Advice For Those Getting "Locked Out" And How Good Are Comparables In Naming Your List Price?

Dave,

I always look forward to your advice and try to file it away for future real estate transactions.

Today's advice for the folks that get "locked out" early in their search, neglected to advise them to find a realtor who gives them an alert the minute a home in their price range goes on the market!!

Also, how good are comparables in your neighborhood for naming your listing price?

Thanks for sharing your knowledge.

Cheers,

Janet, Grand Junction

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Janet,

Thanks for reading my column! I am blessed to have many loyal readers who enjoy it and I am very appreciative of your support and your question. 

You are right and I appreciate the reminder, because I did fail to mention one of the most important aspects of finding a good agent to help in a home search. In an active market, like our market now, making sure you have an agent that has you on, what we call a drip campaign, is vital. A “drip campaign” is imperative to any buyer who is seriously looking to be competitive and find the best properties first! When you are enrolled in a drip campaign, you will be immediately notified when a property that meets your criteria hits the market. This is how you beat other buyers to the best new properties! Now, when it comes to determining your list price, better not ignore the house around the corner.

I consider comparable sales from the same neighborhood the most important comparable properties when determining a properties list price.  Generally homes in the same neighborhood are the strongest comparable properties because they were built around the same time, many by the same builders and most likely used similar finishes and floor plans.  What price similar homes in the neighborhood are selling for are typically your most accurate predictor of what your home will sell for and the ones I look for first!  Of course you have to take upgrades or significant remodels into account when looking at each property and determining how they comparatively stack up.

Lastly, I love that you signed your question, ‘Cheers’!  Just such a friendly and positive way to sign off … I love it. Thanks again, Janet.

Dave Kimbrough

The Kimbrough Team

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Will my neighbor's "stuff" impact my land's property value?

Dave,

I own a 20-40 acre lot, zoned agricultural, in Mesa County. There are parcels surrounding my land which have RV's, outbuildings, and various stuff that is somewhat hard to look at. Would those variables affect the value of my land?

Thank you for your professional reply,

Ronald, Area Withheld

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Ron,

Welcome to Western Colorado! One of the charming things about our area is the eclectic collection of properties that neighbor each other in the more rural areas of our valley, but one of the not so charming things about our area is the eclectic collection of properties that neighbor each other when one or more of those properties more closely resembles a junk yard or antique farm implement graveyard than an agricultural property with a residence. All kidding aside, there is a relatively high level of likelihood that it will negatively impact your property value. 

Part of what makes (and has made) Grand Junction and Western Colorado charming is the mix of not only property types and styles but also the potential mix of the socioeconomic status of our neighbors. In my opinion that mix is wonderful and unique, because the lack of socioeconomic segregation that is created by neighborhoods forces us to become neighbors and many times friends with people who may or may not be the same or live a similar financial lifestyle. As Grand Junction continues to grow, this hodgepodge aspect is becoming much less acceptable and frankly not very desirable by many. Before we get into the potential negative impact these properties may have on your home, let’s exhaust positive options to mitigate their potential impact. 

There may be things you can do to minimize the eyesore aspects of your neighbor’s properties! Maybe you can plant a row of trees or large hedge. You might be able to put up a new fence or put up your own outbuilding that will help shield some of your neighbors “stuff’. Before assuming, or letting me assume for you, that your property will be negatively impacted, work on positive solutions that may partially or completely mitigate the visible issues and even potentially increase your property's value. You might also approach your neighbors and discuss with them cleaning up their “stuff” so you no longer have to look at it. My guess is they may not even realize that it does not sit well with you and if they knew, they very well may be willing to clean it up. If that fails and you find that you have few options to mitigate their “stuff” then it is likely you will see some value erosion.

Let’s face it, for most, owning a farm or “real” agricultural property is not high on the desirability scale, however more executive and well-kept estate type settings with large homes are quite desirable and this is where the mix is met with less than open arms by many. If you have properties surrounding you that have collected RV’s, broken down cars, dilapidated outbuildings, dilapidated fences, long forgotten farm implements, etc., there is little doubt that it will negatively impact your properties value, unless you find just the right “butt for your saddle.”

“If you find a buyer for your property that intends to collect RV’s, broken down cars, dilapidated outbuildings, worn out fences and long forgotten property implement tools then they are likely not to give it another thought and in this instance you will likely not have a significant, if any, negative impact on your property value.”

If you find a buyer for your property that intends to collect RV’s, broken down cars, dilapidated outbuildings, worn out fences and long forgotten property implement tools then they are likely not to give it another thought and in this instance you will likely not have a significant, if any, negative impact on your property value. It may take longer to find that “right” person, but ultimately there lies the theory that would provide you an alternative to the negative property value impact of less than slightly neighbors.

Again, look for proactive and positive options to minimize the impact, but my guess is that if you can’t find ways to mitigate, there will be some negative impact on your properties value! I am hopeful you can find a way to work this out to your favor. Thanks for the question and best of luck.

Dave Kimbrough
The Kimbrough Team

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How much do neighboring properties affect your home value?

Dave,

We have been watching a couple of homes that have been on the market for a couple months and we would be happy with either, but we really do like one of them quite a bit better than the other. Neither are perfect, but the one we like the most has two homes on the street, one right next door, that looks like it has been completely neglected and has junk everywhere.  When we drove by a couple times last weekend it had two cars parked on the front lawn virtually all day Saturday. We are very interested in the home but have big concerns about the impact these two homes are having on the neighborhood. What do you recommend? Thanks.

Donna, Grand Junction

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Donna,

Great question and you have good reason to be hesitant about purchasing if the next door neighbor looks like a dump. There is no question that the surrounding properties have a direct impact on any home. If the neighbors do a poor job of taking care of their property, it brings all the other homes values down in the neighborhood. The questions I would have are, is it a relatively isolated incidence? Or is it a broader problem where there is a lack of a homeowners association or an HOA that lacks the authority or structure to enforce the covenants and keep the neighborhood looking its best?

I would recommend you have your Realtor pull a copy of the neighborhood covenants for you to look over and find out exactly what things are and are not allowed. I would certainly guess that parking of cars on the front lawn would not be in the provisions designed to bolster property values. Homeowners associations are designed to protect values and help enforce a consistency of product which leads to the solid maturity of a subdivision. If the neighbors appear to be in violation of the covenants then you could always contact the HOA and find out why the property is apparently in violation and what steps are they taking to get them into compliance? Don’t be afraid to investigate and ask hard questions, after all, you are considering making a significant investment in the neighborhood. I am making the assumption that there is an established HOA, if there is no HOA then all bets are off and what you see is what you get.   

“One of the first things I do when looking a home is to look at the neighbors. Good neighbors can help make you money and bad ones will no doubt cost you money. I would be very hesitant to invest my money in a home that has a poorly kept home next door. ”

One of the first things I do when looking a home is to look at the neighbors. Good neighbors can help make you money and bad ones will no doubt cost you money. I would be very hesitant to invest my money in a home that has a poorly kept home next door. Keep in mind that this could also change. Should the neighbor move out, then there is the significant likelihood that the home would be cleaned up and updated by a new owner. Find out how long they have been there etc. Do your due diligence and do your best to evaluate their long-term viability of them continuing to own the home.

To sum it up, make sure you do your homework and remember this is not just going to be your home, but it will also be an investment in your family’s future. Location is key, not just the physical location, but the location of eyesore properties nearby, so be careful of investing where you do not feel like the neighbors are equally invested in the integrity of the neighborhood. My bet is that if you are patient you will find a great home in a wonderful neighborhood and not have to be concerned with the surrounding properties. Hope this helps. 

Dave Kimbrough
The Kimbrough Team

Have a question? Ask Dave!