May 31, 2013

The Financial Impact of Bad Neighbors can be Very Real

Where is that loud music coming from? What is with his tall grass? How come that house has bees swarming the roof at all times of the day?

If you have “bad” neighbors, these may be the types of questions you are faced with on a regular basis.

On the surface, you may think your only problem is finding a way to coexist with those around you. However, if you dig deeper you may realize that there is a bigger problem: bad neighbors, especially those who do not keep up their home, can negatively impact the value of your property. This may not be fair but it is definitely the truth.

If you don’t have any plans on moving in the near future, this may not be something you think about often. However, if thoughts of putting your home on the market are in your head, the fear of how your neighbors could impact the sale is enough to stress you out.

Potential Buyers could be Scared Off

Imagine this situation: you have done everything you can to keep your home looking good. From a well manicured lawn to fresh landscaping and everything in between, you haven’t cut any corners.

But on one (or both) sides, you have neighbors who are not willing to do the same. Instead, they have slacked off in terms of maintenance and there is no reason to believe this will change in the future.

This will not necessarily doom you during the sales process, but there is a very real possibility that a potential buyer could be scared off. This is particularly true if the person is on the fence and looking for a reason to say yes or no.

Nicer Neighborhoods Attract More Buyers

It goes without saying that nicer neighborhoods attract a larger pool of buyers. If everybody keeps their home looking good, your community will be known as one of the better ones in your area. Subsequently, when buyers begin their search you are going to get first crack at their business.

What can you do?

Now for the real question: what can you do if you feel that your neighbors are dragging down the value of your home?

Generally speaking, the answer is simple: not that much. That being said, there are two ideas to consider if you are up for it:

1. Ask them nicely to change their ways. This is a huge risk, as you never know what the person is going to say or do. Some may be receptive and apologetic while others could take this as an insult.

2. Call your township, borough, or city to file a formal complaint. Obviously, you need a good reason for doing this. The person has to be doing something that is against the law or a hazard to your health.

Tip: if you are going to do this, make sure you ask if they are going to share your name with your neighbor when speaking with them. If they plan on doing so, you have to be comfortable with the potential backlash.

My Experience with Bad Neighbors

Like most, I have to admit that I have had my fair share of run-ins with bad neighbors. No fights or arguments, just the usual thoughts about the decisions they make regarding their home and the way they approach others.

Rather than “make a thing” of my situation, I simply ignored my neighbors and kept to myself. This may not do much to fight against a negative financial impact, but from a personal point of view it was definitely the best strategy.

Final Thoughts

All in all, there is no much you can do about bad neighbors. For the most part, they can do whatever they want and you will not have much of a say.

If your home is on the market and you are worried about this having an impact on the sales price, the best thing to do is work with an agent to settle on an asking price and go from there. Soon enough, you will know if your neighbors are harming your chance of selling your home for what it is worth. If you find this to be true, you can then formulate a plan for moving forward.

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