Tips on Buying a Second Home
LARRY BRZOSTEK, CRS, CLHMS
Acquiring second home is a major element of the American Dream. Buying a Second Home can provide untold benefits in enjoyment with loved ones and tremendous relief of the stresses of our everyday lives. It can also be an unused luxury and a drain on your resources if purchased totally on emotion without adequate research.
This information can help you get the most for your money whether it be a Cottage, a Condo or a Castle!
Location! Location! Location!
There are many types of Locations here in Sarasota, Florida.
Whatever you prefer the Beach, the Bay, a Golf Community, the social and cultural Downtown Sarasota Area or a Gated Community we have it ALL.
A property you use will give you many benefits; a property you do not use will just give you expenses.
No vacation home can give you any enjoyment if you do not use it. The longer it takes to plan a getaway and travel back and forth, the less likely it is that you will use the home.
Sarasota, Florida is accessible, close to airports and major highways. It is one of the most beautiful locations in the USA. Magnificent Beaches, Arts and Entertainment are all here in this Paradise on the Gulf Coast.
Type of Property: A resort property can be a single family detached home, a multi-family with 2 or more units (adding the possibility of rental income), some form of condominium ownership (a single room or suite of rooms in a townhouse, low, mid or high rise configuration).
Vacant land requires more research and is more speculative. Each type of property has its own pros and cons.
Consider carefully how you will use the property. If you like to work on your home, choose a single or multi-family.
If you prefer all the maintenance done for you, than a condominium with a monthly maintenance fee to pay a staff of groundskeepers, window washer, etc is for you.
Deciding what you like and how you will use it should give you direction in your search.
Local building and zoning codes should be investigated. Are they restrictive or nonexistent? Does the property conform to the codes and can the property be rebuilt in the event of damage, are important questions.
Availability and Inventory: When buying a second/vacation home it is important to look at the inventory and availability of the prospective homes.
The next step is to determine your budget constraints and what your choices are in that price range. Inventory is always a result of supply and demand. You may find that what you want and what you are willing to pay is a rare (or even nonexistent) quantity within the area you are considering. You will have to either pay the price or make adjustments.
On the other hand, you may find that there are a reasonable number of candidates. This puts you in a better position to negotiate.
Town/Area Stability: Before making an offer, determine if there are any changes which can make an impact (positive or negative) on the community. Are any major improvements on the drawing board? A new school or water tower, for example, can cause a significant increase on the tax bill. Are there any unfinished developments?
An uncompleted housing project can be a burden on an area. Any changes in the infrastructure (replacement or upgrade of roads, water or sewer systems, etc) can also impact on the quality of life and the cost of living.
Motivation: You can not compare the purchase of a Second/Vacation home to the purchase of your primary home. While the process (inspections, title work, survey, mortgage application, etc) is the same, a seller’s motivation probably is not. When you sell your primary home you have a need to replace the roof over your head. Since most Second/Vacation home owners are absentee owners, the seller of a second home does not have that motivation! Very often the seller of a resort property has the luxury of waiting for their price.
The fact that an investment home can generate an income also alters a seller’s position. For example: a Florida house with an income from December to April is worth more in the Fall than in the summer with little income until the winter. The exact opposite is true for a beach house on the Northern East Coast. A beach house with a $25,000 income for a 16-week summer season is worth more in the Spring with the income to be received rather than in the Fall with no income due until the following Spring. Also, as with any other property, there are always the motivations that every buyer wants to find: financial distress, divorce, illness, or an estate sale.
Negotiating: Once you have found the property that suits your needs, negotiating the transaction can make it yours. The more questions you ask ( and get answers to) the more able you are to sketch out an offer that will be acceptable to the seller. Every Real Estate transaction has 3 elements – Price, Terms, and Conditions.
Neither the buyer nor seller always gets all three: For example, a buyer willing to meet the seller’s price might not want concessions on the terms (ex. large mortgage contingency, later closing) and/or conditions (repairs to property, extra items included). Conversely a seller willing to accept a lower sale price might want a quick closing (terms) and an “as is” or no repair sale (conditions).
Due to licensing laws, an agent may not be able to disclose confidential information a seller wants to kept confidential (such as divorce or financial distress).
How long a property is on the market in not confidential and may give some insight to make a win-win proposal for both parties.
Working with an Agent: A professional real estate agent earns their living marketing and selling properties. They are bound by the licensing laws of their respective state and the agency/property disclosure laws of those states.
Knowing the Comps (comparable properties that are listed and more importantly, comparable properties that have recently sold) can be critical in your decision on the offer you make on the property.
No location or town is perfect; a successful agent knows the pluses and minuses of their area. A good agent can help you find your dream house; a great agent can make it a pleasure!
I would like to help you find your dream house (or condo) in the Sarasota Area. For more information just give me a call at 941-993-3125 or email me firstname.lastname@example.org I am here to help you or just fill out the form below
Larry Brzostek, 941-993-3125
CRS – Certified Residential Specialist
CLHMS – Certified Luxury Home Marketing Specialist
CDPE – Certified Distressed Property Specialist (Short Sales)