Waterfront Buyers: Avoid These Mistakes
Save Money & Prevent Futures Headaches
Custom Written by Waterfront Property Realtor Steve Huhta – REMAX Lyons Real Estate – 920-889-9989 [email protected]Buying Waterfront Property has Lots of Unique Twists and Turns do to:
Ever Changing Zoning Laws, More Complex Banking Regulations and Difficulty in Valuing Properties as it is Now a "Sellers Market" for waterfront homes…
The following information should help you avoid several common mistakes people who buy lake property sometimes make, as waterfront property transactions have again, lots of unique twists and turns.
Everything here is custom written, based on my personal experience helping loads of waterfront clients – (have completed more than 40 waterfront transactions) – buy and sell waterfront properties.
Again, the information below should help you avoid future headaches and, in addition, help assure you do not over pay.
1. Buying off the Sign – Some waterfront buyers think that if they deal directly with the Realtor who has the waterfront property listed (for sale), that agent will know more about the property than any other agent. By doing this, a buyer may think they can learn more details about the property as this agent is dealing with the seller and has an advantage in learning all the details about the property.
When listing a seller’s home for sale, that agent owes their fiduciary responsibility to the seller; often buyers will simply call the listing agent’s phone number that is associated with that property. That’s like having the same lawyer represent you and your opposition!
The waterfront seller’s agent, or the listing Realtor’s job is to get the seller the highest possible price.
So, always use an experienced waterfront “Buyer’s Agent” when viewing waterfront property for sale.
2. Use a Buyer’s Agent – When you work with an experienced waterfront “buyers' agent," as you look for lakefront property, you’ll be served, not sold, as your interests become the Buyers' Agent' interests. A buyer’s agent, has a fiduciary responsibility to you, not the seller.
If a buyer (you) asks the listing agent how much they think the property being considered is worth, the listing agent is trained to answer with something along the lines of: “you should make an offer based on what you feel the property is worth, based on your knowledge.”
A buyer’s agent should be YOUR advocate, including all of the information you need to make a smart offer. A listing agent can provide comparable sales information regarding the property they have listed – to the potential buyers – but, they cannot LEGALLY, provide an opinion regarding what the property might actually be worth.
A real estate agent who is serving as a “buyers' agent” to a buyer can offer an opinion regarding what a water front property might actually be worth. By working with an agent that is your “buyer’s agent” you are represented by your own agent.
For a Complete list of all waterfront properties for sale on area recreational lakes including the Waupaca Chain and for other waterfront buyer tips please click here www.WaupacaWaterfront.com
3. Many waterfront properties for sale today, reflect the Sellers’ list pricing.
The Sellers’ pricing means the price the owner hopes to sell for, not the market value an experienced real estate professional or appraiser would estimate it will sell for, given today’s market conditions.
Prior to the recession, waterfront homes sometimes sold for a number, higher than a Realtor might estimate as there was a ton of “demand.” Today, many sellers are still hoping for these high numbers however, the reality is: most waterfront sales are now about where an experienced and knowledgeable real estate agent or professional appraiser would estimate.
Example: A local waterfront house was listed for $1,200,000, at the seller’s direction. My comparative market estimate was $750,000 for this home. The price came down to $899,999 – was it a good deal at this price?
It sold for $775,000.
Recently a property listed for $519,000 and in two weeks the price was dropped to $489,000. What is a "fair" price for the buyers? You deserve to have an experience and knowledgable agent on your side.
As a waterfront buyer you want to know the “fair value” of the property, not how much the price has come down. As a result, be sure you are dealing with an experienced waterfront Realtor who has taken the time to analyze all waterfront transactions.
4. Waterfront bank loan financing – Many times, the “Big City” banks don’t understand waterfront values so they are hesitant to write larger or second home waterfront loans.
Example: Recently a “Big Bank” would not fiancé a well-qualified buyer because the residence on the property was marginally habitable. The buyers were planning on tearing down the residence to build a new home. The price the buyers had negotiated was totally based on the poor condition of the residence and the value of the waterfront – sand lake bottom.
After the buyers were turned down by the "big bank" we gave them the name of a local banker and within just a couple of weeks, they closed on their future “new” waterfront home.
So, we always recommend using a “local” independent bank for waterfront financing.
5. Always ask for a Survey – Many times, buyers will take the word of the sellers, a neighbor’s or a Realtor’s opinion of where the lot lines are. This is very dangerous. And yes, never ever take anyone opinion of where the lots line "might" be on waterfront property.
Because every foot of waterfrontage is extremely valuable and because most waterfront structures are close together, having a survey is critically important.
If there is not a survey available, ask for one as part of your offer. If there is a survey available ask that the corners be marked by a surveyor – not by the property owner as sometimes, survey irons get moved.
Ask that the survey or the corner marking be paid for by the seller.
6. Ask for a Home Inspection – sometimes home buyers will buy without asking for an inspection as the “home looks solid.”
Many times waterfront homes started as cottages and over time had multiple additions put on.
Because of this, home inspections are usually an absolute when buying waterfront property.
7. Shore land zoning regulations can present many challenges – Shore land zoning rules are special zoning regulations that determine what can be done with property located on or near a body of water.
If you are planning to make any changes to a waterfront property you are planning to purchase – even changes to landscaping, check with the local zoning office before negotiating.
Never take zoning advice from the seller, a neighbor, a friend and especially not a Realtor as shore land zoning laws have changed drastically recently.
I cannot tell you how many times I have heard sellers or neighbors explain shore land zoning regulations, that are simply are not correct.
Again, don’t make the mistake of not checking with the zoning office BEFORE you buy.
As you might guess, shore land zoning can have a big, big impact on the value of a property.
© Steve Huhta
Re/Max Lyons Real Estate
920-889-9989
[email protected]
206 W Fulton St
Waupaca, WI 54981