9 issues that affect your home search (Hint: They’re all location)

By ,
Ask a Lender
September 19, 2017


Key Points

Map it out: Thoughts on new home location

  • A home’s location affects what you pay, beyond the mortgage.
  • Consider what you want to live near — and away from.
  • Check out the schools and other nearby amenities you care about.
  • Research public documents for local property taxes and crime rates.

It's a long-standing cliché: What are the three most important things to think about when buying a home? Location, location, location.

There's a lot of truth to the old adage. One could even argue that the importance of location is understated. We came up with nine things — all related to location — that every homeowner should consider when buying.

1. Location matters

For real. Where you are and what's around you can offer you a life of daily bliss or be a purgatory on earth. Tired of the Fairview blue on the living room walls? No prob. You can cover it with a lovely bluebird shade today and then cover that with iron blue tomorrow. But when it comes to the 5 a.m. wakeup call compliments of that flight headed to Biloxi ... Every. Single. Morning. There's no changing that.

2. What's nearby the house

Look around the neighborhood, and think about what you want to be near. Is shopping, public transportation and the best pizza joint you've ever experienced the most important? What about family? Schools? Highway access? When you're searching for a home, think about the things you want to be close to.

3. What's not nearby the house

Conversely, what do you want to keep distant? You don't want to be anywhere near the city landfill, or that combination gun shop/boozy bar/political debate club meeting hall. Depending on your personal world, you also may want to avoid busy streets, school zones and be at least 30 miles from the in-laws.

4. Rank the schools 

Living near schools that rank high in terms of quality education is invaluable in a number of ways. One, your children will have more opportunities. Two, other people with children want to move these areas (excellent for when you sell). Keep in mind that school rankings can improve or decline with new administrations or school boards. Also consider the full range of school years, from kindergarten through high school. Does the district's junior high school score below average, but the high school is excellent? What are your priorities?

5. Neighborhood crime rates

Some areas are just safer than others. There are many resources online to help you find real statistics on neighborhood crime rates and see locations for registered sex offenders, all of which is public information, so you don't have to pay for the info. You also should drive around the area at various times of day, and at least once at night. Take a walk on a weekend and stop to chat with neighbors. If everything gives you the heebie-jeebies, keep looking.

6. Current home values

Where the home is located weighs heavily in determining its value. Obviously, homes in Beverly Hills are valued higher than homes in Buford, Wyo. But within a community, many factors determine a property's value, including square footage, amenities, garage and yard size. Factors around the perimeter matter too, such as the nature of the neighborhood (Does everyone keep up with home maintenance?); community amenities (Are there sidewalks and parks close by?); and crime rates (Are there bars on every window?).

7. Future home values

Chrystal balls are hard to come by, but you can make an educated guess on the neighborhood's future. A broader economic assessment of the community and the state can help you consider potential booms or busts. Is the area's economy diverse or does it rely on a single industry? What would happen to the neighborhood if one of the big employers faced a big downturn? Check the land value, as well, to see if it has appreciated over time, a good indicator that trend will continue, so long as the local economy is strong and diverse.

8. Property tax rates

Roads, schools, parks, and other public amenities and services are built and maintained using property tax money. Each state, city, county and school district can assess levies against properties within their boundaries. Homes are assessed, and the state and local mill levy (or tax rate) determines taxes due. Property taxes and rates are public record. Check with the county assessor's office for the home's current tax rate, and learn the area's mill rate. You can also check old ballots to see how often the community seeks voter approval on various bond measures, which tend to rely on property taxes.

9. Homeowners insurance

If you're getting a mortgage, you'll need homeowners insurance. This too varies by location. Costs factor in the home itself: size, condition, age, the cost to replace it, etc. More than that, however, is where the home sits. GoBankingRates.com reported in early 2017 that annual rates ranged from nearly $350 in West Virginia to more than $2,000 in Hawaii. Rates also seem to correspond to the area's median home prices, so pricier communities have higher insurance rates. Also note that insurance companies use their own formula to determine rates, so it's wise to shop around and compare policies.

There are a lot of things to consider when you buy a home. It's a major investment, and it's not something you can get out of easily if you're not happy with the deal. Homebuying goes beyond the mortgage and interest rates, and a home's location absolutely affects how much you'll pay.

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