Feb 04, 2013
Appraisers: Neighbors affect your home’s value
04 Feb 2013
Posted by Andrew Kantor
You know that neighbor with the perfect lawn, well-behaved pets, and a beautiful exterior? Yeah, forget about him. Look at the other neighbor — the one with that yappy Chihuahua, overgrown yard, and Justin Beiber blasting from the bedroom window.
Appraisers are warning that those kinds of neighbors can hurt — really hurt — a property’s value. And not in the abstract. On the appraisal itself.
It’s called “external obsolescence” — appraisalese for things outside the property that affect its value. It could be anything from disgusting neighbors to the location itself. And it can knock 10 percent off the value, according to a Real Estate Economy Watch article. (Heck, the Bieber music alone probably accounts for seven percent.)
Bad neighbors with annoying pets, unkempt yards, unpleasant odors, loud music, dangerous trees and limbs, or poorly maintained exteriors can cost homeowners big time.
“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,” said Appraisal Institute President Richard L. Borges.
Of course, that doesn’t mean every neighbor needs a perfect yard — a few toys around, for example, can be a welcome sight for family with a child. But there’s a line between "Well-loved and lived in" and "The place you avoid at night."