Buying beachfront property is not the same as a regular home

This article looks at some of the unique aspects involved with buying a beachfront house in Delaware.

The vacation property market is back in full swing in Delaware as the economy picks up and many people look for a second home close to the beach. While a beachfront property certainly sounds idyllic, it is important for potential buyers to keep in mind that such properties differ from typical residential properties in important ways. From insurance to ground leases, shopping for a beachfront property is the perfect reminder of why it is so important to talk to a real estate attorney when buying or selling a home.

Be aware of flood insurance

One expense that can really catch beachfront property owners off-guard is flood insurance. It is important to not assume that flood insurance will be included in one's home insurance policy. In fact, as the Delaware Department of Insurance points out, standard homeowners insurance policies do not provide flood coverage.

However, given that beachfront properties are often susceptible to floods, this is a type of insurance that should be considered a necessity for many. Some banks will also only provide mortgages for beachfront properties that are protected by flood insurance.

Other aspects to consider

As WTOP News points out, another issue that also affects many vacation properties is what is called a ground lease. A ground lease essentially means that while the home itself is owned by the occupants, the ground on which it sits is rented or leased. Ground lease fees can add thousands of extra dollars to the annual expense of a beachfront property. They may also include restrictions about what the house occupants can and cannot do with the property.

Qualifying for a mortgage for a beachfront property is also more difficult, especially after the 2008 Financial Crisis. Lenders will typically ask for far more documentation today than they did a decade ago to prove that the applicant can actually afford the expense of owning a second home.

Among those expenses may be condo fees. While beachfront properties are unique enough, those that are part of a condominium tend to be even more complex. In addition to the condo fees, buyers will have to sign a number of condo documents, which will govern what can and cannot be done with the property.

Talking to a real estate attorney

Buying or selling a house is usually the single biggest transaction people make in their lives. That is why it is so important for those who are in the market to buy or sell to have an experienced real estate attorney on hand to help them. An attorney can remove many unwanted surprises and make the entire transaction proceed much more smoothly.