Fixer Price
Prewitt Howells
This paper fills an important gap in the antitrust compliance literature by exploring the perspective of the price fixer in breaches of competition law. It provides a critical analysis of statements made by price fixers, their competition lawyers and in-house counsel involved in cartel cases. The study draws on a combination of publicly available statements and anonymised accounts collected over 15 years of engaging with each of these three groups. It concludes that those responsible for cartels are motivated by varying factors and do not necessarily understand or accept that cartel behaviour is wrongful. Also, disciplining those individuals is complicated by the incentives created through leniency and settlement programmes. These findings highlight the importance of continued investment in compliance and the broader need for education in competition law to make it less likely that infringements will occur in the first place.
Although every home is unique, your local real estate market is not unpredictable. Within certain boundaries (a neighborhood, for instance), a real estate agent or anyone who has been going to open houses and following recent sales can probably tell you what a "typical" home of a certain size will sell for. (This might have little to do with the amount the seller listed it for.) Websites such as Zillow will give you recent sales prices and rough (very rough) estimates of value for a particular home.
But most homes on the market are not fixer uppers. Any theoretical comp value that you arrive at won't really apply to a house in which, say, the floor around the toilet has a hole through which you can view the basement, the roof is a patchwork of old and loose shingles, and the linoleum is peeling badly.
To set a logical home price for the fixer-upper in which you're interested, you'd want to start by figuring out the value of the home if it didn't need work, then subtracting the cost of the needed work.
Hidden problems such as dry rot, pests, and an inadequate foundation can add tens of thousands of dollars to the total. In some cases, the cost of work might be so high that razing the structure to the ground and starting over will make more sense.
That will get you close to the figure you'll subtract from the home's "normal" market value in order to reach the maximum price you should offer. But first, you'll want to make some adjustments to that figure.
Beware of unexpected sources of competition when deciding how much to offer for a fixer-upper. Yes, getting a bargain is important. But home contractors and flippers, in particular, might be ready to bid higher amounts than you. This is their business, and they can efficiently fix up and turn around a house for a lower cost than the average buyer will face.
Believe it or not, you might actually have to raise your offer price a bit in order to compete with the professionals. Do this only if you really love the land and the location, and won't be strapped for cash for years to come.
Through its antitrust enforcement system, society allocates resources to deter anticompetitive behavior. Antitrust enforcement is costly because prosecutors and judges mischaracterize some competitive or efficiency-enhancing behavior as horizontal collusion. In this early application of the Polinsky-Shavell argument about the tradeoff between the probability and magnitude of fines, this essay argues that, given prosecutorial and judicial error, society will not optimally allocate its antitrust enforcement resources by threatening price fixers with exorbitant economic penalties that have only a minimal probability of being enforced.
A home inspection can cost you a couple of hundred dollars, but it should be a nonnegotiable if you want to buy a fixer-upper. A qualified home inspector will perform a thorough investigation of your prospective home and provide you with a report that outlines all the repairs it will need.
Without a home inspection, you may have no idea that the home needs new plumbing, the septic tank needs to be replaced or the foundation is cracked. A home inspection helps you avoid unpleasant surprises as well as budget for and prioritize projects.
Many lenders offer loan options specifically for homes in need of renovation or home improvements. Some financing options can help you pay for the cost of your home as well as the renovations. With a Federal Housing Administration (FHA) 203(k) rehabilitation loan or Fannie Mae HomeStyle Renovation Mortgage, you can purchase your home and put a reserve in escrow to fund renovations.
If at all possible, you should avoid overpaying for a fixer-upper. The whole point of buying a house that needs work is getting a good deal on it. Make an offer that strikes a balance between a good deal and the cost of necessary repairs.
With any offer, you should include contingencies, which are exceptions that allow you to back out of a purchase if something comes up. A couple of common contingencies are inspection and appraisal contingencies. If an inspection reveals a major problem or the home appraises for lower than you offered, you can back out.
The right decision to buy a fixer-upper house depends on your unique situation. A fixer-upper house may be a good option for one home buyer and a bad idea for another. Consider your budget, needs, preferences and lifestyle before moving forward on a fixer-upper purchase.
Rocket Mortgage has won more awards than any other brand in the J.D. Power U.S. Mortgage Servicer Satisfaction Studies; this customer satisfaction study has been conducted annually from 2002-2023. Visit JDPower.com/Awards for more details.
Rocket Mortgage, LLC, Rocket Homes Real Estate LLC, and RockLoans Marketplace LLC (doing business as Rocket Loans) are separate operating subsidiaries of Rocket Companies, Inc. (NYSE: RKT). Each company is a separate legal entity operated and managed through its own management and governance structure as required by its state of incorporation and applicable legal and regulatory requirements.
N2 - As part of a comprehensive collection of essays on Competition Law compliance, this chapter provides the perspective of individuals responsible for serious cartel conduct. It draws on anonymised accounts from compliance officers, interviews with price fixers and documented details from cases investigated by competition authorities.
AB - As part of a comprehensive collection of essays on Competition Law compliance, this chapter provides the perspective of individuals responsible for serious cartel conduct. It draws on anonymised accounts from compliance officers, interviews with price fixers and documented details from cases investigated by competition authorities.
All content on this site: Copyright 2024 Elsevier B.V. or its licensors and contributors. All rights are reserved, including those for text and data mining, AI training, and similar technologies. For all open access content, the Creative Commons licensing terms apply
While home buyers receive significant savings when they purchase fixer-upper homes, they must spend money and time (and sometimes endure a lot of aggravation) on renovations and repairs that can into the thousands of dollars.
Citing data from Redfin, home buyers have a higher chance of finding a fixer-upper in Mississippi, where 4.73% of homes are considered fixer-uppers; Maine, where 4.72% of homes are considered fixer-uppers; and Louisiana, where 3.64% of homes are considered fixer-uppers.
[Note: This post was updated on 7/17/2022 with a lot more information because I was clearly not getting my point across in the original post. This post expresses my own personal opinion, but hopefully my points are clearer now.]
Well, many of you may remember The Gorman House, which was featured during the first season of Fixer Upper. That house is on the market right now for $1.2 million. Here are some pictures from the Zillow listing:
So if the current owner of this house managed to actually sell this house for $1.2 million, that will then affect the value of the other houses in the area, which means that those homeowners will then have their property taxes increased. All because of this house.
It was like I had been transported into a poverty-stricken town in the Appalachian Mountains. I thought for sure that I had made a wrong turn, but I kept on driving, and there towards the end of the street on the left hand side stood the sparkling new and beautiful Shotgun House.
Addicted 2 Decorating is where I share my DIY and decorating journey as I remodel and decorate the 1948 fixer upper that my husband, Matt, and I bought in 2013. Matt has M.S. and is unable to do physical work, so I do the majority of the work on the house by myself. You can learn more about me here.
JENB
Gee I know what you are saying here about people losing their paid for homes. That is happening in my neighborhood. We are retired since 1998 and our mortgage has been paid off since 1991, but with some of the homes in our neighborhood being upgraded inside and outside and then selling for insane prices, our taxes are very hard to pay now. We have pride and try very hard to keep our home maintained and looking as nice as we can, but we have not added onto or gutted to rebuild the floor plan. Many people in our neighborhood have done this and/or doing it right now. This is hard on us elderly people.
Not to disregard your comment completely, but please be aware of a couple of things:
1. In Texas, property taxes can only go up a maximum of 10% on your primary residence in any given year (still not great, but definitely not 1000%) / 2. Property taxes charged by the school district (which is usually the largest chunk) freeze (are capped) when you reach 65 or become disabled. You are also offered the option to defer all or part of your property taxes until you pass away and your estate is settled (not ideal but should keep most elderly and disabled from losing their homes) / 3. There are of course the other homestead exemptions but those become less significant as property values increase.