Buying a home is one of the most important financial decisions many of us will make in our lifetime. It is hard to fully understand the commitment when we sign the multiple pages of loan documents at the mortgage broker's office.
For those who have bought in the past few years, it might feel like one of the worst investments they have made. With the increasingly precarious economy and major value declines in the housing market, foreclosure and bankruptcy may seem like the only choices for some. Our good friends are in that position now, partially due to the housing market, subprime mortgage crisis, and decreasing property values.
How much research is necessary before buying a home? Do we understand all the zoning issues we might run into if we are planning to build or remodel? How much do we know about the neighbors, schools, safety, and upcoming developments in the neighborhood?
There are a few factors that are contributing to our friends' failed investment. The small 2-bedroom house has a large backyard. Their original plan was to build an addition to the back of the house to create rental income.
After initially checking with the city, it appeared the proposed construction complied with their area's zoning laws. Since then, unforeseen factors made it nearly impossible to move on with the project. Issues with permits, difficult neighbors, and outdated parking laws have rendered their construction goals unfeasible. The house no longer offers the same investment opportunities and, at this point, meeting mortgage payments is unrealistic.
How can you know everything you should know before buying a specific property? Please comment below about your experiences and share any advice you might have for those who are looking for the perfect home.
Flickr Photo: The Brady Bunch House photo by s maryland (not directly related to this post)