According to the National Fire Protection Association, there were 363,000 residential building fires in 2018 that led to $8 million in property damage. Causes for home fires include cooking equipment, heating problems, smoking in bedrooms, electrical equipment malfunctions, candles, faulty wiring, barbeques, and lightning, just to name some. However they start, it’s important to know that these things happen and they can happen to any homeowner.
If you find yourself dealing with a house that has suffered fire damage in Memphis, it might feel as though you’re stuck without any options. However, there are steps you can take to sort through the ashes and determine if you want to sell the house. There are options that exist on the open market as well as with real estate investors. Let’s figure out how to sell a house with fire damage in Memphis.
Selling a House in Memphis with Fire Damage
Let Your Insurance Company Know
When you’re dealing with fire damage, the first thing you should do is contact your insurance company. Understand the full extent of your coverage and exactly what is covered and what isn’t. If you have fire insurance, you’re in a very good position to get reimbursements for the damage. If you don’t, it might be trickier. All insurance companies handle these situations differently so it’s probably a good idea to review your policy now before you don’t have a choice.
Your insurance company will want to see an inspection of the property and they’ll need to sign off on any repairs that are done and who does them. Knowing where the insurance company stands and how much money you should expect to receive, you’ll be able to make a good decision about what to do next with your fire-damaged house.
If you find yourself in need of more information about insurance, you can contact the Tennessee Department of Insurance. They’ll provide you with literature and can also point you in the director of a public adjuster licensed in the state you can provide guidance.
Collect Your Things
If the Memphis fire department was called to help your house, you sill need to get their permission to re-enter the home. Once you have it, you need to mentally prepare yourself for what you might find (or not find). It’s normal to have a desire to find items are have emotional weight or heirlooms, but that’s not your priority. Your first priority is to find vital documents such as insurance benefits and financial records. You’ll have time to come back and deal with the rest.
Once you have full access to the house, you’ll want to begin the clean-up process quickly. One of the unfortunate side effects of fire clean-up is that you might have to pump out water that was used to put it out. There are likely broken windows and doors that need to be covered and boarded. Take a look around for other openings to the home in order to prevent further weather damage. It’s also a good idea to put up some kind of temporary fencing around the house or property, which will discourage bystanders and potential thefts.
Get Your Fire-Damaged House Inspected
Whether you do it through your insurance company or simply on your own, it’s critical to get a home inspection from a licensed professional who knows what to look for in a house with fire damage. A reputable inspector will be able to find the issues and problems that might not be obvious on the surface. They’ll be able to understand what certain signs mean and how today’s issue can lead to tomorrow’s problem. Even if the fire damage seems minimal, it’s important to get an inspection for these reasons.
The inspector should provide you with a complete list of what needs to be repaired. If you decide that you want to make repairs in order to sell the house, you can begin to request bids to fix the issues. That way you’ll not only be able to figure out who you want to hire but also what the costs will be.
If you are thinking about selling the house on the open market, you should know that the rule of thumb is to only make repairs that will amount to 1-2 percent of the overall home value. This is because it’s unlikely you’ll recoup costs larger than that in any kind of home sale. In other words, anything bigger is probably not worth it.
Decide How You Want to Sell Your Fire-Damaged House
When a house has fire damage in Memphis, there are two options to consider if you want to sell.
The first option is to repair what you can and attempt to get the house in shape enough to sell it on the open market. You can use the money provided to you by the insurance company or use your own if that’s not an option.
This option can be a very tricky one. Even if you get the house in pristine shape, you’ll have to disclose that there was fire damage to any potential buyer. Even with best efforts, that could make them wonder about the condition of the house and whether or not there’s a problem waiting for them down the road.
Tennessee requires sellers of most residential real estate to complete a Residential Property Disclosure Statement. This will let the buyers know about the condition of the property, including previous damage. The disclosure statement should include the property address and the age of the home. Disclosure requires a list of amenities included with the sale and their condition. Sellers must report any known defects or malfunctions of structural or mechanical components. Failure to include all of this could lead to the canceling of a contract and can even lead to legal action.
It’s also important to remember repairs can be expensive and include a lengthy process. If the fire damage requires you to rehab entire rooms or floors, that could take months and could cost more money than you could expect to get back in a sale. You’ll have to decide if it’s worth it to sit on a fire-damaged home for months with the hope that you’ll be able to recoup your costs in the end.
Per Home Advisor, the average for a homeowner comes out to around $12,483. That cost varies substantially based on many factors, including water cleanup, chemicals, soot removal, and restoration. It’s not uncommon to see repair prices reach as high as $100,000 for extensive damage.
There is another option that exists for those who want to sell their fire-damaged house but don’t want to put in the time, money, and effort needed to make it market-ready. You can sell the house as-is directly to a real estate investor like Fair Cash Deal.
All you have to do is contact them and let them know about your situation. They’ll visit the property to assess it and meet with you. Then they’ll make you a fair cash offer without any need by you to make repairs or upgrades. If you like the offer, you can close on the deal on your time, often in a matter of days. Then you get cash in your pocket, don’t have to worry about renovating the fire-damaged house, and get to move on with your life.