11. Homes that are too big or too small
Do you have the smallest
house on the block? Or did you buy the biggest house in the whole neighborhood?
Maybe you only have two bedrooms or only one full bathroom when most other
homes in your area have three bedrooms or two full baths? Even if you got a
good deal when you purchased the under-sized abode or cavernous dwelling,
buying a home that is out of character with the rest of your neighborhood can
only be detrimental to your home’s value. Remember that homes sell at certain
prices not just because someone is willing to pay a price, but also because an
appraiser values it at that price. But if an appraiser has no comparable sold
properties in the immediate area to compare it to (because there are no
too-small or too-big homes), then your values will stagnate.
12. Outdated appliances or renovations
Maybe your house is a good
size and in the right neighborhood, but when potential home buyers (or an
appraiser) walk through and see cheap Formica countertops, archaic cabinets,
and shag carpet from the 80s, the value of the home starts sinking drastically
in their minds. It’s not that you need state-of-the-art upgrades and brand new
upgrades in every room, but people usually expect to have at least some
upgrades since the house was first built unless it is brand new. It’s not just
a matter of aesthetics, as someone who might otherwise want to purchase your
home is calculating what it will cost to modernize and upgrade everything
themselves, and appraisers have to devalue your home a couple clicks compared
to similar houses that are more up to date.
13. Weird or substandard additions
There’s nothing worse then
when a homeowner converts their basement into living space or winterizes a sun
porch and try to call it living space – going so far as adding the extra square
footage to the original footprint on their listing data. Additions that are
done with shoddy work and substandard materials, unpermitted work (a huge
no-no), and additions that have low ceilings, inadequate heat and AC systems,
or just look cheap and out of character from the rest of the house aren’t even
worth the price of the nails and wood that built them. In most cases they don’t
only NOT add value, they could actually decrease the price of the home.
14. Bad curb appeal
Logic dictates that there
are so many essential factors we should weigh when pricing a home, including
the square footage, layout, quality of construction, neighborhood, and
amenities. But with houses, just like in life, bad first impressions are hard
to overcome – especially when curb appeal is noticeably bad. If your front yard
is overgrown, the paint chipping, the house and yard are too dark, and there is
junk or “stuff” laying about everywhere, it’s going to be nearly impossible to
retain top dollar for your house.
In fact, it’s estimated that
hoarders knock down a property’s value by up to 5-10% (even if it’s a hoarding
renter in one of your investment properties) and if an adjacent neighbor’s
property is noticeably disheveled and in a state of disrepair, it could affect
your value by up to 10%, too.
15. Crime
It’s one thing if there is a
smattering of vandalism, graffiti and petty crime in a neighborhood, but when
there are a rash of violent crimes, break-ins and robberies, or especially
high-profile cases that make the evening news and the morning headlines, you
can bet that potential home buyers will take note and shy away from your
community – eroding prices quickly.
16. A pool or hot tub
Of course a brand new
in-ground pool can add value to your home, but pools and hot tubs also quickly
become outdated, require a ton of maintenance, and even pose insurance and
liability issues for potential homeowners. There is no cheap and easy way to
remove a pool once it becomes an eyesore or a maintenance money trap, so
potential home buyers may be wary of taking the plunge (so to speak).
17. Sinkholes
In recent years we’ve seen
more and more sinkholes open up and swallow up streets, cars, and even houses,
and even just the threat or fear of a sinkhole in the area could wallop home
prices. In fact, home values could drop a colossal 30% if a sinkhole has appeared
– and there’s no specific insurance coverage that will fill in the money drain.
18. Dumps and power plants
If your home is in close
proximity (two miles or less) of a city dump, landfill, or a power plant,
studies show that your property values could automatically fall by 4 – 7.3%.
19. Foreclosure graveyards
It was an all too familiar
sight during the real estate crash and Great Recession – whole neighborhoods
that used to be thriving top-dollar communities turned into row after row of
vacant or unkempt foreclosures. If your neighborhood still has a particularly
high level of foreclosure activity – or even if you’re unlucky enough to be in
the middle of a distressed property “cluster” on your street, your value could
fall by up to $7,200 for no other reasons. It’s estimated that for every
foreclosure within 1/8th of a mile of your home, you can
automatically drop your home’s value by .09%.
20. Fracking and water issues
As we’ve seen now with the
terrible turn of events in Flint, Michigan, fracking, shale gas wells, and
other resource mining that could compromise drinking water can almost instantly
wreck community values. It’s now estimated that even the threat of fracking
coming to town can drive home prices down by 24%, and homeowners who use local
groundwater for drinking lose up to 24% of their property value if they live
within 1.25 miles of a shale gas well.
