Wednesday, February 24, 2016

20 Things That Will Drop Your Home's Value

1. Undesirable location
You’ve heard that the three most important factors in any home’s value are location, location, and location, right? Unfortunately, the flip side of that is true; if you live in a declining neighborhood, or even in a house too close to a busy street, a noisy business, railroad tracks, an airport, etc. your value will surely suffer.

2. Fire or flood inside the home.
Natural disasters are one thing, but if your property has suffered flooding or a fire that originated inside the house because of human error or faulty systems, future buyers will surely take not – and the price will drop. It’s hard to overcome the stigma of past flooding, especially because of the potential for rot, mold, and damage behind the walls or under the floors. 

3. Natural disasters
Damage from hurricanes, earthquakes, and flooding all need to be disclosed when you sell your home – and could raise doubts about the present condition, therefore affecting the value. If your home was in or damaged by a natural disaster, be sure to keep detailed records from insurance adjusters, contractors, appraisers, etc. to satiate future buyers.

4. No garage or inadequate parking
If every house in your neighborhood has a two-car garage and you only have a one-car garage, or just an outdoor carport, your home’s value could drop significantly. Of course there are some neighborhoods where everyone parks on the street, but generally your home needs to be consistent with what is standard in that community for the price to remain intact.

5. Noisy neighbors (and their pets)
Does your neighbor blast country western music at ear-splitting volumes until 2 am every night? Do you live next to a breeder who is raising 20 very vocal Chihuahua puppies? Or did a U-Haul truck just pull up and a college fraternity start unpacking? Even though it’s own out of your control, reports show that having noisy neighbors can drag your home value down by 5 or even 10%.

6. Bad roof
There are many components of a house that may “turn off” buyers if damaged or outdated – electrical, plumbing, and heat and air among the big ones. But a roof that’s past its prime or already leaking can really scare off buyers – even more than the cost to fix the roof would dictate if they looked at it rationally.

7. Unnatural deaths or homicide
Did your home belong to Dexter before you bought it? A homicide, suicide, or any unnatural deaths or violent events on the property absolutely have to be disclosed by the seller, and can really drop the value. In fact, studies show that a non-natural death in a home can drop the value 10-25%, and even being too close to that house or on the same street can sink neighboring home values by up to 3%.

8. A subpar school system
Who buys homes in most middle class suburban neighborhoods? The majority of homes are bought by young couples that hope to start families, or young families who already have children, and that means the quality of the local schools is paramount. A great local school system can boost demand and increase your home’s value accordingly, while a middle-of-the-road school system will neither hurt nor help your value. But a notoriously bad school system in your area can definitely collectively sink your neighborhood’s values.

9. Huge (or cheesy) billboards
Of course businesses need to advertise to stay competitive, but if a local car dealership or casino just constructed a billboard in or near your neighborhood that dominates the skyline, you may experience a sinking feeling. And if that billboard happens to be advertising a strip club, political candidate, laxative brand, or a PSA for drug addiction, that sinking feeling will apply to your wallet as your home price sinks like a stone.

Don’t believe me? A study in Philadelphia found that homes within 500 feet of a billboard were worth $30,826 less on average at the time of sale than others farther away.

10. Low ceilings
You don’t need to necessarily need to have soaring vaulted ceilings in your home, but even if your ceilings are just a couple of inches below average, potential buyers could perceive your home as cramped, claustrophobic, or smaller than its actual square footage.

By the way, most standard ceilings in the U.S. are right about 8’ high, but some communities adhere to the national IRC building codes that allow for minimum 7 foot ceilings in living spaces. But the newer the construction and the bigger the living area, the higher the ceiling should be to maintain proportions.

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