Don’t let a run-down house next door lower your property’s value


With millions of homes in foreclosure — and millions more owners having difficulty paying their mortgages — there’s likely to be one in every neighborhood: the property that has gone to seed.

Maybe the lawn next door that you once envied has turned brown or the flower beds have been overtaken by weeds. Or perhaps the grass hasn’t been cut in weeks and the house is surrounded by what looks like a wheat field.

If the neighborhood eyesore has been abandoned, the house itself has probably deteriorated. The windows may be broken or boarded up, the gutters could be sagging, the garage door might be hanging off its frame and the roof could be covered with debris.


Perhaps the place has been taken over by rodents. Or maybe the neighborhood kids are using it as a hangout. Worse, squatters could be using it as shelter or drug pushers might be using it as their place of business.

It’s not a pretty picture. Yet scenes like these are playing out everywhere. No neighborhood is immune, and the effect on local property values can be chilling, even when the distressed property is still occupied and well-maintained.

Research from the Federal Reserve Bank of Cleveland shows that neighboring property values sag by up to 3.9% when a nearby house is in the foreclosure process but still occupied. When the offending house is vacant and the taxes aren’t being paid, the value drop can be twice that much.

“Vacant homes can be more than just an eyesore,” Federal Reserve Board Gov. Elizabeth Duke said in a recent speech in New York. “They can have substantial negative impacts on the surrounding community, impacts that are felt most acutely by the neighbors and communities that must cope with the dangers and costs of vacant buildings.”

All of this raises the question: What can you do if you are trying to sell your house and a ramshackle property happens to be next door or down the street?

For starters, if the offending property is still occupied, try being neighborly by explaining your situation and offering whatever assistance you can. You might even enlist your real estate agent to help; after all, it’s in his or her best interest too. And sometimes agents can help organize a communitywide effort to help a distressed neighbor.


If you live in a community governed by a homeowners association, let the property manager or the association board know of your problem. Associations often will pay to cut the grass and correct visible exterior maintenance issues. The cost will become a lien on the offending property that will have to be discharged before it can be sold.

Homeowners are generally free to choose how their property looks. However, if your neighbor rejects your offer or otherwise refuses to bring the outside up to a reasonable standard, you may be able to prod the local authorities to force him or her to act. Many jurisdictions fine owners for not maintaining their properties. And with the ongoing foreclosure problem, some state and local governments have enacted ordinances that hold lenders’ feet to the fire.

If the place is abandoned, you need to find the owner. That may be your neighbor’s lender, depending on where the property stands in the foreclosure process.

Several communities are enforcing vacant property registration ordinances that require lenders to secure and maintain the property and call for stiff fines and penalties if they don’t, whether or not the foreclosure is completed. To force lenders to fix up houses that are in disrepair, for example, Chula Vista, Calif., requires holders of troubled mortgages to pay fees and post a bond for each such property. Springfield, Mass., and Albany, N.Y., also command that each foreclosed property be registered.

“The last thing [lenders] want is an unhappy neighbor,” said Joseph Bada of default management company Five Brothers in Warren, Mich. “They are very concerned. They look for such calls. Then they notify us, and we go out and take care of it.”

If you’ve still had no success, you might want to take matters into your own hands. Not by going onto the property or into the house without permission — that could be considered trespassing — but by erecting an obvious border between your place and the run-down house next door.


That might be a fence or even tall shrubs to help block the view. Either one is a fairly fast fix that could be worth the investment, said Margaret Innis, who operates Decorate to Sell, a home-staging company in Andover, Mass.

“If you have a great neighborhood, you want your buyers to see it,” Innis said. “But if the house next door is an ugly duckling, you really have to think on your feet.”

One possibility is to try to make sure that prospects use a route to your house that doesn’t take them by the offending property. Another might be to install plantation blinds angled so that light can stream in but the view does not, Innis said. “Minimize the distraction.”

At the very least, laws in every state afford you the right to prune trees, shrubs and roots that cross the line and intrude on your property. But proceed cautiously.

Make sure that you don’t go over the property line, be careful not to prune so much that the plant dies and clean up your mess. If the debris is on your side of the line, it becomes your responsibility, not your neighbor’s.


Distributed by Universal Uclick for United Feature Syndicate.