Bad Neighbors Can Decrease Property Values
Daily Real Estate News | Thursday, January 31, 2013
A bad neighbor can bring down the value of a home, possibly by even up to 10 percent, according to the Appraisal Institute.
“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,” says Richard L. Borges II, president of the Appraisal Institute. “Home owners should be aware of what is going on in their neighborhood and how others’ bad behaviors could affect their home’s value.”
What qualifies as a bad neighbor — or “external obsolescence” in appraisal speak? Home owners with “annoying pets, unkempt yards, unpleasant odors, loud music, dangerous trees and limbs, or poorly maintained exteriors,” according to the Appraisal Institute.
The organization recommends home owners take action. For example, banding together with other neighbors to approach the “bad neighbor” together and check if the home is violating any municipality codes or subdivision restrictions that you can report. In some cases it may be worth hiring an attorney. “If all else fails, the cost of an attorney likely will be less than the home’s potential loss in value,” according to the Appraisal Institute.
Source: The Appraisal Institute