What to Look for In a House

Home buying is a personal decision and people have different tastes, needs, etc.   However, from a purely financial perspective, here are some things you want to think about:

*Location, Location, Location:  Stupid cliche, but true.  So start with the town and work down to identifying neighborhoods that suit you.  If you're conservative stick with the "branded neighborhoods" (eg. in Palo Alto or Menlo Park:  Professorville, Baron Park, Allied Arts, etc).  Snobby folks generally have money and will always pay a premium. 

*Townhouse/ condo vs house:  This is a little different in the city, but generally in the suburbs, houses always appreciate faster and are worth more per square foot.  As an entry level buyer a lot of times you're face with buying a sweet new townhouse vs. an 50 year house.  The townhouse may be more fun, but the house will always out appreciate the townhouse.  The big difference--ownership and ability to build on the land.  Which leads to...

*Land: Always go for the big plot size.  We got our house assessed after we bought--70% of the value of house was in the land.  Buying a small house on a big plot in a good neighborhood is the way to go.  The math is as follows.  It's about a $150-200 per square foot to build a new house.  Houses in the Bay Area are priced in part by the potential to build a big fat new house on top of the plot of land. 

*Zoning:  Likewise, find out about the zoning restrictions (which are gnarly in many Bay Area suburbs).  This will affect how big a house you can build on the lot and other important issues.  Also, things like an R2 zoning always add intrinsic value, because you can subdivide and build two units on your lot.   

*School districts: Good schools are in short supply in CA, so towns with good schools hold their value.  Be careful in determining exactly what school district a given house is in.  Districts vary by town and sometimes by neighborhood.  Further, there are un-incorporated districts that don't have guaranteed spots at the local schools.  For more on this, check out:  School link

*Inter-neighborhood dynamics:  Although it's  blow to the ego, always be the smallest, oldest house in the neighborhood.  Your house value is partly driven by your neighborhood. You can renovate your own house, but you can't force your neighborhoods to do the same.

*Special bonds or taxes:  Some neighborhoods have raised special bonds or taxes that vary by neighborhood.  Don't get surprised by your first property tax bill.  Find out from town hall about these bonds.

*Noise & Nuisance: After getting outbid on 10 houses, it's real easy to start ignoring things like road noise, traffic patterns, etc. Don't.  You can't change these things and they will affect your enjoyment and ultimately your resale value.

*Parks, downtown areas within walkable distances

*Freeway access

Comments

[John Day]

What nice and informative information you have created for the real estate buyer!

You couldn't be more right. Here in our hot Washington DC and Maryland Sellers market we have a situation where home bidding is normal and clients do get frustrated when they have bid on several homes. To stay the plan is a great approach, but sometimes we also recommend a reality check too.

Please feel free to check out our website (http://www.Homes-Database.com/) and blog, The Home Buying Blog http://www.homes-database.com/weblogs/blogger.html and leave a comment with a link back to your blog. You have some great information.

John Day
Realtor
Long and Foster
http://www.homes-database.com

[Cole Kenny]

Great Blog! I'll definitely be bookmarking this one. Cole @ BigHousingBubble

[Jeb Archer]

What people dont realise is that green homes and buildings are not only worth more (resale value) but are creating more reveneu as well. Higher occupancy rates paired with higher rental premiums equals more money in VC's pockets.
www.initred.com

[Forbes Style]

A great quotation from Samuel Johnson on living the good life: "There is nothing which has yet been contrived by man by which so much happiness is produced as by a good tavern or inn."