The following guide covers disclosure laws and requirements for fire-damaged houses.
It clarifies how to disclose fire damage, the importance of disclosure, the consequences of not being upfront, and how to sell a home after a fire.
Keep reading for a deeper dive into fire-damage disclosure.
Do You Have to Disclose Fire Damage When Selling a House?
Property disclosure laws vary from state to state. Most states require sellers to reveal defects and damages that might affect a property’s value and safety.
Some states, like New York, have especially strict disclosure laws.
They require sellers and agents to provide buyers with comprehensive property condition disclosures, including fire damage and structural and electric issues.
These states provide disclosure forms to fill out and present to buyers. Overall, fire damage must be disclosed to buyers in writing for ethical and legal reasons.
Provide the key details, such as the date, cause, and severity of the fire, along with the repairs and restorations. You should also reveal any remaining defects and potential hazards of the fire.
Still, if a house was completely burnt and then rebuilt from the ground up (such that the house is essentially new), you may not need to disclose the fire damage.
How to Properly Disclose Fire Damage When Selling a House
Sellers and realtors have to rigorously research local disclosure laws and regulations when selling a fire-damaged property.
States like New York, Texas, and California require you to disclose all known defects, including any history of fire damage.
For instance, California requires you to fill out a disclosure form known as a Transfer Disclosure Statement. In the form, sellers have to reveal any damages that affect the property’s value and desirability.
Other states, such as Alabama, Wyoming, and West Virginia, don’t require you to disclose damages unless:
- The buyer asks.
- The damage poses any safety hazards.
- It’s a federal disclosure requirement (such as lead-based paint in homes built before 1978).
What if You Don’t Disclose Fire Damage When Selling a House?
Failing to disclose fire damage can expose you to serious legal and financial repercussions.
If a buyer discovers fire damage after purchasing a property, they can launch legal action against you, leading to expensive lawsuits and the possibility of revoking the sale.
Additionally, failing to reveal the damage during the sale process can affect the sale. The buyer may withdraw from the sale or insist on a huge price reduction.
Dishonesty and violations of disclosure regulations may also ruin the reputation of the seller or agent.
Who Can I Sell My Fire-Damaged House to?
If you’re wondering how to sell a house after a fire, it’s important to note that it comes with several complexities.
Along with pricing a fire-damaged house, one of the most challenging issues sellers face is who to sell the house to.
Most buyers avoid fire-damaged homes, so if you want to sell yours traditionally, by having a realtor list and market it, you will have to clean up after a fire and repair the damage first. Learn how long it takes to rebuild a house after a fire.
But there’s a category of buyers who look for such properties: cash house buyers.
From the following sections, you’ll learn who cash buyers are and where to find them, along with how to sell a fire-damaged home as is without having to make any repairs.
Who Are Cash House Buyers?
Cash house buyers are real estate investors who purchase distressed properties for cash, fix them and flip, or rent them out.
Because of this, you don’t need to repair the property or assess what needs to be replaced after a house fire and what can be salvaged after a house fire: the investor will purchase the house as is.
Cash buyers prefer damaged properties as they’re significantly cheaper than turnkey homes and offer a value-add potential.
Pros of Selling to a Cash House Buyer
- You can sell the house as is, saving yourself time and expensive repairs.
- Cash sales are usually fast and easy, which is much more convenient for sellers than traditional transactions.
- Unlike traditional buyers who need a mortgage, investors make cash offers. That’s why they don’t depend on a bank’s approval of the deal. Lenders may refuse to issue a loan for a damaged property, which for a seller means wasted time showing their property to a buyer, negotiating the price, and waiting through lender-required property inspection and appraisal.
- Closing costs are covered by the cash buyer unlike in traditional sales where the seller covers part of the costs.
- You don’t need to hire a realtor, so you avoid agent commission fees, which is the most expensive closing cost.
Cons of Selling to a Cash House Buyer
- You may get less money than you would if you restored the house and sold it to a non-investor. Obviously, the investor will have to count in fire damage restoration costs and potential profit from reselling your property after repairs.
Where to Find a Cash House Buyer?
Selling a fire-damaged house to a cash buyer is the most convenient selling option for the property owner.
However, you have first to find investors who specialize in fire-damaged properties.
One of the best ways to find these investors is to request cash offers through our website.
Our platform lets you request a cash offer from our vast network of investors and receive up to five offers by filling out just one form. With multiple offers, you can compare and pick the best one.
Or, you can browse through the best local companies that buy fire-damaged houses and choose one manually.
