Home value is based on many different factors, including location, square footage, and individual property features. Whether you’re looking to protect your home’s worth or want to list it for sale in the near future, it’s a good idea to understand what influences your selling price. Here are seven surprising things that could scare away potential buyers and devalue your biggest investment.
1. Contaminated Soil
Montreal’s Mayor Valérie Plante recently announced that 62 contaminated sites had been identified on Montreal Island, mainly consisting of former landfills, garbage dumps and industrial quarries under residentially zoned land. The news came as a surprise to homeowners who had purchased real estate on these former sites, without conducting a soil test beforehand. Once detected, contaminated soil or groundwater could result in a lower municipal assessment, which could in turn affect buyer perception and eventual bids on the home.
In “Beyond Aesthetics: How Billboards Affect Economic Prosperity,” urban planner Jonathan Snyder found that a billboard placed within 500 feet of a residential property would lower its value by an average of $30,826. In contrast, strict billboard controls recorded a strong positive correlation with higher median incomes, lower vacancy rates, and lower poverty rates.
3. A Swimming Pool
Although a swimming pool may seem like an attractive back-yard feature, it can actually torpedo your home’s selling price. In cooler climates where pools are only accessible for a portion of the year, there is a large chance home shoppers will not be willing to absorb the additional maintenance costs.
4. Bright Colors
The color of your facade and interior design is one of the first things a buyer will notice. Most buyers prefer homes that fit in with the surrounding community, rather than ones that stick out. The same goes for interior paint and decor – unusual colors are significantly harder to sell than neutral ones. On that note, real estate agents often recommend removing patterned wallpaper before listing a home for sale.
5. Custom Upgrades
Property value is generally based on comparable listings in the area, and buyers do not take in account expensive upgrades when drafting their offer to purchase. An additional $200,000 spent on landscaping or fancy upgrades will not necessarily be recuperated once your home sells. That doesn’t mean you should abandon plans for transforming your house into a dream home – as long as your design decisions are not motivated by resale value!
6. Proximity to a Highway or Airport
Being close to metro stops and commuting lines is ideal for home value, but being within earshot of a highway is not. If you can see or hear a major thoroughfare, chances are it will negatively impact your home’s value. Homes that are too close to airports, freeways and commercial train lines may also scare off buyers due to potential noise, traffic and exhaust fumes.
7. Hauntings and Stigmas
If your home has ever been associated with an urban legend or poltergeist, its home value could be at stake. A 2013 study by Realtor.com reported that 34% of American buyers would need 30% off the asking price to consider purchasing a haunted house, while 19% would need up to half off. Only 12% said they would pay full market value or more for a home rumoured to be haunted.
Are Canadians less superstitious? We don’t have the gift of clairvoyance, but this creepy Montreal home made headlines when it finally sold a year after listing, for $260,000 less than the original listing price of $660,000.
Even if there are no ghosts inhabiting your attic, a suicide, murder or other tragic death can curse a home’s value for years to come. Quebec is the only Canadian province in which sellers are legally bound to divulge unnatural deaths such to a potential buyer. On July 1st 2012, following a legal case in Montreal in which the plaintiffs sued sellers for omitting information about a suicide in their home, Quebec’s civil code implemented a “stigmatized property” law forcing vendors to reveal such information in the Declarations by the Seller of the Immovable. It was estimated, in a study conducted in Ohio, that a stigmatized property would lose an average of 3% off its market value.