Homebuyer Considerations

Every home purchase decision is an important one. It’s a decision that involves a significant financial investment and a decision that has a major influence on your lifestyle. In many respects your home embodies many of the most important aspects of life for you and your family.

In the process of purchasing a home there are a number of factors about the area, home and neighborhood that you will need to consider in making a sound decision. Your perspective on the various factors are subjective and related to personal needs.

To help you navigate through the home purchase process we offer the following points to consider and clarify while approaching a home purchase.

Selecting the neighborhood you’ll be calling home involves a number of factors that combine emotional factors as well as fulfilling some objective needs. Emotional considerations tend to focus on general perception about the lifestyle that characterizes a specific neighborhood.

Factors can include:

    • Overall Maintenance Standards

    • Perceived Compatibility with Neighbors

    • Area Crime

    • Gated vs Open Community

    • Perception about Status

    • Quiet versus Busy Surroundings

    • Age Profile of Owners

In contrast objective need factors tend to focus on specific mandatory household needs.

    • School System

    • Transportation / Road Network

    • Convenience to Work

    • Proximity to Medical Facilities

    • Distance to Shopping

    • Access to Preferred Recreation Facilities

Also sit back and give some consideration about how a particular community is likely to look like in the future. Areas that may seem a little removed may be ideally situated in just a few short years down the line, while other locations may be poised for an overcrowded scenario in the years ahead. There is also the point of view of the perceived maintenance standards of a community and how it will influence the appearance of a neighborhood over time.

Choosing a Neighborhood

Although home insurance issues are taken for granted in many areas, in Florida it is a factor of home ownership that needs to be more seriously viewed. Varying potential for flooding, storm damage and sink hole activity will result in significant differences in insurance premiums.

As a result, the location of a home can greatly impact homeowner’s insurance premiums as well as the need for flood insurance. Stronger potential for storm damage and therefore higher insurance premiums generally occur in coastal regions of the southeast, southwest and northwest panhandle where the highest probability of a hurricane landing exists.

The requirement to carry an additional flood insurance policy is triggered by a mortgage lender when a property is located within a higher risk flood zone. Owners have the option as opposed to requirement of maintaining flood insurance when a property is unencumbered by a mortgage.

Like areas that have higher insurance premiums due to greater risk of hurricane damage, some areas have a history of pronounced sink hole activity. This added risk will also impact insurance premiums. Regular homeowner’s insurance policies that are now issued provide for sink hole coverage only in the event of catastrophic damage resulting from sink hole activity. A broader form of protection is available as a rider to a homeowner policy at an added cost.

The age of a home also influences what an owner will be paying for insurance. Over the years the building code standards have become more demanding regarding “wind load” requirements. A major code change in 2001 created an important milestone in the wind resistance standards. As a result homes built from 2002 and beyond will receive more favorable insurance rates. Older homes can gain the benefit of reduced premiums if an inspection by a licensed home inspector confirms the manner in which a home is constructed mitigates the risk of wind damage. Such an inspection primarily focuses on the construction technique in which a roof is fastened to a home.

The cost associated with homeowner’s insurance for higher risk versus low risk conditions can run as much as % higher for the same coverage amounts.

Insurance

In the whirlwind of shopping for a home it is common to review a large number of different homes, communities and locations. In short order information overload can easily result in confusion. It is not easy to keep the facts straight and focus on those choices that best meet your needs. That’s why organization is important to running a successful home hunting experience.

To maintain an organized approach to home shopping it is advisable to create a simple log or spreadsheet where you document properties reviewed. Keeping a simple recap of homes where you note positive and negative features will provide you with a resource for recounting homes and places you have inspected. This documentation will allow you to effectively create a “finalist” list based on the best choices without running the risk of forgetting or confusing the numerous properties you will see.

It is suggested that this documentation take on an organized format of a running log-style or individual property profile sheet where you make notations. All too often notes are scribbled onto brochures or scrapes of paper that muddy the facts.

In the end, this effort will pay back handsomely by minimizing confusion and keeping the facts and perceptions straight so you can make a more informed and clearer decision about which home to purchase.

Stay Organized

In today’s world we are all well aware of rising energy expenses and the need to conserve. Recent national surveys point to the trend that homebuyers want strong energy-efficiency standards in their homes. Although greater energy-efficient construction standards add some costs to a home, today’s consumer strongly wants to reap the benefit of permanent energy expenses savings.

When reviewing the standards of a home concentrate on the insulation standards, the rating of the climate control system, windows structure and ancillary equipment designed to conserve energy. Over the years standards building code requirements have resulted in the overall standards of a home escalating.

The most fundamental and important feature is a home’s ceiling insulation. Like wearing a hat to minimize heat loss from our body, the level of ceiling insulation in a home can greatly influences use of energy. Insulation standard is expressed as ”R Value” with the higher the number the greater the insulation effectiveness. Throughout most of Florida a R-40 ceiling insulation has become the preferred standard with a variety of products being used including rolled batts, blown cellulose and sprayed polyurethane foam. In older homes you will commonly find ceiling insulation values of R-19 and R-30.

A supplemental product being widely used today to enhance ceiling insulation is Reflective Radiant Barrier. This foil type material is applied to the underside of the roof in the attic and works to reflect radiant heat to reduce summer cooling expenses.

Hand and hand with insulation standards are also efforts to reduce air infiltration into the home. Leaks of air into a home from the attic, windows and doors contribute to higher energy bills. Sealing air leaks is one of the most cost-effective measures to reduced heating and air conditioning costs. New construction standards require a “seal” program designed to reduce the impact of unwanted intrusion of air from the outside and loss of “climate controlled” air from the inside.

Then there is a home’s HVAC (heating and air conditioning) system. For years the standard practice in constructing Florida homes has been installation of heat pump systems. This type of climate control system pulls heat from the air outside air to heat and removes heat from a home’s interior air to help cool. During the winter heat pumps are effective until the outside temperature drops below 32 degrees Fahrenheit when the systems use of backup resistant heat kicks in.

To judge the efficiency of a climate control system consumers can look to the SEER Rating, The higher the rating number the more efficient the system operates. Standards for new systems is a SEER Rating of 13 to 14 with ratings upwards to over 20 available.

The type of windows used offers another bright spot in increasing efficiency. Use of double-glazed windows and sliding glass doors is today’s standard with added use of UV coating and Low-E glass that repeal heat from windows contributing to the cause. Fortunately, Florida’s attractive climate allows use of aluminum frames compared to considerably more expensive wood or vinyl clad windows.

Other energy conserving products you’ll find include tankless water heater systems that eliminate the need to continually heat water held in a conventional tank. Waste heat recovery units that make use of expelled heat generated from the HVAC to heat water. There’s even the simple use of timer devices, like a programmable thermostat, to avoid unnecessary use of electricity.

As technology advances the cost-effective use of solar energy will reach beyond the heating of swimming pool water to become a meaningful contributor of power for the overall operation of a home.

Energy- Efficiency

There are a number of situations that can result in added costs to a home that are not obvious in the purchase price. First among these is a home that involves a CDD or Community Development District.

This arrangement allows a community developer to fund improvements necessary for a community through the creation of a special taxing district. In simplest terms, this involves a bond being sold to an investor to raise the money required for community improvements with the homeowners paying back a proportionate share of the money owed in installments over an amortization period that generally runs about 20 years. This “loan” payment is paid annually in conjunction with property taxes.

The obligation associated with a home encumbered by a CDD can range considerably from just a few thousand to tens of thousands of dollars. The amount owed on the CDD clearly represents a cost associated with a property beyond the obvious purchase price.

The expense associated with high insurance premiums is recurring throughout the life of the property. The difference between a “traditional” insurance bill and high premiums resulting from hurricane, sink hole and older construction standard risks is an annual higher cost associated with a particular home choice.

Homes that do not enjoy strong energy efficient standards pay higher energy bills. Once again, this is a recurring added expense that runs with the property until improvements to the home enhance its energy efficiency.

Maintenance and repairs to homes are a natural ongoing requirement. When purchasing an existing home you need to objectively consider repairs and the remaining lifecycle of elements that will require replacement such as a HVAC system, paint, kitchen appliances, water heater and pool equipment. This cost associated with such items should be factored into the price you are paying for a home.

Hidden Costs

The relocation to a new Florida location generally involves coordination of a number of life issues. This is especially the case for baby boomers that are starting their retirement journey. Things that often need to be coordinated include sale of a home, family issues and specific timelines related to transitioning from a long time career.

Once you have found the opportunity you wish to pursue waiting for all the pieces to come together can be costly, particularly in a market of rising prices. There is also the concern that once you find a property that fits a delay in acting runs the risk of losing the opportunity.

Potential for coordinating the purchase and delayed possession of a home is a workable solution. This is particularly the case when you choose to construct a new home. By working with a builder you can devise a purchase program that allows you to both control the price of a home and date time of completion. The combined result of the construction cycle and a prearranged delay in the start of construction will typically result in delivery of a home beyond a year from the time of purchase.

Although all builders do not offer such a plan, the professionals at Harbor Hills are accustomed to structuring programs to accommodate the needs of clients.

Such a purchase plan provides the guarantee of securing the property you want together with a way to better coordinate your transition to a new home.

Timing the Move