Can Black Mold Rot Your Home Resale Value?
From the WSJ Real Estate Archives
by Robert IrwinQuestion: I currently have an opportunity to purchase a house at a greatly reduced price because it is being foreclosed on. My concern is that it looks as though the drywall on the ceilings and wall has black mold on it. I am a little apprehensive about purchasing the house because of the mold. My plan was to gut the house, remodel it and resell. After doing some research, I have health concerns for myself as I clean up the house as well as concerns about reselling the house. How might the mold affect the resale value even though it will have been cleaned up? Is there anything else that I should watch for?
-- Richard,
Richard: Black mold is the current bane of real-estate transactions. You are smart to watch out for it. There are really two issues, here. The first is, can black mold cause illness and possibly even death, as some have claimed? The second is, how does black mold affect a home's resale value?
Can Black Mold Rot Your Home Investment?
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When it comes to most buyers' perceptions of a home that is known to have black mold -- and this perception usually is bad. Buyers simply prefer to stay away from homes where there's even a hint of black mold. Their rationale is, why take a chance? A home is so costly, why risk losing future equity because of a fungus infestation? In short, homes with black mold in them (sometimes even after the mold has been eradicated), can take longer to sell and may bring a lower price. In some areas it is even hard to get homeowner's insurance on such homes.
You'll undoubtedly want to have the existing known black mold removed, probably professionally. Then, when it's time to sell, you'll also undoubtedly want to disclose both the black mold and how it was removed to future buyers. You should do this to help reduce the threat of them suing you later if they discover more black mold, that the old fungus was not totally removed, or something else untoward happens because of it. As noted above, this could mean a lower price and longer selling time.
Mr. Irwin has more than 25 years' experience as a Los Angeles-area real-estate broker. He is the author of more than two dozen books about real estate and is recognized as one of the most knowledgeable writers in the real-estate field. Mr. Irwin's most recent books are "How to Get Started in Real Estate Investing" and "How to Buy a Home When You Can't Afford It" (McGraw-Hill, 2002).
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