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HOME BUYERS FAIR : Choosing the Right Neighborhood : Questions to Ask Before Making Major Decision of Where to Buy : Location: It's difficult to pinpoint what makes a neighborhood good, but the right choice can pay off for a buyer in satisfaction and profits.

May 06, 1990|JOEL MAKOWER | Makower is the author of "How to Buy a House/How to Sell a House" (Perigee Books, New York), from which this article is adapted. Copyright 1990 by Tilden Press Inc

When you purchase a house, you're buying more than just the property. You're also "buying" a neighborhood and, along with that, neighbors.

While there are a great many people who exist quite comfortably in neighborhoods they may not necessarily like, it is a great advantage to find a place that will appeal to you. If it does appeal to you, it likely will appeal to others, meaning that the value of the property will probably be stable, or possibly increase substantially through the years.

Simply put, buying in a good neighborhood is like buying a blue-chip stock.

But what makes a good neighborhood? Unfortunately, there's no one answer because in evaluating a neighborhood, everyone has different needs. But here are some factors to consider in your selection process:

Do you need to be close to your work? Are you willing to commute? How long?

Do you prefer the city, the suburbs or the country?

Are there parts of a city that you find appealing--places close to major parks, near a lot of restaurants you can walk to, near the best elementary school, far from the local college?

Do you need to get away from it all when you come home from work?

Is location even important? Would you be willing to live just about anywhere within reason, if it meant getting the right house?

One obvious factor here is whether you have--or are planning to have--children. If so, you probably have some ideas about the kind of neighborhood or area in which you'd like them to grow up.

How about public transportation? If you're older, or if you have children who need to take buses to school or other activities, this may be an important factor.

Is it important for you to live near department stores, hospitals, parks, restaurants, schools, supermarkets or theaters?

Once you have some neighborhoods or towns in mind, you should pay them a visit--not just once, but several times.

And don't just drive through. Get out of the car and walk around. Go into the local supermarket, eat at a local restaurant, check out a local drugstore, walk down the main street, ask questions of people in areas that interest you.

You'll soon begin to get a feel for whether this area is really a good choice.

In doing your research, you'll want to know not just what the neighborhood is like now, but where it is going. The neighborhood's future will have an effect on the value of a home and your ability to sell it later on. It will take more than just looking around to determine this. Some neighborhoods may look all right, but after asking some questions you may find it's going down hill.

One indication would be a lot of vacant houses or for sale signs. It could mean that a growing number of people are frustrated with the noise, litter, crime, or whatever. Similarly, a neighborhood that doesn't look great may not necessarily be a bad neighborhood.

Schools are one place to find the answer, even if you don't have school-age children, because the quality of local schools can tell you a lot about a neighborhood.

According to Anthony B. Sanders, a professor of real estate finance at Ohio State University, positive trends in the scholastic rankings of a school district indicate a neighborhood on the way up.

If, for example, you are moving to a new town or city, you may not be familiar with the local school system and some basic research may be needed.

And remember, looks may be deceiving: The shiniest new suburb may have an underfunded school system compared to an older, more established one closer to downtown.

On the other hand, a lavish public school system may indicate that local real estate taxes are sky high. Moving to the next suburb or town could make a difference of hundreds or thousands of dollars in taxes alone.

Crime rates are another obvious indicator of quality neighborhoods. A visit to the local police precinct or a chat with a police officer on the street could tell you all you need to know about the crime in the neighborhood.

Owner occupancy is still another way to judge a neighborhood. Areas where there are more owners than renters tend to be more stable and better taken care of. If there are a lot of recent renters, it could mean that unfavorable conditions resulted in owners leaving the neighborhood and renting out their homes to others.

If you really want to do some digging, go to a local library and look through 1- or 2-year-old real estate classified ads for the neighborhoods you are considering.

If home prices seem to be rising faster than those in the rest of the region, it's a good bet that they will continue to rise--and that the neighborhood will continue to improve.

Another good source of information is the local land use or planning office. Officials there can provide some insight about a neighborhood, and perhaps tell you about any future development that may affect home values.

Timing, of course, is of the essence, particularly when considering neighborhoods that may be in transition. You may find an improving neighborhood, but it may take a year or so before it rises to the level that you find acceptable. But if you find the right neighborhood too late, you may be priced out of the market.

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