Dealing With A Disaster-Damaged Dream Home - A Homebuyer's Guide
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A Homebuyer’s Guide to Dealing with a Disaster-Damaged Dream Home
Discovering that a house you plan to buy has suffered significant damage from a natural
disaster, burst pipe, fire, or another calamity can be concerning as you may have put a deposit down, had an inspection, and are ready to buy. So, what should you do? In this article from RE/MAX Gateway, we go through the steps necessary to navigate the situation.
Research Home Prices in the Area
Before making any decisions, research home prices in the area so you know a reasonable amount to ask for in terms of a price reduction to compensate for the necessary repairs. Doing this will also give you an idea of how much you should offer, considering the house’s condition.
However, keep in mind that if the damage is extensive and the cost of repairs is many times the sale price, it may be time to walk away from the deal.
Call Your Real Estate Agent
Your real estate agent from RE/MAX Gateway is your best resource and knows the area, the market, and what options you have. They will be able to advise you on what you can do, giving you a clear idea of what options you have available. They will also know what other issues need to be addressed before moving forward.
Have a Home Inspector and Contractor Assess the Damage
Having a home inspector and contractor assess the damage will help get the most accurate cost estimates for repairs. Do not rely solely on the seller’s disclosure of the damage. An inspector and contractor will have a better idea of the damage’s extent and the scope of the repairs needed.
Carefully List All the Repairs Needed and Price Out Those Costs
Once you have a list of damages and repairs needed, it’s essential to price out those costs. Use your contractor’s estimate and factor in any additional expenses for permits, inspections, or other fees. Be sure to ask for more in the price reduction if necessary, and if you agree on the price, make sure it is clearly written in the contract so there is no confusion later.
Negotiate Which Repairs Need to Be Made Before the Final Sale
When negotiating which repairs need to be made before the final sale, the Inspection Report Network says to make sure you and the seller agree on what repairs are necessary. If there is a discrepancy, try to find a reasonable solution that works for both parties, such as splitting the cost of repairs. Remember, not all repairs may need to be made before the sale. Some issues may be easily handled by yourself once you move in.
If Planning to Run a Business, Select a Structure
Registering your business with the state is a critical step in establishing your company. Some business structures require more paperwork and fees than others. While LLCs typically require less paperwork, they still need to register with their state. If you’re registering an LLC in Texas through ZenBusiness, you’ll need to file a Certificate of Formation with the Secretary of State. Certificate contains the name of the LLC and the purpose of the business. It’s also important to check the Texas Administrative Code for any specific regulations regarding your industry.
Hire a Real Estate Attorney
Hiring a real estate attorney is a smart move, especially when purchasing a home with significant damage. The attorney can review the contract and make sure it has all the necessary clauses to protect your investment. The lawyer can also advise you on any legal risks that come with buying a damaged property.
Do a Thorough Walkthrough Before Closing
Before closing, Bankrate suggests making sure to do a thorough walkthrough. Check everything from the top to the bottom and make sure everything is in order. Make sure that all repairs agreed upon are completed satisfactorily, and there are no hidden issues. If something looks amiss, ask your real estate lawyer for advice to make sure you understand your rights. Buying a home that has suffered any kind of damage is a situation that can be managed. Research home prices, call your real estate agent, have a home inspector and contractor assess the damage, and carefully list all the repairs needed and price out those costs. Negotiate which repairs need to be made before the final sale, if planning to run a business, know the additional considerations necessary, hire a real estate attorney, and perform a thorough walkthrough before closing. By following these steps, you can protect your investment and make sure you are making the right decision for your future...
- Marissa A. (September 13, 2017 - Yelp)
- Eric Scagnelli - Investor(October 22, 2023 Ask Mike Cossette Facebook)
- Chris W. (December 30, 2014 Yelp)