By David Myers | Cowles Syndicate
A growing number of home sellers are paying for an inspection of their property before they put it on the market.
Q. I am planning to list my home for sale, and the agent I have hired says that I should pay for a “pre-inspection” of my property by a certified home inspector. This seems to me like it would be a waste of money, especially because I’m sure my future buyer will want to pay for an inspection of their own. What do you think?
A. I think it would be a good idea to obtain a pre-inspection report, even though it might add another $500 or so to your marketing costs.
A small but growing number of sellers are ordering a pre-inspection of their home before putting it on the market. Such an inspection can help to identify problems that could turn off buyers and allow you to make any needed repairs before open houses begin.
Conversely, if the inspection shows that the home is in excellent shape, copies of the report could become a valuable tool in your marketing efforts because potential buyers would know that the property has no major construction flaws - and thus might be inclined to offer more than they would for a home that did not undergo a pre-inspection.
Q. We purchased a home in a new housing tract last September. Three weeks ago, the developer cut prices for his remaining nine homes - which are virtually identical to ours - by almost $30,000 each. This basically reduced the market value of our own home by an equal amount, or more, because now you can purchase a brand-new house like ours across the street for much less than we paid for our own home last fall. Can we sue the builder to recover our lost value?
A. You could sue, but you probably wouldn’t win. The law allows builders to raise or lower prices whenever they wish, so it’s doubtful that a judge would award you $30,000 to compensate for the “lost value” of your home.
I recall a lawsuit similar to the one that you’re contemplating back in the early 1990s, the last time that our nation went through a big housing slump. A group of California homeowners had sued their builder after the company had initiated a major round of price cuts to sell its remaining inventory of homes.
The judge eventually ruled against the owners and likened the sale of a house to the sale of a new car, noting that a consumer wouldn’t be entitled to any compensation if he purchased a new vehicle one day and the automaker lowered prices for the same model a few months later.
Don’t get too upset about the builder’s recent price cuts. After the last of the homes in the development are sold, prices should slowly start rising again because there won’t be as many homes available in your neighborhood. If you plan on staying in the house for at least a year or two, you should recover any short-term loss of value created by the builder’s recent price reductions.
Q. My uncle purchased a 10-acre parcel of raw land in another state three years ago, and left it to me in his will when he died in May. I want to sell the land, but all of the agents I have talked to in the area want to charge me a 10 percent or 15 percent commission. I have bought and sold several houses through the years, but never paid more than a 6 percent commission. What gives? Are they trying to gouge me because I live so far away?
A. No, the agents you have interviewed aren’t trying to take advantage of you because you live in another state.
Although most realty agents charge a 6 percent commission to sell a house, it’s common for them to charge 10 percent or even 15 percent as a commission to sell an undeveloped parcel like the one that your uncle left to you. Raw land can be very difficult to market and typically sells for much less than similar-sized parcels with homes on them. By charging a double-digit commission, the agent will earn about as much as she would by charging 6 percent for selling land that has a house on it.
For a copy of the booklet “Straight Talk About Living Trusts,” send $4 and a self-addressed, stamped envelope to David Myers/Trust, P.O. Box 2960, Culver City CA 90231-2960.
© 2008, Cowles Syndicate Inc.