10 signs you’re overbuilding for the neighborhood

top-10How do you know if you’re overbuilding? Here are ten signs for your mental checklist if you’re considering a significant addition to the size of your home.

You are overbuilding…

  1. If your house is going to be twice as large as all others in the neighborhood.
  2. If you no longer need Neighborhood Watch because your house towers over all others and is a watchtower in and of itself.
  3. If you have double the bedrooms of other homes in the neighborhood.
  4. If your house is mistaken for a motel or residential care facility.
  5. If you can see in every backyard on the street.
  6. If what you are building will yield little value in the resale market.
  7. If the larger size removes the rear yard and thus creates a negative for buyers.
  8. If prospective buyers think “Yikes, what were they thinking?” or “I would not want to live next to THAT house.”
  9. If shade from your house lowers energy bills for neighbors on every side.
  10. If buyers don’t have the expectation for such a large house in the neighborhood.

Obviously some of the points are only for fun, but you get the gist. If what you are doing is not consistent with the look and feel of the neighborhood as well as the expectations of the marketplace, then you’re probably overimproving your property. Watch a fun 30-second clip below of an overbuilt house I saw in Sacramento (and here is another in Woodland).

Anything you’d add to the list?

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  1. says

    Your example in the video is spot on. That house wouldn’t be out of place in other neighborhoods – like it or not, most neighborhoods in the Sacramento region are built around conformity. I think overbuilding sometimes happens when someone has lived in a home for a while – really likes something about their neighborhood but they need more space. Unfortunately they don’t always talk this over with anyone in the real estate industry before moving forward.

    • says

      Very well said, Carolyn. Thank you. The irony of the house from the video is that it would fit in a whole lot better just a few streets away – but clearly not on the steet it’s on. I think you’re right about the motivations people have. I can understand the value in use, but there will come a day to sell too, so that should be considered also. There certainly is something to be said about conformity. Thanks for your insight.

  2. says

    Love the video. Any ideas on what do do if you have already overbuilt the home and now need to sell. Now that it is much bigger than most homes have extra beds and baths, what can we do to sell it and still make good money even if the property values in the neighborhood dont support it.


    • says

      Hi Geoffrey. Thanks for the comment. The key here is figuring out the market. Hopefully there are some large sales from time to time that can command a premium above and beyond what typical houses do command. It’s okay if the large sales haven’t closed in the past few months. There is no problem in looking back years in the immediate neighborhood to try to see the context of the market. How have buyers historically responded to large homes? Has a premium been paid? Is there any price difference between the top of the market for smaller-sized homes and larger ones? These are only questions that can be answered through research. Or are there any competitive neighborhoods that have seen some large homes sell? Any lender is going to want to see an appraiser use similar sales (if possible) from the subject neighborhood or at least a neighborhood that is truly competitive (not cherry picking from a higher-priced neighborhood). I find some areas there are very large homes that are built because they are in demand, but other areas simply do not support the notion. If you are in an area where the house is simply a sore thumb, you might want to keep two prices in mind: 1) High Price; and 2) Realistic Price. You can try to list the house at a really high price in hopes of someone paying cash or maybe the market valuing this one differently for some reason. Yet at the end of the day, ask yourself where the price ceiling in the market is at, and be realistic about what price your property might fetch. Other than creatively marketing the property and considering who might want a larger home and use it in the neighborhood, I don’t know if there is anything you can really do to fetch a higher price because the market is the market.

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