I have been dipping my toes in the sands of the famed Hamptons beaches since I was three weeks old so I have deep roots in Hamptons real estate. Having bought and sold numerous properties here as well as serving as a market consultant and now as an agent at Sotheby’s International Realty, I have leant my expertise to those interested in the market (I am very popular at dinner parties.) People often ask when is there opportunity in the market and my answer is, always, with the right agent advising you with their local knowledge.
Here are five key things you need to know before buying or selling Hamptons real estate.
1. Know the costs involved.
With a Hamptons home median price of $1.4 million and properties ranging up to $150 million you have to consider not only the purchase price and closing costs but any specific local taxes. The Community Preservation Fund Tax is a 2 percent real estate transfer tax after the first $100,000 of unimproved vacant land or $250,000 of improved land paid by the buyer at closing. This is sometimes referred to as the Peconic Land Tax, yet is has nothing to do with the Peconic Land Trust which is not the recipient and dependent on individual donations for its vital preservation work. Since January 1, 1999 the Community Preservation fund has raised over $915 million dollars and made 469 acquisitions. While this can be a hefty cost at closing, your money is going to protect local open space, farmland, historic structures, and water quality.
2. Be prepared.
In a market which moves quickly, desirable properties can receive multiple offers upon listing. You need to have all your due diligence ducks in a row. Have your source of financing and a deposit ready and if you are looking for a mortgage contingency have a pre-approval letter from your lender. Deciding on an attorney is an advantage as time is of the essence in contracts to keep the deal moving forward. Everyone is free to choose any attorney but local attorneys are a wealth of specific knowledge and experience which can be a real asset. Positioning yourself as a prepared and serious buyer is a plus in a highly competitive setting.
3. Truth in advertising.
Do not just assume that if a home has five bedrooms it is a legal five bedroom home or the pool house will make a great guest quarters. This comes up more often than you realize. Before listing your home for sale an experienced agent will work with you to check your current Certificate of Occupancy to make sure the home and any work that has been done has been legally approved. It is also a benefit to do a current survey to identify any issues such as a neighbor encroaching on a property line or a lot which has been over cleared of trees and vegetation. Where a septic tank is located or well will also affect any expansion or your “room for a pool.” An experienced agent will know how to read the survey and anticipate any problems before they arise.
4. Know your end use game.
If you are looking at rental potential be sure to check out the local rental permit regulations which vary from Southampton Town to East Hampton Town and village to village and can be found on their websites. Consult with your tax advisor or accountant as you might want to structure an investment property as a Section 1031 exchange. If you are looking for a building project, land which is “shovel ready” means that there are already approved plans in place which can be valuable in a time of uncertainty and backlogs to get permits through the various local building departments, architectural review and zoning boards.
5. Find the right agent.
Find the right agent if you are a seller or a buyer just like you would any other trusted advisor. For a buyer, an agent can show you any property and when you give them your parameters can do the research of existing listings and also keep an eye on anything new coming on the market. There is not a central MLS (Multiple Listing Service) system in the Hamptons so having a good agent is essential to obtaining accurate availability and listing information. For sellers you are not only listing with an agent but with a company and all its marketing and networking assets. Listen carefully to listing presentations to understand the tools they have as well as their personal commitment so you will not get lost in a sea of listings or shuffled off to someone else. After all, this is your home or someone’s future home and that means the world. Like I learned from an early age, it is your footprint in the sand.
Heather.Buchanan@sothebys.realty
