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7 dos and don'ts of buying a beach house on the Crystal Coast

Posted June 9, 2020 5:00 a.m. EDT

This article was written for our sponsor, Linda Rike Real Estate.

Buying a traditional home and buying a beach home are not a one-in-the-same process. From insurance intricacies to locational considerations, a beach house purchase requires preparation, knowledge, and — perhaps most importantly — local insight.

At Morehead City-based real estate agency Linda Rike Real Estate, Linda and her son Wyatt and daughter Kelinda have been helping coastal buyers find their ideal properties for decades.

For those interested in purchasing a coastal home, these dos and don'ts can serve as guidelines during the buying process.

Do: Think About Your Budget

The last thing a buyer wants is to set their heart on a property only to discover it's out of their price range.

Before beginning the search for a beach house, it's crucial to complete a full analysis of your financial situation, evaluating any monthly payments you might have, mortgages on other homes and your debt-to-income ratio, meaning how much money you pay per month versus how much money you earn.

To get the most holistic and accurate view of your financial situation, most real estate agents recommend getting pre-qualified for a loan, especially if the beach home is a second house or rental property. Doing so will allow buyers to get a rough estimate of how much banks or lenders are willing to loan them, saving time by preventing any out-of-range shopping.

"A lot of people come to town, have a good time at the beach and think they want to buy something, but they haven't done any preparation in the financial arena," Linda said. "That takes some work on the buyer's part, figuring out what they can buy, if they need to borrow money, or if they want to use money from savings or family."

At the same time, there's more to buying a home than a price tag. There's also a significant amount of worth that comes from the potential enjoyment it can provide. While it's important to understand financial limitations, buyers should also factor in the lifestyle benefits of each property when making a final decision, even if their dream home ends up on the higher end of their price range.

"If someone wants a beach house, they have several factors to consider," Kelinda said. "For a buyer, part of the vision and thought process should be how much you're going to use and enjoy it."

Don't: Work with Non-Local Professionals

From real estate agents to insurance providers, working with professionals that live in the area where you are looking to purchase a home can save buyers time, stress and money. Since they're familiar with the area, they're able to educate individuals on the intricacies that out-of-town professionals may not even be aware of.

"Real estate is local, and so are we," Kelinda said. "There are not a lot of people here who are actually from here. I was born and raised here. If you want to know what the history of a property is, a broker from Raleigh or Charlotte isn't going to know. They also will not know whether what you're buying is actually a good investment."

Real estate is, after all, all about location. And what better judge of location is there than a long-time local? Knowing the ins and outs of each community on the coast — from the amenities available to the square footage, offering insight as to what sorts of insurance is needed for certain properties, whether or not a home is in a flood zone and if it could be a potentially profitable rental unit — these are all parts of a local agent's job description.

Aside from the added insight, buying a home is also one of the most stressful events in life. Working with an agent helps alleviate some of that burden.

"Real Estate transactions are as stressful as marriage," Kelinda said. "It's a big investment. We're here to help you take the stress out of the process."

Do: Drive Through the Neighborhood at Different Times of Day

For some buyers, the only time they see their potential home is during the showing with their real estate agent. Obviously, neighborhoods change based on the time of day. To get a more accurate view of everyday life, buyers will need to do a little investigating.

"I want you to drive by first thing in the morning. I want you to drive by on a Friday night," Kelinda said. "You want to know if somebody has a teenager with six kids hanging out. You want to know if, on a Friday night, your neighbor has zero cars in their yard, then on Monday morning they've got nine."

Don't: Neglect Insurance Coverage

Hurricanes, heavy rain, wind and hail — considering the potential weather hazards in areas like Morehead City, Beaufort and Emerald Isle, buyers would do well to look into coverage options that protect against all possible risks.

With beach homes, especially, the proximity to the water can cause the details to get tricky. For example, if you're looking into a condo, is insurance included in dues? Are only certain floors covered for certain risks? Is your property in a flood zone?

"Let's say I'm from Greensboro, and I want to use my insurance agent in Greensboro that I've been using for 20 years," Linda said. "You get a quote from them, but it may be four times the amount that it would have been here. And I've seen that happen — I've seen a quote come in at $13,000 from an upstate insurance agent when the local quote is $4,000."

Added Kelinda, "Don't call a non-N.C. coastal insurance agent to give you an insurance quote, because it could be three to four times as much as one from a local agent."

A local insurance agent will be able to give buyers a more accurate view of what coverage is realistic for their property, ensuring that what they're paying is both necessary and as affordable as possible. For example, most insurance agents want to cover the full purchase price of the home; however, a $200,000 lot could possibly be deducted from the coverage to keep premiums down.

Do: Spend Time Investigating the Home and the Area

Once you've made an offer on your home, you'll have a brief period of time to dig into the property and make sure no unexpected issues arise.

"You need to go over the offer and contract in detail with the agent that you're working with, and make sure you understand the details during what's called a due diligence period," Linda said. "That time period is when you can investigate anything and everything about the property, you can get a survey, you can get your loan approval, you can get a home inspection, you can find out about the insurance, you can find out about termites — all kinds of things."

Other details include any homeowner association fees and condo rules and regulations. For example, some condos allow the property owners to have pets, while renters are prohibited from doing so.

Buyers have until 5 p.m. on the due diligence date listed in the contract to back out of the sale and still get their earnest money deposit refunded.

Don't: Make Another Big Ticket Purchase

If a buyer is interested in a beach home, then they may be making a number of other expensive purchases around the same time — like boats, golf carts, ATVs and trucks. While it may be tempting to splurge on a large purchase to celebrate closing, it could actually affect loan eligibility.

"While your loan is in process, don't go out and buy a new car, don't go out and buy new furniture, don't open any new accounts," Linda said. "I've had a case where the buyers got loan approval, so they thought they were good to go and went out and bought a new truck. You can't do that — it messes up your debt to income ratios, and you may not get your home loan."

Do: Take Advantage of the Location

At the end of the day, no matter what, you'll be purchasing a home on the beach — a home surrounded by crystal clear waters, sandy shores and stunning sunsets most every night.

"We have a massive amount of water around us, so no matter where you live in our area, you will be no more than seven to 10 minutes from the water," Kelinda said. "Aside from the water, you can also ride your bike everywhere — downtown, on the beach, on the land and a lot of our streets — it's all accommodating to that."

This article was written for our sponsor, Linda Rike Real Estate.

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