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What is the impact of property encroachments on home value?

On Behalf of | Oct 25, 2023 | Real Estate

Property encroachments, though they might sound like a minor concern, can significantly impact the value of your home. This occurs when a neighboring property owner’s structure, like a fence, shed or part of their building, crosses over the property line onto your land. While this may seem inconsequential at first, these encroachments can create legal and financial headaches for homeowners.

How does encroachments affect home value?

An encroachment can affect your home’s value in various ways. Here are a few key points to consider:

  • Marketability: Homes with encroachments may be less marketable because knowing they might inherit a property dispute could deter potential buyers. This can make it harder to sell your home.
  • Property appraisal: Appraisers may lower the value of your home. This can directly impact the amount of money you can get for your property.
  • Legal costs: Resolving encroachment issues can be costly. It may involve legal fees and potential court battles. These expenses can eat into your home’s equity.

Although it seems like encroachments can be a real bother, there are ways to resolve the issue. The easiest one is probably by being transparent about the situation.

Disclosing property encroachments

If you are aware of an encroachment, it would be best to be honest about it when selling your home. Full disclosure is not just ethical. It is also legally required in many cases. Failing to disclose can lead to legal repercussions down the road.

When disclosing, provide all relevant information about the encroachment, including its type, extent and ongoing efforts to address the issue. Buyers will appreciate your transparency and may be more willing to consider your property.

Mitigating the impact

To mitigate the impact of property encroachments on your home’s value, consider these steps:

  • Negotiation: Try to reach an agreement with the neighbor to remove or adjust the encroachment. Mediation or arbitration can also be helpful.
  • Property line adjustment: In some cases, it might be possible to adjust the property lines to accommodate the encroachment legally.
  • Legal assistance: You may also consult a real estate lawyer for professional guidance on how to handle the situation effectively.

Property encroachments can indeed affect your home’s value. It is important to be forthright with potential buyers and take the necessary steps to resolve these issues. By doing so, you can protect the value of your home and avoid future legal troubles.

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