How Your Neighbors Affect Your Home Value
In a perfect world, your neighbors are your friends. You love your neighborhood, and everyone works together to make it an attractive, safe, and friendly place to live. In the real world, we all know someone who has “that neighbor” that doesn’t fit the mold.
For homebuyers searching for a new home, checking out the neighborhood and its residents should be a top priority. A home may have everything you’re searching for, but if the neighbors neglect their yard or frequently have squad cars showing up late at night, the homes around them will be less desirable and the value will decrease. In fact, the Appraisal Institute has found that bad neighbors can reduce property values up to 10%.
Here are some signs of bad neighbors to steer clear of when searching for a new home.
Curb appeal – like well-designed landscaping, clean, well-maintained siding, roof and garage door, and crack-free sidewalks and driveways – all affect a home’s value. If a home is in disrepair and these outside items are neglected, an appraiser will note “external obsolescence” on a buyer’s appraisal, which will lower the value of it and neighboring homes.
Bottom Line: If you love a home, decide whether you can tolerate seeing a neighbor’s unkempt home every day and whether you can accept how it will affect your home’s value.
Barking dogs, people loudly arguing, screaming kids, and smoking and other unpleasant odors are all nuisance factors that could make a neighboring home an undesirable place to live. Unfortunately, these behaviors may not be apparent the first, second, or third time you view the home, nor when the appraiser visits. Instead, they may surface over time and become obvious as more neighbors move and are forced to sell below value just to get away.
Bottom Line: If a price on a home you are looking at seems too good to be true, knock on some doors and ask neighbors what it’s like living there.
Short sales and foreclosures often sell way below market value. While many are bought by first-time homeowners thrilled to get a great deal, others are bought by investors with flipping and rental projects in mind. The unfortunate result is that neighboring homes also experience a dip in value when a distressed property is sold. If the property sits abandoned or continues to fall into disrepair after a rental tenant moves in, values could further decline. However, the opposite is true as well! It is possible for values to rebound quickly when a buyer moves in, makes repairs, and returns the property to good condition.
Bottom Line: It can be risky to buy a home in a neighborhood with distressed properties.
This one is pretty self-explanatory. If a neighboring home has a history of loud parties, drug activity, or violence, steer clear. While it may be a temporary situation where tenants will eventually be evicted or the owners land in jail, that’s not guaranteed, and it’s usually not worth risking your peace and safety to buy the home next door.
Bottom Line: The great news here is that this information is public, and there are many websites where you can view the crime in the neighborhood before you even drive by and see a home.
The Link Team Knows Where All The Good Neighbors Live!
If you’re searching for a new home in Southwest Florida, trust Nina Link and her team to help you learn everything you can about your neighbors. We’ll help you get the best deal on a great home that will retain its value for years to come. Contact us now at (239) 357-5058 to get your home search started.