Just last week, I met with an older couple planning on selling their home. They were wanting to downsize. As they were showing me around, they pointed out the upgrades they’d made and commented “And we have a corner lot. It cost us to get it, but it was well worth it.” In fact, they said that a couple times just to be sure I registered the point.
When we got around to talking about what they should price the house, the value of the corner lot came up again (with emphasis). In their minds, the corner lot added at least a couple thousand dollars (2% of the overall value) to the asking price.
I wasn’t sold on the idea, as I’ve had many buyers skip past houses located on corner lots. So, in these situations I make a list – – Pros and Cons – – asking myself “Do buyers prefer houses on corner lots or do they shy away from them?” Here’s what I came up with …
- Corner lots are larger
- Corner lots do not have a neighbor directly next door on one side (which can translate to having less noise from neighbors)
- Circular drives are more often possible
- If building, more flexibility on how to set the garage and driveway (side load or rear load)
- In many locales, existing homes on corner lots are less expensive than interior lots!
- Taxes may be slightly higher
- Builders may charge a premium for the larger lot
- Likely to have more traffic which parents are fearful of (and more traffic also means more traffic noise)
- Corner lots typically have very small back yards, which parents don’t like because it’s often a challenge to fence the side yard or to keep an eye on children playing there
And a TOSS-UP
- Because you only have a neighbor on one side, some people will say you have more privacy. On the other hand, you have a lot more people staring as they drive by.
So, who’s right and who’s wrong? Well, sometimes it just comes down to the lot itself. More often it comes down to personal preferences. But if you’re thinking about resale, and your potential buyer pool involves people with young children, then I suggest you keep looking.
When you are ready, give Indy’s Choice a call! – Bob (317) 625-0655
More often than not when it comes time to have the appraisal done with properties with acreage, there can be challenges. (Or should we call it really what it is – PROBLEMS). That all has to do with $$$$$$$. Most types of residential financing take a dim view of excess acreage, pole barns, outbuildings, and farming activity. Think VA and FHA as two forms of financing that can be particularly tough when it comes to these items. As a rule of thumb, residential lenders will not lend on a working farm.
But you ask, “That makes no sense! Wouldn’t a lender rather have 10 acres leased out to a neighboring farmer, than have that land unproductive?” And the answer would be “No”. The lender would rather it not be farmed. And if the property has any outbuildings that cost $40,000 to build new, the appraiser and lender are only going to give $5-10,000 of value for it. So, as you approach buying a property with acreage, you’re going to want to double check your financing strategy to make sure it measures up.
The GOOD NEWS is that there are lenders who will lend on working farms. Think Farm Credit. Maybe others if you can convince them that you will not be farming the property once you buy it. Another factor that can make a difference is the size of your down payment. Generally speaking, there will be more options if you have a larger down payment. If your down payment is small or non-existent and you’re trying to buy a property with acreage, then you’ve got to bank on the property appraising for the sale price without a whole lot of value being given to the excess acreage.
Buying a property with these characteristics may take an extra dose of patience and persistence. Know that this is not our first rodeo. Having been in the mortgage business for 17 years, I can be in your corner coaching you over and around all of the challenges! Give us a call!
You’ve got to be careful if you get your news from a national media outlet. While January national home sales were the weakest in years, Central Indiana continued on a very strong path. Pundits blamed rising mortgage rates and low inventory as the reasons for the weaker national sales. It’s true that rates have been creeping up slightly— BUT they are still amazing by any historical perspective. Think mid 4’s right at the moment. I mean, since when was 4% a bad mortgage rate? Come on now!
The experts say “Real estate is local”- and they are correct. Here in Central Indiana, Closed Sales were up 5% over January of a year ago. And up 4% for the past 12 months. Obviously more people are buying homes in our neck of the woods.
Want help getting the lowest rate and buying successfully in this tight market? Easy— call me! “I work harder to make good things happen!” -Bob Morris