Q: My neighbors are about to move to Colorado. Their house has been on the market for a month.
They found a house in Colorado already and will close on it at the end of the month. The company that is relocating them will take over the sale of the house if it is not sold in 60 days.
Should we be concerned that when the relocation company takes over that they will sell it for a much lower price just to get rid of it? We plan to live here about 2 to 3 more years. We have already been here for 5 years and have invested a lot in the property.
I just don’t want the value of our home to be lowered because the home next door sold for much less. Thanks for any help you can provide!
A: In a time when home sales are slowing in many neighborhoods, neighbor anxiety is on the rise. So many people are worrying about how their own home values will be affected by the way their neighbors choose to handle the sale of their homes.
First, you shouldn’t speculate about what’s going to happen in your local real estate market two or three years from now. Three years is a lifetime in the residential real estate world. Housing markets can change over in a matter of weeks, and most of what happens (interest rates, local and regional economies) that can affect them is out of your control.
While it’s possible that the resale company will dump the house if it isn’t sold in 60 days, it’s not that likely. Resale companies aren’t in business to lose money, so it’s more likely that the house would simply be for sale for an extended period of time. If there is a price reduction, it might be 5 percent of the sales price or less.
But let’s say that the resale company decides to drop the price by 20 percent in order to sell the house quickly. It’s likely that the actual resale price of the property would rebound fairly quickly once a new owner is living in it. Any dip in neighborhood values would most likely be temporary.
The most important thing you can do is to continue to maintain your home and landscaping to the best of your ability – and let everyone know that the house next to you is for sale.
Published: Jun 1, 2006