Buyers

Buying your new home is a serious venture. It can be an absolute pleasure or a massive headache. Your house is not just your home, it is a serious investment in the dwelling, the area and your future.

When buying a home – you’re bound to have many questions. For example, “In what area can I find a home that suits my needs?”, “How much money will I need to afford the monthly payments?” and “How long will the home buying process take?”

Below are some articles I have written that you might find useful in the home buying process. Please feel free to click on one of the links to read more.


Buyer’s consultation meeting is a good idea

Before taking clients out to look at homes, I schedule a buyer’s consultation meeting with them in our office. The meeting takes about 45 minutes, and I consider this to be the most important 45 minutes I spend with my clients throughout the entire buying process.

At the consultation, I get to know the wants and needs of the clients. They help me to identify the type of home they need, and the neighborhoods that will work for them. Together, we take a look at the city map and identify neighborhoods that have easy access to the roads they need to travel to their jobs. We look at the proximity to schools and shopping, and of course, price range. I can pull up a few homes on the MLS and show them what they can expect to find in various neighborhoods. I also tell them about new home builders in the area and discuss the pros and cons of purchasing new construction as opposed to existing homes.

We also discuss financing and the pre-approval process. If they have credit issues, I can discuss options for improving their credit scores, and if needed, can refer them to credit counseling services. We discuss down payments and funds needed to close, and take a look at any grant programs or special loan programs that they might qualify for.

At this meeting, not only do I get to know the clients, but they also get to know me. They can determine that I have a lot of knowledge about the local real estate market, and that I can provide the information they need to make good decisions about their purchase. This meeting gives me a chance to connect with them and establish a good rapport. Because our first meeting is at the office, we are in a professional, controlled environment.

Occasionally I may have to show a home to a client without first having a buyer’s consultation meeting, but I don’t like doing that. I always seem to have the best experiences with those clients that I meet with prior to the first showing. It puts us all on the same page, helps save time, and lays a foundation for a great Realtor/client relationship.

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copyright © Rose King 2012


Your Realtor knows more than you think!

Did you know your Realtor is almost like a jack of all trades?While a real estate agent’s expertise (and legal license) is in the buying, selling and leasing of properties, there are many other areas where your Realtor can be a big asset for you by providing general information.

For example, your Realtor might not be a licensed mortgage loan officer, but he/she will be able to give you some ballpark estimates on mortgage payments and some general mortgage information. Your Realtor will know what documentation is required for the loan application, and can answer general questions about getting a loan. Of course, your Realtor will have a list of several trusted mortgage loan officers or mortgage bankers that you can call for more specific information.

Additionally, your Realtor is probably not a licensed inspector, but having been through hundreds of inspections, he/she will be able to help you better understand the inspection report. Your Realtor will be able to help you identify significant repair items on the report, and will be able to tell you which things appear on almost all reports, but are rarely included in the repair addendums. You can trust your Realtor to help you find a good licensed inspector, and to help you understand the items on the report.

Chances are your Realtor is not a licensed insurance agent, but he/she will be able to answer some general insurance questions for you. If you are trying to purchase a home, your Realtor will be familiar with insurance requirements for the area. For example, your Realtor will know that if you are trying to purchase coastal property, you will need windstorm insurance and in some areas flood insurance.  Your Realtor will be able to refer you to a trusted insurance person who can answer more detailed questions for you about requirements for purchasing home owner’s insurance.

Your Realtor is also really good at researching information for you. You can count on your Realtor to tell you what houses are selling for in a neighborhood, how many houses have sold there in the last year, how long houses stay on the market in a neighborhood, what price you can expect to get on a home based on current market conditions, and much more. If you are dealing with a local expert, your Realtor will know about taxes, MUD districts, city government, local schools, planned development, and things of that nature.

You can also trust your Realtor to be an excellent source when you need a referral for a particular service or product. Here are just a few of the services your Realtor will probably be able to help you find:

  • Movers
  • AC/Heater Check-up and Repair
  • Landscapers
  • Handyman Services
  • Cleaning Services
  • Plumbers
  • Electricians
  • Painters
  • Fence Companies
  • Roofers

If you need a service, just ask your Realtor, and chances are he/she will know someone you can call!

So you see…Realtors have a lot of knowledge and can help you with many things when you are buying or selling a home!

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copyright © Rose King 2012


Buying new construction homes

Are you thinking about looking at new homes in Friendswood, Texas? If so, be sure to take a Buyer’s Agent REALTOR with you!

Even when looking at new construction homes, you need the representation of a REALTOR who is working JUST FOR YOU – not for the seller, the builder, or the developer. The sales agents in model homes and new home sales offices work for the builder and their goal is to sell the house for the highest price they can.  A Buyer’s Agent REALTOR can help you avoid that trap.

When you work with a Buyer’s Agent REALTOR, you can expect:

  • Help in negotiating the lowest price possible
  • Help in negotiating upgrades as part of the base sales price
  • Help in obtaining financing
  • Someone who understands real estate jargon and will explain complicated documents to you in everyday language
  • Someone who will walk you through the home-buying process step-by-step
  • Someone who is COMPLETELY ON YOUR SIDE!

Before you visit any model homes in Friendswood with the intention of buying, contact Rose King and ask her to represent you. Rose will go with you to the sales office and help you negotiate the lowest possible price on your new home. If a new home sales agent asks you to register when you visit a model, tell them you are working with Rose King, your REALTOR, and that Rose will be representing you if you decide to purchase.

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copyright © Rose King 2012


Don’t call the listing agent for a showing on a home

I have talked with countless buyers who call wanting me to show them one of my listings. When I ask them if they are working with a Realtor, many times they will say, “No, we are just looking on our own.”

Big mistake! You should never try to go it alone when buying a home!

When you call the agent whose name is on the “For Sale” sign in the yard, you must remember that this agent represents the seller. It is this agent’s job to sell that house for the highest possible price. The listing agent is not looking out for your best interest, but is protecting the seller.

You should have your own representation! Your buyer’s agent is a valuable source of information about the neighborhood, homes for sale in the area, and the market value of homes you are considering. Your own agent will do an objective market analysis to help you determine a “fair price”, and will help to insure you do not over-pay for a home.

Your buyer’s agent can show you any home listed on the MLS, and will assist you in finding the right homes to look at. Once you have found the perfect home, your agent will help you present an offer, negotiate on your behalf, and coordinate all aspects of the purchasing process.

Don’t be an “Unreprotected Buyer”. Find a buyer’s agent to look out for your best interest!

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copyright © Rose King 2012


Check out the schools before you buy

When looking for a new home, one of the things most people take into consideration is the quality of the schools in the area. Even if you don’t have children, there are a lot of reasons to find a home in a good school district. Homebuyers can find out a lot of information by looking at the school district website. Here are some things you might want to know about schools in the area you want to live in:

  • The performance rating for the schools your children would be attending
  • The average number of years of teaching experience of the faculty members
  • Extra-curricular activities offered at the schools your children would be attending
  • Amount of money spent per student by the district
  • Overall absentee rate of students at the school
  • Overall absentee rate of the teachers at the school
  • Average number of years teachers stay in the district
  • Average standardized test scores for the district
  • Percentage of graduates attending college

There is a wealth of information on school district websites. Here are some links to school district websites around the Pearland/Friendswood/Alvin areas:

Friendswood ISD

Pearland ISD

Alvin ISD

Clear Creek ISD

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copyright © Rose King 2012


Don’t let a low price keep you from making a responsible home-buying decision

A bargain price on a home can be enticing to an inexperienced homebuyer. That bargain house might be in the neighborhood you would like to live in, and it might be larger than some of the homes your Realtor has been showing you. And…you can’t believe how low it’s priced! You’re ready to make an offer now!

But hold on! Before you jump in to make an offer on that bargain-priced home, maybe you should think about a few things that can affect what you will have to pay in the long run.

How much repair work or updating will have to be done? Many times a home that needs a lot of repair work is priced to reflect the condition. You might end up paying much more if you have to make those repairs yourself. You don’t want to end up with a money pit!

Older homes may not be as energy efficient as newer ones, so you will want to check the utility bills for the house before making a decision. There might not be adequate insulation, or the windows may not be sealed properly. Or the HVAC system might be an older, inefficient system. If you’re not careful, the utility bills on a home can eat up any savings you thought you were getting on that bargain price!

Is the home in a flood zone? If so, you are going to be required to purchase flood insurance. Flood insurance prices on homes in flood zones can be several thousand dollars a year, whereas a home in Zone X (not a flood zone) can obtain flood insurance for just a few hundred dollars a year. Being in the wrong flood zone can cost you a bundle!

Speaking of insurance, you need to check with your insurance agent before making an offer on a house to find out what homeowners insurance will cost for that home. There are many factors that determine the cost of insurance, including the age of the home, the age of the roof, the elevation of the house, and the area. Even if you buy a house that has a great price, you might end up paying more in the long run because of the cost of insurance. Better check with your insurance agent first!

Just because the price looks good doesn’t mean it really is. You need to do some homework before you make an offer on a home. And…you can trust your Realtor to help you determine if a bargain really is a bargain!

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copyright © Rose King 2012


Looking at homes in the rain can be a good thing

“Raindrops keep falling on my head….”

That song was on my mind today as I showed nine houses in the pouring rain! But I didn’t mind the downpour at all! We have been so hot and dry here in the Houston area … the rain was a blessing! Here in Friendswood, we got about four inches this afternoon!

Besides, sometimes showing homes in the rain can be the best thing for the buyer.

They get to see if the street floods in sudden downpours. There are areas all around where the drainage system just can’t handle a lot of rain that falls in a short amount of time. In that case, the drains back up and the streets collect water. When looking at a house during heavy rain, the buyer can see how much water accumulates in the street.

The buyer also gets to see if there are low spots in the yard that puddle or don’t drain properly during heavy rain. That’s always a good thing to know before buying!

Additionally, when the buyer looks at a house in the rain, he gets to see if the gutters function properly, or if there are parts that need repair. And, if a house doesn’t have gutters, he can see why having them is a good idea.

It might be a bit inconvenient to show houses in the rain, but I prefer to look on the sunny side of life…even when the sun’s not shining!

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copyright © Rose King 2012


FAQ – What is the option period?

Here in Texas, the real estate sales contract allows the buyer to pay a small fee (usually $100) for the right to terminate the sales contract for any reason, for an agreed-upon amount of time. This period of time is known as the Option Period. Many buyers are not familiar with the Option Period, and have a lot of questions about how it works.

The Option Period begins on the day the contract is executed, and usually lasts for 7-10 days on a residential sale. During this time, there are several things the buyer needs to take care of, including the following:

  • Have a licensed inspector inspect the home for any deficiencies. This needs to be scheduled as soon as possible once the Option Period begins.
  • Have a termite inspection done on the home. Sometimes the home inspector will do the termite inspection, but usually a separate licensed pest-control company will do the termite inspection. This usually takes place at the same time as the home inspection.
  • Have a pool inspection done if the home has a private pool.
  • If you have plans to put in a pool after closing, you would want to have a pool company come out to look at the layout of the land and discuss design and price. You would also want to contact the city to make sure there are no city ordinances that would restrict your pool plans.
  • If the home shows signs of foundation movement, the buyer might need to get the advice of a foundation repair company during the Option Period.
  • If you have plans to do any remodeling on the home you are trying to buy, you might want to have your contractor come out during the Option Period to look at the scope of work and give you an estimate.    
  • You can have any other inspections done during this period, including environmental testing if you feel it is necessary.

During the Option Period, you will negotiate repairs with the seller, and provide documentation from your inspections to back-up your repair requests.

The best thing about the Option Period is that you can withdraw from the contract during this time FOR ANY REASON. As long as you withdraw from the contract before the Option Period is up, you will receive your earnest money back, but the seller keeps the fee you paid for the right to terminate. If you do not terminate the contract, and continue with the purchase, the Option Fee applies to the purchase price.

Time is of the essence when it comes to the Option Period. Your Realtor will keep you advised and not let the Option Period expire before terminating the contract, if that is what you want to do.

If you are looking for a home, be sure to use a Realtor who can guide you through the Option Period without a hitch.

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copyright © Rose King 2012


FAQ – What is escrow?

I just had a closing on a small starter home for a very young first-time home-buyer couple. Throughout the buying process, we covered all of the information they would need to know about purchasing a home, including how the house payment will include principal and interest, and ESCROW.

But wouldn’t you know it…when the escrow amount came up at the closing table, the wife looked at me with a blank face and said, “I know you told us about that, but what is escrow?

There is so much information that is thrown at first-time home buyers; it’s no wonder they don’t absorb all of it.

If you are like most first-time home buyers, you are probably focused mostly on the total amount of the house payment being affordable, and you may not understand what is included in the overall payment.

Your house payment is divided into different parts.

  • Part of it goes to pay off the PRINCIPAL, which is the amount you borrowed.
  • Part of it goes to pay the INTEREST on the loan, which is where the mortgage company makes its money.
  • Part of it goes into your ESCROW account.

The escrow account can be compared to a separate savings account that the mortgage company uses to pay the taxes and insurance on your home. Every month, a portion of your payment is diverted into this “savings account”. It’s YOUR money, but the mortgage company manages it for you. The money stays in the escrow account until it is time to pay your property taxes and insurance. Those bills go directly to the mortgage company, and the mortgage company will use the money in your escrow account to pay them for you.

Sometimes there will be extra money leftover in the escrow account after taxes and insurance have been paid for the year. If there is a lot of extra money, you can get it back. If it is just a little bit of extra money, the mortgage company can leave it in your escrow account as a cushion for the future.

Sometimes, when the tax and insurance bills come due, there won’t be enough money in the escrow account to pay the bills. This might happen if your taxes have increased, or if your insurance company raises your premium. When this happens, the mortgage company will go ahead and pay the bills for you, but you must cover the shortage. You can do this in two ways.

  • You can send the mortgage company a check to cover the shortage
  • Or you can pay it out over the next year by making a higher mortgage payment.

Over time, the amount of your house payment can change. Most likely, it will go up. The amount you pay toward principal and interest will NEVER change, but the amount you put into your ESCROW account will change as taxes and insurance amounts go up (or down).

If you are a home buyer looking for a home in the Friendswood, Pearland, Alvin, Manvel, League City or Clear Lake areas, please call me!

I teach classes for home buyers at the public library, and will be happy to sign you up for one of the FREE classes, and help you find a home!

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copyright © Rose King 2012


FAQ – When is my first house payment due?

One of the questions I often get from first-time homebuyers is, “When is my first house payment due?” Many of these buyers are surprised to find out they won’t have to make a house payment the first month after closing. It might feel like you are getting a free month, but in reality, you are not.

As a general rule, house payments are made in arrears. For example, you live in the house for the month of July, but make the July payment on August 1.

At closing, you will have to pay the interest for the month in which you closed, from the day of closing to the end of the month. This is called pre-paid interest.

So, let’s say you close on your new house on June 15. You would pay the interest on the loan (not any of the principal) for June 15 through June 30 at closing. This would be included in the amount you would have to pay for closing costs. Then, on July 1, you would not have to make a house payment, because the principal and interest payment for July would not be due until August 1. It’s almost like getting a free month!

The nice thing about it is that you do have a month when you don’t have to make a house payment, and that money can be applied to other things you need for your new home…or you can just save it!

Ask your Realtor or your lender to tell you when your first house payment will be due so you can plan accordingly.

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copyright © Rose King 2012


Speed up the approval process – get your documents to the lender on time

Once upon a time, you could find your dream home, make an offer, get an executed contract, apply for a mortgage loan, and expect to get the keys to your new home in about 30 days.  Things don’t always go that fast anymore. Now you can expect the loan approval process to take 45-60 days after the contract is executed. With some types of sales, it can take even longer.

Running ClockThere isn’t much your Realtor can do to speed up the loan process. Once you are under contract, the timeline is usually driven by the lender, not the Realtor. But, there are some things you, the buyer, can do to speed up the loan approval process. The most important thing you can do is get your documents to your lender EARLY!

First, get a pre-approval from your lender before you even start to look at homes. Your Realtor will probably insist on a pre-qualification from a lender, which is a quick check of your income, debt and credit score; but you can take it a step farther by submitting most of the documents your lender will need for the final loan application in advance.

The lender that I work with most often asks for the following:

  • Two months of current bank statements, including checking, savings and retirement accounts
  • W-2 income statements for the last two years
  • Paycheck stubs for the last two months
  • Name, address, phone numbers for employers for the last two years
  • Name, address, contact number for landlords for the last two years
  • Legible copy of your driver’s license and social security card

The more documentation you can get to your lender BEFORE you make an offer on a home, the better. With the majority of your paperwork already taken care of in advance, you can cut down on the time it will take your lender to process and approve your loan, and you can be in your new house sooner, rather than later!

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copyright © Rose King 2012


Don’t walk away from your dream home because of lender requirements

The Houston Chronicle ran an article in last Sunday’s paper entitled, “Some in home market just call it all off”. The article looked at reasons buyers walk away from a home purchase before closing.

The article lists several factors for a contract falling apart, including:

  • Declined mortgage application
  • Failures in loan underwriting from appraised values coming in below the negotiated price
  • Problems related to home inspections
  • Employment losses or job transfer issues

The article also mentioned some not-so-common reasons for a contract falling apart, such as lack of confidence due to stock market losses.

But the focal point of the article was on buyers who walk away from contracts because the lending process is too difficult or frustrating for them.

One particular couple was interviewed for the story, and they admitted to walking away from a contract just 16 days into the deal because of the amount of documentation required by the lender. They cited a large deposit in their bank account that resulted from the sale of a boat, and the lender wanting them to produce a detailed paper trail of the transaction. According to the article, the frustration was too much for them, so they bailed.

Lending today is certainly a different ballgame than it used to be. Good grief, when we bought our home 15 years ago, the lender pulled our credit and said okay…and that was it! Now, the amount of documentation required to get a loan on a home can be enormous. It’s not easy.

But, if you want to buy a home, and you can’t pay cash, then your choices are to jump through the hoops the lender wants you to jump through, or just don’t buy. As my friend Pete would say, “You’ve got to do what you’ve got to do!”

A good Realtor will educate you about the lending process before you begin your home search, and will put you in touch with a good lender who will prepare you for all that you will need to do to acquire a loan. It shouldn’t be a surprise when the lender sends you a list of 21 items to gather up for the loan application, or questions that large, unexplained deposit that went into your checking account last month.

If you are about to begin the home-buying process, know that it will involve some effort on your part, and a lot of cooperation with the lender. When you’re prepared in advance for what you’ll need to do to get a mortgage loan, then you will be less likely to walk away from your dream home in frustration.

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copyright © Rose King 2012


Here is the scoop on home inspections

So, how does this inspection thing work? Do you hire the inspector? Will you be there for the inspection? Do we have to make an appointment with the seller? These are common questions asked by buyers who have just gone under contract to purchase a home.

HERE’S THE SCOOP ON HOME INSPECTIONS:

In Texas, the buyer usually has 7-10 days after the sales contract is executed to have inspections done and negotiate any repairs. This period is known as the OPTION PERIOD, and the buyer has an unrestricted right to terminate the contract for any reason and receive a refund of the earnest money during this time. The buyer will pay a small fee for the right to terminate during the option period.  This fee can be applied to the purchase cost if the contract is not terminated during the option period. If the buyer does terminate the contract, he gets the earnest money back, but not the option fee.

Home Inspections

Your agent can provide a list of licensed inspectors who have proven to provide good service, or you can find them on the Texas Real Estate Commission website, or on the internet. It is up to you to hire an inspector. You should get quotes from more than one, and check references. Normally, you, not your Realtor, should make the appointment with the inspector, and you need to be present during the inspection. Your Realtor will notify the listing agent of the appointment time.

Your Realtor does not have to be present for the inspection, but good agents always try to be there to take notes, ask questions, and to make sure they understand all of the things the inspector is putting in the report. Most inspectors have Supra keys to get in if the house has a Supra lockbox, or they can get the lockbox information from the listing agent so they can get into the house.

Most inspectors will email the inspection report to you and to your Realtor within 24 hours. You will determine any repairs that you would like the seller to have done on the home, and your Realtor will help you negotiate the repairs before the end of the option period. Once an agreement is reached with the seller, each party will sign an amendment to the contract documenting the requested repairs.

So, that’s the scoop on home inspections. The most important thing to remember, however, is that you should ALWAYS get a home inspection on a home you are planning to purchase, even if the home is brand new construction.

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copyright © Rose King 2012


The final walk-through is an important step for homebuyers

It’s just a week before closing, and you, the buyer, are getting really excited about getting into your new home! There are a few last minute details to take care of before closing, but one of the most important things your Realtor will do for you is schedule a FINAL WALK-THROUGH of the home a day or two before closing. Sometimes this is done the morning of closing.

Final Walk-Through ChecklistThe final walk-through serves several purposes.

On a new home, it gives you a chance to check to make sure the builder has everything perfect and in working order in the house. The builder will go over all of the details of the home, including how everything works, and how to schedule any warranty work that needs to be done in the future. Your Realtor will do the final walk-through with you to help check to see that every detail has been taken care of by the builder.

On a re­sale, you need to do a final walk­-through to check any repairs that the seller had done, and to make sure the home is move-in ready. Hopefully, the seller will already be out of the house for the final walk-through, and will have left the house clean and clutter-free. I always check to make sure the seller has removed all trash from their move-out, and has left the lawn mowed for the new owner.

Your Realtor will have you sign a “Final Walk-Through Acceptance” form which is given to the seller to acknowledge that you have checked the home one last time, and accept it in the condition the seller has left it for you.

The final walk-through is an exciting time. Not only are you doing a final check of repairs and condition, but you can also use that time to envision where you are going to put all of your furniture and decorating items! And best of all, it’s just a day or two, or maybe just a few hours, until you are the owner of a great new home!

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copyright © Rose King 2012


First item of business – change the locks on your new home!

How many people have keys to your house?Your parents, your children, other relatives, good friends, the handyman, the cleaning crew, or the neighbors? When you stop to think about it, you probably have a lot of extra keys to your home floating around out there.

That’s exactly why you should change the locks on the doors when you purchase a previously-owned home. It’s one of the first items of business you should take care of. Most people give extra keys to family members or friends, and chances are the previous owners gave out keys as well.

Changing the locks is a minor expense which will give you great peace of mind. Some home warranty plans actually include changing the locks in the basic coverage plan. If you purchased a home warranty, or if the seller purchased one for you, be sure to check to see if new locks are covered.

And, don’t forget about the garage door opener. You can easily change the code on the opener, just in case someone out there has an extra remote that the previous owners gave them. If the previous owner did not leave the instruction manual for the garage door opener, you can check online with the manufacturer for directions on changing the code.

Better to be safe than sorry when purchasing a previously-owned home! Take care of that first item of business, and change the locks!

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copyright © Rose King 2012


Purchasing raw land in the city limits can come with hidden costs

Do you know the true cost of that raw land you want to buy within the city limits?

If you are trying to purchase undeveloped property or raw land within city limits, there are many things you will want to consider before moving forward with a purchase. Of course you will want to check with the Community Development Department, or Planning Department, of the city to find out if they will allow the type of use you have in mind for the property. Another very important thing your Realtor should do for you is check with the Public Works Department of the city to determine any hidden costs that you might encounter when you build on that land.

For example, if you purchase a piece of property to use for a home or a business, you need to check with the city to find out if sewer and water services are available. Just because there are developed properties all around does not mean that water and sewer are available for the piece of land you want to buy. You could possibly end up spending a great deal of money to have the services extended to your property.

Just recently I represented a buyer who wanted to buy a piece of raw land adjacent to their current property, for expansion of their business. The listing agent said water and sewer service was already present, but when I checked with the city, I discovered that the sewer line ended about a quarter of a mile away from the property for sale. The listing agent seemed surprised by this because, as she said, “There is water and sewer all around there.”

Anyone who wanted to develop that land for any purpose would be required to extend the sewer from its existing location, all the way across the front of the property for sale. Additionally, because the sewer lines are drained by gravity, the slope of the line is very important. If the existing sewer line is not deep enough for the gravitational drainage requirement on any extension, the person who wants to extend the line must also pay to have the existing line dug up and repositioned to allow for proper drainage of the extension. All of this would have to be done at the property owner’s expense.

There are also some other fees the city might charge when a property owner wants to extend water or sewer lines. For example, the city can charge an “Impact Fee” which helps shift some of the cost of providing capital facilities for new growth from the general tax base to the new development.

Before you buy a piece of land within city limits, be sure your Realtor knows to check with the city on your behalf to find out what the true cost of the property will be!

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copyright © Rose King 2012