Do you smoke? I’m not trying to sound like I’m on a high horse, but I definitely don’t smoke. I think I was cured of any desire to do so as a kid after being in the car on many occasions with my late Grandma as she dragged her Virginia Slims with the windows rolled up. I guess it was a blessing in disguise, right? Anyway, whether you smoke or not, used to smoke or will smoke, let’s talk about the impact of cigarettes on property value. I’ve inspected quite a few “smoke homes” through the years, so I was glad to answer a question from a REALTOR friend about a home she is listing. Here is our conversation below (I’m sharing with permission). This post is not meant to be anti-smoker in any way, but only weigh a legitimate issue on how smoking inside can impact property value.
Question: Do you have a generally accepted rule of thumb for negative adjustments to value for a house that has a pungent cigarette smoke smell? I’m having trouble convincing a seller that this is a big detractor. Without the smoke smell the house would probably sell around $285k, but I think a more appropriate value would be around $265k given the odor.
Answer: There is no standard adjustment because it depends on the condition of the house as well as what the market is doing. But usually a house that smells like cigarettes will sell toward the lower end of the price range for a few reasons. First, there is a smaller pool of buyers. In fact, many buyers simply wouldn’t purchase the home because of the pain of getting rid of the smell. Secondly, the house may likely be outdated already. I have found many “smoke homes” to have older carpet and an overall dated or retro feel. This means the house will probably not compete at the upper end of the market anyway. Lastly, a cost-to-cure and/or discount is in order. How much would a buyer spend on a property if the carpet has to be replaced and the interior has to be painted? A 20K adjustment is probably very reasonable when considering the cost to replace or very deeply clean all carpet and re-paint – not to mention the house may already be outdated anyway. One last consideration though is what the market is doing. If this house hit the market in early 2013 when real estate was acting like it was hyped on steroids, there would probably have been slightly less of a negative reaction because buyers are willing to look past some negatives when inventory is really tight. But now that the market has shifted, it’ll probably be much more of an issue.
Questions: Anything else you would add to my answer? When was the first time you were exposed to smoking or cigarettes? Comments are welcome below.