Do Neighborhoods Affect House Prices?

Do neighborhoods affect house prices? Neighborhoods really do affect the value or price of a home. Absolutely; neighborhoods really do. If you really want to keep the value of your home up, start doing...

Absolutely; neighborhoods really do. If you really want to keep the value of your home up, start doing neighborly things. I used to live in Philadelphia and depending on which streets had block parties a couple of times a year, the values from one street to another could vary. One block to another could vary like 10%, 15% or 20%. They'd block off the street once a year in the summertime and everybody would come out and neighbors would help neighbors. And when I was a real estate agent there, people would say "the next time a house comes on the market on the 400 block, let me know because I want to buy it." My husband had a house there that he bought for just under $110,000 or something like that and I think it's selling for about $300,000 today. You can go around to other streets in that neighborhood block and they won't have that at all. So neighborhoods make all the difference. When you get ready to buy, if you haven't found a house, find a neighborhood; find a street where you like the neighbors. A buyer is buying four things. The first thing that the buyer is buying is a certain price and that will depend on how much savings they have and how much their earnings are if they have to buy a certain price. The second thing they are buying is a certain location. The third thing they are buying is the outside. The fourth thing they are buying is the inside. There is no sense going and looking at home on the inside if the first three don't match. If you have the money, you have been approved, you can afford it and you like the neighborhood but you drive up and you take one look at the house and you don't like the outside, don't even bother to go in. When you come home from work, you are not going to like that. First go to the lender, and then determine the neighborhood that you are interested in, and then start looking at properties. When you see one that you like from the outside, get out of the car and go knock on the doors and talk to the neighbor. If you are afraid to talk to the neighbors, then you shouldn't buy in that neighborhood. What you should do is just walk up and knock on the door and say "hey, I am looking at this house that is for sale and I am wondering if you would share any thoughts about the neighborhood. What do wish you had known before you moved in? What do you like best about the neighborhood? Is there anything that I should know about the house that I am looking at?" Frankly, the neighbors always know if there is something wrong with the house, and you might as well find out before you make an offer. A lot of people don't meet their neighbors until the day they are moving which is after closing. So first the price, location, outside, then if those three things all work for you then make an appointment to see the inside of the house.

Get your money in order, make sure you like the neighborhood, make sure you like the outside of it, then step foot inside. Buyers think they are supposed to go out and look at houses, but that's the last thing they need to do. The second thing that they should be doing at the same time that they are doing applying for their financing, they should also contact their insurance agent to find out if there is any thing about them personally that's going to be a problem in getting insurance. If they have got a low credit, that could hurt them as well. Sometimes some of these insurance companies are not writing new policies. They will continue to work with the policy you have, but if you move to a new house they will write a new one. So I tell buyers to go to the insurance agent and say "we are thinking about moving, we are going to be buying a new house tell me what I need to do to make sure that I qualify for homeowners insurance." So after financing and insurance, the third thing that the buyer should be doing before they look at houses is to contact all of their potential inspectors. In almost every state, there are what we call seller disclosure forms. It's a blank form that you look at where the seller is supposed to say if the plumbing is okay and are there any easements and it's called the seller disclosure form. The buyer should get a hold of the one that's most commonly used in their area and read through it and see if there is anything in addition that they would want to be aware of. For example, somebody with small children might want to have some testing done for lead based paint because that could be an issue. Somebody who has cancer might want to check the radon situation in the home. There are some groups of people that want to know if someone has died in the home, they don't want to live in the home where somebody has died or had a violent death. Everybody should have a home inspector come through the property. I advise them to go out and interview three or four of them and hire them. Now you've got your financing in order, your insurance is in order, and your home inspectors are all lined up. Everything is lined up; now go out and look at your home.

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