9 Mistakes to Avoid When Buying Waterfront Property

Waterfront property in Maryland offers one of the most desirable places to live.  With numerous rivers, lakes, streams, ponds, the Atlantic Ocean and of course, the Chesapeake Bay nearly dissecting the state, activity on the water can range from very active and dynamic to benignly relaxed.  Surfing, fishing, boating, crabbing and sunbathing are but a few of the leisure activities enjoyed here, so it’s no surprise that so many people want to invest in their dream of buying waterfront property in Maryland.

While there are definitely deals to be had, due to the demand, waterfront real estate generally has a higher price tag.  In addition to the increased price point, there are also more factors and variables that can complicate a waterfront transaction.  With that in mind, here are nine of the most common mistakes made when buying waterfront property.

1.  Not getting bulkheads inspected

A bulkhead is a barrier wall that separates the water from the property.  The buyer may be responsible for building or repairing a bulkhead, so you will want to hire a certified bulkhead specialist to inspect any bulkhead or area where a bulkhead should be, to get an idea of what costs may be associated with it.  For a large bulkhead, the cost can be in the tens of thousands or more.

2.  Not being proactive with financing

A typical waterfront property will be more expensive than a similar property that is landlocked. Because of this, many lenders will place waterfront property in the specialty loan category.  These loans will typically take longer to underwrite, so waiting until the last minute to obtain financing will drag the sale out and could jeopardize the deal altogether.

3.  Buying a house that is not built to withstand the waterfront

Homes on the water take twice the abuse of a regular home.  Homes on the ocean have it especially rough.  Salt actually gets thrown into the air when the water evaporates, causing massive rust and oxidation.

Keep an eye out for any metal outside at all.  It should be stainless steel (the grill, the gate hardware, the nails on the siding, etc.).  Also, look for features that can help protect the home from weather, like storm shutters and a taller foundation.

4.  Neglecting to consider flood insurance

Flood insurance can be very expensive, so you should consult a qualified insurance provider to get a quote on flood insurance before making an offer on a property.  A real estate agent who specializes in waterfront property will likely know several good insurance agents to choose from.  Also, you should take into consideration whether the sea level in the area is rising.  Will the home require flood mitigation?  Take into account that flood insurance premiums will likely be rising.

5.  Neglecting to find out if you can make improvements to the property

Part of the appeal of waterfront real estate is being able to use the property recreationally.  But research should be done to find out what the city will allow regarding construction.  If a waterfront home needs a new dock, but the water isn’t deep enough to float a boat, you might be out of luck. Check to make sure brush and trees can be removed if you want to improve the views.  If you are planning on building a pool or a tennis court, it might be a good idea to check with the city for approval first.

6.  Not talking to neighbors

Speaking with neighbors might not seem like an obvious choice, but you might want to consider the opinion of someone who has lived on the same water and understands the issues associated with it. Neighbors might have some information about a home that could make or break a deal.  Find out if swimming is allowed and if you can partake in activities that interest you.

7.  Not looking into utilities

Many of us take our creature comforts for granted, but if you are considering a home on the water in a rural area, it is very important to inquire about the availability of basic utilities.  A septic tank is usually required by a lender, and a new tank can cost thousands.

8.  Not knowing the responsibilities of a waterfront homeowner

If the home is part of an HOA (Homeowner’s Association) or a POA (Property Owner’s Association), homeowners will have certain responsibilities that are expected of them.  Some of these include what color they can paint the home, whether or not they can install a fence and what type of landscaping is acceptable.  An HOA is not for everyone, so be sure to read the rules and regulations.

9.  Not making sure your agent pulls the permits on docks and outbuildings

Just because a dock conveys with the property does not mean that it was permitted and doesn’t necessarily mean that homeowners can use it.  Make sure the dock and any attachment to the land are properly and legally permitted.

Take the time to do your homework and find an experienced agent who knows the ins and outs of buying and selling waterfront property.  It can pay off big in the end!

With over 3 decades in the real estate industry, and recognized as Recreation and Resort Specialists, we have both the knowledge and experience to guide you through every step of the process, whether buying or selling a home.  We are happy to answer any questions you have regarding real estate, home ownership, our current market, or our local community.  Please give us a call.  We look forward to talking with you!

Gee Dunsten
410-251-8233 (cell)