How Water Damage Hurts Property Values, Especially During Property Transfer

Property owners have a love-hate relationship with water. We need water to be available in many parts of our building. We love a beautiful water feature outside including perhaps a pond and fountain. We know that well-constructed property handles the water that falls from the sky in the form of rain or blows and flows in during storms.

However, we are too aware of the many ways that water can damage our investment. Here’s a list of some of the expenses that arise when water damage is visible in a property about to be bought and sold.

  1. Seeking an estimate. The first expense that is certain to come up to address water damage is an inspection and repair estimate. The prospective buyer will want a comprehensive inspection. An inspector with integrity is expensive, and will take as much time as is needed to not only determined how to repair the damage but to also address and correct the source of the water. Just the estimate can cost hundreds of dollars.
  2. Billing for interior repairs. When the initial estimate is complete, the buyer will also want to assess or subtract the estimated amount of repairs. This can include inches of foundation, framing, drywall or other wall or ceiling surfaces. It can also include inner wall surfaces if the source of the water is outside of the property. These repair costs include not only materials and supplies, but compensation for the workers.
  3. Billing for exterior repairs. Of course the most expensive repairs are those which include dealing with water along the foundation. Exterior repairs can then include digging out the affected area, regrading, water management including drains and pipes, and landscaping when the work is complete.
  4. Rounding. In building and planning, there is always the chance for the unexpected event or the need to address something that was not seen originally. For this reason many estimates provided by buyers include significant rounding. The unofficial explanation is “just in case.” This habit, if not carefully checked and asked about, can end up taking hundreds of dollars from the seller’s pocket.
  5. Seeking a competitive estimate. If the buyer’s estimate seems too high, the seller may want to invest in a competitive inspection and repair estimate. While this seems to add to the overall expense, it might actually save money in a major or expensive repair. This is especially the case if a contractor is already employed by the seller, because their time will be factored in to the overall business. A competitive estimate might help pay for itself of the buyer can be shown reasonable places where their estimate is too high – or if one or more of the buyer’s assumptions for costs do not match local averages.