2010 Real Estate Guide
A cream house with white trim, wooden accents and the sky
real estate
When 'dream house' becomes horror home

It's like a fairy tale: your dream house with a white picket fence surrounded by blooming flowers, shade trees and an almost meditative silence, save for rustling leaves, chirping birds and the distant hum of a lawn mower. What could possibly be wrong with this idyllic picture?

Nothing ... it seems ... until your research uncovers barely adequate public schools, an authoritarian neighborhood association and a "zoning pending" placard on that vacant corner lot -- a sign you discovered when you leapt onto the curb to escape a fast-moving caravan of vehicles speeding home during subdivision rush hour. You start wondering: Where are the sidewalks? And why did my agent seem so dismissive when I asked about crime? Could this "dream house" be a "house of horror"?

"There was a time in the not-too-distant past when people worried first and foremost about finding their dream house -- and only worried about the location after the fact," says Andrew Schiller, creator of NeighborhoodScout.com, a neighborhood-data system, and founder of its parent firm, Location Inc. The site helps buyers find compatible neighborhoods by enabling them to narrow down hundreds of potential neighborhoods to a select few by finding similar cultures, comp-school ratings, crime stats and more, using over 2,700 data elements.

Today's buyers are becoming increasingly wary of a widening number of neighborhood concerns like walkability, compatible age, background and education levels, as well as sex offenders, Schiller says. But the No. 1 relocation consideration remains schools, he says.

"Being in a good school district is the best insurance policy for an easy exit strategy and to ensure property values," says Realtor Kristal Kraft, a broker associate with Denver-based The Berkshire Group.

Neighborhood culture isn't far behind. "I tell people considering a purchase in a specific neighborhood to come back at random times of day," Kraft says. "This often leads to discovery of conditions that might be objectionable -- or welcome. Poke around, take a walk, talk to neighbors." An overabundance of vehicles in driveways or on streets sometimes indicates a declining neighborhood "or just too many teenagers in residence," Kraft says.

To avoid potential short-term value depression, potential buyers should check local foreclosure rolls for an excess of pending defaulters in a neighborhood, says Jim Klinge, owner of Klinge Realty in San Diego. But foreclosures aren't always a stigma. Whether foreclosure buyers are investors or owner-occupiers, "they're coming in solvent enough to qualify for full mortgages," he says. "They're also fixing up houses in disrepair and are usually smart landlords." One big "must" for every buyer, says Klinge, is to check local sex-offender lists. "It's a bummer when you find out later that the guy across the street is a peeper."

In years past, you could rely on your real estate agent for information about crime and whether the house you were considering was in a "safe" neighborhood. But that's no longer the case, necessarily. In a recent issue of Realtor magazine, The National Association of Realtors warned agents not to "disclose crime statistics or say a neighborhood is a safe place to live ... or say anything yourself about the quality of the schools." Why? To avoid violating the Fair Housing Act "steering" guidelines. The article, "6 Ways to Avoid Illegal Steering," suggests agents advise clients to contact police for crime and sex-offender data and to set up personal visits to schools for performance data.

Here are a few other neighborhood-research "musts":

  • Construction: Check with city planning or zoning to determine allowable or forthcoming uses on vacant land. "Planned roads can be a positive or negative depending on the proximity to the home in consideration," Kraft says.
  • Social activity: Is there too much? Too little? Are there too many or too few kids and teens? Chat with neighbors if you can.
  • Night visits: Are there frequent parties, barking dogs, informal drag races, band "rehearsals" or too many (or few) sources of illumination around your street?
  • Noises, smells: Are train whistles audible at bedtime? Is highway or factory noise incessant? Is the city landfill downwind?
  • More online research: The Web is rife with resources. One of the best is: "50 Tools to Research Your New Home, Neighborhood, and Community."

Klinge cites studies determining that about half of all homebuyers, "make the buying decision before they get into the house based on the neighborhood and curb appeal of the house." Look deeper, he says. Potential buyers should also be prepared to manage expectations, says Kraft. "Some bases can be covered, but seldom do you get to purchase the perfect home. It doesn't matter what price range you are in, you cannot control what your neighbor is going to do. Remember, the Beverly Hillbillies moved in next door to someone."

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