From this guide, you will find out the best ways to sell a fire-damaged home, decide whether to sell the home as is or rehab it, the costs associated with fire-damage repairs, how to price the property, and the legal aspects of selling your house after a fire.
Read on to learn everything you need to know about how to sell a burned house.
Determine Your Selling Objective
The first step when selling a fire-damaged property is to decide what you want to achieve from the sale:
- Get rid of the property as soon as possible (sell as is).
- Repair the property and sell it to maximize profit.
Depending on the extent of the damage, selling the property as is may be the best option for many homeowners.
In this case, the most convenient way to sell a fire-damaged home is through real estate investors, particularly cash buyers.
Professional investors have the capital to cover repair costs and manage teams of licensed home repair professionals. As a result, it costs them less to fix the property than it does for the average home buyer.
You may also choose to restore the property and sell it traditionally (via a real estate agent) or market it as FSBO (for sale by owner).
If you choose this option, you will need to have the damage assessed and repaired by professionals, appraise the property, and learn about the legal and insurance aspects of selling your house after a fire.
Here is how long it takes to rebuild a house after a fire before selling it.
How to Sell a Burned House As Is
You need to consider various factors when selling a burned home.
In the following sections, we’ll discover where to find buyers for this type of deal and discuss the pros and cons of selling the house without having to repair it.
Who Are Cash House Buyers?
A cash house buyer is a professional real estate investor (individual or company) who buys homes in bad condition to fix and flip (repair and resell at a profit) or rent out.
Investors target damaged and distressed properties because they’re significantly cheaper than turnkey homes and have a value-add potential.
Cash buyers are the best option for selling fire-damaged property quickly and conveniently.
Pros of Selling to a Cash House Buyer
- You can sell the property as is without going through expensive and time-consuming repairs, or assessing the house for what to throw away after smoke damage.
- Cash buyer transactions are quick and easy.
- Investors make cash offers, unlike traditional buyers who need a mortgage and depend on a bank’s approval of the deal. Especially if a property is damaged, a lender may deny issuing a loan on it. For the seller, this means wasted time showing their property to a buyer and negotiating with them.
- Appraisals and inspections required by mortgage lenders won’t apply to a cash-financed deal. This means weeks of saved time.
- A cash buyer covers closing costs.
- A cash sale to an investor means you don’t need to hire a realtor; you can avoid agent commission fees, which are the most expensive among the closing costs
Cons of Selling to a Cash House Buyer
- You will get less money from a cash sale than you would if you restored the house and sold it to a non-investor home buyer.
Where to Find a Cash House Buyer?
To sell a burned home, you need to find cash buyers specializing in such deals.
One of the best ways to find cash buyers is to request cash offers from investors via our website.
By requesting a cash offer on the platform, you get up to five cash offers from local buyers. This allows you to compare them and choose the best one. Sell fire-damaged houses quickly now.
Alternatively, you may choose to repair the property and sell it for top dollar.
The following sections highlight the costs associated with fire-damage repairs, the legal requirements of selling a fire-damaged home, and how to price a burned house.
How Much Does It Cost to Repair a Fire-Damaged House?
The cost of restoring a burned property varies depending on the extent of the damage, the size of the home, your location, your insurance coverage, and the fire category.
The average cost ranges between $8,000 and $20,000, or about $4 to $7 per square foot. Restoration of entire homes can exceed $100,000.
Fire damage is categorized based on what caused the fire:
- Class A: Fires caused by combustibles like paper, wood, or cloth. Repairs cost between $8,000 and $20,000.
- Class B: Fires caused by flammable liquids like gas, alcohol, oil, grease, or paint. Repairs cost between $12,000 and $18,000.
- Class C: Fires caused by electrical faults and equipment. Repairs cost between $10,000 and $20,000.
- Class K: Fires involving vegetable or animal oils and fats. Repairs cost between $11,000 and $18,000.
- Class D: Fires involving combustible metals like potassium, sodium, and lithium. Repairs cost between $12,000 and $25,000.
What happens after your house burns down and the extent of damage is also a key consideration. The four common damages associated with fires include:
- structural damage ($4,000 to $50,000)
- smoke and soot damage ($500 to $5,000)
- water damage from extinguishers ($2,000 to $6,000)
- personal property damage
Structural damages are typically the most expensive type of repair, as they affect major components such as beams, walls, electrical wiring, and entire house sections.
Other costs include:
- Inspection fees: $300 to $900
- Appraisal costs: $300 to $600
- Legal and local authorities fees: Fire restoration projects of any size require approvals from several entities, including your insurance company, mortgage lender, the fire department, and local building authorities. You will be responsible for any associated costs.
Learn more about how to price a fire-damaged house and how much it costs to rebuild a house after a fire.
Do You Have to Disclose Fire Damage when Selling a House?
Real estate disclosure requirements vary by state. You have to check your state’s regulations to determine whether you can sell a previously burned home without revealing this fact.
But generally, you have to disclose fire damage when selling a house. In most states, sellers must fill out and sign disclosure forms describing a property’s condition.
Although some states may not ask specifically about fire damage, they will likely ask about any material damage to the property; this means you should include damages caused by fire.
Disclosing fire damage is recommended to avoid any legal liabilities on your end.
How to Price a Fire-Damaged House?
Once you’ve successfully restored a fire-damaged house, the next step is to determine how much you’ll sell it for. Consider the following when pricing the property:
- Scope of damage
- Cause of fire (fire category)
- Cost of repairs
- Home sale prices for similar properties in the area
- Account for the fire: fire-damaged homes have low demand and sell for less than what similar homes that haven’t suffered fire damage would sell for.
To accurately price the home, hire a fire-damage restoration contractor to get an estimate for required work. Then hire a realtor for a broker price opinion. Or, you can hire a professional real estate appraiser.
If you are selling as is to a cash house buyer, they will give you a cash offer much quicker, without making you wait for an appraisal report.
