What to Know About Buying a House in a Subdivision

By
Real Estate Agent with RE/MAX Executive Realty 91362

Buying Into a Subdivision For Your Next Home

Are you considering buying your first home? There are numerous decisions involved with purchasing a home, including the type of location you want. There are three basic choices: a home on a busy road, a country road setting, or a subdivision or neighborhood.

One of the steps to buying a house is picking the location that will suit your lifestyle best. For numerous buyers, that choice is living within a subdivision.

For those who don't know, a subdivision involves the act of dividing a big piece of land into smaller lots. This division makes it easier to sell or develop the divided pieces. These lots are used for residential building construction, and they are typically called subdivision houses or home developments.

Some developers call these subdivisions house communities. However, a subdivision is not quite easy or quick to develop. Approval may take months to years because of the development rules involved within a city or town.

Subdivisions are, in fact, one of the most popular location choices among home buyers, both young and old. Neighborhood settings can include traditional stick-built housing or modular homes.

Making The Right Decision

When you think of buying a house in a subdivision, you need to make the right decision. However, the best choice may differ depending on the people you ask since different people have different preferences in subdivision homes. Therefore, it is not a very simple task, as one may think.

Some investors would recommend buying a home in a subdivision without thinking twice, while some would give you red flags about it. It may not depend on whether it's their anecdotes, experience, or beliefs.

You can easily get swayed by other people's experiences, both positive and negative. Therefore, it would be best if you relied on your own research on what makes sense for your lifestyle.

Doing research can take you a long way in making the best decision regarding buying a home in a subdivision. You can ask yourself the following questions to get the best idea of what it is like to live within a subdivision community.

Is There a Homeowners Association?

HOMEOWNER'S ASSOCIATION: An HOA is a group of people who are assigned to oversee different services in a designated area. The HOA is in charge of services like trash pickup, maintenance, security, and removing the snow. In addition, HOA is responsible for establishing and enforcing rules and regulations within a certain community.

HOA charges a certain amount of money to the subdivision house owners every month to cover the services mentioned above. The fee typically ranges from $100 to $600 in many neighborhoods. If you consider buying a home in a subdivision, you need to adhere to the rules and regulations of the HOA board. The benefit of an HOA is keeping everything in the subdivision looking uniformed and well maintained. Your property value is subsequently boosted as well.

When considering buying a home in a subdivision, it is also possible the HOA has established rules and guidelines you are not comfortable with. Therefore, it becomes essential to do proper due diligence whenever buying into a neighborhood with an HOA.

If you find the rules are unfair or restrictive, you can opt to run for a committee position.

What is The Location Like?

LOCATION: Location is significant when buying subdivision homes. There is a reason why real estate agents emphasize the importance of location. It really matters when you consider resale, investment potential, and your enjoyment of everyday living.

It would be beneficial if you considered time to commute to work, transport, social amenities like shops, schools, arterial routes, sports grounds, and roadways. Also, ensure things like playgrounds, walkways, community spaces, among others, are part of the new subdivision.

How is The Builders Reputation?

CREDENTIALS OF THE DEVELOPER: Do a thorough check to know who the developer is, the credentials, and the previous history of subdivision homes already developed. Issues like conflicts with the local council, buyers, or HOA involved should be on your checklist. It is always wise to do a thorough background check of the builder/developer.

Walking through at least a few homes, they have built within the subdivision is crucial.

Have a checklist of questions to ask the builder. One of the key questions will be whether they deliver on the closing date they promised. Many builders are notorious for overpromising and underdelivering when it comes to closing time frames.

Also, check if the land is stable as per the engineering's report. Has the area ever being affected by flooding or landslides? Do you need to have a flood insurance policy? Purchasing flood insurance can be very costly.

Have an Attorney Look Over Neighborhood Documents

HIRE A LAWYER: As you look into buying a house in a subdivision, you may not be familiar with contractual materials relating to the subdivision homes. Therefore, it is wise to hire a lawyer to confirm details like the general builder's contract, land title, and warranties, among others. Also, check out things like what will happen if the construction is delayed.

Measurements: Check your floor plan meticulously against the plan of the model and analyze the differences and impacts, if any. Ensure if it is the standard package. Next, take measurements of the existing living area to get a picture of the actual size of the rooms and the layout.

Remember to measure hallways, doorways, ceiling height, spaces between the kitchen, toilet, bathroom, and doorways sizes leading to the living area. Ensure also to check water pressure, broadband, and other city services.

On the exterior, make sure the builder points out the exact location of your lot lines. You should get a mortgage plot plan from your lender at the completion of your financing.

Who is Doing Exterior Maintenance?

MAINTENANCE: Remember you are buying a home in a brand new subdivision and need basic maintenance. You need to confirm what landscaping is within the package and the length of time to start maintaining it. Always remember low maintenance does not mean any maintenance.

Pricing is Probably Not Flexible

Negotiation: Most subdivision homes are sold at a fixed price, and there is no room to negotiate. Sometimes builders will throw in an extra or two but don't expect that when the real estate market favors sellers.

Builders rarely drop their prices unless the real estate market tanks. As a result, the first buyers in a new neighborhood almost always get the best deal as prices typically climb rapidly.

There are advantages and disadvantages of buying a home in a subdivision which is mentioned below:

Advantages of Subdivisions

There are advantages and disadvantages to buying a home in a subdivision. Let's take a look at some of the most crucial.

  • You have potential amenities like schools, a dare care facility, a park, shops, and swimming pools right on your doorstep.
  • If you buy the subdivision house early and the location is strategic, it adds value, and you could consider selling it later.
  • New subdivision homes benefit from utilizing the latest home construction technology like better storage solutions, energy efficiency, and easy living layouts.
  • Subdivision house maintenance time has also been reduced, creating more time for the homeowner.

Disadvantages of Subdivisions

  • There is typically less privacy than in a non-neighborhood setting.
  • You cannot always personalize your property as there are covenants that may need to be followed.
  • You have to be patient with the community you are moving in to establish greenery out of the tiny trees, freshly laid grass on the streets, and shrubs.
  • There will be construction noise from trucks, contractors, etc.
  • Sometimes, the newly developed subdivision houses are far from the main centers; hence one needs to commute longer to work, shop, or school.

Final Thoughts

The bottom line is that, after researching and knowing what buying a home in a subdivision requires, you are now good to go. Your dream home is ready for your ownership. Please don't be too anxious but calmly arrange for a professional to walk with you inspecting it before you sign the agreement for full ownership.

Remember, you can choose from a completed subdivision house or one that is in the process. Hopefully, you have found this guide to subdivision homes to be helpful.

Posted by

Bill Gassett is a thirty-two year veteran to the real estate industry. He enjoys providing helpful information to buyers, sellers and fellow real estate agents to make sound decisions. His work has been featured on RIS Media, National Association of Realtors, Inman News, Placester, RESAAS, Credit Sesame and others.

Comments (1)

John Pusa
Berkshire Hathaway Home Services Crest - Glendale, CA
Your All Time Realtor With Exceptional Service

Hello Bill Gassett these are very valuable list of questions to ask when buying a house in a subdivision.

Jun 14, 2021 01:50 PM
Bill Gassett

Thanks for the comps John Pusa - there is a lot to think about when buying a house in a subdivision with an HOA.

Jun 15, 2021 08:14 AM