When you’re looking to sell or buy a home, determining the right price is crucial. A house’s value is often based on its fair market value, which refers to the price a knowledgeable buyer would pay for the property under normal market conditions.
Discrepancies can arise when different parties have differing opinions about this value. One way to ensure that you’re getting a fair assessment is to hire your own property appraiser. This independent professional can give you an unbiased estimate, which might differ from that of a real estate agent or the buyer’s/seller’s appraisal.
Disputing house values can become a complex matter, especially if it leads to a breach of contract or other legal issues. This is where a real estate attorney can help. Read on to learn about common house value disputes and how a lawyer can help.
Pre-Sale Home Inspection Dispute
Before finalizing a home sale, a pre-sale inspection is generally conducted to identify any potential issues or needed repairs. This inspection can become a point of contention if the seller believes that certain highlighted defects are minor or non-existent. At the same time, the buyer might view them as significant and demand repairs or a reduction in the home’s price.
Example: Historic Homes
Jane, a homeowner, decided to sell her historic Craftsman home, nestled in a sought-after neighborhood with beautiful tree-lined streets. Built in the early 1900s, the home boasted original hardwood floors, intricate woodwork, and stained-glass windows—features that drew the attention of Paul, a potential buyer. Enchanted by the charm and history of the house, Paul quickly made an offer, which Jane accepted, contingent upon a satisfactory pre-sale inspection.
The inspector, hired by Paul, was a seasoned professional with experience in assessing older homes. His inspection report, however, became a flashpoint between the two parties. Key points of contention included the following.
The inspector noticed minor cracks in the foundation. While such cracks are common in older homes and might not necessarily indicate structural issues, the report recommended a more detailed examination by a structural engineer. Paul was concerned about potential future repair costs and wanted a significant price reduction. Jane, having lived in the house for over two decades without any noticeable foundation problems, believed the cracks were just typical signs of settling and not indicative of any major flaws.
The home still had some original knob-and-tube wiring. The inspector pointed out that while it wasn’t necessarily a safety hazard, many insurance companies view it as a higher risk, and some may not even insure the home or would charge a higher premium. Paul requested the entire home be re-wired before purchase. Jane countered, stating that she had never faced any electrical issues and felt a complete re-wire was an unnecessary expense, given the historic nature of the home.
The clay tile roof, original to the house, had some missing and cracked tiles. The inspector’s report highlighted the need for repair or replacement soon. Jane had assumed the roof was in good shape, given it didn’t leak, and she argued that the tiles added to the home’s historic charm. Paul, on the other hand, was concerned about the potential cost and hassle of repairing such a unique roof.
The resulting negotiations were tense. Paul felt that if he was paying a premium for the home because of its location and historical significance, he didn’t want to inherit a host of potential issues. Jane believed that the very nature of a historic home meant it wouldn’t be “perfect” by modern standards and that its quirks and minor flaws were part of its charm.
Eventually, both parties reached a compromise with the help of their real estate agents. Jane agreed to a modest price reduction to account for the roof repairs, while Paul decided to handle the electrical updates post-purchase, understanding the heritage value of the home.
This example underscores the intricacies and emotions tied to home sales, especially when the property in question has historical or unique features. Pre-sale inspections, while invaluable, can bring these to the fore, necessitating clear communication and compromise from both parties.
Property Damage Home Valuation
Property damage, whether due to natural disasters, accidents, or neglect, can significantly impact a home’s value.
Example: The Case of the Riverside Retreat
Sarah had recently listed her riverside home for sale. The house, with expansive windows and a deck overlooking the river, had always been a haven for her, providing tranquil views and the gentle sound of flowing water. However, a month prior to listing, an unprecedented heavy rainstorm led the river to swell. This caused minor flooding in the basement and ground floor of her home.
Upon discovering the water damage, Sarah acted quickly. She hired professionals to pump out the water, dry the affected areas, replace the damaged hardwood on the ground floor, and restore the waterlogged portions of the basement. She believed that her swift action and the thoroughness of the repairs had made her home as good as new.
When Robert, a potential buyer, showed interest in the property, he was captivated by the home’s setting and the promise of serene riverside living. During the disclosure process, Sarah openly shared the recent water damage incident and provided documentation of the repairs. However, Robert, being cautious, decided to engage his own home inspector and a specialist in water damage assessment.
The inspector’s findings introduced several points of contention:
- Mold Concerns: Despite Sarah’s prompt action, the inspector found traces of mold behind a section of the newly installed drywall in the basement. Mold could pose health risks and would require additional remediation efforts.
- Foundation Integrity: The water damage specialist raised concerns about the long-term implications of water exposure on the home’s foundation. Even if there were no immediate visible signs of damage, the saturation might have weakened it.
- Future Flooding Risks: The recent flood was described as a “once-in-a-decade” event by Sarah. However, Robert’s research suggested that changing climate patterns could make such events more frequent. He was concerned about the potential for future flooding and the associated costs of potential damage and insurance premiums.
Sarah, confident in the quality of the repairs and the rarity of the flooding event, felt that the house’s value remained largely unchanged. Robert, on the other hand, saw the recent water damage as a potential liability and felt that the risk of future flooding events decreased the property’s long-term value.
Negotiations became a balancing act. Sarah offered to reduce the price slightly to account for the mold remediation but held firm on her valuation otherwise. Robert, still in love with the riverside views, proposed that a flood barrier or retaining wall be built as a condition for the purchase.
After involving their respective realtors and further discussions, a middle ground was found. Sarah would address the mold issue and contribute partially to the cost of installing a flood barrier. At the same time, Robert accepted the inherent risks of a riverside property, believing the intangible benefits outweighed the potential challenges.
The Riverside Retreat case highlights the complexities arising from unforeseen property damage and the perceptions of both sellers and buyers in evaluating a home’s true value.
Do I Need a Lawyer to Dispute House Values?
Having a real estate attorney on your side can provide valuable guidance, ensuring that your rights are protected and helping to negotiate or mediate any disputes. An attorney can review contracts, advise on local property laws, and represent you if the dispute escalates.
Are you facing house value disputes or other property-related concerns? Protect your interests with legal guidance. Connect with a dedicated property lawyer today through LegalMatch.