Questions to Ask Before Buying a Waterfront Home

Purchasing a home can be a complicated process, but as soon as you throw in the word “waterfront”, things get even more complex. While waterfront living can definitely be a rewarding experience, it comes with different responsibilities and a need for extensive due diligence.

Here are just a few questions to consider before you “dive in” to waterfront living.

Can you get a loan?
The first step is the same as with any real estate purchase: get preapproved. This will help establish a budget and enable you to put in an offer when you find that perfect waterfront home.

Where your property is located, and whether it will be your primary home or a vacation getaway, are just some of the factors that will influence financing. For instance, if you’re purchasing the property as a second home, you may need a higher credit score, and you might receive a higher interest rate due to the increased risk for the lender.

Because waterfront homes tend to be more pricey, they often require larger loans. If the location you’re targeting is quite expensive, you may even need a jumbo mortgage, which comes with its own set of stringent requirements.

How will you use the property?
Start by asking yourself some important questions. Do you want to be on the Great Lakes, a community lake, a private lake, or maybe a river? Are you looking for an all sports lake or a quiet fishing lake? If you’re hoping for a smaller lake, what kind and how big? If the property will be your vacation home, how far away from your primary residence do you want to be?

“And keep in mind there are different rules and regulations depending on what body of water you choose,” said REALTOR^® Kathleen Battle with Key Realty. “If you have teenagers who love to tube and waterski, some lakes have time limits on those activities. If you have a large boat, you’ll need a lake that’s big enough to enjoy it. If you have young children who love to swim, you’ll want a well-maintained lake with a sandy beach area.”

Do you like both the house and the land?
When buying a waterfront home, remember that you’re purchasing both the home and the property, and it’s entirely possible that in some cases, one or the other may be less-than-desirable. For instance, the home itself may tick every box on your must-have list, but the property leads down to a rocky, unattractive beach. Or, the view and waterfront may be breathtaking, but the home needs some major work in order to meet your standards. Determine what’s most important to you and discuss your needs with your REALTOR^®.

What are the rules?
The last thing you want is to spend a large chunk of money on a beautiful waterfront property only to find out you aren’t allowed to build the dock you planned on adding. And there may be cases where visually it appears as if a property extends to the water, but it actually stops well before.

“Some areas have greenbelts in which you only own the property up to that greenbelt line,” said Battle. “There could be 30 feet of space leading to the water that is owned by the subdivision or association, and you don’t have control over that area.”

If you’re looking for a private beach, you need to clarify exactly who has use of the property along the water's edge and what docks and roads can be used by other residents. And, if you have plans to build any sort of garage or shed to store your water toys, make sure it’s possible.

“You may notice a neighboring property has a shed near the water, and decide to do something similar,” said Battle. “However, that shed next door may be grandfathered in and new restrictions prohibit a structure within 50 feet of the water. If you don’t know that ahead of time, and proceed with your plans, you could be fined by the municipality.”

Have you considered the costs and maintenance?
Utilities like electricity, an adequate septic system, cable, and internet are not always readily available in some waterfront properties, especially those that are more remote. If these services need to be bought in, it can get a bit pricey.

Waterfront properties also require more upkeep than a traditional home. In many cases, these properties are exposed to greater risk of wind, water, and sand damage from storms, as well as soil erosion and/or potential flooding, which can affect homeowners insurance premiums. And, depending on where the home is located, you may need to purchase a separate flood insurance policy.

If the property is used as a vacation home, you’ll need to check up on it regularly, or pay someone nearby to keep an eye on things. And, before it turns too cold, the place will definitely need to be winterized.

Do I have the right REALTOR^®?
Lastly, but most importantly, are you working with an experienced REALTOR^®? Purchasing a waterfront home is different from purchasing a regular home in many ways, so it’s important to work with someone who knows these transactions well.

“There are many advantages to buying a waterfront home, but there is also the potential for big problems if you aren’t fully informed,” said Battle. “The average agent may not have the detailed knowledge of these properties, and it’s critical that you have all the facts and understand exactly what owning your waterfront home entails.”

For a list of professional agents who can help, visit the Greater Lansing Association of REALTORS^® website at www.lansing-realestate.com.