What term describes issues such as a dirty home or a bad neighbor that can negatively affect property value?

The term that describes issues such as a dirty home or a bad neighbor, which can negatively impact property value, is external obsolescence. This concept refers to factors outside of the property that can lead to a decrease in its value. These external factors might include undesirable environmental conditions, neighborhood decline, or the presence of nuisance properties nearby, such as those that are poorly maintained or involve problematic neighbors.

Understanding this concept is essential for real estate professionals, as they must recognize and address issues that arise from external influences when determining a property's value or advising clients regarding a sale or investment.

In contrast, functional obsolescence refers to a property being less desirable due to outdated features or poor design, while economic obsolescence (often used interchangeably with external obsolescence) typically focuses on broader economic factors affecting an area. Physical obsolescence pertains specifically to the physical deterioration of the property itself. Thus, understanding the subtle distinctions between these terms helps real estate professionals assess property values more accurately.