External obsolescence
Loss of value from something outside the property: a new highway next door, a shuttered factory in view, a rough patch in the surrounding neighborhood. Hard to fix.
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Where this comes up: getting ready
Part 1 of 4
Why a seller cares
A highway, a power line or a shuttered plant next door lowers value and nothing you do to the house changes it. Pricing has to start from comps that share the same neighbor.
Part 2 of 4
A simple example
Your home backs onto a four-lane road. Homes two streets in sell for $320,000; the ones on your street sell for about $290,000.
| The comp | Why it does or does not fit |
|---|---|
| Two streets in, $320,000 | Wrong; it does not share the road |
| Same street, $290,000 | Right; the road is priced into it |
| A new fence and landscaping | Helps the photos; does not move the road |
External obsolescence is outside the fence, and so is the fix.
Part 3 of 4
What people get wrong
That improvements can offset it. They can make a home the nicest on the road; they cannot make the road go away.
Part 4 of 4 · where to read next
Where it appears in the sale
What a definition is, and what it isn't
Keighbor is a software company, not a law firm, brokerage, or tax adviser. This is general information, not legal, tax, financial, or real estate advice about your sale. Your situation may differ. Before acting on a contract, disclosure, title, tax, or pricing question, ask an appropriately licensed professional in your state.
Written and researched by Keighbor Research · drawn from the reference glossary · how we research and check what we publish
In your Room, this word explains itself where it appears.
Your Room defines external obsolescence in the step you meet it in, beside the document or the date it belongs to. Free to set up, with an agent or on your own.
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