Not So Fast: Questions To Ask Before Buying - 27 East

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Not So Fast: Questions To Ask Before Buying

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author on Jul 18, 2013

Two types of prospective homeowners wading through the Hamptons housing market exist: those who know exactly what they want and those who are completely clueless.

Either way, any potential buyer needs to weigh a series of factors—location, size, condition and amenities, for example—before closing on a home. But there is one bottom line, agents agree: buy what’s affordable.

“I’d rather have my money in East End dirt instead of bonds, stocks or even art,” Town & Country Real Estate Chief Executive Officer Judi Desiderio said during a recent telephone interview from her East Hampton office. “First of all, you can see it and touch it. And second, it is really poised to go up.”

The real estate market is bouncing back here, both north and south of the highway, so buyers first need to decide where they want to live—by a beach, in a village, among the fields or surrounded by woods, The Corcoran Group associate real estate broker Meegan Darby said.

“They need to know their lifestyle. What they do, what they like,” Ms. Darby, who is based in Southampton, said recently during a telephone interview. “There are so many things the Hamptons have to offer. They need to decide how they’re going to use the house. Will they use it on weekends only? Coming out for the whole summer? Proximity to their vacation home is important if they plan to visit frequently.”

Choose wisely and don’t rush the decision process. Real estate is, after all, about location, location, location, Douglas Elliman Real Estate agent Susan Hovdesven said recently during a telephone interview.

“Let’s face it. Anyone who starts looking for a house and starts talking to their friends, they’ll understand there’s a prestige issue with being north versus south,” Ms. Hovdesven said from her Southampton office. “North and south is about distance to the beach. In places like Southampton, you’re going to find smaller lots and things where you can walk to the village. You start heading to the north, you’ll get great views of farmland or reserve. You’ll probably get more land and more house for your money.”

Oftentimes, location also dictates style. If a buyer is looking for a sleek, contemporary number, there will be a limited inventory in Southampton than in points east, Ms. Hovdesven said. The village is more of a hub for vintage abodes, she said.

“Some people really love old homes,” she continued. “I live in a really old home. But some people don’t like them at all. They want something new and open and every bedroom to have a bathroom. They need to understand what their personal taste in style is.”

House size—number of bedrooms, bathrooms, square footage and land acreage—amenities—such as a pool or tennis court—and community infrastructure—including school districts and local government—should be on a potential homeowner’s radar, too, Ms. Darby said.

And consider the pros and cons of new construction versus an existing property, Ms. Hovdesven reported.

“Do they want something that’s move-in ready or are they willing to do some work? In this market, the buyer who’s willing to do some renovation can usually get a better value,” she said. “New construction is still selling at the highest premium.”

For some of the older homes on the East End, buyers should be prepared to put in time and money before they’re deemed livable, according to Martha Gundersen, an associate broker for Brown Harris Stevens in East Hampton. Be sure to understand repair, improvement and maintenance costs before closing, as well as zoning regulations and expansion rights, before making the final decision, she said.

“Because we live out here, there are so many properties near the water. So, you have to deal with FEMA,” Ms. Gundersen said recently during a telephone interview. “It’s not like buying a condo or apartment in the city, dealing with boards. You’re dealing with real environmental issues out here.”

Lastly, be aware of carrying costs, including taxes, insurance, lawyers’ fees, title insurance costs, inspection fees, mansion tax—which is 1 percent of the purchase price if the home is $1 million or more—and a Peconic transfer tax (which goes to the Community Preservation Fund), approximately 2 percent of the purchase price, Ms. Gundersen said.

Of course, there’s also a very obvious consideration: money.

“Perhaps the most important question, but I don’t usually ask it first, is ‘What’s your budget?’” Ms. Hovdesven said. “I don’t come right out of the gate and say, ‘How much money do you have to spend?’ like they do on ‘House Hunters.’ I don’t do that.”

But a fixed budget shouldn’t necessarily stop a potential homeowner from making their dream house wish-list, Ms. Darby said. Just be flexible.

“You have to compromise on something if budget is in the mix,” she said. “If sky’s the limit, fine. But if not, you really, really need to compromise.”

Before the search even begins, all of these topics should be covered before hitting the road and beginning the search, the agents agreed. It is an important conversation to have, Ms. Desiderio said, and should take 30 minutes—at least.

“The buyer may be in a hurry to get out there. Sometimes, you get people who are really in a hurry in life,” she said. “So I suggest to agents, ‘Stick them in a car, start showing them different things in their comfort level.’ And if they have a hard time wrapping their heads around all these questions, start with, ‘What’s your budget?’ Show them the top three listings in all different locations and then hone in on what’s malleable and what’s fixed. It doesn’t need to be overwhelming. It should be fun. But you need to have your bases covered first.”

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