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If you experience a house fire, the loss is stifling. Not only are your personal belongings gone up in smoke, but you lose thousands of dollars in damages to your property. Most times the insurance money is not even enough to cover repairs.
So what do you do? Here is what you need to know if you decide to sell a property with fire damage.
1. Contact Your Insurance
The first thing you need to do is call your insurance and report the fire. You’ll start a claim and provide a copy of the fire report to your insurance agent. They’ll send out an adjuster to take pictures and assess the damage and needed repairs.
Insurance can take a few days or a few weeks. You ONLY need to deal with insurance if you plan to make repairs. If you decide to sell the property “as-is”, filing an insurance claim is not necessary. I recommend you talk it over with your insurance agent though to understand your options.
2. Contact Utilities
While the property is damaged, it is dangerous to continue running electricity, water, or gas. Contact your utility providers to have these shut off till the property is restored. Otherwise, you risk additional damages.
3. Recover Your Possessions
Once a fire department official gives you permission to reenter the premises, retrieve anything of value the fire did not destroy. Also take pictures and document the damages. When it comes time to sell, you’ll have to disclose to buyers this incident, even if it’s remediated. Keep a copy of the fire report for your records too.
4. Get an Assessment from a Fire Restoration Contractor
This step may be optional, depending on how you feel about the insurance adjuster’s report. It never hurts to get a second opinion. A fire restoration contractor will assess the damage and estimate repair costs.
5. Start the Cleanup Process
If you hire a contractor for repairs, their team will likely do the cleanup for you. This is preferred because exposure to soot can cause health issues. Moreover, you need the proper clothing and equipment to remove contaminated materials and debris.
Be sure to open the windows to vent smoke and charred odors from the house, but also to ventilate it so it dries out.
6. Make Repairs
Repairs can take several months, depending on the extent of damage. The cost of remediation after a small fire can fall between $3,000 to $5,000. Significant damage though can run up to tens of thousands of dollars.
7. Alternatively, You Can Sell “As-Is” to a Cash Buyer
Chances are you will not find a traditional buyer who can or will purchase a property with fire damage. Even if a buyer were interested, a mortgage lender will not give them a loan unless the house is in good condition.
The good news is a real estate investor will pay cash for a house “as-is”, be it damaged and full of charred belongings. You can skip the formalities of a traditional sale, like warranties, an appraisal and inspection. Also, the inspector pays all closing costs and associated sale fees.
You can sell in 15 days or less, or in several months: the investor lets you choose the closing date! You enjoy a quick closing, taking the heat off owning a problem property, and get cash in hand without getting burned.