How To Look At A House
McGarry and Madsen's home inspection blog for buyers of
site-built, mobile/manfuactured and modular homes
How does a repaired sinkhole under a house affect its market value?
Friday, October 26, 2018
Houses that have had sinkhole repairs sell for around 10% less than a comparable house that has not had previous sinkhole problems. A 2016 joint study by risk management professors at Florida State University and University of South Florida pegged it at 9%, and also found evidence that a home’s location near known sinkholes “has a negative impact on selling price,” without defining a percentage.
Although it could be argued that a house that has had a sinkhole professionally repaired—with specifications by an engineer and work done by a qualified contractor—is less likely to have future problems than one nearby with no current signs of sinkhole activity under it, some buyers simply refuse to consider a sinkhole-repaired house. So the pool of available buyers is smaller.
Also, getting homeowner’s insurance requires providing extensive documentation of the work done and final approval by an engineer. In some cases, a homeowner may have to get “builder’s risk” insurance, also called “surplus lines,” if Citizens Insurance and other providers will not issue a standard policy. To learn about builder’s risk insurance, see our blog post How do I get insurance if my home can't pass a 4-point inspection?
If you own a home with a current sinkhole problem or a repaired sinkhole, it must by law be reported in your disclosure statement to any homebuyers because it will materially affect the value of the home. To read a sad story about a home with structural damage due to an unrepaired sinkhole, and only cosmetic repairs done, then sold without disclosure, go to our blog post Should I trust the Seller's Property Disclosure Statement?
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Here’s links to a collection of our other blog posts about SINKHOLES:
• Why do so many more sinkholes open up after a hurricane?
• What are the warning signs of a sinkhole?
• How can homebuyers protect themselves against buying a house over a sinkhole?
• What is my chance of buying a Florida home over a sinkhole?
• Where are sinkholes most likely to occur in Florida?
• Are there sinkholes in The Villages, Florida?
• Are sinkholes happening more often?
• What are the basic facts about sinkholes?
• Does homeowners insurance in Florida include coverage for sinkhole damage?
• Should I be concerned about an old sinkhole on a property?
• Should I be concerned about my house if a sinkhole opens in my neighbor's yard?
• What are the Florida law regarding sinkhole insurance?
• Can a home inspector determine if there are any sinkholes on a property?
• Is it safe to buy a house with sinkhole foundation repair?
• How can I tell whether my house foundation problems are caused by a sinkhole or expansive clay soil?
Visit our SINKHOLES page for other related blog posts on this subject, or go to the INDEX for a complete listing of all our articles.
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