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Of all the horrible things that could happen to your home, a house fire is among the most serious. It’s particularly devastating if you were hoping to sell your home soon, because now you’re worried about the challenges of selling a house with fire damage.
A house marred by flames and smoke often bears scars that go beyond physical deterioration, leaving prospective buyers wary of potential underlying issues and the home’s history.
Gene Darden, a top-selling real estate agent in Birmingham, Alabama, with close to 400 transactions under his belt, has seen his fair share of homeowners struggle with selling a house with fire damage.
When selling a house with fire damage, homeowners can choose to sell their home as-is to a cash buyer, or focus on restoring their home to its previous condition and selling to a traditional buyer using an experienced real estate agent.
Immediate action after a house fire
It’s understandable that after a house fire, you will be overwhelmed, emotionally drained, and stressed out about the financial ramifications. However, there are important actions you must take immediately after a house fire.
According to Ready.gov’s comprehensive guide about home fires, if you need temporary housing, food, or medication, you should contact the Red Cross or your local disaster relief service for help. They can also help with mental health support and recover documents for financial recovery.
After getting in touch with a disaster relief organization, you’ll need to:
- Only enter the residence after the fire department confirms that it is safe to do so.
- Inform utility providers about the fire and request emergency shut-off service.
- Contact your homeowner’s insurance company to begin the claims process.
- Hire a fire restoration contractor to assess the damage, get estimates, and start cleanup.
- Document the damages with photographs and detailed notes.
- Get an official report from the fire marshal or fire investigator for the insurance claim.
- After getting the all-clear, open all of the windows throughout the house to vent smoke.
- Remove everything from the refrigerator and freezer once the power is disconnected.
Next, you’ll need to decide if you will sell your home in as-is condition or if you’ll make the repairs.
Selling a house with fire damage in as-is condition
If you want to sell your home in as-is condition, you can seek out a cash buyer, but there’s no guarantee that it’ll be a fast sale. If you’re looking for a speedy transaction, you can try HomeLight’s Simple Sale platform.
With Simple Sale, you can get an all-cash offer in as little as a week, and you could have cash in your hand in as few as ten days without worrying about doing any repairs or being on the hook for prep costs, agent commissions, and other fees.
5 steps to selling a house with fire damage
If you’re not pressed for a fast sale and want to hire a real estate agent to sell your home, you’ll want to follow these five steps to selling a house with fire damage.
1. Restore the home to its original condition
Restoring your home to its previous condition can get expensive. According to HomeAdvisor, repairing fire and smoke damage can cost between $2,975 to $40,956, and the national average sits around $21,531 for a total repair. Larger fires that destroy a kitchen or cause significant damage to the roof can cost $15,000 to $25,000 per room to repair.
Keep in mind that these costs are going to depend on a variety of factors like:
- The extent of fire damage.
- Water cleanup.
- Cleanup from fire extinguishers.
- Soot removal.
- Smoke damage.
Before doing any work to your home, you’ll need to contact your insurance adjuster or representative. They’ll go over your policy and let you know what is covered and how much you’ll have to pay out of pocket.
Luckily, most insurance policies cover fire damage, with some exceptions such as arson and a negligently maintained structure. Insurance may also cover lodging expenses while you repair your house and any damage the fire may have caused to your neighbors.
Note: There are more than 4.5 million American homes in high or extreme risk areas for wildfires. If you live in one of these areas, your insurance company may require a wildfire insurance policy. However, some insurance companies may not offer coverage, and if that happens, you can contact the state commissioner’s office for help or look into a FAIR plan.
2. Disclose any previous fire damage to potential buyers
Once the house has been repaired, there’s no more damage, and it doesn’t smell like smoke anymore, do you have to disclose a fire when selling? To comply with your state’s disclosure laws, you will likely need to.
“Most people are going to find out or know that the home has been on fire,” Darden said. “So the only way to alleviate that and actually be able to sell that home and get a fair market value for it is to be extremely extensive with the details, what you did to put that home back together, and how you made sure it met codes and standards that would apply to any home.”
3. Keep detailed records from the restoration
You must keep detailed records of all the work that’s been done to your home when you’re repairing fire damage.
“A buyer is going to be looking at the house through a microscope, so you need to be prepared for that, even more so than your standard inspection and purchase,” says Darden. “Really dot your i’s and cross your t’s in reference to documenting everything that was done to bring that house back up to speed, all the way down to photos and paid invoices.”
Note: It’s a good idea to keep track of all repairs and renovations you make to your home from the moment you move in. You can use the receipts and invoices when determining the asking price when you want to sell the house further down the road.
4. Don’t withhold information from buyers
Darden advises that homeowners be upfront when selling a house with fire damage, including how the fire started.
“People are going to ask, just wanting to know, like anything else that would happen in the house that would stigmatize it. Then they’ll make their assessment based on that,” Darden reports. “If it’s your standard kitchen fire or electrical fire or vent hood, it goes right back to the documentation of showing them that, ‘Hey, this is what happened, and this is what we’ve done to make sure it doesn’t happen again.’”
5. Be patient
Selling a house with fire damage can be a challenge. Potential buyers are likely to have plenty of questions and will want to go over every repair that was done as a result of the fire. They may also request specialized inspections like:
- A chimney inspection if the fire originated in the chimney or fireplace.
- An electrical inspection if the fire was caused by an electrical problem.
- A roof inspection to ensure the fire didn’t damage the roof.
- An HVAC inspection if the fire was caused by a faulty heater, poor ventilation, etc.
- A structural home inspection to ensure the fire didn’t damage the structure of the home.
Navigating the sale of fire-damaged home
The trauma of a house fire is undeniably profound — its implications reaching far beyond charred walls and the stench of smoke. For homeowners planning to sell, the journey from disaster to putting up a ‘For Sale’ sign can be intimidating. Yet, as grim as the aftermath might seem, the selling process doesn’t have to be an insurmountable challenge.
Immediate action can mean the difference between a successful sale and lingering damages deterring potential buyers. If you decide to restore your home to its previous condition, documenting the restoration process and providing buyers with the peace of mind that comes from comprehensive disclosures will go a long way.
Or if you decide to take the as-is route, resources like HomeLight Simple Sale can help you land a cash offer for a fast and easy home sale.
Header Image Source: (Omar Rodriguez / Unsplash)