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Point of Sale Inspections

Monday, March 20, 2006 at 7:43 AM

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Selling a house can be a huge undertaking. Now a growing number of suburbs around Cleveland are requiring homes to pass final inspections before titles are transferred. Some say the practice, known as Point of Sale Inspections, boosts the quality of the housing stock. But a growing number of community leaders and citizens object to the added costs. In South Euclid, City Council wants the inspections to start this year, but some citizens want to put it to a vote. ideastream's Lisa Ann Pinkerton reports.

Driving through South Euclid, it seems almost every street has a house for sale - some have over four. The small bungalow homes lining street after street hint the area thrived in the 1950’s. Today the average house in South Euclid is 45 years old. Paul Kowalczyk, building commissioner for the suburb, says expanding exterior inspections at the time a house is sold fulfills the same purpose as seeing a doctor.

Paul Kowalczyk: When you hit the age - you get in you late 40’s early 50’s, your doctor says ‘come see me every year because your body is aging; it needs to be kept up.’ When we start turning our backs and ignoring it, that will start to bring neglect into the neighborhood.

Kowalczyk says each house in South Euclid sees a exterior building code inspection every five years. He credits the roving inspection program for a rise in the suburb’s property values. But he says the process can’t stop the practice of “flipping,” a term used to describe a home owner who sells a house with numerous violations to avoid prosecution by the municipality, or make a huge profit. Kowalczyk stops his car in front of a three-story victorian house with chipped red paint and over grown shrubbery.

Paul Kowalczyk: As you can see, the front steps are falling apart, the roof is in bad condition, the fence is broken. As you go around the house, you’ll find broken windows and more of what you see on the front.

In the last two years, this house has gone though three owners - each time, the house sold just before South Euclid was taking an owner to court for uncorrected violations.

Paul Kowalczyk: Through the point of sale we probably could have taken care of this two years ago.

Most of the 17 Cleveland Suburbs that require Point of Sale Inspections lie east of the city. Some just look at the home’s exterior, while others inspect a home inside and out. Costs range from $50 to $225, depending on the area. Cities also vary on how soon violations must be fixed and if the buyer can take responsibility for them. Some cites want a guarantee a buyer has money for repairs, so they’ll require escrow accounts be set up.

Paul Kowalczyk: If we just closed our eyes to these violations, the value, the actual value of that property, would go down. And that can also potentially bring down the value of houses around it, even is those people are keeping their values up.

Kowalzcyk says that in turn could cut into property tax revenue. But Byron D. Weems, a top selling realtor South Euclid, says new construction has a greater influence on the selling price of a home than exterior inspections.

Byron D. Weems: In regards to the quality of the housing stock, it’s pretty much been the same in the 19 years I’ve been in the business. You can’t just put a value on the inspections that doesn’t hold.

Generally, Point of Sale Inspections look for building code violations. Weems says if a house has been maintained over the years the process can go smoothly. But if the downturn in the economy has forced a homeowner to put off repairs, a Point of Sale Inspection can hurt a seller’s chances of fetching the highest price.

Byron D. Weems: If all the items that are stated as violations, or some things that need to be corrected on the property are not done, it can slow the sale of that property or totally stop the sale of that property.

Weems says that’s why buyers commonly love inspections and sellers loathe them. South Euclid Planning Commission member Yakov Leiber is one resident skeptical of Point of Sale Inspections. Over lunch at a local diner, he says they’re just too much government intrusion.

Yakov Leiber: The government is not letting the people do for themselves what the people can do for themselves and the government is hammering down on the people. It’s wrong.

But Leiber concedes after six years of consideration, South Euclid City Council appears poised to pass legislation requiring Point of Sale Inspections. The suburb’s goal is to start inspections by July 1st. Before that can happen, Lieber and his supporters will attempt to derail the legislation by gathering the 655 signatures needed to put the question on the fall ballot.

Yakov Leiber: And really, you know this is the fairest way. If in fact the city of South Euclid wants to take my property rights away from me, at least give me a say and give all the other people of South Euclid a say. Put it on the ballot. Let the people vote yes or no.

South Euclid and Willoughby have legislation pending to require Point of Sale Inspections. West of Cleveland, Fairlawn and Parma Heights are merely considering such action. And if Lieber’s effort to put the question on the ballot fails, inspections in South Euclid could start as soon as July 1st.

Lisa Ann Pinkerton, 90.3.

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