What Are The Advantages and Disadvantages of Subdivision Houses?
Are you considering buying a house in a subdivision? Subdivision houses bring with them pros and cons. When buying a home, you want to choose the best property.
If you are buying a subdivision home, you need to consider and be sure you are happy with it before you proceed.
Many owners like subdivision houses, but some folks will have an opposing view. You might hear anecdotal stories about the negative experiences of living in housing subdivisions. Still, the reality isn’t likely to be as terrifying as some of the stories might make you fear.
When considering houses in a subdivision, what matters is if the living experience will work for you. Your opinion should be based on the neighborhood and the subdivision features rather than other people’s beliefs or horror stories.
It would be best if you did some research whenever you are looking at moving to a new area, and it will undoubtedly help you decide whether you want to live in subdivision homes.
There are other things to consider with this type of property. Before buying into a subdivision, let’s review the pros and cons and everything else you need to know.
What is a Subdivision?
For those unsure about what a subdivision is, let’s review it for a moment. The definition of a subdivision is not challenging to understand. A subdivision is just like it sounds. It is a parcel of land divided into smaller units known as lots.
Subdivisions can be large or small. The land is usually bought by a developer who will sell lots to other builders or build on them themselves.
Some subdivisions have a homeowners association, and others do not. Subdivisions are governed by local zoning laws, which will dictate the size of the lots. The land size could be an acre or something much different.
Communities of homes are known as subdivisions. Some subdivisions are gated communities, and others are not. Many newer subdivisions have dedicated green spaces, an attractive feature for many buyers.
Occasionally, a subdivision could be for one housing class, such as an over-55 retirement community. A subdivision does not necessarily have to be single-family homes, either. It could be a community of condos or townhouses.
Many people consider a subdivision a newer neighborhood, but that is not necessarily the case. Housing subdivisions are among the most popular places to live. New subdivisions are especially popular among home buyers.
Resale homes in a subdivision are often among the first to sell when they hit the market.
Let’s get into a subdivision with or without a homeowners association and what you need to know.
Subdivisions With an HOA
The Pros of a Subdivision
A subdivision’s houses are sometimes under the control of an association. The homeowners association is an essential factor in the day-to-day living within a subdivision.
Often referred to as the HOA, this organization oversees services and maintenance in the area. This might include ensuring the development’s common areas look their best, collecting trash, and snow plowing.
Some neighborhoods may offer perks such as a community pool, tennis courts, or a gym when you are part of an HOA.
The HOA ensures that living in the community is a more ordered experience and better for everyone. If living in the neighborhood is more pleasant, more people want to live there, ensuring subdivision houses maintain their value.
If you live in an HOA subdivision, you will have more services than elsewhere, which can benefit your living experience.
You can also help run the HOA by applying to join the board. This allows you to influence the direction of the association, to make the subdivision a better place to live.
There are some common association rules you should verify before moving forward. If you have never lived in a neighborhood, some rules and regulations might be unbearable. It pays to know this upfront before making a purchase mistake.
Some subdivisions will have an HOA, and others will not. When you start looking at homes, it will be helpful to let your real estate agent know if you prefer to live in a neighborhood with a homeowners association.
The Cons of a Subdivision
There are some negatives to living in a homeowners association too. You will have to pay HOA fees to the association every month, and these costs can range from as little as $100 to more than $500.
The flip side of living with an HOA is that you are no longer your castle’s king. Before making a final decision on buying, study all of the guidelines.
Part of living in an HOA means that you have to follow the rules. This can restrict what you want to do and the changes you want to make to your property. If you don’t like the rules in the community, you could end up in a dispute with your neighbors and the HOA board.
You need to check what the HOA rules are and what their fees will cost you each month before you decide you want the subdivision home.
While HOAs can be great if they run well, sometimes they aren’t. If the board members aren’t diligently doing their job, the maintenance of the community can slip. Subdivision homes can become undesirable when the homeowner’s association is lousy.
Community and Privacy With Neighborhoods
The Pros of Neighborhood Living
You can often find a better sense of community in subdivisions than you would expect in standard neighborhoods. Since people live closer together, you are more likely to see your neighbors more frequently and, therefore, have a better relationship with them.
This can be particularly attractive if you have young children. It gives them a better opportunity to make friends in the community as they are growing up.
A subdivision home can be an attractive choice if you like being invited to neighborhood barbecues and other events.
A new neighborhood brings the appeal to the residents to establish bonds with others in the same boat. These are essential factors for many home buyers.
Older neighborhoods also have the benefit of mature trees and other healthy landscaping.
The Cons of Living in a Neighborhood
Subdivisions tend to have less room between properties, which can reduce your privacy. Living in a subdivision may not be for you if you don’t want to feel like you live on top of your neighbors and value your privacy.
Property taxes are often higher because the purchase price is usually more for a home in a subdivision.
What Are The Amenities Surrounding The Neighborhood?
One of the most vital things when choosing whether to live in a subdivision is what is in the general area. First, picking the right home is crucial, as is the neighborhood in which the property is located.
It will become essential to choose the right neighborhood based on the things you require.
Maybe you want to be in one of the best school districts. Crime and safety could be vital considerations.
You might want to be nearby or within walking distance of shopping. These are just some factors to consider when picking a neighborhood you will love. They are good reasons why you will be happy in the long run.
What About Neighborhood Covenants?
Does the subdivision have housing covenants? Some people like to call these “protective covenants.” Other people like to refer to them as “restrictive covenants.” Whatever side of the fence you are on could determine whether you want them.
Subdivision covenants are rules and regulations you must follow when living in the neighborhood. Here are some examples of typical neighborhood covenants:
- You can only paint your home in specific colors – you can’t have the purple house you always wanted.
- No commercial vehicles will be allowed on the property – sorry, your dump truck is out.
- No livestock raising- the chickens you have always wanted can’t live here.
These are just three examples of neighborhood covenants. There could be numerous others. It makes sense to find out the covenants of a subdivision before committing to a purchase. Newer homes in neighborhoods often have covenants.
Covenants offer a massive benefit if you like what they don’t allow in the neighborhood.
Resale Value in Subdivisions Tends to be Higher
One of the essential variables in property values is location. The common phrase people talk about in real estate circles is location-location-location. For a good reason – it matters!
More often than not, all things being equal, a home in a subdivision will command more money on the open market than one that is not. The reason for this is simple – supply and demand. More buyers prefer living in a subdivision than a country road or a busy street.
The typical buyer who purchases a home in a subdivision has kids. They want their kids to have a place to ride their bikes and play with other kids safely. Subdivisions tend to have sidewalks and are usually well-lit.
Given the constant demand for neighborhood housing, resale values tend to be higher. While you might pay more for a home located in a subdivision, you will also sell for more. Subdivision houses also tend to hold onto their value better in down markets.
One thing you do want to avoid if you’re concerned about investment, however, is buying the most expensive home in the subdivision. The appreciation rate will be much slower when buying the best property.
Subdivision homes tend to sell quicker and for more money than non-subdivision homes.Click To TweetHow to Find Houses in a Subdivision?
The most innovative way to find homes in a subdivision is to find a top-shelf buyer’s agent to work with. You should pick someone with a few years under their belt who knows the popular local subdivisions. You could do an online search if you are just being relocated to the area and have not found a real estate agent to work with.
Driving around the area to familiarize yourself with some neighborhoods will be helpful. Hop on your computer or smartphone and search for subdivision houses near me or subdivision houses for sale. You will probably find a few homes to drive by to get a feel for the area.
Your best bet, however, will be hooking up with an exceptional buyer’s agent.
Buying a Newly Built Subdivision Home
The Pros of New Construction in Subdivisions
The houses in a subdivision are often newly built, or you might have the option to have a home constructed. If you want to live in a new house with all the modern features you expect, subdivision homes could be a great option.
New subdivisions are desirable, given that you will buy a new construction home.
Builders often have model homes where they showcase their home’s floor plans and all the amenities and upgrades they offer.
Some more prominent national builders will also have a sales office to make all your choices. National home builders often have a building process that you must follow.
A new build allows you to customize the home exactly how you want it. You can get those granite countertops, custom paint colors, and the luxurious master bath you’ve dreamed about. Custom homes have immense appeal to many people.
Builders almost always provide a home warranty guaranteeing to fix any issues over a certain period. They also must follow the latest building codes, unlike older homes. There should be no significant concerns like in an old home.
Another significant perk is that new construction homes use less energy, so your utility bills will probably be lower. They will use the latest technology, which will be more energy efficient.
If you don’t want to worry about the repairs old homes naturally attract, a new subdivision home will help you avoid those major problems.
The Cons of New Construction in Subdivisions
Some folks don’t like living in a development filled with identical homes, where the options to customize your property could be limited.
If you are buying an already constructed home, you won’t have to worry about the progress of the build and how your contractor is performing. To avoid problems with your contractor, check their Better Business Bureau profile for customer feedback and complaints.
It is also crucial to ask a builder questions whenever purchasing one of their homes, especially when starting from scratch. New developments have many pros than cons, but not if you get stuck with a shoddy builder.
Another drawback of new homes worth considering is that you will live in a construction zone for a while. When building a custom home, there are often unexpected costs you didn’t account for. The average home building cost has also skyrocketed recently due to rising lumber and labor costs.
Fortunately, the home’s value has probably kept pace with the increased costs. The real estate market has been booming in all areas of the country.
Buying a Home in an Incomplete Subdivision
When you decide to buy a home in an incomplete subdivision, you could make a substantial profit when you come to sell. If you are prepared to wait until most of the vacant lots have been built, your home should increase in value.
When you are one of the first buyers into a subdivision, builders tend to throw in extras or offer incentives. They do this to start the sales and make their project successful immediately. Acting quickly when construction starts is prudent if you want the best deal.
Homebuyers who are first to purchase in a new subdivision usually get the best deals. Once there are some sales put together, prices can escalate quickly. Early buyers benefit from taking a leap of faith the neighborhood will turn out as they envision.
Check For Zoning Changes Nearby
However, it would be best if you were sure there weren’t any problems with access to the necessary utilities within the subdivision. It would help if you also were sure that the zoning doesn’t change, putting your home’s value at risk.
There are other considerations when buying subdivision houses in an unfinished development. Let’s review what you need to know if you plan this purchase.
Check The Map
You should check the plat map for your neighborhood. Your contractor should be able to provide this, but failing that, the county tax assessor’s office can provide a copy for a small fee.
This plat map will give you a better understanding of the zoning in the local area. You can check where the nearest commercial and industrial zones are, making sure that you aren’t too close to non-residential zones that could push down the value of your home.
The plat should also allow you to see which lots are still available and which will be developed. It should also show details of construction projects scheduled near the subdivision allowing you to assess the likely changes it will make to your neighborhood.
One of the nice things about buying subdivision houses is that property lines are usually easily identifiable.
Subdivision Documents Become Essential
Ensure you get your hands on the essential documents related to the subdivision. This includes HOA documents, HOA regulations, and the subdivision land survey. These can be obtained from the city council or planning commission, as well as the homeowners association.
These subdivision documents will give you all the details on the HOA. This should outline the regulations and the fees they expect you to pay monthly.
Check the Availability of Utilities
Utilities will be vital to the development if you expect the neighborhood to grow and become popular with buyers. Subdivision homes with limited access to utilities aren’t the first choice of someone looking to build a home.
The subdivision plan should give you the information about utilities available, or you can contact the utility companies. The developer of the subdivision should have the contact information you need.
Checking cable television availability is usually at the top of everyone’s list.
How Will You Finance Your New Home?
When buying a home, the financing is usually no different than a resale home. You will apply for a mortgage and get a traditional loan.
In some instances, however, you may need to get your own construction loan. On rarer occasions where the developer is not a builder, you may be able to buy your lot to custom-build a home.
Get Comparable Subdivision House Sales
When you want to offer to the home builder or the owner, you should check comparable prices. With this comparable sales data, it will be easier to understand how much you should offer for the home. Real Estate agents often refer to comparables as “comps.”
Comparable home prices will help you avoid offering more than you need to, which is a problem in several ways. It should allow you to make an offer the seller will likely accept without spending more than you should. It can also prevent your mortgage from being declined if the value is found to be worth less than you have offered on the home.
You can get comparable data from the title company, the county tax assessor, real estate agents, as well as the developer of the subdivision. This should show you when homes were sold and for how much. It might also be possible to get details of the expected completion dates of homes currently being built.
You can use sales data from the subdivision and surrounding areas. You are trying to find homes with the same features as the home you are looking to purchase. Consider things like the number of bedrooms and bathrooms, the square footage of the home, lot size, and features.
When you are interested in buying a subdivision home it is wise to have a skilled buyer's agent who is familiar with new construction sales.Click To TweetSetting Your Offer
When considering how much to offer for the home, the time other lots took to sell is essential. The more lots the developer has to sell and the longer previous sales take will, affect how motivated the developer will be to sell.
The developer is going to have to pay taxes as well as other costs on the empty lots. The faster they can find a buyer, the quicker they reduce their outgoings on these expenses.
What is The Difference Between a Subsidivion and a Neighborhood?
Many folks don’t realize that there are differences between a neighborhood and a subdivision. A subdivision is a development where a larger piece of land is divided into smaller plots with homes for sale.
These plots of land, known as plats or lots, are created by builders who construct a community of homes on the sold land. As a result, the original united plot of land becomes a subdivision, providing individual lots of land with homes for sale.
On the other hand, a neighborhood is a defined geographic area encompassing various structures, such as homes, apartments, stores, and schools. Agreed-upon boundaries, city limits, or significant roadways typically delineate it.
Although neighborhoods are commonly associated with residential areas, they can also include commercial or industrial zones. For example, a commercial neighborhood may have shopping areas or a central business district.
While the differences between subdivisions and neighborhoods are minor, subtle distinctions exist.
Final Thoughts About Buying in A Subdivision
Choosing a subdivision house includes considering slightly different things before living in this type of home. The right choice will be unique to your situation, and you shouldn’t be overly concerned about others’ negative feelings about subdivision homes.
For resale values buying a home in a subdivision is an excellent choice. Hopefully, you have found my guide on what to think about when buying a house in a subdivision to be helpful. Please contact me if you are in my area and need help purchasing a home.
About the author: The above Real Estate information about what are subdivision houses was provided by Bill Gassett, a Nationally recognized leader in his field. Bill can be reached via email at billgassett@remaxexec.com or by phone at 508-625-0191. Bill has helped people move in and out of Metrowest towns for 37+ years.
Are you thinking of selling your home? I am passionate about Real Estate and love sharing my marketing expertise!
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