When it comes to selling a real estate property in a market with high crime rates, the process can be complicated and time-consuming, to say the least. Homebuyers often consider security and safety to be the most important factors when deciding whether or not to purchase a particular property. This concern stems from the fact that high crime rates typically lead to increased neighborhood instability and poorer overall living conditions, both of which can dramatically reduce property values.
Statistics show a direct correlation between rising crime rates and increased home vacancy rates. A study showed that property value drops by 1.5% with every 1% increase in violent crime rates in an area. Increased crime rates also increase the risk of property damage, resulting in even more homeowner headaches and expensive repairs down the line.
Here’s how high crime rates affect property values and how you can address this problem if planning to sell a home in a high-crime area:
Homebuyer’s Concern
Safety is a major concern among homebuyers with families, especially those looking to buy their first home. Among other things, they prefer properties with good schools and low crime rates because they feel their children will be safer in those areas. If the neighborhood is not safe, chances are they are less likely to purchase the house.
Note that not all crime rates are created equally. For example, the rate of robbery or burglary tends to be less important to potential home buyers than the rate of violent crime like murder or assault. As a result, your property may be devalued because of a single crime at a house across the street.
Insurance Costs
Another way that high crime rates can affect the value of your home is by increasing your insurance premiums. Many insurance companies base their premiums on statistics related to recent crime and accidents in the area where you live. So if your house is located in a high-crime neighborhood, your premium is likely to be higher as a result. Therefore, even if a homebuyer buys the real estate property for less, they will still have to pay a higher insurance cost because the insurance company will factor that into the price as well.
When a residential property is placed on the market, the owner must obtain the appropriate insurance to protect the property from unexpected damages or losses. As a result of high crime rates, homebuyers are deterred from purchasing homes in neighborhoods where the crime rate is high because it could cause an increase in the cost of insurance.
Crimes Happening in the Neighborhood
Property value and crime rates correlation also influence crime rates. With low property rates, the neighborhood is likely to attract people with low-income levels or other people involved in criminal activity. Therefore, it becomes difficult to keep the crime rates low when property values are low. As more and more people move to the neighborhood to take advantage of this low-rent opportunity, the neighborhood becomes unsafe as more and more people commit crimes.
It’s a cycle that can spin out of control and lead to major neighborhood crime issues. Therefore, the reduction of property value and increase in crime rate are negative factors affecting the community.
Tips for Selling a Property in High-Crime Areas
If you’re trying to sell your home in a neighborhood with high crime rates, there are certain things that you can do to help the situation. Here are some tips:
Hire a Real Estate Agent
Working with a seasoned real estate agent can help you market your home to potential buyers who might be afraid of living in a crime-ridden area. They have years of experience and a wide network that they can use to promote your home and attract potential buyers. Their expertise and connections can also help you get the best price for your home.
Many homebuyers underestimate the benefits of marketing tactics and strategies when selling their homes. A realtor can carry out an advertising campaign to drum up interest among potential buyers and promote the property across different channels.
Staging and Property Tour
Stage your property so that it appeals to most buyers visiting your home for the first time. Ensure that the property is clean and tidy and looks its best before inviting prospective buyers for a property tour. Focus on areas that can add the most value to your home and make it more appealing for buyers. A good staging job can help increase the value of your home and help you get a better price if you are looking to sell it.
Make sure to declutter and de-personalize your property before showing it to potential buyers. Keep personal items to a minimum and show the space in the best light possible.
Pricing the Property
When pricing the property, you should expect a bit of a challenge. It can be difficult to gauge the value of a home in a high-crime area, so it’s important to consider many factors when setting a price. Regardless of everything, you can expect a price reduction of around 5% to 10% compared to similar properties in other areas.
Don’t Mislead the Buyer
Be honest with the buyer about the condition of the property and the details of the crime incident. It’s best they find out for themselves before making any commitments towards the property. Avoid making any claims that are not true, and don’t try to hide the crime incident from your buyer.
Explain Why It’s a Good Investment
Despite the area’s negative reputation, chances are high that there might be some positive aspects that make it a worthwhile investment for entrepreneurs or homebuyers. Highlight these positive attributes and sell the benefits of investing in the property.
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They have real estate agents who are licensed and experienced in the industry. They can help you buy and sell luxury homes in Brevard County, riverfront properties in Volusia County, Townhomes for sale in Melbourne Beach, and more!
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About the Author
The author of this blog is Megan Hernandez, a real estate professional with more than 15 years of experience. As a realtor with a top-performing team, she specializes in helping clients sell their homes in various markets, such as Brevard County, Satellite Beach, and Melbourne Beach.
