The Real Deal / Selling or buying an 'impacted' property
An "impacted" property is one whose value is negatively affected by an outside factor not in the owner's direct control.
In Westport, these factors may include too-close proximity to Interstate 95 or the Merritt Parkway, Metro-North Railroad tracks, commercial buildings, power transmission lines -- even a cemetery.
In Weston, most impacted properties are near power lines which course through both the northern and southern ends of town. Other factors may include proximity to the town dump, or a hospital, a public works garage where snowplows come and go in the night, a school bus lot that gets noisy at 5 a.m. -- or just a very busy road. A pond close to the house or significant wetlandsalso may depress value.
It may be risky to buy an impacted property -- even though the price may be attractive -- because they may be very difficult to re-sell. About 50 percent of buyers would never consider such a purchase. So if you own an impacted property, it may be risky to invest too much in improving it.
Surprisingly, some owners of impacted properties are not even aware of their home's status. I visited a broker's open house in Weston recently -- a gorgeous home that had undergone an expensive, major renovation with a lovely result. I asked the listing agent about the location of the nearby power lines -- which were close to the house but well screened by foliage. In the ensuing conversation, I learned that the owner had no idea they were there. That is, until the topic of impacted properties was raised during the listing appointment.
Some owners are not bothered by the impacting factor and assume that future buyers will overlook it as well. Still other owners believe that upgrading the property inside and out will make up for the deficit that impacts it. Unfortunately, neither of these may be the case.
You've probably heard the expression that the most important factor when buying real estate is location, location, location. Because this is 100 percent true, impacted properties may sell at a 10 to 25 percent discount versus comparable homes in non-impacted locations. The amount of the discount depends on the appeal of the home, the severity of the impact and the supply of available homes at the time of the sale.
If you're a buyer, an impacted property may appeal to you because you can usually get more house for your money at a lesser location. Buying a house that backs up to the Post Road may be the only way to get what you're looking for within your budget. Before buying, however, it's important for you to be fully educated about the pros and cons of your purchase. A savvy buyer agent is your best resource.
If you're a seller, being fully educated is perhaps even more important. A listing agent who tells you that your impacted property is not disadvantaged versus other homes on the market is doing you no favor. The agent who is honest with you about your likely sale price and who recommends strategies for optimizing your home's appeal to potential buyers is the one you should hire.
Impacted properties can sell quickly and at top dollar, just like any other home. But the key is pricing that the appropriate discount. Perfect exterior presentation as well as a staged interior is also critical, in order to convince buyers to seriously consider your home. Lastly, because some buyer agents would never consider showing a house that backs up to a highway, it's important to offer an incentive that will make them willing to do so. A 3 percent buyer-agent commission usually does the trick.
Evi Coghlan's "The Real Deal" appears every other Friday. She is a licensed real estate agent with the Riverside Avenue office of Coldwell Banker and a former marketing consultant to Fortune 100 companies. She may be reached at 203-247-6691, by emailing her at email@example.com, or visiting www.evicoghlan.com.