A neighborhood nuisance such as an overgrown yard or a curmudgeonly resident next door could bring down home values up to 10 percent, the New York Times reported.
Home appraisers refer to factors outside the homeowner’s control as “external obsolescence,” and take them into account when determining the price of a home. In some cases, these factors could drop a home’s value or even prevent the homeowner from closing a deal.
“There are a number of different things that can be going on, from a nasty, cranky neighbor to a sloppy neighbor to lots of barking dogs,” Diane Saatchi, a real estate broker at Saunders & Associates in Bridgehampton, told the Times.
The impact of nuisances, however, changes depending on the area and its priorities, appraisers said. A yard cluttered with musty old boats may be a deal breaker in the Hamptons, but may not effect prices in a less exclusive coastal neighborhood.
“It’s very much case by case,” Richard Borges II, the president of the Appraisal Institute, told the Times. “This is why the appraiser should be geographically competent, with a knowledge of how significant the external factors are in that particular market segment and on that particular property.”
In co-ops or condos, the building’s rules generally restrict residents from indulging in activity that would disturb their neighbors, Neil Garfinkel, a real estate lawyer in Manhattan, told the Times. In such close quarters, he said, the habits that commonly cause disputes have to do with noise, smoking and other odors. [NYT] –Hiten Samtani