Repair Expenses, Selling Contracts, and House Prices
This paper examines the impact of repair expenses on the selling price of a house. Using data from settlement statements, we investigate the frequency and extent to which performance of major repairs is part of the sales contract. We find that most homes are restored to a "normally maintained" state each time the home changes hands, and that the cost of bringing the home to this condition is included as part of house selling price. This implies it may be unnecessary to measure maintenance levels when using transaction data to study components of house price or to construct house price indexes.
Volume (Year): 20 (2000)
Issue (Month): 3 ()
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- Jan K. Brueckner, 1984. "Creative Financing and House Prices: A Theoretical Inquiry into the Capitalization Issue," Real Estate Economics, American Real Estate and Urban Economics Association, vol. 12(4), pages 417-426.
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- Sirmans, G. Stacy & Smith, Stanley D. & Sirmans, C. F., 1983. "Assumption Financing and Selling Price of Single-Family Homes," Journal of Financial and Quantitative Analysis, Cambridge University Press, vol. 18(03), pages 307-317, September.
- Shilling, James D. & Sirmans, C. F. & Turnbull, Geoffrey K. & Benjamin, John D., 1992. "Hedonic prices and contractual contingencies," Journal of Urban Economics, Elsevier, vol. 32(1), pages 108-118, July.
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