Every home seller is guilty of putting in that extra effort to make their place look as valuable as possible, both in a house value calculator in Canada and in the eyes of buyers. But at times, even after trying every trick in the book, certain factors outside your control can bring your home’s value down - external obsolescence. Your next-door neighbour could be one such factor. Yes, one bad apple (house or household) can drag down the value of all the other homes in the neighbourhood. Here’s how your neighbour’s property can impact your home’s value - and what real estate experts recommend doing in this situation.

Ways Your Neighbour Might Be Hurting Your Home’s Value

1. Their Property is an Eyesore

Your neighbour's house's curb appeal, more precisely, the lack of it, can pull down your house’s value. According to the Appraisal Institute, when a professional appraiser determines the market value of a house, they consider the surrounding properties. So, if your neighbour’s place looks messy or run-down, that could knock 5 to 10% off your home’s value.

2. Your Neighbour is Breaking the Law

An Urban Studies report states that homes located within 0.1 miles of a registered sex offender sell for 14% less on average compared to similar homes further away. Apart from sex offenders, if your neighbours are known to be drug dealers, fraudsters, or involved in any other criminal activity, your home value could take a hit.

3. The Bank Foreclosed on Their House

A foreclosed home down the street has nothing to do with your home sale, right? Well, it does. Researchers found that a 7% decrease in a foreclosed house price can lead to a 1% dip in neighbouring home values.

So why does this happen?

First, as you might know, foreclosed properties usually sell for less than their actual market value. This low sale price gets recorded in the area’s home sales history, which appraisers use to value other homes, including yours. Plus, a foreclosed home nearby might make buyers think the worst, like:

• People in this neighbourhood must be struggling financially.
• There might be a crime or safety issue here.

That little bit of doubt is all it takes to make a buyer second-guess, make lower offers, or even walk away from your house entirely.

4. The Noise Next Door Is Just Too Much

You might not mind it much now - the barking dogs, the booming music, or the sound of arguments spilling through the walls. However, that noise from next door can be a real dealbreaker for potential homebuyers. They would instantly start picturing sleepless nights and tense days, and decide your home isn’t worth the risk. So, yes, a noisy neighbour can impact your resale value and also your day-to-day sanity.

Your Next Move in a Situation Like This

Unfortunately, there are some situations where you can do nothing to fix the issue. For example, if your neighbour is losing their home to foreclosure, there’s really nothing you can do to stop it. Similarly, if your neighbour is involved in criminal activity, it’s better to steer clear and let law enforcement handle it. In these situations, your best move is to be upfront with potential buyers and tell them transparently about the issue.

But if the problem is regarding loud noise or anything to do with your neighbour’s curb appeal, fortunately, there are steps you can take. According to real estate experts, here are the best ways to deal with this situation -

Try Talking to Your Neighbour

Before taking a giant step forward, talk to the neighbour politely about the issue. Explain the situation and inform them how their actions or their house’s curb appeal impact your sale. However, even after the friendly chat, if the neighbour refuses to cooperate and things get ugly, record the conversation, as long as it’s legal in your area. Ontario usually follows the “one-party consent” rule. As per the rule, if you are part of the conversation, you can legally record it without telling the other person. This way, you’ll have proof that you tried to resolve the issue politely if things escalate.

Offer to Lend a Hand if They’re Struggling

There may be a good reason why your neighbour hasn’t kept up with their exterior maintenance. Maybe the neighbour is elderly, ill, or is away most of the time. If this is indeed the case, consider offering a helping hand. You could directly help them with tasks like mowing the lawn or trimming the hedges. Or if you’re unable to help yourself, you can recommend a reliable professional who can take care of it. This small act of kindness can keep things neighbourly and improve the look of the whole street, which benefits your home sale.

Reach Out to Your HOA

If talking and helping do not work, and there’s no sign of a change, it might be time to escalate things. Contact the Homeowners’ Association (HOA) if you live in a neighbourhood with one. HOAS usually have rules and enforcement options for maintaining property appearance and dealing with nuisance behaviour. In fact, one of their core missions is to ensure the neighbourhood home values stay high in online house value calculators in Canada.

Take the Legal Route (Only as a Last Resort)

File a lawsuit if the issue is severe enough to impact your property value and nothing else works. However, filing a lawsuit under nuisance law is expensive and could delay your home sale. That’s why, if possible, avoid this legal route unless absolutely necessary.

Get Help from a Realtor - They Will Know How to Work Around This

A realtor can’t magically fix your neighbour’s bad behaviour or make their house look better. But yes, they can craft a winning strategy to help you sell your home for the best possible price despite the situation. Real estate agents usually have experience handling this type of home sale. They can recommend pricing, marketing, and staging strategies to help shift the focus off the neighbour and onto your home’s strengths.

Wrapping It Up

When selling a home, you’ll face many obstacles - it’s a normal part of the home-selling process. There are some issues you can control and fix; others you just have to deal with. However, with the right approach and patience, you can make the most of the difficult situation and get the best possible price for your home.