The process of house hunting is nearly identical for everyone. You scour the listings, eventually finding what you’ve always wanted. It’s the best home in the neighborhood on the nicest property. It must be yours.
Before you become awestruck by the idea of having the nicest home in the neighborhood, there are a few factors you should consider. Understanding these factors will save you from financial burden and will come in handy if you ever need to sell it.
Why You Should Not Buy the Nicest Home in the Neighborhood
Below are reasons not purchasing the best house on the block will save you from a lot of heartache down the line.
1. Your Home’s Value Won’t Match the Location
Your home’s value will inevitably increase over time. However, when your house is the best in the neighborhood, the value increase will happen at a snail’s pace. That’s because your home’s price tag is partially based on its surrounding properties.
If you have a mid-to low-value home relative to the location, just about every repair and home improvement project you do will increase its market value. However, for the nicest home, these upgrades will do little to increase its worth.
Likewise, when you renovate high-priority areas like the kitchen, siding, or roof, your home’s value will skyrocket. However, with the nicest house on the block, renovations are inconsequential. Your home’s value will barely increase, and renovations may put a bigger barrier between your home and neighboring houses.
Either way you look at it, having the nicest home is more of a money pit than a bragging right. You certainly won’t be bragging when it’s selling time, either.
2. Selling Your Home Could be Mission Impossible
Most people buy a house expecting it will be their forever home. Even if that’s not the case, the plan is usually to stay around for the mid to long term.
However, a new job opportunity could lead you to list your home with little notice. Now, you’re stuck with a house beyond the budget of most buyers looking for houses in your neighborhood.
You’re essentially left with two choices: You can count your losses and sell for much less than you had hoped. Alternatively, you can relocate before selling and have the burden of two mortgages. That is, of course, assuming you’re able to get a second mortgage.
3. The Best Home in the Neighborhood Has Property Taxes to Match
What many overlook when buying a home is property taxes. Often, this added cost can bring your dream home out of budget.
With the nicest house in the neighborhood likely comes the steepest property taxes. Maybe you are looking at a house with acres of property or square footage that doubles the size of the next biggest house on the block. No matter the reason for the increase, your tax bill alone could rival the total mortgage bill of the surrounding properties.
You could appeal your tax cost by showing comparable homes in your area with lower taxes. However, if you have the nicest home around, you’ll be hard-pressed to find a similar property. This could leave you with an overwhelming tax bill, making your property less reasonable to maintain and more difficult to sell.
Build a Custom Home to Avoid Overspending
Now that you know what to avoid in your new home search, you’re well on the way to finding the best home for you. You may decide to buy a preexisting home or start with an empty lot and a dream.
The possibilities are endless.
Buying the best home in the neighborhood may seem like a great idea at first glance. After considering long-term costs, you will realize it’s usually a mistake.
Remember to avoid the nicest home in the neighborhood if:
- The home you’re looking at far out-values others in the neighborhood
- You could imagine eventually putting this home on the market
- Your property taxes will be through the roof
While this article briefed you on the burdens of going after the best home on the block, there is plenty more to consider before making a purchase.
Discussing the process with a professional will help you explore options you may have never considered. Building a custom home is a perfectly viable option and could save you thousands of dollars and a lot of frustration.
If you’re interested in building your own custom home, contact us today to discuss your options.
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