Repair Expenses, Selling Contracts and House Prices

Posted: 19 Feb 2001

See all articles by John R. Knight

John R. Knight

University of the Pacific - Eberhardt School of Business

Thomas J. Miceli

University of Connecticut - Department of Economics

C. F. Sirmans

Florida State University - Department of Risk Management, Insurance, Real Estate & Business Law

Abstract

This article examines the impact of repair expenses on the selling price of a house. Using data that include the actual dollar amount of repairs stipulated in the settlement statement, we investigate the frequency and extent to which the 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 the house selling price. This implies that it may be unnecessary to measure maintenance levels when using transaction data to study components of house price or to construct house price indexes.

Suggested Citation

Knight, John Ross and Miceli, Thomas J. and Sirmans, C. F., Repair Expenses, Selling Contracts and House Prices. Journal of Real Estate Research, Vol. 20, Issue 3, November 2000. Available at SSRN: https://ssrn.com/abstract=241010

John Ross Knight (Contact Author)

University of the Pacific - Eberhardt School of Business ( email )

3601 Pacific Avenue
Stockton, CA 95219
United States
209-946-2637 (Phone)
209-946-2586 (Fax)

Thomas J. Miceli

University of Connecticut - Department of Economics ( email )

365 Fairfield Way, U-1063
Storrs, CT 06269-1063
United States
860-486-5810 (Phone)
860-486-4463 (Fax)

C. F. Sirmans

Florida State University - Department of Risk Management, Insurance, Real Estate & Business Law ( email )

Tallahasse, FL 32306
United States
850 644-4076 (Phone)

HOME PAGE: http://www.cob.fsu.edu/rmi

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