How to Rate a Neighborhood
Quick question for house hunters: What’s more important – the house or the neighborhood? Answer: Probably the house, but there’s no doubt that the neighborhood doesn’t get as much scrutiny from prospective home buyers as it should. A bad neighborhood can have a catastrophic impact on the value of your home, even if the house itself is great, so it’s key to choose wisely. Eric C. Wentworth, author of “A Plan for Life: The 21st Century Guide to Wealth, Health, Career, Education, Love, Place…and You!” captures the gravity of your decision: “Moving in next to a psycho neighbor can ruin your life.”
It’s easy to find advice on evaluating a home before you buy. But how do you know a good neighborhood from a bad one? Here’s the scoop.
Check Out the Neighbors
The Internet allows you to take a look at the types of people who might eventually be your neighbors. Numerous background-check sites, for example, let you view basic background information on someone so you can search the addresses of the houses next door. Crimereports.com is a great place to find out about criminal activity – it covers everything from homicides to robberies. You can also visit your local clerk of courts website to view any court actions against the perpetrators.
Be sure to check out familywatchdog.us, which lists known sex offenders living in a specific locale and includes identifying information such as their photo, home address and type of offense. Also search the official sex offender database where you plan to buy and the U.S. Department of Justice’s sex offender database at nsopw.gov. If you have trouble finding local information, call the local law enforcement agency.
What are the comps in the neighborhood? That’s real estate lingo for the value of homes in the area that are similar to the one you’re considering. If they’re significantly lower than your potential home, that’s a serious red flag. You can look at zillow.com to find some of that information on your own. Since you probably don’t want to be the most expensive house in the neighborhood, look at property values of all homes around the house you want. If you’re working with a quality realtor, he or she should give you much of this information if you’re seriously considering a home.
Prospective homebuyers should “compare the cost per square foot with other neighborhoods under consideration,” says Tonya Lockamy, a realtor at Olive Branch Realty in Lakeland, Fla. “More desirable neighborhoods will demand a higher cost per square foot.” Looking at square footage costs is also a good way to find a deal, Lockamy adds. “If the average cost per square foot in a neighborhood is $150 and other houses in the neighborhood are $125, you might have found a good deal. On the flip side, if the price per square foot is substantially higher, find out why. You can find the historical sales information on realtor.com by searching, ‘Recently Sold’ in the search dropdown box.”
Go for an Exploratory Walk
Internet searches are important, but they will only give you a fraction of the information you need. To find the rest, you have to get into the neighborhood. “Park your car in front of the place you want to buy and take a stroll two to three blocks in every direction,” says Arvin Sahakian, vice president of BeSmartee in Los Angeles, Calif. As you walk, he suggests you ask yourself the following questions: