Five Things to Know About a Place Before Buying a Home There

Home soldOnce was, you could buy a home without much worry about how long it would take to recoup your upfront investment in the down payment and closing costs. Today, home prices have actually rolled backward to 2004 levels sinse their 2006 peak, according to Standard & Poor's Case-Shiller Home Price Index. So smart buyers know they'd better plan to hunker down for the duration (experts say 7-10 years, give or take, depending on the locality) before they make the commitment to buying a home, to stack the decks in favor of being able to break even -- or better.

Accordingly, it behooves a buyer to do a bit of research into his or her town and its real estate market dynamics to max out the chances of a regret-free home purchase.Here are five things you should research about your hometown-to-be before you buy.

1. Projected Job Growth

In today's post-apocalyptic job market, people want to buy homes where the jobs are now -- and where they will be in the future. Even people who have jobs right now are often concerned and feel somewhat insecure about whether they'll have jobs long into the future. Buying in an area where projected job growth is strong is one way to hedge against both the prospects of losing your own job in the future and of being caught trying to sell a home in a market where many would-be buyers are unemployed. USA Today and Moody's Economy teamed up to create this handy interactive projected job growth map. Click the "By Metros" tab to see what the job future of your town's job market may look like.

2. Projected Population Growth

Even if you don't plan to sell for many years in the future, the resale market for nearby homes is critical to the value of your own home for purposes of your net worth and your ability to refinance it in the future. It stands to reason that geographic areas with net population growth in the future will be the real estate markets where homes hold value in the future, especially if there are also stringent building controls or limited land for development in that area.

3. Land Use Restrictions, Limited Land and the Climate for Building Permits

Population growth in an area is less insurance of strong home values if the geography and/or the local government allows for nearly unlimited construction. Home values in built-out urban areas and coastal markets with very tight building controls have withheld the recession better than others because the cap on the supply of housing favors homeowners (and future homeowners, too!). Conversely, markets where overbuilding was rampant (think Las Vegas, Central California, Florida) have been in serious crisis.

Also, if you know your plans for the home include major repairs, remodeling or even an addition, investigate the climate, ease (or difficulty) and cost of obtaining permits for the work you plan on doing, including any increase in the assessed value of the home and your property taxes for the new-and-improved version of the house you envision.

4. The Scoop on the Schools

Property listing advertisements may blare "great neighborhood schools!," but the National Association of Realtors' most recent profile of home buyers revealed that more than 60% don't even have school-aged kids. But even if you don't have kids and don't plan to, schools still matter. Great schools support homes' resale value, and also indicate that a community places a high priority on its children, and its future. In markets where the public schools aren't strong, there is still a very strong selling point if there are other quality educational options, whether they be private or charter schools, or high-quality open enrollment schools nearby, available.

5. Special Assessments

Every home buyer worth his or her salt knows about property taxes, and finds out what the going property tax rate is in his or her neck of the woods. However, in many areas, special assessments can get tacked on top of your tax bill. I just looked up my own and found line items for public services like street lighting, vector control (city pest control), libraries, public tree trimming, etc. all added on top of my basic property taxes. The former owner's tax bill, the online property tax records or even the county assessor's office can give you a good idea of what special assessments you can expect to pay on a regular basis.

But condo buyers should also ask the home's seller and review homeowners' association (HOA) documents with a fine-tooth comb for any future special assessments that have even been proposed. While single family homes' special assessments can run as high as 10% of their total tax bill annually, HOA special assessments for unbudgeted roof or foundation repairs can run in the multiple thousands of dollars for every unit, depending on the degree of the budget shortfall and the severity of the problem that needs addressing.
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