Can Mold Infestations Decrease the Worth of Your Home?
There are two main reasons why you should be concerned about mold in your home environment. The first is your family’s health. The health risks of mold are well-known, with effects ranging from mild to extremely serious. There’s no question that part of maintaining a healthy home involves mold prevention and mold removal when necessary.
But what about maintaining a valuable home? This is the other main reason to take mold seriously. The longer mold is allowed to thrive and colonize, the more difficult it will be to remove the infestation completely. There are even cases of mold colonies that are so extensive and damaging that it makes more sense to tear the home down and start over, rather than spending tens of thousands of dollars trying to root out a mold colony that has completely run rampant—and having this situation forever documented in the property records.
The question is, how bad can it really get? Does mold really affect your home’s value that much?
In many cases, the answer is yes. According to researchers who conducted a detailed study in 2001, one particularly serious mold infestations decreased the overall value of a luxury home by more than half. The loss in value was hundreds of thousands of dollars. While this was a rare case, the researchers found that losses in value up to 25% were common as a result of large scale mold infestations. Now obviously, when you’re talking about losing between a quarter and half of your home’s value, you know you’re dealing with a serious threat!
Here’s the kicker: Even when professionals were called in for mold removal, the value of many properties never completely recovers. In several documented cases, homes that were treated for large scale mold infestations have consistently lower resale values, even after they had been bought and sold several times. There’s only one logical conclusion: Once mold reaches a critical threshold, it can still be eradicated through professional mold remediation—but the value of the property will often be permanently affected. That’s because sellers are required to report such issues to potential buyers. In turn, buyers worry that the problem could be ongoing or resurgent. Because of this concern, they not willing to pay as much for the property as they otherwise would.
Determining the extent to which mold will devalue a given property is not an exact science. A lot of it depends on the neighborhood and real estate market, as well as current economic conditions.
That said, the evidence shows that mold infestations do seriously affect property values, especially when remediation efforts are expensive and time-consuming. Some property owners who have an existing mold problem will put their property up for sale anyway (at a discount) and disclose the nature of the mold problem to potential buyers (as they legally must). This will almost always result in a downward pricing spiral. Most buyers take their investment seriously and will carefully think about all the associated costs, including the cost of replacing materials and other renovations.
So what if you, the property seller, decide to take care of all the remediation and renovation efforts before putting the property on the market? Of course your property will carry a higher market value than if you had left the problem unsolved. However, the value will typically not return to what it was before the mold problem existed. If the seller takes care of these things ahead of time, the resale value goes up, but not as high as it was before the infestation. You may also find that insurance companies want higher premiums in order to cover the property, which in turn will affect the market value.
The one thing you don’t want to do, if you’re a homeowner, is to put your property on the market without disclosing the nature of the mold problems, and trying to mask the situation. You could be facing a serious lawsuit if you go this route.
Honesty is the best policy, even if it means you have to take a loss. Whether you discount your price and leave the solution to your buyer, or take care of everything in advance and sell for a higher price, a serious mold problem will still hit your pocketbook.
What’s the solution to those mold-related property value troubles?
It’s simple. Mold prevention and remediation are readily available in most areas, and can help you to avoid pesky mold issues from becoming epic mold problems. Getting familiar with how mold grows, and how to spot it, is another way to prevent large scale infestations that damage property values.