How to Spot Bad Neighbors When Buying a House

It might sound extreme, but buyers should investigate their neighbors before making an offer.

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After months of looking, you've finally found the house of your dreams. It's the perfect size, the perfect price, and the perfect layout. However, there's only one small problem. You think you might be living next door to a neighbor, or a neighboring property, that's less than desirable.

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How do you know? The grass in the yard is knee-high, there's a rusty vehicle peeking out of some overgrown brush, and the house's paint is peeling away like old wallpaper. As a result, you're torn. Is a lousy neighbor going to make the house more difficult to sell when you're ready to move again?

This is an important question to ask when buying a house, and there's a one word answer for it: Yes. When you're shopping for a home, even a fantastic house is going to seem blighted if it's plopped right next door to a lousy neighbor. You may love the place, but most buyers are going to shy away from the property, which means selling could be a long, complicated affair.

Remember, the old adage "location, location, location" is around for a reason. You can always change a house, but you can't change its location. Ignoring the neighborhood, and your neighbors, is one of the most common common home buying mistakes you can make, especially if you're a first-time home buyer. And, bad neighbors can come in many guises. What should you look for?

How to Spot Bad Neighbors

1. Property Upkeep

First, look for signs of disrepair and neglect. Make sure you look at all the homes surrounding your potential buy, as well as homes down the street and behind your property. Look for uncut grass, garbage and other clutter left in the yard, and weedy flowerbeds. Also, look closely at the homes and buildings around you. If they look like they're hurting for some love and care, that could be a red flag. The neighborhoods in your price range might be full of modest, older homes, but the yards and the exteriors of the homes should indicate pride of ownership.

2. People

Who wants to listen to yet another frat party at 2am Friday morning? Bad neighbors don't just neglect their property; they can also have no consideration for other people in the neighborhood. If you're buying in a college town, or in a neighborhood where there are already lots of rentals, be aware that you might have to listen to more than your fair share of loud music and late night parties. Inspect the neighborhood during the day, and make sure to also drive around the neighborhood at night.

Look for signs such as one house having a lot of cars parked outside and front porches dotted with sofas, recliners, and ottomans. Bad neighbors might also ignore their pets; no one likes listening to a barking dog all night. When you're house shopping, keep an eye out for neighborhood pets. Are they tied up outside, or in a small fenced area? Do they look like they're taken care of, or are they being neglected? A neighbor's pets offer an important clue to how good, or bad, a neighbor is likely to be. It can be helpful to talk to other homeowners in the area to find out the inside scoop about their neighbors.

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Many home buyers also forget to look into the criminal history of neighbors. Think that's going overboard? Well, you might think differently if you found out your new home was right next door to a registered sex offender. Living in the same neighborhood as registered sex offenders and other criminals can drive down the value of a home. According to researchers at Longwood University in Farmville, VA, living within one-tenth of a mile of a sex offender will lower your home's value by 9 percent. So, find out before you buy. Visit FamilyWatchdog.org to see who you'll be living next to if you buy a home in the area.

3. Homes in Foreclosure and Vacant Buildings

Absent neighbors and empty buildings can also bring down property values in the neighborhood. Search online to find foreclosed homes for sale in the area, and then drive by the homes to inspect their condition. Look closely for damage to the exterior of the homes, overgrown yards, and graffiti. In addition to searching for vacant or foreclosed homes in the neighborhood, look for vacant commercial buildings as well. Neighborhoods with stores that have gone out of business and schools that have closed do not reflect a growing, prosperous community. Furthermore, vacant buildings encourage a variety of nefarious activities that you do not want in your neighborhood.

4. Zoning Changes and Development Plans

Zoning laws and plans for development can negatively impact neighborhoods. For example, are residential homes mixed with commercial buildings or mobile homes? Do any of the homes have poorly built additions? Does the city plan to build a road alongside the home? Learning more about existing zoning laws and development plans can tell you more about the neighborhood.

5. City or Community Services

If your potential dream home is located near a power plant or landfill, you might have a problem when it comes to selling your home. Homes located near city services lose, on average, 6 to 10 percent of their value. And if the landfill happens to be designated as hazardous, then your home's value could drop off by 15 percent or more. Excessive light pollution at night, caused by a nearby power plant or prison, can also make your new home seem a lot less desirable. Although many people depend on these services, no one wants to live near them. So avoid buying a home close to major city or community services whenever you can.

Final Thoughts

Bad neighbors can take many different forms: neglectful or inconsiderate homeowners or renters, or a bad location. Not only will bad neighbors lower your home's value and make it harder to sell, they can also make your home life miserable. Have you dealt with bad neighbors? What was the experience like and what actions did you take to alleviate the situation?

Heather Levin lives in the Detroit area, and writes about real estate, home improvement, and "going green" on both the Money Crashers personal finance blog and The Greenest Dollar.