We all have at least one bad neighbor. Maybe it’s the nosy old neighbor who likes to tell you what to do with your front lawn. Or the family with unruly kids whose trash frequently flies into your yard.
You might think it’s simply a nuisance you’ll have to deal with now and then as the cost of living in your home, but it’s actually a lot more than that because some types of bad neighbors can actually be costing you and your home money. And here’s why.
Ugly Next-Door Home
No matter how well your landscapers make your lawn look good or how tidy you keep your home, an ugly next-door home can devalue your home by up to 10 percent. Their curb appeal affects your home’s overall value.
So if you’re planning on opening your house to potential buyers, the more eagle-eyed ones might take note of your neighbor’s home. After all, who wants to live next door to someone with an unkempt lawn, broken windows, and other signs of carelessness? This can lead to some potential buyers negotiating for a price slightly lower than its fair market value.
Fortunately, this is where homeowner associations can come in handy. While you can’t legally force your neighbor to spruce up their home, some HOAs have rules on cleanliness to avoid this sort of effect neighbors have on other neighbors’ properties. If your neighbor is unwilling to maintain their yard, see if your HOA has rules that allow the association to handle it.
For those with little experience in real estate, a foreclosed home is when someone cannot afford to pay off their loan from a bank or lending company so that organization has the right to seize control over their property. The home is then seized by that company, marked as foreclosed, and auctioned off so that the company can recoup their losses.
If your neighbor has gotten into financial trouble and has their home foreclosed, your own property can be affected by that giant foreclosure sign attached to their home. A study from the New York Times found that homes that were up to 500 feet away from a foreclosed home saw an average 1.3 percent value drop.
While a foreclosed home might not deter some first-time buyers and those on a tight budget, buyers like parents or the more affluent might be hesitant to buy your house if it’s close to foreclosure. This is because a foreclosed home might give them the idea that your home is within range of financially unstable people, giving them the uncomfortable feeling that there are also others in the area that are also financially struggling.
Let’s say that, visually, your neighbor’s home is just like everyone else. But with a loud dog or two, unruly children, and visible signs your neighbor has some really loud hobbies or loves to host large parties at home, you’ve got another problem to deal with.
Homes that are closer to sound pollution tend to drop in property value. So areas with railroad tracks, a busy street, or a commercial or industrial site prone to noise are usually avoided by buyers who can afford to pay extra for a quiet home.
So if it’s clear that your home doesn’t promise a quiet and relaxing sanctuary for your potential buyer to go home to at the end of the day because of your neighbors, prospective buyers are likely to hold the noise against you. That is, of course, if you’re willing to drop the price of your home. So thanks to your neighbors, you have to lower your profit from the sale.
What If You’re the Bad Neighbor?
As you’re reading this, what if you realize that this article resonates with you, but in a way that makes you suspect that you’re the bad neighbor? The good news is that you’re aware of it — not many people are willing to admit that they are bad neighbors, but it’s up to you to change it or continue as normal.
The bad news is that if you’re the bad neighbor, you now know that your actions and how you maintain your property might be costing your neighbors money if they’re trying to sell their home. Well, at least now that means you can try to be a good neighbor by sprucing up your home’s facade and trying to keep the noise to a minimum.
So now that you know how much you might be losing because of your neighbors should you decide to sell, there are some things you can do to mitigate the effects of their actions. But if you’re the bad neighbor, now’s a good time to clean up your act — and your lawn, for that matter.