Selling a Fire Damaged Home
Selling After A Fire
Two ways exist of sell a house after a fire. First, you can restore your home before selling. Second, you can try to sell your home with the existing fire damage. There are pros and cons to either option you select.
Why fix fire damage?
The main reason to fix fire damage in your home is to increase the resell value. Buyers want move-in-ready homes. They are willing to pay more for a functioning home than a house requiring lots of work.
If your home has minimal fire damage, fixing up the home might be the best option available to make money on the sale of your home. Fire damage can send prospective homeowners running from your property, even if the damage is only cosmetic.
Even with repairs, buyers and their lenders can be hesitant to purchase your home or even look at it. It is critical to keep all paperwork on repairs. Buyers will have more confidence in a residential sale if they can see the exact details of the repairs done.
Homes with fire damage, on average, take longer to sell because the pool of potential buyers is smaller. When deciding whether to repair your home or not, it is essential to realize your home may be on the market longer than other homes. Hence, your holding costs may be higher.
Pros of repairing your home
- increase home's market value
- turn a better profit on your investment
- increase number of potential buyers
- increase chance of a fast sale
Cons of fixing your home
- the inconvenience of living through home repairs
- researching and hiring contractors
- takes time
- repairs can be costly
When to sell as-is
Sometimes circumstances dictate selling your fire-damaged home as-is. Repairs can be costly, especially in bathrooms and kitchens. If you cannot afford to make repairs and pay your mortgage fees, consider selling your homes without fixing the fire damage.
The naked eye will not be able to reveal all of the problems a fire can cause. Decisions about selling your home need to take into consideration all potential costs associated with repairs. Smoke, soot, and structural damage result from a fire. Also, water damage can occur when putting out a home fire.
Substantial repairs can be costly and not covered by insurance. It is advisable to get a home inspector to review the damage before deciding on a plan of action when selling your home.
Rarely will you turn a profit selling your home without repairs. Though, sometimes the stars do align. If you receive a payout from your fire insurance coupled with finding an investor for the property, you may come away from the process whole. In other words, the sale of the damaged property plus the insurance money could be comparable to selling your home undamaged.
What to know about selling a home with fire damage
It is crucial to report any fire on your property, whether you make repairs or sell your house as-is. Buyers need to be aware of the cause of any fire damage. There is a difference between an electrical fire, arson, or someone leaving a candle unintended. For example, an electrical fire will concern buyers if the electrical repair does not take place. They may conclude the house may have a repeat fire.
Sharing all information with your realtor ensures that buyers understand the full scale of the fire damage done and what steps you took to repair the home. Providing critical information about the fire damage to buyers shows that you are reputable and trustworthy.
Failure to disclose information on a property is unethical and criminal. You put yourself and your sale at risk by covering up any problems. Likely, the buyer's home inspection will uncover any deceptions. If the buyer discovers your failure to disclose after the fact, you may face legal action.
Buyers for as-is properties
While many buyers are looking for fixer-uppers with minor repairs, a special kind of buyer seeks out fire-damaged properties. Real estate investors have the experience and the funds to deal with heavily damaged properties.
Because real estate investors are not reliant on lenders, they can make decisions quickly about properties. They usually have a group of trained contractors to make these repairs. With all these advantages, they can repair homes for less than the average homeowner. These reasons make buying your home desirable for real estate investors.
Whether or not you restore your property or sell a house with fire damage relies on many factors. Your finances, time, and the ability to handle repairs all help inform your decision.