Selling a Flood-Damaged House: 7 Steps to Follow

An estimated 23.7 million homes in the U.S. are at immediate risk of flooding, according to Flood Factor. In 2021, hurricanes caused an estimated $33 billion dollars in damage to homes. But the risks extend inland as well. Across the nation, as many as one in 10 properties face flooding risk from storm surges and the rising water lines of local rivers and lakes. Flooding is also commonly caused by burst water pipes.

If your home has experienced a significant flood event, it can impact your course of action when it comes time to sell the property, even if you’ve done full remediation and repair. The truth is a home that has flooded carries a bit of extra baggage. That’s not to say you won’t find a buyer, just that there are some extra steps and considerations that come into play.

To provide you with the best information about selling a flood-damaged house, we spoke with top real estate agents Steven Kinne of Houston, Texas, and Nathan Strager of Las Vegas, Nevada. We also consulted with flood restoration and mold remediation experts, Michael Rubino, President of All American Restoration, and Sophie Williams of Splendor Flood Damage Restoration.

In this post, we’ll review the key factors to consider when making decisions about a flood-damaged house and seven actions that can help you move forward with plans to sell your home.

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How much does flooding devalue a house?

Experts agree that flood events will hurt your property value. For homes that have flooded, even if they’ve been renovated, Kinne has seen a 20% to 30% reduction in value.

The level of property devaluation can vary depending on the severity of the water damage, the overall impact, the type of repairs that were needed, the home’s location, and the potential for future flooding.

Should I try to repair the damage or should I sell my house?

If you decide to sell your flood-damaged home, you do have options. You can make necessary repairs, sell a damaged but inhabitable home “as is” to a cash investor, or if it’s uninhabitable, sell the property your home sits on.

When making a determination whether to repair before selling, consider the following scenarios:

• If you can afford repairs
  Flood remediation and repairs may be covered by flood insurance or you may be eligible for a FEMA grant or a home repair loan from the Small Business Administration (SBA). If not and you have the financial means to do so, it may be worthwhile to remediate, clean, and repair your home. Due to safety risks to the clean-up crew and future residents, cleaning and remediation are best left to licensed professionals. If you choose to clean and repair your home yourself, please refer to the repair section below.
• If repairs are beyond your ability to finance
  If your home is too costly to repair, you may choose to sell it “as is,” or it may be possible to live in it safely. For example, a damaged structure may take years to pose a safety risk. According to Rubino, if water damage is not remediated within 24 to 48 hours, however, you must assume it has mold damage and is therefore uninhabitable.
• If your home is absolutely uninhabitable
  If flood damage has rendered your home completely unfit for anyone to live in, you may still be able to sell the home “as is” to an investor who can make repairs or you may be able to sell the property your home sits on. If however, your home is uninhabitable and irreparable, it’s only a matter of time before it is condemned, seized by the government, and demolished. In this event, the government may reimburse you for the value of the land less the cost to demolish the structure.

Is it hard to sell a flood-damaged house?

How difficult it will be to sell a flood-damaged house depends on the extent of the damage, future flooding risk, and your willingness to negotiate. The first step is to contact a local real estate agent who has experience selling a water-damaged home. Having an expert in your corner will make the process of selling your home a lot easier.

Partner with a Top Agent to Sell Your Flood-Damaged House

If you are selling a flood-damaged house, consult with a top local real estate agent about the best way to proceed. Doing so could save you significant time and money. An experienced agent can also help you know what to fix, and what repairs you can skip.

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How to sell a flood-damaged house, 7 steps to follow

1. Contact a top local real estate agent for guidance

While there are several starting points you can consider, we recommend contacting a top real estate agent to help you navigate all the steps in the home-selling process. Partnering with a top agent who’s sold flooded homes before will help you price the home appropriately, communicate with buyers who may have concerns, and make sure you’re following the law when it comes to your local disclosure regulations.

Consider an agent with these skills:

• Experience selling water-damaged homes
• Knowledge of local and state laws
• Proven negotiation skills
• Hands-on experience selling to home investors
• Knowledge about remediation and renovation costs
• Solid understanding of the local market and buyers

2. Stay on the right side of disclosure

Failing to disclose water damage can lead to a lawsuit if your buyer feels you weren’t forthcoming. Furthermore, disclosure laws, which vary across the country, can be pretty extensive. The National Resources Defense Council provides a map with each state’s individual flood disclosure regulations.

In Kinne’s state of Texas, disclosure laws are pretty extensive – homeowners are required to disclose if:

• There has been previous water damage to a structure due to a natural flood event
• There has been previous flooding due to a natural failure or breach of a reservoir or a controlled emergency release of water from a reservoir
• Your property is located wholly or partly in a 100-year floodplain, a 500-year floodplain, or a reservoir
• Your property is covered by flood insurance
• You have ever filed a claim for flood damage to property with any insurance provider, including the National Flood Insurance Program (NFIP)
• You have ever received assistance from FEMA or the U.S. Small Business Administration (SBA) for flood damage to the property

Provide your disclosures in a detailed but non-alarming way. Let buyers understand the scope of the damage and the extent of repairs and remediation without scaring away a buyer who might be on the fence. Below are some of the details to include:

• How many times the home has flooded
• How much water affected the property (i.e., three inches or three feet)
• Whether flooding happened on the property, in the house, or both?
• A list of remediation, repairs, or remodels that were performed after the flood
• Whether you hired a licensed contractor who followed state and local laws

Your agent can help you understand the disclosures that are mandated by your state when you sell your home. Depending on your situation, you may want to hire a real estate attorney to be certain you’re staying on the right side of disclosure laws when selling a flood-damaged home.

3. Select your improvements wisely

If your home has flooded and you know you’ll ultimately plan to sell, the biggest decision will be how deep you want to get into the repairs and renovations, and how much money to sink into the project before seeking out a buyer.

This is where it’s important to work with a top real estate agent who is experienced with buying and selling flooded homes. Your agent can evaluate the market and recommend renovations that buyers are looking for in your neighborhood.

For homeowners selling  a home after a flood, Williams says not to skip these improvements:

• Restore carpets and flooring
• Repair and repaint the walls
• Replace any affected furniture
• Tackle any mold problems and get a mold remediation certificate

4. Acknowledge the price hit

According to Strager, if your home has water damage from broken pipes and you’ve made full repairs, the property value is unlikely to depreciate. Unfortunately, the same isn’t true for homes that are flooded by natural disasters. Kinne has seen major flooding several years in a row. If your home has been through a flood event, you might see a 20% to 30% reduction in value depending on the extent of the damage, flood history, and risk.

“The drop in value will depend on whether the house is in a flood-prone area that is likely to see

more water damage, or whether the flood event was more of a fluke,” says Kinne. Other factors that come into play include how much water entered the house and whether it’s located in an area where it’s expensive to get flood insurance.

5. Get all of your documentation together

When preparing to sell a house that has experienced flooding, documentation is key. Gather all of the reports and receipts related to any corrective measures you took, including:

• A line item of what was done to correct any damage from the flood.
• A record of who completed the work (i.e., a professional contractor or a handyman).
• Receipts and/or invoices of all expenses incurred from the remediations and renovations
• A record of all insurance claims.
• A mold remediation certificate stating that the mold has been removed by a certified professional.
• A copy of the declaration page for your flood insurance policy, which details the terms and limits of coverage.
• A FEMA elevation certificate detailing the flood zone, your home’s building characteristics, and its lowest point of elevation.

Kinne points out that homes that sit higher than Base Flood Elevation (BFE) might have flood insurance premiums of $600 to $700 per year, but if it’s lower than that, coverage could cost up to $5,000 per year. “If you don’t have an elevation certificate, you’re automatically thrown in a high-risk, expensive category,” he notes. Follow these steps for how to get your elevation certificate.

6. Consider transferring your existing flood insurance to the buyer

If you have flood insurance, allowing the buyer to assume your flood insurance policy can sweeten the sale. Doing so provides the buyer with the following benefits:

• Help the buyer meet mortgage underwriting requirements for obtaining flood insurance
• Save the buyer the hassle of obtaining an elevation certification
• Cover the buyer’s insurance cost until the renewal date, thus reducing the buyer’s closing costs
• Grandfather the buyer into a lower-risk zone, and lower rates, in the event the home has moved or will be moved into a high-risk flood zone

7. Consider selling your flood-damaged house to an investor

If you’ve had extensive flood damage and don’t want to invest the time and money in repairs and renovations — particularly without knowing what return you might get — another option is to seek out an investor who would be interested in buying the house “as is.”

In many cases, investors have access to more resources to tackle major fixes that would be costly and time-consuming for most homeowners.

The benefits of selling your home to an investor:

• A hassle-free sale
• No financing delays
• No repairs or renovations needed
• Greater flexibility

The drawbacks of selling your home to an investor:

• You’ll likely get less for your home
• You may not know who the buyer is
• Foreign investors can take longer to close
• Not all investors are reputable

If you’re interested in selling to an investor, Simple Sale, a solution from HomeLight, is an online platform where sellers across the country can request a cash offer for their home. Simple Sale has a network of cash buyers on its platform, and partner investors have a wide range of investment strategies, including fix-and-flip and buy-and-hold.

This enables Simple Sale to provide cash offers for a wide array of properties, even those that need some or a lot of work. With Simple Sale, you can get an all-cash offer in as few as 48 hours and sell your home in as little as 10 days, skipping repairs and the months it can take to sell the traditional way.

How to minimize the damage immediately after your house floods

In the immediate aftermath of a flood, every minute counts. Flood water can carry sewage or hazardous chemicals into your home and expose residents to viruses, bacteria, and diseases. After 24 to 48 hours, your home will also begin to grow mold. Mold causes adverse reactions in healthy people and is especially hazardous to infants, the elderly, and individuals with weakened immune systems.

“It all comes down to liability,” says Strager. “You don’t want to take on the liability of selling a home with untreated water damage. By taking the right actions post-haste, you can minimize the damage, the health risks, your liability as a seller, and the monetary loss to the greatest extent possible.”

If your home experiences a flood event, some crucial immediate steps to take include:

• Turn the electricity off if you can safely access the breaker box from a dry area.
• Don’t turn on the HVAC system until it’s been professionally inspected to verify that it’s dry, mold-free, and safe to use.
• Document the damage with photos and videos and remember to include a yardstick or measuring tape to show how high the water line reached.
• Get rid of standing water with a water pump, buckets, and wet/dry vacuum, or hire a water removal service like Servpro.
• Dehumidify but do not use a fan or blower that might spread environmental contaminants.
• Dispose of soft goods that can’t be easily dried, such as carpets, rugs, mattresses, pillows, upholstered furniture, paper products, and stuffed animals.
• Clean all hard surfaces with water and laundry or dish detergent.
• Contact your insurance company.

Partner with a top agent to sell your flood-damaged house

If you’re thinking of selling a home that has been through a flood event, your best bet is to contact a real estate agent who has experience selling water-damaged homes. Even if you’ve repaired the damage, you’ll want an expert in your corner who can negotiate the best deal for you and help protect you from liability.

HomeLight’s Agent Match platform can connect you with a performance-proven agent to work with your specific needs and location. It’s free, simple, and data-backed by millions of home sale transactions that HomeLight has analyzed to find the top-rated agents in your market.

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