6 Tips for Selling Fire Damaged Property for Cash In Any Market
After Property Fire Damage, Do These 3 Things First:
Call the Insurance Company
The first step to selling fire-damaged property is contacting your insurance company. This may seem redundant but it’s important that you speak with an agent/representative as soon as possible after fire damage. You or the agent will file a claim and work on getting reimbursed for your loss. You do not need to work with a Real Estate Agent or Realtor, be wary of entering into 6 or 12-month contracts too soon. The sooner this process starts, the sooner you can begin working on repairing fire damage, if necessary, and getting plans together for selling the house.
Have Your Home Inspected
This is particularly important for insurance purposes, but it will also benefit the house’s resale value. A certified inspector will be able to tell you exactly what was damaged in the fire and how much it will cost to repair. If you are not sure if your state requires an inspection, check with your insurance agent or call your local Fire Department. Either way, we highly recommend you get an inspection of the damage whether or not legally obligated to.
Contact a Restoration Contractor
If there is major damage to the interior of the property, you’ll need to contact a restoration professional and probably replace many items. This should be done as quickly as possible—and within 30 days according to some sources—to rebuild an attractive house that will sell well.
Make Sure Your Insurance Claim Is Processed
Don’t let your insurance company delay or deny your claim just because it’s an inconvenience for them right now. If necessary, consider hiring a fire damage lawyer to help speed up this process so you can get back on track with selling your home as soon as possible. And if you don’t have enough coverage for replacement costs, look into buying additional insurance through another company or at another time until you can sell the house
How Much Does Fire Damage Restoration Cost?
The average cost to repair fire damage is roughly $9,800, while the average cost to demolish a fire-damaged structure is $8,800. (more from Hometown Demolition Contractors)
Challenges of Selling a House with Fire Damage
Selling a house with fire damage is not an impossible task. However, you’ll need to be prepared for several challenges both during the sale and after closing escrow, especially if the house has been severely damaged or demolished because of the fire.
A big challenge you’ll face while trying to sell a fire-damaged house is the fact that most people are turned off by this type of damage.
If any part of your home has significant burn marks, try hiring someone with experience working on properties that have been burned down to cover up the blemishes. This way, potential buyers will be less likely to notice them when they tour your property for the first time.
High-end finishes are another tactic some homeowners have used to successfully sell their fire-damaged homes. For example, if an electrical outlet in one room gets partially melted during the blaze, you may want to replace it completely with more expensive material like marble or silver instead of painting over it.
6 tips to selling a house with fire damage
When considering selling your fire-damaged home, there are several important steps you need to take in order to maximize your chances of selling your house quickly or gaining the highest possible value depending on the current condition.
1. Sell Your Fire-Damaged Home As-Is
If the insurance company has come out to assess damages and a contractor has been hired, you will probably be offered a list of problems that need to be fixed. Before accepting their offer, you should consider selling the property as-is if the fire damage is too extensive to make the cost of repairs worth it. Many people will buy homes this way, and if they are willing to spend money on repairs, you could get more for your home due to the lower price point and avoid making the costly repairs yourself.
2. Offer Seller Financing
If you are planning on selling your house through a real estate agent or just doing it privately, offering seller financing is an excellent way to entice buyers who may not qualify for traditional mortgages. If you sell with seller financing, there is no interest involved, but you will be able to collect monthly payments so that over time—as equity builds up in the house—you can eventually refinance without having to bring any money out of pocket or pay off the previous mortgage.
3. Sell Your Fire-Damaged Property for Cash
If you don’t mind forfeiting the equity that you built in your house, selling it for cash is another excellent option. Since there are no mortgages or monthly payments involved with this type of sale, you’ll be able to recoup some money quickly and avoid dealing with repairs.
4. Sell Your Fire-Damaged Home With a Realtor
Finally, you can list your fire-damaged property with a real estate agent. However, for this option to make sense financially, the home may need to be in very good condition considering the large percentage typically paid by buyers when purchasing homes (typically at least 6 percent). For a property worth $300,000 that’s potentially a fee of $18,000 just for the agent. It might put more money in your pocket to sell it AS IS and for cash.
5. Restore and Sell Your Fire-Damaged House
If you choose to restore your fire-damaged house, you’ll need to finish the repairs and sell it. For this option, unless repairs are small or cosmetic in nature, you’ll need to hire a real estate agent so they can handle showing the property for purchase. Also, consider that people don’t like buying homes with obvious problems that require more money than they’re willing to spend—even if they do want to buy them quickly. If possible, try to get it ready without needing an inspection before selling it.
Fix Up Your Fire-Damaged House Yourself
Selling a fixed-up fire-damaged home yourself means hiring the professionals needed for specific tasks while doing other work on your own. There’s no law saying you have to hire a professional for everything—but keep in mind that any repairs can be subject to inspection, so work carefully and within code.
Here are some of the most important things you’ll need to do before selling it yourself:
1) Repair all fire damage
2) Remove or cover up smoke odors with an ozone treatment or fogging machine
3) Fix the roof if damaged. A new roof will likely cost between $10,000 and $20,000 depending on size and material.
4) Remediate mold if necessary. It’s also a good idea to update your disclosure forms.
5) Make sure there aren’t obvious signs of moisture damage
6) Finally, make sure the house is clean inside and out.
6. Demolish Your Fire-Damaged Home And Sell The Land
If the property has not been restored, you will need to demolish the house. Many people follow the rule of thumb that a home is worth roughly half its value after it’s been destroyed by fire. So if your house was valued at $100,000 before it burned down, figure on getting about $50,000 for it once it’s finished being repaired.
Demolishing your fire-damaged home gives you another option – selling the land only. If you don’t have any sentimental attachments to the structure, consider selling to a real estate investor who wants to turn it into an empty lot.
Selling Fire Damaged Property At Land Value
When homes are more expensive to repair than it would be to completely rebuild from the ground up, you might consider selling at land value. And even if the cost to repair is less than the home’s land value, there may be other reasons you decide to sell for land value.
For instance, maybe this wasn’t your primary residence and you’re ready to move on with your life. Or maybe the fire was so complete that rebuilding would require tearing down some or all of what used to be there.
Why Choose Our Company?
Regardless of why you’re selling, the goal is the same: to get a fast cash offer. And with our years of experience buying fire-damaged properties from all over the United States, we know how to make an offer that’s fair and reflects current market conditions. In fact, we can even get you guaranteed cash offers within 24 hours—no waiting for an appraisal or negotiating with your bank.
Most importantly, we work on whatever terms are agreeable to you. So whether that means taking some time for repairs before closing or wanting a super-fast close instead, ASAP Cash Offer will accommodate your needs 100%. You can also call us at (805) 325-7020 to speak with our team about selling your home to a cash buyer.