room with water How to Sell a House with Flood or Water Damage

How to Sell a House with Flood or Water Damage

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Hurricanes, flash floods, or burst pipes after a freeze – you never know when water damage will occur. It frustrates the majority of homeowners and leaves them wondering, “What now?”

Selling a house with water damage is intimidating but not impossible. You have options, depending on your budget and timeline to sell.

Here are the essential steps to sell a house with flood or water damage.

Step 1: Call Your Insurance

Water damage claims put home insurance policies to use more than any other claim. Most policies cover overflow, accidental discharge, or sewer and water backup, but not flooding.

The damage has to be accidental; you could not have predicted it. Any water damage as the result of negligence or a lack in maintenance is NOT covered.

The insurance company will send an adjuster to assess damages and estimate costs to repair. You should document the loss of personal belongings and damage to your property, before or while the adjuster is there. Take plenty of photos and guestimate the value of your loss.

Collecting insurance can take several days or weeks. There is no guarantee the insurance will cover the full cost to restore your house.

If you decide to sell the property “as-is”, filing a claim may not be necessary. I recommend you discuss options with your insurance agent.

Step 2: Turn Off Utilities

No doubt you shut off the main water supply valve to stop water flow. But you also need to turn off the power because water and electricity do not mix. Same with your gas lines.

By turning off the utilities, you prevent additional damage and put yourself and professionals out of harm’s way.

Step 3: Start Water Damage Cleanup

Pump out standing water and dry the affected areas. Gather those belongings the water missed and throw out anything that is ruined. You want to do this fast because mold sets in after 24 hours.

Open windows to let in fresh air, and if a professional says it’s safe to restore power, use floor fans and dehumidifiers.

Depending on the extent of damage, and if mold is present, you might consider hiring professional water damage and restoration services. Make sure the company you hire is licensed and insured.

Step 4: Start Restoring the House

Repairs could take several months, depending on the amount of damage. Flooring and sometimes walls need to be replaced. Electrical wiring and corroded parts must be switched out. Bad plumbing needs to be changed and the spaces around them refinished.

Water and mold remediation should be done by licensed professionals. It is not the type of work you do alone, not without risks to your health or the house, or without significant loss of time.

Step 5: Disclose the Truth to Buyers

Even if damages are remediated, you must disclose water damage and mold to buyers. If you never corrected the problem, legal remedies can be pursued against you if, after closing, the buyer discovers the truth.

Disclosure requirements vary between states. Research these and maybe ask a real estate agent to explain them.

Step 6: Alternatively, Sell “As-Is” at a Lower Price or Offer Credit

If you cannot afford repairs, and want to roll the dice on the market, you have two options. You can either lower your asking price or credit the buyer to cover repairs.

The issue here is lenders have strict loan requirements, and buyers cannot secure funding to purchase a property with water damage.

Step 7: Alternatively, Sell “As-Is” to a Cash Buyer

Your best option, if you want to sell fast and without repairs, is to sell to a real estate investor. Investors pay cash for properties in any condition. It can have water damage, mold, and be full of soaked furniture and belongings.

Investors do not need an appraisal or inspection, and they skip traditional sale warranties. All closing costs and additional sale fees are covered by the investor, saving you money. All you have to do is choose the closing date.

You can close in a few months, 15 days or less, giving you plenty of time to pack up anything left untouched by the water. You enjoy a quick closing on a washed up problem property for a sure deal without getting all wet.

burned interior Selling a House with Fire Damage

Selling a Property with Fire Damage

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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.

There may also be water damage and mold from the water used to fight the fire.

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.