News
12-07-2006, 04:18 PM
Selling a Home With a Fiery Past
Or Other Buyer-Scaring Flaw
By June Fletcher
Question: We custom-built our home in 1999. Seven months later, our house caught on fire. Nothing regarding the home's construction contributed to the cause of the fire. Substantial damage was done to the home. Everything was completely repaired and brought back to its original state by a restoration company our insurance company recommended. We now have our home up for-sale-by-owner. We recently had an interested party. When we disclosed the information regarding the fire, they backed off with concern that the home was "tainted." Is there anything we can do to assure the buyer that the home is completely repaired and the fire hasn't caused any reduction of its value?
-- Frances Malone, Waco, Texas
Frances: Every house, like every person, has its secrets. But just as you wouldn't want to marry someone without at least being aware of his or her worst flaws and medical history, you don't want to get into a long-term relationship with a house without knowing what is, or was, wrong with it. Hence the trend towards full disclosure in real-estate transactions, and the renewed interest in home inspections (at least now that the market has cooled enough that most buyers no longer have to partake in bidding wars and write love poems about houses in order to persuade owners to sell to them).
Related Links
Should You Try to Sell Your Home During the Holiday Season?
Overall, full disclosure is healthy in a real-estate transaction, just as it is in a romantic relationship. In fact, I think it's just as positive for sellers as it is for buyers. After all, buyers who are surprised to find skeletons in the closets of their newly purchased properties are far more likely to feel taken advantage of -- and to sue-- than those who know, and accept, that those flaws are there.
Unfortunately, as you have discovered, you can't control how another person is going to receive news of past problems. Some people can easily accept life partners who have physical scars or troubling histories with abuse, drugs or mental illness; others can't. It's more an emotional issue than anything else. That's why I suspect that no matter how much evidence that you give to these buyers that your house has been completely repaired and isn't "tainted," they won't be swayed. In their minds, the home has an indelible black mark on it.
However, you have a house to sell, so amass information that you can give to potential buyers. Michael A. Hall, a state-certified general real-estate appraiser in Waco, suggests that you include three things:
* A report from the fire department, insurance company or other expert that explains the cause of the fire.
* A detailed summary of the restoration, including replacement of all walls, sheetrock, joists, rafters, trusses, wiring, fixtures, finishes and electrical and mechanical systems.
* A written report from a real-estate inspector or engineer on the current state of your home. (Since the eventual buyers probably will want their own inspection done as well, you may want to sweeten the deal by offering to pay for that, too, Mr. Hall says.)
Even this information may not be enough to sway some buyers. But those aren't the ones who are going to purchase your house anyway. Be patient and open, and eventually someone will come along who will love your home as it is -- despite its fiery past.
P.S. Although your home fire happened long ago, others who have recently experienced one may want to review the useful information on the Web site of the U.S. Fire Administration.
-- June Fletcher is a staff reporter at The Wall Street Journal and the author of "House Poor" (Harper Collins, 2005). Her "House Talk" column appears most Mondays on RealEstateJournal.com. Email your questions about the residential real-estate market. Please include your name, city and state. If you don't want your name used in our column, please indicate that. Due to volume of mail received, we regret that we cannot answer every question.
Join a reader discussion about the residential real-estate market.
Email your comments to june.fletcher@wsj.com.
Or Other Buyer-Scaring Flaw
By June Fletcher
Question: We custom-built our home in 1999. Seven months later, our house caught on fire. Nothing regarding the home's construction contributed to the cause of the fire. Substantial damage was done to the home. Everything was completely repaired and brought back to its original state by a restoration company our insurance company recommended. We now have our home up for-sale-by-owner. We recently had an interested party. When we disclosed the information regarding the fire, they backed off with concern that the home was "tainted." Is there anything we can do to assure the buyer that the home is completely repaired and the fire hasn't caused any reduction of its value?
-- Frances Malone, Waco, Texas
Frances: Every house, like every person, has its secrets. But just as you wouldn't want to marry someone without at least being aware of his or her worst flaws and medical history, you don't want to get into a long-term relationship with a house without knowing what is, or was, wrong with it. Hence the trend towards full disclosure in real-estate transactions, and the renewed interest in home inspections (at least now that the market has cooled enough that most buyers no longer have to partake in bidding wars and write love poems about houses in order to persuade owners to sell to them).
Related Links
Should You Try to Sell Your Home During the Holiday Season?
Overall, full disclosure is healthy in a real-estate transaction, just as it is in a romantic relationship. In fact, I think it's just as positive for sellers as it is for buyers. After all, buyers who are surprised to find skeletons in the closets of their newly purchased properties are far more likely to feel taken advantage of -- and to sue-- than those who know, and accept, that those flaws are there.
Unfortunately, as you have discovered, you can't control how another person is going to receive news of past problems. Some people can easily accept life partners who have physical scars or troubling histories with abuse, drugs or mental illness; others can't. It's more an emotional issue than anything else. That's why I suspect that no matter how much evidence that you give to these buyers that your house has been completely repaired and isn't "tainted," they won't be swayed. In their minds, the home has an indelible black mark on it.
However, you have a house to sell, so amass information that you can give to potential buyers. Michael A. Hall, a state-certified general real-estate appraiser in Waco, suggests that you include three things:
* A report from the fire department, insurance company or other expert that explains the cause of the fire.
* A detailed summary of the restoration, including replacement of all walls, sheetrock, joists, rafters, trusses, wiring, fixtures, finishes and electrical and mechanical systems.
* A written report from a real-estate inspector or engineer on the current state of your home. (Since the eventual buyers probably will want their own inspection done as well, you may want to sweeten the deal by offering to pay for that, too, Mr. Hall says.)
Even this information may not be enough to sway some buyers. But those aren't the ones who are going to purchase your house anyway. Be patient and open, and eventually someone will come along who will love your home as it is -- despite its fiery past.
P.S. Although your home fire happened long ago, others who have recently experienced one may want to review the useful information on the Web site of the U.S. Fire Administration.
-- June Fletcher is a staff reporter at The Wall Street Journal and the author of "House Poor" (Harper Collins, 2005). Her "House Talk" column appears most Mondays on RealEstateJournal.com. Email your questions about the residential real-estate market. Please include your name, city and state. If you don't want your name used in our column, please indicate that. Due to volume of mail received, we regret that we cannot answer every question.
Join a reader discussion about the residential real-estate market.
Email your comments to june.fletcher@wsj.com.