WASHINGTON – Feb. 1, 2013 – A bad neighbor can bring down the value of a home, possibly by even up to 10 percent, according to the Appraisal Institute.

“I’ve seen many situations where external factors, such as living near a bad neighbor, can lower home values by more than 5 to 10 percent,” says Richard L. Borges II, president of the Appraisal Institute. “Homeowners should be aware of what is going on in their neighborhood, and how others’ bad behaviors could affect their home’s value.”

What qualifies as a bad neighbor – or “external obsolescence” in appraisal speak? Homeowners with “annoying pets, unkempt yards, unpleasant odors, loud music, dangerous trees and limbs, or poorly maintained exteriors,” according to the Appraisal Institute.

The organization recommends homeowners take action. For example, band together with other neighbors to approach the “bad neighbor” together. Also check if the home is violating any municipality codes or subdivision restrictions and report them.

In some cases it may be worth hiring an attorney. “If all else fails, the cost of an attorney likely will be less than the home’s potential loss in value,” according to the Appraisal Institute.

Source: The Appraisal Institute

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