Helpful Tips and Pre-Qualification
Are you contemplating the purchase of Smith Lake property? Many questions will begin to run through your mind as you consider the acquisition of lake property. What exactly do you know about Smith Lake? What are the current market conditions such as pricing, property selection, design trends etc? What critical information should be complied and evaluated? Below we have assembled many tips and timely suggestions which will help you make an informed decision when purchasing Smith Lake property. Follow closely as we describe what can happen when planning, the gathering of information and pre-qualification is neglected or ignored.
“Let’s grab the GPS and head to the lake this weekend, we’ll scout things out.” This sounds so easy, unfortunately at some point during the trip, one may come to the realization your excursion did not produce the desired results. If you feel the trip was unproductive, ask yourself the question, did I invest the time and effort required to determine my specific wants and/or needs? Remember, your lake property needs, requirements and desires will be quite different from that of your primary residence.
What do we do next? Below we have created a checklist. Use this checklist to thoroughly discuss each item of concern. Once you have worked through the process, qualified your opinions, determined a course of action, it’s then time to create a property acquisition timeline. Be sure at this point you have a clear picture of your lake property wants and needs. If there are multiple purchasers make sure everyone involved, is in agreement as to your combined wants and needs.
Determining lake property needs and requirements.
Consider the following
- Are water sports activities important?
- Do you need to be close to services, marina,
- convenience store, hospital, etc?
- Depth of water, shoreline, docking facilities
- Views
- Developed – undeveloped areas
- Main channel – smaller creeks
- Restricted – Unrestricted property usage
- Water access – gentle sloping or bluff views
- Age of home construction
- Design of home construction
- Boat – Swim Dock
- EMS – Fire – Police Services
- Single lot – acreage
What’s different about purchasing lake property? The purchase of recreational property is quite different in several ways, when compared to the purchase of your primary residence. A major component when valuing lake property is the amount of water frontage.
Several contributing factors which effect valuations:
- the type of view(s) offered
- depth of water
- location of the property on the lake,
- improvements to adjacent properties
- boat dock/swim pier permits
Recreational property continues to be in great demand. In fact, recently compiled data indicates that thirty-three percent of all improved property acquisition was for recreational, or investment purchases. Buyers will continue to purchase second homes, vacation property, and vacant tracts as lending rates remain attractive.
If your purchase of lake property will involve financing, your first stop should be at a lending institution for the purpose of determining current lending requirements, ie. closing costs, loan to value ratios, down payments and credit verification etc. The lender will determine what amount of funds you can qualify for. Prepare yourself by contacting a lender(s) in advance to determine what documents/records you will need to bring to the qualification interview. Make sure you ask the lender if they make lake or recreational property loans.
Pricing
Consider the following:
- What can we afford?
- Will the purchase be a cash transaction or financed
- How much can we borrow?
- Terms or purchase – what is acceptable
- Possible Owner financing
Once you have determined the amount of your investment in lake property, engage the services of a qualified realtor. Realtor’s can provide a wealth of pertinent information; after all it is their business. A qualified realtor will discuss your wants and needs in detail. This information, along with the amount of your investment, will help the realtor determine which properties will meet your requirements. Ask lot’s of questions, take the time to acquire information which pertains to your situation.
Questions to ask your realtor
Consider the following:
- Current pricing of waterfront property – Cost per
- running foot
Permitting – Alabama Power, - County Health Department,
- Alabama Dept. Environmental Management
- Restrictions/Covenants – Subdivisions
- Pricing – New Construction – Existing Homes
- Identify Most Desirable Areas of Lake
- Building Costs
- Resale Trends
- Investment Returns – Lake Property
- Taxes – Insurance
- Homeowners Associations – Fees
- Utilities – Electricity – Telephone –
- High Speed Internet Access
- Marine Services – Boat Docks
- Education – Schools
What are the current trends with Smith Lake waterfront property? Most of the information is good news! Smith lake property continues to hold its value. While appreciation of lake property has reached a plateau, many good buying opportunities now exist with our present market conditions. The percentage of lake property owners who maintain their permanent residence in other parts of the country continues to hold steady. Within the past three years however, we have experienced an influx of boomers who now call Smith Lake home on a full-time basis. Many have made the decision to leave behind areas where the cost of living is high or frequent severe weather patterns continue to exist. Within the past twelve months the market has stabilized, that means today we have a balanced number of properties which support the level of demand. Gone are the days when growing lists of sellers were chasing a diminishing number of qualified buyers. During the past year we have experienced an increase in the number buyers who are looking for improved properties offered for sale in the two-hundred fifty (250K) to five-hundred (500K) dollar price range. Without question, prices continue to increase for those considering new construction. Currently, the cost of purchasing highly desirable deep water lake property has stabilized to the point, where typical lot prices begin at approximately 130K. As a consequence of returning to a stable market situation….growing numbers of potential Smith Lake buyers are now reconsidering their options. For some, the purchase of improved lake property might be considered an alternative wealth management strategy, allowing one to diversify his investment holdings. For those, who in the near term, will use the lake infrequently, consider purchasing a lot, adding a boat dock/swim pier as a viable alternative to investing in an existing lake home.
If you are serious about lake property, don’t make the mistake of playing the waiting game. Affordable Smith Lake properties at certain price points are now in short supply. With today’s market, these affordable properties don’t remain available very long. Current trends indicate Smith Lake property sales over the long term, will continue at a steady pace.
Create your property acquisition time line. Once you have finalized your lake property requirements: investment amount, improved/unimproved parcel, build/existing dwelling, etc., it is time to create your acquisition timeline. Allow yourself plenty of time as many items on this list will require scheduling/rescheduling.
Make appointment with realtor
to write purchase offer on property(s)
Interview Lending/Mortgage Provider(s)
(Gather necessary documents for loan qualification)
(Complete loan application process, if applicable)
Make appointment for home inspection, if applicable.
Procure satisfactory property survey documents,
or order new survey.
(If improved property is located within a floodplain,
flood insurance is mandatory, FEMA requirement)
Make appointment for Termite/Wood Boring
Insect inspection, if applicable.
Make appointment for certified septic tank
inspection, if applicable.
(County Health Department must be present for
inspection)
Check on Homeowners Insurance premiums
for improved lake property, if applicable.
(Include protection for watercraft/docks)
Make application to Alabama Power
for a dock permit, if applicable.
Sharon Miller – RE/MAX Platinum, has provided specialized real estate services for buyers and sellers of Smith Lake property over the past twenty years. Join the thousands of people who have shared her knowledge, attention to detail and abilities when purchasing Smith Lake real estate.
Copyright © 2006 by Sharon Miller – Revised March 2014
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