A damaged home can be a seller’s worst nightmare. Some homebuyers are in the market for a fixer upper — and for those trying to unload a house damaged by a flood, a fire, mold, an earthquake or some other natural disaster, you need special home staging strategies and techniques to sell a damaged house as is.
Selling a home can be confusing enough, and when you add the complications of a damaged property to the mix, the process can become nothing short of intimidating. However, the more you know about selling an as-is home, the more comfortable you’ll be that you are making the right decisions for yourself and your family. You can have an easier time making these decisions when you know:
- What “as is” means, and what you need to disclose to potential buyers
- Reasons to sell a damaged home without repairs
- What to expect when selling a home damaged by:
- Fire
- Flood
- Mold
- Earthquake
- Quick tips for renting a house with damages
The right buyers for a damaged home are out there. Be thoughtful, mindful and honest, and you’ll eventually get them in the door. Before that happens, though, you want to be sure you know everything you can about selling damaged property.
What does it mean to sell a home as is?
When looking to sell a home that needs some work, ask yourself, “Why do I want to sell a damaged home as is?” Buyers who want a house with waterlogged carpets are in short supply. Plus, you won’t make as much on the sale if the house has serious issues. Those statements might be true, but there are many benefits to selling a home in as-is condition, which is a legal term which means you, the seller, will not be making any repairs. First, it’s important to understand that as is doesn’t mean you don’t have to disclose the faults and flaws. Selling this way means the closing occurs with both parties fully aware of the property’s issues. For example, a homeowner or real estate agent must disclose to a prospective buyer if there is:
- A major known plumbing or electrical issue
- A level of radon that exceeds the acceptable EPA limit
- A major structural defect, like a substantial crack in the foundation or roof damage
- Mold
- Termite damage
- A significant external issue like loud noise levels
- Any known legal issue with the property
It does no one any good to hide flaws or not mention damage. These issues will almost certainly be uncovered during inspection, so being up front right away helps you weed out buyers who simply won’t be interested. Selling a property as is isn’t the best choice for everyone. There are a lot of things to consider before putting a damaged home on the market.
Why would I want to sell a damaged property without repairs?
Selling a piece of property takes time — a commodity that is a luxury for some people. While you may be looking to unload a home damaged by a natural disaster or other issue, someone else is likely looking for that kind of project. Maybe you’ll find a buyer who is adept at home repairs and, more importantly, enjoys doing them. Perhaps you’ll find someone who really wants to be in your neighborhood, but can’t afford most homes in the area. There are about as many reasons to sell as to buy a fixer upper, and some of those reasons include:
- You’re in a financial situation where making the repairs will put you deeper in debt
- Reducing the amount of stress you face during the home-selling process
- You need to sell your home immediately and cannot wait to make repairs
- You have inherited a home that was not well kept by its previous owners
- The payout from insurance for the damages plus the as-is selling price of your home covers what you owe on the property
Even with a damaged home, you can make a sale to non-traditional buyers if you focus on highlighting the good and unique qualities of the home. That’s why it’s important to know what can happen when you try to sell a home damaged by a fire, a flood, mold or an earthquake.
What should I expect when selling a damaged home?
In some cases, selling a home as is may be your best bet. Maybe the damage only affected a few rooms. Maybe the cost of the repairs would mean you can’t afford to pay off the mortgage. You never want to try to hide the damage, even if it happened years ago. Before putting a damaged home on the market, make copies of insurance files, police reports and anything that documents the circumstance, whether it was a fire, a flood, mold, an earthquake or some other disaster.
Pro Tip: Give a Fire-Damaged Home a Good Cleaning
First off, your buyers will be very interested knowing the type of fire that broke out. An electrical issue that hasn’t been fixed is a different concern than a candle that was knocked over by a pet. When selling a home that has seen fire, regardless of the as-is state, there are ways to highlight its best features and qualities. One of the simplest ways to show home buyers the property’s potential is to thoroughly clean. Though you are required to disclose the fire damage, that doesn’t mean you should advertise it. Clean and, if you can, replace anything burnt or with visible smoke or fire damage. Don’t forget to do your best to get rid of the smoke smell, along with any traces of materials used to put out the fire.
Pro Tip: House Staging for a Flood-Damaged Home
Water damage can have a substantial impact on the structural elements of your home, but also possessions like furniture, appliances and electronics. It’s best to address water damage as soon as possible to prevent mold, mildew, damage to floors and the roof, and other issues that can progress over time. But if you don’t have the time or money, then you’ll want to stage the house as best as you can to sell as is. Repaint your walls to white or beige; neutral colors appeal to a buyer’s imagination, as well as give the interior a clean and fresh look. Like with a fire, you need to disclose flood or water damage, but you can stage the house to show that it’s not impossible to fix. Replace or remove any damaged furniture, pull up any waterlogged carpets, and use simple but elegant decor to distract the eye from areas that you are not able to repair.
Pro Tip: Hire an Inspector for a Mold-Damaged Home
Small amounts of mold are rarely a problem. In large amounts, however, it is terrifying to see in your home. A mold problem that requires disclosure goes beyond the kind that pops up on food in the fridge. Black spots developing on a wall in a room with poor ventilation, dark brown spots behind wallpaper, or a cotton-like substance in a dank basement are all signs of a mold problem. One way to get the highest price possible for a house with mold, whether or not the issue has been resolved, is to pay to have an inspector come through and give an assessment. An inspector can identify areas of mold, how dangerous it is, and what is required to fix it. Keep all of these documents to help answer questions for potential buyers. You can take this a step further by getting the estimates for potential buyers as well. However, let them know you have already factored the costs of repair into your asking price in case they try to make a lowball offer.
Pro Tip: Know Your Selling Points for an Earthquake-Damaged Home
Earthquakes can be a terrifying wake-up call for some people who live near a faultline, while others see them as a minor nuisance. Selling an earthquake-damaged home as is means knowing what the appeal for a buyer is. Be sure to highlight attractive features that remain undamaged, such as a lush lawn or well-landscaped backyard, a swimming pool, areas with bright natural lighting, or updated kitchen appliances.
Renting out a damaged home
Last, but not least, if you aren’t ready to repair or sell a damaged home, you can consider renting it out. If you put your as-is home on the market and it seems to just sit there, becoming a landlord might be the best — or only — way to keep your finances afloat. However, just like with selling a home as is, you will have to disclose any information on environmental or safety hazards in the home, such as:
- Lead-based paint
- Mold
- Radon
- Bedbugs
- Recent flooding, or if the property is located in a flood zone
- If the property was once the location of a methamphetamine laboratory
- Outstanding building inspection or condemnation
- Housing code violations
Each state has different requirements for landlord disclosures, many of which also include details unrelated to any kind of damage. When renting a property that has seen a fire, a flood, mold, an earthquake or other damage, it’s important to be transparent with the home’s issues and fair with the rent.
The stress of dealing with a home-damaging disaster can be debilitating, both financially and psychologically. You may be ready to let the house go quickly because the repairs are too hefty or the emotional wounds too fresh. Either way, selling a house as is can be done, and can be beneficial for the buyer and the seller.
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