Often times we see a large 2-story home in a single story neighborhood. In an attempt to increase the value of the house, homeowners may make improvements to the house that fall outside of the neighborhood norm.
A home is consider overbuilt when it has been expanded or improved to a level beyond that of most homes in the area. Those homes can be difficult to sell for a reasonable price because typical buyer can not afford it for the area.
Statistically in our area, overbuilt homes can fetch up to 20% more than the neighbored homes. If a house is in a $500,000 neighborhood, buyers will be willing to pay up to $600,000 to purchase it.
Even if the overbuilt home is more desirable than the surrounding properties, buyers may choose to spend their $600,000 in a $600,000 neighborhood instead. Homeowners may have difficulty recover their investment if the house is overbuilt.
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