Selling a house with damage is bad enough – but water damage is especially tricky. Many homeowners have run into trouble for not disclosing water damage when selling a house.
Water is enemy number one when it comes to home sales in the USA. It’s not covered by insurance (unless specific coverage is taken out) and it can destroy an entire ground floor. Selling a house in Memphis TN with a wet basement is going to make a hard sell even harder.
The Problems With Water Damage
Water damage to a home is more than just a simple fix. If the water has been there for prolonged periods, it could easily result in mold or mildew, which are a health hazard to occupants. Typical mold remediation can cost between $1,100 – $3,300. You might need to vacate the premises while the property is being repaired, and this will add to your overall costs.
It only takes 48 hours for mold to set in, so the first thing you want to do is dry the home off as best as you can. Next, it’s time to start documenting with pictures and to contact your insurance company, if you have an insurance policy in place. Water affects the walls, pipes, floors, carpets, upholstery, furniture, and nearly everything it comes into contact with.
If you are planning on selling your home on the MLS, then you need to repair everything as it was before the damage or look towards an alternative method of selling a house with water damage. Water damage is not something that is cheap to fix. Thankfully, there are ways to sell a house with damage, even water damage. We’ll run you through some of them.
Option #1 – The Classic Method
The typical approach would be to renovate the home and sell it using a full-service real estate agent or discount brokerage. The problems with this are obvious. First, is that the cost of renovating the house is itself expensive, though necessary. Second, the real estate agent will often take a hefty 6% of the total sales price.
In other words, you can be expected to pay a large amount of money if you want to sell a house with water damage, in Tennessee or anywhere else, using a full-service real estate agent or discount brokerage. What’s more, is that your house can be on the market for months on end. This can add considerable stress to daily life, especially for people who want to move quickly and painlessly.
Even if you fix the house and sell using a discount brokerage, the fees are still going to be onerous, and you will have a lot of work to do in terms of paperwork and marketing. While using a discount broker or a real estate agent can be a reliable approach, you are still left paying large fees. You also need to be prepared to wait for months for a sale, to get the price you want.
Option #2 – Sell Direct to Customers
It’s also possible to sell a house with damage directly to a buyer. This is known as ‘FSBO’ or For Sale By Owner. While this is growing in popularity, the majority of people who go down this route find the stress of selling your house on your own is not worth it. It’s hard to find the right buyers. And coupled with water damage, the sale becomes even harder.
To sell your home directly as an owner, you would need to find a buyer independently of agency assistance. You could do this by:
- Asking your neighbors if they know anybody interested in buying.
- Using social media to find buyers.
- Using an online listing service such as Zillow.
Remember to disclose the water damage at the outset or to get it repaired beforehand. There is little point in wasting people’s time as many buyers have no interest in taking on this kind of project. On the other hand, there is always a market for fixer-uppers, if you can find them.
Whatever you do, don’t just pretend the problem is not there. Buyers will inspect and bring in their own teams. You could also fix the house up and then sell it directly to consumers, much like the first option. This takes time and money, but it might be worth it depending on your situation.
Option #3 – Sell Via Auction
You could sell your home without repairing it by using an auction. This could be a physical auction or an online auction. The auction has a number of benefits. The house is sold on the spot and there is no open house, aside from perhaps a few hours to review the house before the sale. Auctions are often held on the property itself and there is no duty to disclose damage.
The online auction can also be very lucrative. While most people associate auctions with foreclosures and distress, this is not always the case. They can be enjoyable for both buyers who get a good house and sellers watching people compete to acquire the home they are trying to sell.
If going down the typical route, there are strict conditions in terms of disclosing water damage when selling a house. But this is not the case with an auction, where the mantra is ‘buyer, beware’. Buyers will understand that they are not getting the home in perfect condition.
If you are selling via an auction, then you need to find an auctioneer who is qualified in selling your type of home. There are plenty of under-qualified auctioneers. You also need to understand what the qualifying criteria for applicants is – all too often, a house is bought at auction and the buyer cannot find the cash due to a poor financial screening process.
Unfortunately, the auction has serious disadvantages. The auction fee can go as high as 10% (though this fee could be split 50/50 between buyer and seller). The auctioneer may also charge a no-sale fee if you change your mind that can be the same as the 10% fee. With an absolute auction, your home may sell for very little.
Option #4 – Sell Using Real Estate Investors
It might be hard to believe, but there are companies out there that are more than happy to be buying a house with water damage. These are not merely sharks looking for ultra-cheap prices or vulnerable sellers. They are experts at repairing houses as well as real estate property valuation in general. They are professional ‘fixer-uppers’.
Quotes are free, there is no need to contact a full-service agent, no need to market your property, and no need to have an open house. Even better, the transaction can be finalized quickly without undue delay – the real estate company has the funds at hand.
You are not dealing with a buyer, who has to come up with all of the funds and paperwork. Using real estate investors gives you the speed of an auction and the expertise of a real estate agent, at the cost of selling it directly. You can get a quote within 24 hours and a sale within 2 weeks, avoiding the typical 6% sales fee with a full-service agent.
And all this without dealing with the very disturbing problem of water damage in your home. Houses in any condition in Tennessee can be bought with a reputable real estate investing company, like Fair Cash Deal, including yours.