• Oct. 19, 2007 - No Surprise Here - More Disclosures Equals Lower Prices on Homes!
You SHOULD Always Fully Disclose - So Be Picky When Buying
To Avoid This Problem.
Interesting article reprinted below regarding Seller's Property Disclosures and their effect on selling prices. Not
surprisingly when the law forces sellers to disclose certain adverse aspects of their home - like flood zones, or noise zones
the sell price takes a pretty significant hit.
OK why to care? Well if you're out BUYING a home you want to be extra careful here. I work with builders and SOME will say - I
can buy lots for HALF the cost in a 1% flood zone than ones that are out of the flood zone. They think buyers won't care and
in many cases they do not - but once it is on a disclosure statement - as the article clearly shows - it lowers offering price
buyers are willing to pay. So even though you like a particular home consider that laws regarding disclosure are ALWAYS going
to grow MORE stringent so if you have a choice, and you are concerned that something about a home will later hit you in the
pocketbook when you have to disclose it - walk away. In the current market there are so many homes available you needn't feel
pressured into buying anything like that.
By the way, when you are selling, work with a good realtor who knows the laws about disclosure and ALWAYS disclose any adverse
items, even if you think it is going to hurt your pocket book. Avoiding a lawsuit or having a deal go south is worth a lot
more than any concession you may need to make. Plus - hey it's the RIGHT thing to do! - Mike W
MORE DISCLOSURES = LOWER PRICES
Disclosure laws that require sellers and real estate practitioners to provide prospective buyers with information about a
neighborhood - like whether it is in a flood zone or an airport noise zone - decrease property prices by thousands of dollars,
according to two studies from Virginia Tech University. The studies examined housing prices a year before disclosures laws
were passed in North Carolina and a year later. Homes near the Raleigh-Durham International Airport already sold for 4 percent
less than comparable homes in parts of town farther from the airport. A year after the disclosure law went into effect, prices
dropped an additional 3 percent, according to Jaren Pope, assistant professor of agriculture and applied economics at Virginia
Tech. Likewise, there was no substantial price difference between comparable homes in North Carolina that were in a flood zone
and those that were not until the state legislature required home owners to disclose this information. After the law passed,
houses in flood zones lost an average 4 percent in market value. Pope says similar disclosure laws have been passed
nationwide, but there is no standard, so the specific tenets vary not only from state to state but also from county to
county.
Source: Virginia Polytechnic Institute and State University (10/16/2007)
© Copyright 2007 INFORMATION, INC. Bethesda, MD (301) 215-4688 |
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Real Estate Market statistics, buying, selling strategies, financing, insurance for Sarasota, Siesta Key and the barrier islands from Ann & Mike Winger, REALTORS with REMAX Tropical Sands.
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• Oct. 31, 2007 - RE: No Surprise Here - More Disclosures Equals Lower Prices on Homes!
disclosures are good when read!
we have to disclose a lot on paperwork, and most borrowers dont even read what's on the documents. they generally trust their brokers which can come out expensive!
north carolina mortgage