Expert: Jessica Bryan - 1/19/2008

Question
Most houses in my subdivision are between 115,000 to 170,000.  In the back of this subdivision are houses with lots of square footage and acreage.  The average lot size in the subdivision is 1/2 to 1 acre.  The house we are looking at is about a thousand sq. foot larger than other houses with the exception of the ones on that particular street.  This house also has 6 acres.  The price of the house is 399,000.  Would this be a good investment?  We have three children, two are teens.  My husband wants land and we love the house.  There is a subdivision within one mile with houses in the same price range or more.  I'm just afraid that it will not hold value or if we ever had to sell it no one would be interested.  Please let me know your advice.  We are suppose to sign a contract in two days.  Thank you.

Answer
Dear Cindy;
So much depends upon the house, the history of the neighborhood and current conditions.  How long has the house been on the market?  Has the price dropped?  Are you getting it at a very good price?  Would you be willing to lower its value when selling it?  If you can't answer any of these questions then you need to talk to a real estate agent familiar with the local market and get an opinion. Off the top of my head I would say that this is not the best investment when the home is on a larger lot and is a bigger home than the surrounding ones.  However, if the homes around there are varying in size and if the neighborhood is a custom neighborhood in a rural setting then it will not matter as much. Again, I can only stress that you speak with someone professional who knows the sales history of the neighborhood to give you good advise. If you don't want to talk to an agent, call an appraiser.

Good luck,
Jessica Bryan