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So my wife and I are first time home buyers. We are using a broker due to the fact that I am using a VA loan and want to make sure that everything goes smoothly. We have found an ideal home, FSBO, and the owner is willing to pay the commission for my broker. The house is perfect for us, with one amazingly horrible flaw. It is located in an unincorporated part of the county, and the lots in this subdivision are about 3/4 of an acre. There isn't an HOA. The neighbor directly behind the house has a junkyard. It's not really a junkyard per se, but he has a bunch of crap back there. The home we are interested in has a second floor balcony looking right into his yard, and the view of the mountains are in that direction as well. He has a bunch of old shipping containers, a school bus, 4 cars, 3 boats, and about 6 sheds.
So, what type of a deduction can we expect this to have on the appraisal. Secondly, how aggressively should we push this to our advantage. I don't want to rip off the homeowner, but I also don't want to overpay. This home is the only one that has ALL of the features we want, but because of this neighbor I know that I am going to have to install a vinyl privacy fence and plant some huge bushes to try and hide the blight.
Thanks a million, and I am sorry about the long post.
I'm not a Realtor but it seems unlikely to me that the junky view would affect the appraised value. However you might be able to use it as justification to negotiate a better price.
Sadly, even in HOAs you sometimes have to put up with other peoples' bad behavior and being poor neighbors. That's life in the real world.
Just remember that any reluctance on your part to buy the house because of the neighbor will likely also be shared by the next purchaser when you go to sell. The appraisal--as an estimate/opinion of value--is almost immaterial (except as it may affect financing). Hopefully an appraiser would take into consideration the less desirable view, but they might not fully do so...in which case you should take an appraised value with a grain of salt. What really counts is how much you value the property given the circumstances.
You should inquire as to whether the owner is friends with the neighbor. Maybe they would have some sway in getting them to clean up their mess (although that sounds unlikely based upon the extent you described).
Last edited by jackmichigan; 12-23-2016 at 05:05 PM..
Listen to the Jackman from Michigan. If those neighbors are there when you want to sell, you may not be moving when you like. How long has this home been on the market?
Adverse locational elements definitely have an adverse effect on value if the appraiser is any good. Ideally, he/she can locate comps which also have a similar external influence. Barring that there should be a location adjustment to estimate the decrease in value which results from this issue. I recently did a lovely home that backed up to a parking lot for a commercial building and I hit it 50 grand for the external obsolescence (million dollar home). Luckily I was able to locate a recent sale which also sold for less because of the same issue, so my adjustment was supportable. Location, location, location.
Adverse locational elements definitely have an adverse effect on value if the appraiser is any good.
It's hard enough to find comps that have the same #BR #BA #sqft, lot size, even without finding comps with or without junk yards in the neighbor's back yard.
I would ask your realtor if that will affect the appraisal, but IMO I think appraisal just has to do with sold comps within a few mile radius and home features, not if your neighbors backyard is messy. I would negotiate the sales price based on needing a fence to hide some of the view of the neighbors yard.
You never know what you're going to get when it comes to neighbors. If the front of the homes on the street surrounding the home for sale are kept up nice and front yards are clean and mowed, I think that's more important then someone's backyard. If the home meets all your needs and you really like it then I would work with the sellers on price and go for it!
Trashy neighbors usually don't just have trashy yards. Usually there are things that go along with it, like loose aggressive, poorly socialized dogs, neglected pets, loud inconsiderate parties with beer bottles thrown into your yard, late night domestic arguements, shooting off fireworks over your house, shooting tin cans in their back yard, etc.
I've never heard anyone say "he's a great neighbor, except for his messy yard."
You will have a hard te selling it if you ever decide to. And if he turns out to be the neighbor from hell, or engages in the behavior I listed above, you WILL want to sell.
Remember the first rule in buying...location, location, location.
Adverse view or location (i.e. backing to highway/retail/tracks) can most definitely affect appraisal and is officially known as "external obsolescense". Just remember, it's a "two way street". You could potentially suffer the same result as your seller.
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