If you’ve considered buying a home, you probably know a busy street with double lines or transformers in the backyard doesn’t bode well for your property value.

But have you ever thought about other factors that negatively impact the value of your home that’s not so obvious?  Ones that an unscrupulous real estate agent might forget to inform you?  Read below for more.

1. New Construction Density – As you probably know, the more nice homes you are surrounded by, the better.  All things equal, newer homes tend to increase your property value.

The flip side is also true.  Sometimes you can have a “bad apple” that ruins it for the rest.  If you’re trying to sell your pristine beautiful home and your neighbor’s house next door is falling apart – roof shingles missing, drooping gutters, boarded windows – that will draw some (unwanted) attention.

The benefits to living in a neighborhood with new construction are obvious.  But an overlooked NEGATIVE is homeowners typically have LESS equity in newer areas.  Homes in long-developed and seasoned neighborhoods typically have less distressed properties because most homeowners there have lived there over 15 years and have a large buffer of equity.

By contrast, homes in new developments means buyers likely DON”T have EXCESS equity – or more than 20 percent.  When the market hits, strong buyers who came in with 20 percent equity now have no equity.  And buyers who bought with 10 percent… or 5 percent… or zero down… well… we’ve seen what a falling prices can do.  Refinancing is hard if not impossible, downsizing doesn’t work for underwater mortgages, the list goes on.

2. Wind – is one of things that is hard to determine until AFTER you’ve lived there – when it’s too late.  For example,  Snoqualmie Ridge (Snoqualmie, WA) is a beautiful development.  But depending on where you live  you might be stuck with a home that receives the wind traveling up through the southeast from Snoqualmie Valley.  In the evenings winds can get up to 20-40 mph and even up to 50+ mph during the winter.

When winds pickup at night you can hear the whistling and windows flexing. For those people used to it, fine.  But if you have guests staying over, they’ll be in for a midnight awakening.

When you purchase any asset you must think, what’s my exit strategy?  What is the future buyer of my house going to think?  The next person that wants to buy the “windy home” either 1) has to be oblivious to this (like you were possibly) or 2) will price in a discount.

Wind, you don’t see it, but it’s there.

3. Galvanized piping – these pipes were used extensively in homes built before 1970.   Galvanized pipes were used for water supply and drain lines.  Essentially, these steel pipes are covered with a layer of zinc to prevent the steel from corroding.

While galvanized piping still has other industrial uses, they are obsolete for home construction today.  Water lines typically use copper pipes which are more durable and can even come with 50 year warranties from the manufacturer.  Drain lines use ABS pipes – far superior to galvanized pipes – which don’t rot, build up, and are easy to transport because of their light weight.

Homes with galvanized pipes will likely get FLAGGED at inspection.  The water pressure will likely drop because of sediments and corrosion in the pipe.  A couple years ago my clients were selling a home in Newport (Bellevue, WA) that was built in 1950.  After the inspection, the buyers requested my client to replace ALL the plumbing in the house.  This cost $15,000 to replace. We had no choice but to pay the lofty price tag.

4. Septic – if your home is not connected to a sewer, but most people in your neighborhood are, you’re in for a nice surprise when you sell.

If I had to guess, I’d say apples-to-apples a home without sewer is at least 4% less.  So if the average home in King County is $400k, then an identical home without sewer connection is $16,000 less. Certain areas in the Renton Highlands (Renton, WA) have sewer and some don’t.  I guess it depends on which side of the (sewer) line you’re on.  🙂

In addition to the value drop, it also means selling your property gets more complex.  Issues can often arise during septic inspections and require you to service or pump it.

Lastly, if your property has development potential, it often requires sewer connections in order to get approval of the city/county.

5. Metro proximity – every neighborhood has “anchor” commercial.  If you veer to far from these areas in an UP market you won’t notice the difference in terms of price.  However, in a DOWN market it often impacts your property significantly.

In the wake of the housing crisis, it’s not surprising to see price drops of 25%+ in the outer-metro areas and “only” 15-20% in core metro areas.

When recession hits, people no longer want to spend an extra hour each way commuting to work and paying for gas.  People will forgo the luxuries of the 3500sf home and downsize to 1800sf homes in order to live closer to work and save money.

6. FHA/VA approval – for condos or townhomes (those that are called townhomes, but are technically condos), not having FHA approval can drastically reduce potential buyers.  Especially, now with FHA funding over 50% of all loans this makes a BIG difference in terms of demand for your property.  If your condo is not FHA approved that means buyers will need to get a conventional loan with stricter debt-to-income (DTI) ratios.  You can check the HUD’s site to see if your condo is FHA approved.

I recently helped a client put an offer on a condo that said it accepted FHA and found out that it was NOT FHA approved.  It was a beautiful home, but we had to pass on the home and wished the sellers good luck.