Should I Buy Real Estate Now?

There are several factors that make buying real estate attractive now – especially in Williamson County, Tennessee.  Real estate prices are at some of the lowest levels seen in years, if not decades.  And, given the recent reports of potential and expected job growth in this county, real estate is a hot investment right now.  Couple that future market growth with current low interest rates and you’ve got an extraordinary opportunity.  Check out this recent article: Home construction permits are up across the county | The Tennessean | tennessean.com

 Over our 16 years in the industry, we’ve developed a set of guidelines to help us make good real estate choices.  These guidelines help us sift through the real deals and the ones that only look like deals.  We hope they help you, too.

  1. Get your team together.  We recommend that you find a builder you want to work with before you buy a piece of property.  A builder will help you figure out if the type of house you want to build will actually work on a property. 
  2. Do a background check on the ground.  For example, the builders in an area may be aware that a neighborhood is known to have significant underground rock that would make it very costly and/or difficult to build a basement home.  If having a basement is really important to you and you buy a lot without that knowledge, then you may have to put your dream home on hold. 
  3. Pay attention to Mother Nature.  The lot can give you clues about what’s going on beneath the surface.  For example, a lack of big trees on the property could indicate poor soil quality. A dry creek bed may indicate a flood plain issue.  If there are lots of cedar trees, there may be significant limestone.  Pay attention to the clues nature is giving you. 
  4. Too good to be true.  This is a big one – if the seller is making you a deal that seems too good to be true, find out why.  Do your homework very carefully and thoroughly.  It may be a dud the seller is trying to dump rather than a real deal. 
  5. Location, Location, Location.  Figure out where you want to live, why you want to live there, and then verify all reasons.  Check out school zoning, both for now and possible future re-zoning.  Actually drive the route from the lot to your place of business during rush hour times to determine the actual commute time.  Are the amenities you want (e.g., grocery store, gym, church) as close as you want them to be?
  6. Be wary of overbuilding.  Remember that the bottom of the price range in the neighborhood yields the greatest appreciation. Make sure you know how your dream home could relate to the rest of the neighborhood and understand what that means to your long-term home value. 
  7. Guard your budget.  What are the home prices in the area where you want to build?  Pull out your budget – can you afford it?  If not, look somewhere else and don’t look back. 
  8. Ease your mind.   Verify what easements are on the property.  An easement is a right given to another person or entity to trespass upon land that person or entity does not own.  For example, a neighbor may have a driveway easement which means you must allow them to install a driveway on your property and use it on that easement.  Or a utility company may have an easement to run service (e.g., electric lines, gas lines) across the property.  You cannot build on top of an easement so it’s important to know where they are before you buy a property.
  9. Get plugged in.  Investigate how you will get your utilities – electric, water, sewer/septic, etc. — to your house.  Don’t assume that there is an available sewer tap or that the electric service is right there at the street.  Verify exactly where and how each utility will be accessed. 
  10. Don’t cramp your style.  Many neighborhoods have certain requirements on the properties that are in the community.  There may be minimum square footage requirements, building material requirements, architectural style requirements, etc.  Also, be sure the check out the cost of homeowners’ association dues, if applicable, to ensure there are no surprises.  Make certain that the restrictions of a neighborhood won’t cramp your style before you buy into the neighborhood.
  11. Watch your setback, Jack.  A setback is the minimum distance required between a house and the property line.  There also may be restrictions on what can and cannot be placed in the setback – things like driveways, decks, pools, covered porches.  Find out what the municipality may require for setbacks on the property before you buy the property.   
  12. Get in the zone.  All residential zoning is not equal.  Don’t make assumptions on what the zoning for a property may allow based on what is on the adjacent properties.  For example, the property next to the one you’re interested in may have an outbuilding like a barn or pool house.  That property may have been grandfathered to have that outbuilding or they may just be in violation of building codes.  Determine exactly how the property is zoned before you buy it.
  13. Survey the landscape.  Get a professional survey of the property before you buy it to make sure everything is as it seems.  If the next door neighbor has accidentally put his driveway onto the lot you’re about to buy, you need to know that beforehand so it can be handled appropriately.
  14. Insure for pre-existing conditions.  Most insurance policies provide coverage for future losses.  Title insurance – which is paid for one time when you purchase a piece of property — protects the insured from an event that occurred before the policy was issued. Can you buy a piece of property without getting title insurance?  Sometimes.  Should you buy a piece of property without getting title insurance?  In our opinion, NO.  Title insurance can protect you if there is a serious problem with the title and pay claims if it can’t be fixed.       
  15. Finish strong.  Make sure you have a reputable closing attorney who will handle the title search, recording the transaction, easements, property tax proration, HOA dues, contracts, warranties, and all the other things that could cause you major headaches if not handled properly.
  16. Bottom line — be realistic and practical.  Yes, that incredible view from the mountaintop lot may blow you away.  But if all the other things that make a piece of land the best location for you, your family and your dream home are not there, then the view is worthless.  Don’t get carried away when evaluating a real estate purchase – be realistic, be practical, and you’ll do fine. 

Tyke and Judith Johnson, owners of Brentwood Builders, have built custom homes in the Brentwood, Franklin and Greater Nashville areas since 1994.  For more information call them at 615-776-4143, e-mail brentwoodbuilders@comcast.net or visit their website at www.brentwoodbuildersllc.com.