Actual data about what does and does not affect resale value?

[Flyover]

Some of the people on my HOA bylaws-rewrite committee seem to think that if one of their neighbors paints his house purple, or has a metal shed with rust on it, that this will negatively affect their own resale value. A purple house might be unusual, and a rusty shed might be unsightly or even dangerous, but I am skeptical that things like this have any significant impact on resale value.

I'd like to see some data on it. Can anyone recommend a source?

 

[bud16415]

Some of the people on my HOA bylaws-rewrite committee seem to think that if one of their neighbors paints his house purple, or has a metal shed with rust on it, that this will negatively affect their own resale value. A purple house might be unusual, and a rusty shed might be unsightly or even dangerous, but I am skeptical that things like this have any significant impact on resale value.

I'd like to see some data on it. Can anyone recommend a source?

I don’t know of any data but our house was the neighborhood eye sore when we bought it and I had two different neighbors come over after we had been working on it for a couple months and tell me they felt like they should give me money or something for improving their property values. It can work both ways.

I guess is when people are house shopping they look at comps and say well this house sold for this amount close by and it doesn’t look as good as this other house so it will be worth this. Neighborhood are all kinds of things like what kind of a school is in its location. Some school districts can change home value and that has nothing to do at all with the building or property.

 

[Flyover]

I just can't fathom demanding a seller knock $$ off the price because there's an ugly house or shed nearby in an otherwise nice, pretty, safe etc. neighborhood. If all the houses around are ugly and all the sheds are decrepit, then that house will sell for less anyway because the neighborhood is probably bad. Maybe it's a question of how many unsightly houses/sheds before you go from "nice neighborhood with one or two eyesores nearby" to "this neighborhood looks like a trailer park"?

 

[Sparky617]

I'd say what your immediate neighbors do can have a pretty direct impact on your marketability. If their yard is a mess it hurts your curb appeal. If you or a neighbor has to sell at a lower price than otherwise it brings down the comps for the neighborhood. This is where a quick divorce sale can really hurt your home value in the short term. When we sold our last house, 22 years ago, the day we had an open house the kid next door spent most of the day tuning up his ATV in the driveway. That didn't exactly make the open house a runaway success.

HOAs can be a very mixed bag. Some are run by people with a real power trip. I remember one in a neighborhood near me in Virginia that fined someone for changing out an exterior light fixture without prior approval. The fixture was fine, but they didn't say "mother may I" before changing it. Early on when we moved to this neighborhood I applied for permission to install a wooden swing set for the kids. I got approval and installed it. A few months later they sent me a violation notice. I told them to check their records. Another neighbor served on the architectural review board and a popular addition was putting a front porch on homes. Many had them, but some didn't. People would propose putting a standing seam copper roof on the porch because they couldn't get the pitch needed for shingles. Standing seam copper was used widely in the neighborhood for bay windows and some of the original builder porches. One lady on the board pointing the covenants said they need to match the existing roof style. At the time my neighbor and the others on the board overruled her as standing seam copper was architecturally appropriate for the neighborhood style.

That all said, right now the way the real estate market is around here, homes are selling for 10-20% above list. My neighbor listed his house for $575K and sold it overnight with multiple offers for $665K. If you try to buy a house in this market with contingencies or expectations for the sellers to do repairs your offer will be rejected. My wife is an agent and she's lost numerous strong offers to buy where they were outbid by another buyer. List price is the starting point. Strong due diligence offers are common. Trying to buy with a VA or FHA loan right now is really tough. Sellers don't want to jump through the VA's hoops to close the deal.

 

[bud16415]

You can demand all you want when making an offer on a house and it doesn’t mean anything. The seller has the right to ask anything he wants and demand not a penny less. The buyer has the right to pass and go demand someplace else.



I worked with an odd guy that bought a home and the next day he had a realtor come out and put a for sale sign on it with a contract and his price was at least 10% higher than he paid. He said if I can sell it and make money then he would move. He would get offers and turn them down saying he needed his price. Pretty soon the realtor would give up and he would find a new one. That went on till he couldn’t find a realtor and up went a for sale by owner sign.



The solution is to buy a place out in the sticks with no neighbors and no HOA and live the way you want.

I had a friend that could not sell his house no matter what and he asked the realtor what was wrong. She told him to be honest no one wanted his beautiful in ground pool that was like new. He was sick about it but he filled it in and sold over list.

 

[Sparky617]

You can demand all you want when making an offer on a house and it doesn’t mean anything. The seller has the right to ask anything he wants and demand not a penny less. The buyer has the right to pass and go demand someplace else.



I worked with an odd guy that bought a home and the next day he had a realtor come out and put a for sale sign on it with a contract and his price was at least 10% higher than he paid. He said if I can sell it and make money then he would move. He would get offers and turn them down saying he needed his price. Pretty soon the realtor would give up and he would find a new one. That went on till he couldn’t find a realtor and up went a for sale by owner sign.



The solution is to buy a place out in the sticks with no neighbors and no HOA and live the way you want.

I had a friend that could not sell his house no matter what and he asked the realtor what was wrong. She told him to be honest no one wanted his beautiful in ground pool that was like new. He was sick about it but he filled it in and sold over list.

That can be an option. Around here it is extremely hard to buy a parcel of raw land to build on. If it is out in the country the owners are waiting for the development to reach them and sell the entire farm to a developer rather than dividing it up lot by lot themselves. Big developers buy the raw land and hook up to the town utilities and ask to be annexed into town. Usually when the farmsteads go up for sale it includes all the land. Most subdivisions here built in the last 40 years have HOAs. Our last house didn't have an active one and for the most part our neighbors did a great job maintaining their homes. A couple didn't and one's yard got so bad the city came and cleared a bunch of bushes that were blocking views at the intersection. They were a corner lot on our cul de sac. 20+ years later and it is still a mess.

Pools can be a huge challenge to sell. You definitely limit your marketability with a pool unless you're Florida, Texas or other sun belt state. We have one pool in our neighborhood and that house has been a challenge to sell. We have a neighborhood pool and most buyers are fine with not having one in their backyard when the neighborhood pool is available. A nearby subdivision without a pool and larger more expensive homes has a number of private pools.

I live with an HOA because our current house allowed me to walk to work and the neighborhood is very convenient to everything. I couldn't live closer to the airport without being in the flight path. I'm 2 miles from the interstate, 2 miles from a county park with miles of mountain bike trails, a quarter mile from a greenway, 2 miles from a state park, and just about any store I could want is less than 10 miles away. Our town has exploded in population going from less than 10,000 in the 1970s to 160K now. So most of our housing stock is fairly new.

 

[Flyover]

what your immediate neighbors do can have a pretty direct impact on your marketability. If their yard is a mess it hurts your curb appeal.

Of course. That's why HOAs exist in the first place. I'm just saying, in last night's committee meeting I heard people claiming that a single purple house somewhere in the neighborhood, or a metal shed with a little rust on it somewhere else, would hurt their resale value, and I found that preposterous. That's why I'm asking about what actually does and does not impact resale value.

I'd bet money that if you took a random sample of half the HOAs in the country and randomly painted one house in each of them purple or installed a slightly rusty shed in their back yards, the other homes' resale values would not be impacted in any significant way compared with the control group. But I need the data!

Some are run by people with a real power trip.

Exactly. That was my very first impression from participating in these meetings, that these are people greedy for power. They have their own tastes and preferences and see an opportunity to force it on others, rather than stick to their job which is to maintain safety and resale value.

The solution is to buy a place out in the sticks with no neighbors and no HOA and live the way you want.

Sure, I'd love it! That's my dream, to build a cabin in the mountains just the way I want, out west somewhere, and live there at least part of the year. But for now my kids have their friends all across the street or behind us, and they can walk to school, the grocery store and nice parks are all <5 minutes away, etc. just like Sparky said, and those things will remain important until I'm an empty-nester or retired.

By the way, just to clarify, over all I think my HOA is pretty nice and reasonable, and the HOA fees are very low so no complaints there either. It's just that we're in the process of updating the deed restrictions and I'm trying to be the voice of sanity in the room. (Or the Ron Swanson, if you're familiar with the "Parks and Rec" TV show.) It's very easy for a group of people like that to get together and start wanting to codify what are at the end of the day their particular preferences, when all they should actually be worried about is safety and resale value. And for the latter, I want to make sure they're working with data and not BS they made up because they like the way it sounds.

 

[oldognewtrick]

Remember a camel is a horse designed by an HOA committee.

 

[Flyover]

Right, and if I was on that HOA committee it'd be an ox: it does one thing, does it well, and doesn't mess around with the other stuff it's not supposed to be doing.

 

[Sparky617]

A group of Karens is an HOA.

Our covenants are almost impossible to change. You have to have something like 95% approval and you have to be present to vote. It is impossible to get 260 homeowners to show up at a meeting. The biggest controversy was years ago our 10 year old mailboxes were showing their age, they had steel metal mailboxes and painted pressure treated bases. And of course you had to replace it with an identical one. I went to the general meeting when they were talking about people's mailboxes and the need to replace them. I suggested we look at a more durable replacement for the neighborhood. They thought that was a great idea so they got a subcommittee together and tottered off do do some research. Of course if you weren't at the meeting you had no idea they were going to look for a better alternative, so you might have contracted with the sole vendor to replace your wooden post/ rusting steel mailbox. Much later, like 9 months they decide to get really nice cast aluminum mailboxes for everyone, the HOA even agreed to pay for part of it with the reserve funds, but everyone would have to pay $200 or something for a $350 mailbox & post installed. Well if you had replaced your mailbox in the last year or two when they really started pushing the issue you might be a little annoyed. The best part was the semi annual assessment arrived a day before the newsletter explaining the decision and costs. That next HOA general meeting was the best attended one in 22 years of living here.

 

[bud16415]

My ex-mother in law lives in a very upscale golf course community on a lake in SC and folks with $1.5M+ homes are HOA to death and drive around looking for someone making an infraction of the mailbox rule paragraph 4 subsection 3 regarding changes to the box flag indicating they like black labs. Etc.



A new house was being built up the street and I was down visiting and checking out the progress after hours and it was one impressive foundation with 14’ ceilings and underground theaters and the whole 9 yards. I got back and mentioned I checked it out and was told maybe I should come to the HOA meeting that house was getting tore down and will never be built. Seems the whole community was against it as they were told it was being pre manufactured and brought in on trucks and they were not running a trailer park. I tried to explain but the 75+ crowd had their minds made up. Well the house got built despite protest and it came in on about twenty 18 wheelers and was put together in a couple weeks and it is the biggest grandest McMansion in the compound, didn’t take a year to build annoying everyone like every other house to boot. The locals seemed to quickly forget the whole trailer park thing and the new owners were welcomed into the country club. I’m sure they are now worrying about someone left a guests car in the driveway over night instead of moving it to the guest parking area a half mile away.



I grew up in the late 50s where my dad built our house and every house on the block had its own design. Then in the 60s the subdivisions started up and we would go to my aunts house and my dad would say look at this every house is just like the rest how are you supposed to find your house from the neighbors.

There will always be the best new thing I guess.

 

[Flyover]

Yup, y'all's stories confirm what I said, that my HOA is relatively relaxed and reasonable. I'm trying to keep it that way, maybe even nudge it to be even more relaxed and reasonable. If I didn't I'm sure it would start moving in the other direction. Power corrupts, etc.

 

[joecaption]

When I was a contractor I got stuck having to work for some realtors that were trying to get homes ready to sell and was just blown away by some of the things I saw that homeowners where not willing to fix before putting it up for sale and where expecting to get top dollar.
#1, All the comp. homes in the area where selling for about $250,000. and they wanted $300,000.
This one they had nailed 2, 2 X 6's between 2 trees and had an engine hanging from it.
There was fist sized holes in the sheetrock everywhere, all the screen frames where bent, inside doors had broken jambs, all the railings on the deck where broken, because of the two people living there fighting.
I hauled away 2 trailer loads of just trash left behind in the back yard and shed.
#2, This one they wanted $400,000 because it was water front.
I walk out back and there's a DIY installed above ground pool that looked like no one had done anything to in years. The grass outback was 4' high.
All the "flower beds" where just a solid mass of weeds.
The back deck had trees growing up through the deck boards that where all rotten.

 

[bud16415]

When I was a contractor I got stuck having to work for some realtors that were trying to get homes ready to sell and was just blown away by some of the things I saw that homeowners where not willing to fix before putting it up for sale and where expecting to get top dollar.
#1, All the comp. homes in the area where selling for about $250,000. and they wanted $300,000.
This one they had nailed 2, 2 X 6's between 2 trees and had an engine hanging from it.
There was fist sized holes in the sheetrock everywhere, all the screen frames where bent, inside doors had broken jambs, all the railings on the deck where broken, because of the two people living there fighting.
I hauled away 2 trailer loads of just trash left behind in the back yard and shed.
#2, This one they wanted $400,000 because it was water front.
I walk out back and there's a DIY installed above ground pool that looked like no one had done anything to in years. The grass outback was 4' high.
All the "flower beds" where just a solid mass of weeds.
The back deck had trees growing up through the deck boards that where all rotten.

Around here I don’t think the realtors would do anything to prep a property for sale. They just show it as is and tell you to make an offer if you feel the price to high. After a short bit no one will even touch showing it. if it goes to the bank like ours did you would think the bank would spend a little to get back a lot but they don’t. Our house sat two years without heat or electric and never had a bid. The realtor did everything in his power to not show us the house and he was the listing agent. He opened the door for us and waited outside telling us to take our time. He was really shocked when I told him I wanted to make an offer. The guy that lost our house to the bank had taken all kinds of pieces of K&T wire and stuck it in the walls with a wire nut on it to make it look like the wiring was bad. I look outside I see a brand new cable running coming in and running to the garage. Go out in the garage and hidden behind a sheet of old nasty wood nailed to the wall is a 100a panel. Down in the basement 200a panel brand new. I think he was allowed to live there till it sold so he was trying to make it look bad. He did a good job of making it look bad that’s for sure it didn’t need extra help.

We saw the same thing in some of the higher priced places you described. I would tell the realtor are you kidding me the owner wouldn’t take 10 minutes to fix something that totally made the house look like trash. Her brother sold his house last year and the buyer had a list of must do things before the sale. He had a wood 10x10 yard building and the list said demolish it or fix the door. He wanted to torch it so bad and I told him it just needs a screw or two in the hinge. I said it will take us all day to burn it down. So we did a couple lags. I would never task the seller with painting and stuff they do a sloppy job just to sell it then you have a mess to fix.

 

[Guzzle]

A mansion next to a junk yard does not make the junk yard look better, it makes the mansion look worse.

More generally, we get junk mail from realtors comparing # of bedrooms & # of baths to sale price.
I checked the correlation between these using a spreadsheet function.
The conclusion is this junk mail info is useless.

But who is going to check correlations on this junk mail? Just me, I guess.

We had a Psychic Reader put up a sign in our neighborhood.
Some "entity", maybe the county, made them take the sign down.

Good for our property values. Otherwise, next, we'll have tattoo parlors & paycheck loan places.