Homeowners and people interestedhttp://rismedia.com/2013-01-31/bad-neighbors-can-reduce-property-values-appraisal-institute-warns in buying homes are advised to pay attention to the properties close to their home or a home they’re interested in buying, according to the Appraisal Institute. http://rismedia.com/2013-01-31/bad-neighbors-can-reduce-property-values-...
Know what’s going on
The Institute is the largest professional appraisers association in the country, and it warns that nuisances caused by neighbors, such as annoying pets, messy yards, obnoxious smells, loud music, and ill-maintained exteriors impact the values of close-by neighboring properties. AI suggests that homebuyers go by and view the home they’re interested in buying several times at different times so they can form a more accurate idea of what’s going on in the neighborhood.
“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,” according to Richard L. Borges, II, MAI, SRA, Appraisal Institute President. “Homeowners should be aware of what is going on in their neighborhood and how others’ bad behaviors could affect their home’s value.”
Appraisers refer to depreciation caused by external factors not on the property as external obsolescence. Although this type of obsolescence can have a variety of causes, such as locational or economic, or it may be temporary or permanent. However, whatever the cause, owners, tenants and landlords of adjacent properties are unable to remedy it, the Appraisal Institute said.
Dealing with the problem
The AI offers three suggestions for homeowners who have bad neighbors:
1. Speak with other neighbors. Identify the issues and join together to address them.
2. Research original and revised subdivision restrictions. If discussing the problem with the neighbor doesn’t resolve the issue, try to find out if he is violating any municipal codes. If so, report the offense which may encourage an investigation. And, it may even be possible to report it to the local health department.
Hire an attorney. If homeowners run out of options to deal with the bad neighbor, hiring an attorney is an option. Probably the cost would be less than the amount lost if the home losses its value.
“Even though homeowners do have some recourse, 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.”
Other types of neighbors that may negatively affect home values are the near proximity of commercial facilities, such as power plants and funeral homes. Potential homebuyers are encouraged to investigate these possibilities also.