Everyone knows it's harder to sell real estate in the city than the suburbs. The problem isn't a lack of interested buyers, the problem is that it's tough to sell aging housing stock in older neighborhoods, as buyers are afraid of that old axiom, "you never know what you're going to get" when it comes to these homes. And city housing inspectors are too few to systematically inspect every property, and sometimes the city is a bit bureaucratic, bouncing you from department to department like a pinball - these are just a few of the challenges.

Last year, the City of Cleveland passed an anti-flipping ordinance, meant to end an onerous practice in which real estate investors buy a property and then, in fairly short order, complete superficial, often cosmetic repairs and "flip" it at an artificially inflated price to an unsuspecting buyer. The anti-flipping ordinance was developed with the assistance of a task force that consisted of real estate and community development experts. The city came up with a disclosure form that the seller is required to fill out and the buyer is required to sign. It asks such questions as, "Has your property ever been condemned?" and "Does your property have code violations that you are aware of?" These may seem like obvious questions, however, the layers of fact and fiction in urban real estate are many. It happens all the time - you peel off the yellow skin of a seemingly up-to-code house, and find rotten fruit beneath. It looks OK when you do the walk through - then the plumbing or the roof turns out to be a nightmare.

Completing this form will create an additional hoop that buyers, sellers and agents have to jump through. But won't this turn buyers off? Yet despite the fact that selling in the city is about to get harder, it may get better. Why? The hassle of convincing a seller to fill out such a form and a buyer to sign it in acknowledgement of receiving it, in addition to the $60 processing fee paid by the seller, may be worth the investor confidence it will help create. It may be worth it if it helps to prevent "flipping," a practice that takes advantage of unsuspecting buyers, mostly in low to moderate income neighborhoods that can hardly afford more disinvestment. The disclosure form is also an alternative to point-of-sale inspections, which are required in some First Suburbs, such as Cleveland Heights. If sellers were required to have their homes inspected, and if either the seller or the buyer were required to escrow the funds needed to complete repairs, then real estate companies would be much more worried. Many homes are so desperately in need of fix-up, it would devalue them completely; and moderate income buyers and sellers would be priced out of home ownership.

For several years, I worked as a Community Organizer at St. Clair Superior Neighborhood Development Corporation, a community development corporation on the near east side of Cleveland. I saw plenty of boarded up houses stapled with battered signs that read, "HOMES FOR CASH." The phone number usually led to shady, would-be development companies that picked up the homes at a sheriff's sale, fixed them up enough to impress, and sold them to a buyer that didn't know any better. Such transactions not only gave the perception that the neighborhood was sliding quickly downhill - when these properties were "flipped," they also robbed their new owners of the ability to develop genuine equity, and robbed the neighborhood of investment.

The new property disclosure process required by the City of Cleveland will be tough to implement and will have to be tweaked so that it's more user-friendly. Yet it represents an attempt to curb the flipping that keeps neighborhoods like St. Clair Superior down. So, selling real estate in the city just got a bit harder, but that extra hoop might just be worth jumping through if it helps sellers and buyers create real investment in their neighborhoods. And that would be worth every penny. from Cool Cleveland reader Lee Chilcote leechilcote@yahoo.com

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