Don't buy the most expensive house on the block.

True. "Generally speaking, lower-priced properties tend to pull down the value of higher-priced properties, and more-expensive properties pull up the value of lower-priced properties," says Chuck Delaney, associate professor in the Department of Finance at Baylor University in Waco.

"The underlying theory is that people want to feel like they've moved into the nicest neighborhood they can afford," agrees Mark Dotzour, chief economist at the Real Estate Center at Texas A&:M University in College Station. Ignoring that theory may hurt sellers on resale. "If sellers have a $250,000 home, and the rest of the homes in the neighborhood are valued in the $180,000s, they'll be competing with properties that aren't in their neighborhood," he explains. "If all the homes in another neighborhood are worth about $250,000, buyers might think, Do I want a really nice house in a lesser-quality neighborhood or a more-moderate house in a higher-quality neighborhood? "

Exceptions: Unique properties-such as the only home on a block that overlooks the ocean or backs up to a greenbelt or a park-may be worth the extra money. Another exception may be in the highest-priced neighbor­hoods. "If people are buying in a pure prestige area, maybe they want to have the most expensive home," says Larry D. Kokel, an appraiser at Kokel, Oberrender, Wood Appraisal Ltd. in Georgetown.