So you’ve settled on a new home. You’ve checked out the plumbing, electrical system, the foundation, and the roof.
But what about the neighbors?
Bad neighbors can lower a home’s value as much as any physical defect, according to the Appraisal Institute, an association of nearly 23,000 real estate appraisers.
“I’ve seen many situations where external factors, such as living near a bad neighbor, can lower home values by more than 5 to 10 percent,” Appraisal Institute President Richard L. Borges II said in a statement. “Homeowners should be aware of what is going on in their neighborhood and how others’ bad behaviors could affect their home’s value.”
Bad neighbors may include homeowners with noisy pets, unkempt yards, foul odors, loud music, dangerous trees and tree limbs, or poorly maintained exteriors.
The institute recommends that prospective homebuyers visit the street where they’re considering buying at different times over the course of several days to learn more about what is happening in the neighborhood.
Also, talk about the neighborhood with a real estate professional who knows the local community.
“It’s important for prospective homebuyers to carefully examine the neighborhood where they’re considering living,” Borges said. “That way they can hopefully prevent any problems in the first place.”
Neighborhood crime obviously affects property values. But the institute says homebuyers should also be aware of a property’s proximity to commercial facilities — such as power plants and funeral homes — that can affect a property’s current value and potentially the rate at which that value declines.
If trouble arises after you’ve moved in, the institute advises that you take the following steps when dealing with bad neighbors:
- Speak with other neighbors. Get consensus when identifying issues and approach the bad neighbor together.
- Look up original and updated subdivision restrictions. If talking to the neighbor doesn’t work, see if there’s any violation of the rules. If so, writing to the city code office and reporting the bad neighbor could spur an investigation into the nuisance. Depending on the offense, a call to the local health department also may be warranted.
- Hire an attorney. If all else fails, the cost of an attorney likely will be less than the home’s potential loss in value.
A number of social networking websites let users share insights about neighborhoods:
BlockAvenue allows residents to comment, good and bad, on their neighborhood. It also enables anyone to post questions to local residents who are members of the site. Walk Score rates a neighborhood’s walkability and identifies local amenities, such as restaurants and schools. PolicyMap provides demographic information by street address.
(Overgrown lot photo courtesy of AuthenticEccentric, via Flickr.)