Sell a House that has Water Damage: The Right Way to do it

Did you recently find out that your property has leaking pipes or some type of flooding that has caused damage to your home?

Water has a way of finding its way through cracks in walls, and even seeping through floors.  

Do you want to sell your house but you are not sure how to di it the fastest and most efficient way? Our guide will help you get through this entire process.

• Over 20% of all water damage insurance claims are related to home sales (Source: Insurance Information Institute)
• Over 50% of home buyers are unaware of the potential for water damage when purchasing a home (Source: National Association of Realtors)
•  Over 30% of home buyers who discover water damage after purchasing a home are unable to recover the cost of repairs (Source: National Association of Realtors)

This guide contains information to help you sell a house that has water damage, such as black mold or water stained ceilings. 

Sell to a Real Estate Investor

You will find signs such as “We Buy Ugly Houses”, in every American city. Ever wonder who is behind these signs and how they are able to buy homes that have been damaged?

Many homeowners have to sell their houses quickly due to divorce or other difficult circumstances. 

While some homeowners believe they can sell their house without major repairs if they don’t have the money, most buyers are looking for a beautiful home.

There are always plenty of real estate listings that have water damage!

Many investors in real estate own house buying companies to help those who are facing financial difficulties such as this. 

These home investors can buy any properties in any condition for cash, and they do so with quick and easy real estate transactions.

Seller don’t have to deal with a repair, or issues with the property like replacing the flooring. It is sold “as-is”.

The tools that legitimate house buyers use to make the cash offer are sophisticated and based on current market trends.  

Investors without any integrity  make low-ball offers to try and take advantage of a seller who is stressed.

Some house buyers mistakenly call themselves professional investors, even though they are not ethical in their business practices. 

Before you ask for an offer, find out the integrity of these home buying companies.

Request cash offers from reputable companies. 

You may not receive the best offer if you sell your home to the first investor who offers you a deal. 

Different home investors may value your house differently. Compare cash offers from different companies and shop around.

Pros of Selling to a cash investor

A typical buyer will make an offer and move in to your home, making the transaction easy. But  if they find black mold due to water damage, the buyer will most likely cancel the contract.

Investors do not have an emotional stake in your property. Investors will only offer what it will cost to fix and resell your home at a profit.

Investors won’t leave if mold is found or other issues including the foundation. They will deduct the cost of mold remediation in their cash offer.

You don’t need to worry about expensive repairs if your house is damaged by water. 

No matter the condition of your house, you can sell it “as-is” and not ev. If your buyer is an investor, selling properties won’t be difficult.

If want cash quickly,  selling your house to a company is a good option and can be less stressful and leave you with fewer worries. 

The investor will be in charge of the renovation of the property.

There are no realtor fees. You won’t have to pay any closing costs, nor deal with cleaning the home! 

Closing is fast and simple with minimal paperwork.

Selling for a Cash Offer: the drawbacks

The perfect solution for the right homeowner is a quick sale to a property investor. This convenience comes with a cost.

Investors will always offer less than the market value.

This is a common practice for getting paid in cash and receiving it quickly. 

If you don’t want to cut the price, then you should consider traditional methods of selling your house;  like listing it on MLS.

However, you should confirm that the company is legitimate before you sell to a cash buyer. 

Scammers are common in the real estate industry, and they prey on those who don’t do their research. Violations do occur in the real estate industry.

Sell with an agent

Real estate agents facilitate negotiations between potential buyers and you for your home. 

A typical real estate transaction involves both you and your buyer. Both agents get paid when the house closes. 

This motivates them to work together to bring the buyer and you together.

How to choose the right Realtor

The right realtor will have an idea of the best offer you can receive on your house based on conducting a CMA.

The local housing market should be well understood by an experienced realtor. 

Prices will be determined by many factors including the neighborhood and schools.

Benefits of selling with a realtor

An experienced real estate agent can offer advice and help you determine a fair asking price for your house, taking into account its condition, market demand, and other factors. 

You may even make more than an “for sale by owner” or investor cash sale transaction. 

You might get offers that are higher than your asking price in a hot market. In a slower market it may take you months to get the best possible price for your property.

Traditional sales will make your home more visible to potential buyers by having it listed on a local Multiple Listing Service. 

The MLS is only available to licensed agents, which is a great advantage.

Buyers often demand unreasonable things before closing.

For example, home inspectors may find faulty wiring or leaks and recommend that these be repaired. 

However, the buyer insists on having the whole house rewired and wants a new roof! The source of the leak may be hard to find!

These demands are one reason why its good to have agents assisting you throughout the sale. 

Selling with a Realtor has its drawbacks 

• Your realtor may ask you to stage your home for the highest possible price.  
• Before listing your house, you may have to make repairs and other potential upgrades.
• Showings can be a pain for sellers. Each time a buyer wants to view the house, you will be asked to leave.
• They may charge you anywhere from 5% to 6 percent for realtor commissions.

It could take months to sell homes. If your asking price is too high or your neighborhood isn’t hot, you may find your home sitting on the market longer than you like.

That means it could be time-consuming and a high DOM (days on market) can turn off many people! 

It’s possible the buyer can ask for price concessions or walk away from the contract.

Buyers will want to cancel the contract home inspectors mention “black mold” or there is growth of unknown substances.

For sale by owner

Signs that say “For Sale By Owner” are commonplace signs in America.

The asking price is set by the seller. The seller handles all advertising, showings and other processes until the closing. 

Several third-party websites can help the seller with advertising for a fee.

Benefits of selling on your own

Selling your house by yourself has the greatest advantage: you can save money. 

FSBO transactions reduce the commission so you have a greater chance of making more money by selling your house yourself. 

This means you need to do your research on the local realty market and know all details in order to determine the right price.

Selling on your own has its drawbacks

If you choose to sell on your own you will have to handle everything without any assistance from a realtor.

This includes:

• All paperwork
• Marketing
• Negotiation
• Title company interaction
• Handing inspections and appraisals, etc.
• Communication with buyer and agents

Plus if you are selling a home with flood damaged, you will have to know the laws about disclosing previous known issues. 

You could face legal action 

You need to be sure that you have the correct disclosure and release papers for the buyer.

It is important to determine what forms are required and where they can be found.

It’s crucial to present to the buyer that the price you are offering matches the condition of the house.

Selling yourself may not be a good idea. Some information shows that FSBO homes sell for less than property that are sold through real estate agents. . 

A seller may not know how to price a house that has water damage. A price set above the market will surely scare away buyers.

You could also sell your house quickly, only to find out later you could have gotten more!

Just like a regular home sale, staging your home will help you get the best possible offer.  

It can be hard to for many sellers, when buyers present a low ball offers and complain about a repair that is needed.

In the end, length of time it takes to sell a house with flood damage will depend on the damage, the location (neighborhood) of the property, and the current market. 

Disclosing flood and water damage

Any potential buyers should be notified in writing if your house is damaged by water from a storm or a mechanical problem.

It is not always necessary to disclose water damage, but it is the smart thing to do.

Any buyers should be made aware that you know there is water in your basement for eight months. 

You can see that disclosure rules are complicated. Don’t risk legal action against you. It is prudent to disclose all information. 

It is important to do it in writing so that the buyer cannot sue you.

Always disclose repairs! 

The buyers will appreciate it and probably trust you more!

Disclosure in a flood zone

If your home is in a floodplain, you may be subject to additional disclosure requirements. 

As previously stated, some states have buyer beware real estate transaction laws that place the burden of discovering problems on the buyer.

In these states, the buyer must determine whether the house is in a flood zone and whether there has previously been water damage. 

As a general rule, any information about a property that could affect the price paid and the buyer’s desirability should be disclosed.

You may also decide it’s better to rent out the property than take a low offer.

To get a no obligation free cash offer for a damaged home, fill out our online form.