance or use of docks and piers. Seasonal residents should prepare for year-round upkeep. “If you’re buying a second home, I always recommend securing a caretaker to look after and winterize the place while you’re away,” Jeffery says. “Limiting that stress is well worth the additional cost.” Economies that depend on summer traffic have two phases: flourishing in the summer and nonexistent in the winter. Stewart Young of LandVest, a New England luxury real estate firm, says that buyers looking to relocate full-time to a coastal resort community must take into account the availability of services, supermarkets, restaurants, and hospitals during the off-season. 4. What can I expect to pay in taxes?
Understand local tax laws so you’re not surprised by annual costs. “Communities without a strong commercial and industrial tax base are likely to have exceptionally high residential tax,” Stewart says. Look at the big picture. In addition to property tax, consider income, utility, and sales taxes, and budget accordingly. For more info, visit coastalliving.com/rightonyourmoney.
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