So in the process of hunting for our first house, my wife and I came upon a new construction house. There was a ranch-style house on this lot, and somebody bought it, knocked it down, and split the lot in two. Two new colonial-style homes are in the process of being built, and we just put an offer in for one of them. The builders wouldn’t accept our offer until after they had disclosed this – the entirety of the backyard (only about 20’ x 30’ or so – it’s a tiny plot of land) is a utility easement, where the sewer, water, and gas lines run to the (newly-constructed) house next door. From what we understand, having it there means that if the city needed to, they could dig up our back yard to get to the utility lines. They’ll have to replace things to the way they were, though (re-seeding the lawn, etc.).
We weren’t planning on putting anything back there other than maybe a shed, which we’ve been told is OK so long as it’s not a permanent structure… so it doesn’t really bother us, but I’m wondering “would this bother a potential home-buyer in 5-7 years?” (When we plan on selling.) Well – would it bother you? Would you buy a house like this? Have you bought a house like this and what has your experience been?
We’re obviously checking in with a real estate attorney to make sure we fully understand all of our rights and the city’s rights, but I’d also like to hear what others have to think. I mean, we really do like this house but it’s about $500K we’re talking about here, so I’ll walk away if I have to. Thanks guys…
Having an easement in your backyard reduces the property value, which means you can negotiate a lower price for the home. The bad news is the property is still in the same condition when you sell it. If you’re planning to live there for a very long time, I wouldn’t worry about it, but if you only plan on living there for a few years, it might be a concern when you try to resell.
If there’s any possibility that you’d want to extend the house in the future, or even just put a pond in, then forget it. OK, so it sounds like you won’t - but the same logic will be used by prospective buyers in future. So as well as a lower value (which you should be able to trade off with negotiations as friedo says), you might be looking at a more protracted sale than would otherwise be the case when you wnat to move out.
Why would the utilities for the second house have to come through your back yard? That sounds like a poor design. There may also be a standard easement along the front of your property, too. Check with your local planning or public works department to see if that’s true. They can also tell you who owns the easement. It may belong to a utility company instead of the city. If you get them talking, you might be able to get someone to comment on the design.
Also, is the second house selling for significantly more than this one is? Or is their back yard also one huge easement?
Our townhouse development consists of seven buildings, laid out in a more or less square configuration, with the swimming pool in the middle. The back yards are about ten feet wide and each and every one of the buildings has a utility easement through the back yard. The units that have been sold by the original owners have sold at considerably more than was paid for them. I’ve never heard that an easment lowers value, and it certainly hasn’t (so far) in this developoment.
There could be all sorts of reasons. End-of-road plots can pose problems. It might simply be to hook up to existing systems. Or local geology could play a part. And even the awkwardness of a previous landownder.
Yeah, but usually when a lot it split either each house has frontage on the street (from whence the utilities usually come), or there is a driveway going to the back lot and it’s easiest to put the utilities along the driveway.
True. But one of them could be a preference for bad designs that cost less. That sort of preference might also show up in the construction of the houses, so I’d want to rule it out.
Utility trenching and piping is running about $60 per foot in my area (for one pipe - multiple pipes or conduits would be more) so I know there’s an incentive to minimize the pipe length. Still, piping is forever. If another $10 - 20k would have produced two $500,000 homes with back yards free and clear, I want to know that.
I’d say it depends on what kind of easement it is. You may want to contact the utilities and find out what kind of traffic might go through your yard.
Nearly everyone has some kind of easement or utility right-of-way on or adjacent to their property. It’s a matter of degree. A low-voltage power line is going to have almost no impact, where a transmission-line easement is probably going to mean a lot more traffic and building/planting restrictions and bring down the cost of your home. Ask the utilities if they inspect regularly and who specifically would have access to the property (inspectors, contractors, etc.). That may give you a better idea of the overall impact.
To add to Ghanima - who is resonsible for the upkeep? Obviously, in the case of a sewer in particular, you want to have full details, in case of any problems. Again, if they don’t immediately acknowledge full responsibility, walk away. But on the other hand, they may have the full thing fully set out in legalese.
In this case, the street where the houses have frontage has no utility lines running underneath – so all utilities have to come from other streets. So for “our” house it’s not that much of a problem because we can get the utilities from our side street, but for the house next door, the options were either to: 1) dig up the frontage street to extend utilities out there (which I doubt the city would be thrilled about 2) pipe it through “our” front yard or 3) pipe it through “our” back yard. In the grand scheme of things, #3 sounds the least invasive, at least for the builders.
Nope – that house is actually going for about $10K less, but it is smaller by about 200-300 sq.ft., it has a smaller deck, no walk-in closet in the master bedroom, and its master bedroom doesn’t have a cathedral ceiling… <homer>mmmmm… cathedral ceiling… </homer> There’s no easement through their yard because the houses on the opposite side presumably already have utilities (the homes on the rest of the block look to be at least 30-40 years old so their lines are already set).
This is what we’re (the two of us and our lawyer) working on right now. I mean, if it’s a utility easement for the city, we’re pretty much OK with that – if it’s a utility easement for NStar, then, um, I’m not so sure…
We’re leaning more towards going for the house now, pending our attorney’s advice… We’ve spoken with some other realtors who’ve said that the main effect will be that this will probably just extend the negotiation period when we try to sell the house because it’s an extra sticking point – but it shouldn’t be that big a deal, it’s fairly common. Their advice was mostly, “just high-ball the price to a little bit more than what you want, and any competent realtor (like myself, yuk yuk) should be able to get you want you’d like through the negotiation process.”
Thanks for everyone’s advice, though – any other questions?