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Selling a Storm-Damaged Home

by Vanessa Saunders

Its summer already, time for picnics, beaches and…STORMS!

We’ve already had a fairly active spring weather season this year, with regular, almost weekly rain and wind in the Lower Hudson River Valley of New York. By my reckoning, there’s more to come. If disaster happens and a storm damages your home beyond fixing, can you still sell it? The answer to that depends of course on the details, but it is still possible. Sellers do, however, need to be careful.

he most important part of selling any water-damaged home is to provide complete disclosure of the current condition of the property. If damages aren’t disclosed fully, sellers can be held liable even after handshakes at the closing table. Lawsuits stemming from nondisclosure of a property’s problems are growing, according to a recent survey of agents by the National Association of Realtors. Of the agents who responded, about 75% ranked non-disclosure suits among their “top three current and future issues.”

Damages and any repairs that have been made to the home are at the top of the list for disclosures. Sellers should bring in engineers, contractors and building inspectors and have them perform a thorough examination of the property. Any repairs necessary to the roof, plumbing, electrical system or heating and cooling unit that the seller is aware of should be laid bare. Likewise, details of any drywall or structural repairs necessary to remedy water damage.

Sellers must also disclose repairs that have been made prior to the date of the disaster including any repairs disclosed by previous owners. The sellers’ responsibility is to reveal anything that is not obvious to the buyer.

Water damage and mold go hand in hand. Gypsum-based dry-wall is particularly susceptible to mold growth when exposed to water. There are literally thousands of kinds of mold spores in the air at any given time (you’re breathing them right now, as a matter of fact!) Not all are toxic but some are quite dangerous with even short term exposure. People with sensitivity such as hay fever or allergies can be seriously affected. Disclosure of water damage and subsequent mold infestation is absolutely essential to selling a damaged home. Water damage is the biggest cause of disclosure-related lawsuits

Sellers also must disclose any risk of natural disasters such as being in a flood plain or an earthquake zone. Not only does this disclosure warn buyers of potential disasters, but it also may alert them to trouble they may have getting homeowners’ or renters insurance. State Farm recently excluded large areas on either side of the Hudson River for coverage due to new flood zone designations by the federal government.

If a buyer is still interested in acquiring a water-damaged property, one good financing option is the FHA’s 203k loan program. 203ks are offered by the federal government specifically for the purchase and rehabilitation of damaged properties. The loans provide money for the purchase, and also for repairs. Buyers need a significant down payment, and interest rates are higher than conventional mortgages. Paperwork for an FHA mortgage can take more time as well, anywhere from sixty to ninety days.


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