A Guide to Selling Your Fire-Damaged Home in Florida

A house fire is one of the worst things that a homeowner can go through both emotionally and financially. Minor damage is typically repairable, but major damage can create a long road to recovery, in terms of remediation as well as peace of mind. 

If your home has been damaged in a fire, you have several factors to consider when deciding whether to repair your home, fix and sell it, or sell it as-is. We understand that you need the option that gives you the best financial return and emotional stability, so this guide will help you explore each option.

If you decide selling as-is is the best route for you, we can help with a quick and hassle-free sale. In our 12+ years of buying and renovating properties in Florida, we’ve purchased quite a few fire damaged homes. and can guide you through the process. Contact us today for a no-obligation cash offer and advice on how to handle this situation. 

How to Determine if You Should Sell Your Fire-Damaged Home

Ultimately, whether you should keep or sell your home depends on the extent of damage, the financial burden you’re under, and the emotional toll on you and your family. These steps will help you weigh your options and determine the best route for your situation.

Contact Your Insurance Company

The first step is to talk to your insurance company. You need to understand what is covered under your insurance policy, how much you’ll pay out of pocket, and the documentation that your insurance company needs to process your claim. You might need to provide a fire department report, photos, or estimates from a restoration company or reputable contractors.

Make sure you read through the terms of your policy and discuss next steps with your agent. Your agent can help you with the adjuster and understand if you have certain deadlines to adhere to, receipts you should save, or requirements to follow, like using specific professionals for estimates.

Assess the Damage to Your Home

Some smoke, heat, and water damage may be obvious to the naked eye, but the extent of the fire damage can affect the unseen areas of your home, too. All damage, both obvious and hidden, needs to be factored into your damage estimate so you can make sure you set a fair price for your home or accurately calculate the cost of repairs.

So document the damage by taking photos and videos, but also seek professional assistance to evaluate specific damage like:

• Structural issues: Fire can easily tear through wood and drywall, which can affect important structures within the home. Load-bearing walls, beams, and columns are all structures that help keep your home intact and could be severely damaged by a fire.
• Smoke damage: Smoke leaves a distinct smell and discoloration behind and can ruin paint on the walls. It can also invade HVAC and electrical systems and cause damage, requiring cleaning or even replacement.
• Soot: Soot is the black dusty substance left behind when materials don’t burn all the way. It can cover surfaces and is often difficult to clean.
• Water damage: Water used to fight the fire can cause further structural damage to the home. Water easily soaks into walls and floors, causing mold growth and more structural issues if not remediated properly.

Get Professional Estimates for Repair

Even if you think you can fix some of the damage yourself, get estimates from professional, reputable contractors and specialists in fire-damage restoration so that you know what the repairs will cost. Not only does your insurance company use this important information, it can also be factored into your decision-making as you calculate your out-of-pocket costs.

To get an accurate estimate of repair to both obvious as well as hidden damage, use professionals that are experts in their field. Your insurance company will likely have a list of contractors they work with that you can reference.

Calculate the Value Before Repairs

Coming up with an accurate price to list your home may feel like a daunting task, but doing so allows you to effectively weigh your options, whether you should keep your home or sell it as-is. The following steps help you evaluate the price of your home with fire damage:

1. Assess the value of your house before the damage. Consider the market value of your home in the current neighborhood and local market, without damage, and with the original square footage. You can compare it to other homes in the area to get an idea of the price, even breaking it down to price per square foot. For this example, let’s say your 2,400-square-foot house was worth $250,000.
2. Estimate the percentage of loss. Unless your home is burnt to the ground and requires a complete rebuild, you’ll do some estimating. Measure out the damaged spaces of your house to get an idea of how many square feet need repair. Then, divide the square feet in need of repair by the total square footage of your home. For example, if 950 square feet were damaged and your house is 2,400 square feet, you’ll need to divide 950 by 2,400. The resulting answer is 39.58%, which is rounded up to 40%.
3. Multiply the value of your house before damage by the percentage of loss. This is simply $250,000 (from step 1) multiplied by 40% (from step 2). The resulting answer is $100,000, which represents the dollar cost of your damage.
4. Subtract the dollar cost from your estimated pre-damage value. If your house was estimated to be worth $250,000 (from step 1), but the dollar cost of the damage is $100,000 (from step 3), you know your house is worth about $150,000 as-is ($250,000 – $100,00 = $150,000). 
5. Compare this number to the estimated repair cost. Comparing your estimate to the estimated repair cost helps you figure out if your home is worth selling or keeping. Just take the market value of your home and subtract the price of all the estimates you gathered, seeing how that compares to the estimated cost you just calculated. You can use this information to get a range of how to price your home, or use it to see if repairing or selling makes the most financial sense for you. Be sure to consider the insurance payout as well, since insurance may cover some or all of the repair costs.

Weigh the Decision to Sell or Repair Your Home

Now that you have the numbers you need, it’s time to weigh your options and decide what’s best for you and your situation. To keep this decision-making process as straightforward as possible, set up a pros and cons list. Consider the elements listed below and decide if each is a pro or con for you. As you consider whether you should keep or sell your home, a simple list can offer the clarity you need to make a sound decision.

• Finances: Look carefully at what money you’re getting back from the insurance company compared to the estimated repairs and the expense of staying outside of your home, if that is necessary. Once you see what your out-of-pocket expenses are, you can consider whether the financial burden of repairing is too immense. Even if you can handle the cost of repair, consider how much of a burden you place on your budget and emotional state. Selling your home allows you to get cash fast so you can move on with rebuilding your life. However, if you can repair your home without breaking your budget, it might be easier and less of an upheaval to repair your home and keep it. 
• Timelines: Selling your home allows you to move on quickly as we can buy your house and close within a few weeks. Repairing your home could take weeks or even months. Take a look at the extent of the damage and see if the repairs are worth waiting for. 
• Emotions: It could be difficult to stay in a house that gave you such a traumatic experience, especially with the added tolls of waiting weeks for repairs. However, you could be emotionally attached to the house and this could be a factor in your deciding to keep and repair it. 
• Legal obligations: You have legal obligations no matter what choice you make. You must obtain permits and licenses to get repairs done, but if you sell, you have to also make disclosures about the extent of the damage.
• Long-term goals: Think about what your future plans are. If you need a bigger house due to a growing family or are planning on an empty-nester life, you may find it easier to sell so you can use the cash to downsize to a new home. On the other hand, if you have strong long-term roots in the area your house is in, you might want to repair the home so you can avoid making a transition.
• Local connections: From work and school to community and aesthetic, you may want to repair your home if you have strong ties in your neighborhood and neighboring communities. However, if you have these connections that do not interfere with your normal daily life, selling and moving might make the most sense.

Options for Selling Your Fire-Damaged Home in Florida

If you’ve decided that you need to sell your home, you face a few challenges. Your buyer pool is limited to only people looking for a bargain on a fire-damaged house, you’re faced with living in a damaged home until it sells, and you need to sell your house fast without a hassle. The following contains several different selling options with different timelines and outcomes.

Sell to a Cash Buyer for a Quick and Easy Sale

A cash buyer is a real estate investor who can purchase a house with fire damage without financing. The quickest solution, you don’t need to make repairs and the transaction can be completed within a few weeks. With a cash buyer, you don’t need to worry about a professional appraisal, closing costs, or the potential buyer not getting a loan from lenders. However, you may face a lower sale price as they factor in repair costs to make you an offer.

The pros of selling to a cash buyer include:

• Quick closing process
• No need to manage repairs
• No appraisal needed
• No financing delays

The cons of selling to a cash buyer include:

• Lower offers 
• Limited negotiation

At Florida Cash Home Buyers, we pride ourselves on being transparent about how our process works and how we calculate the actual cash value of the house. If you’re curious about how much you’ll lose selling your house as-is, read our in-depth article which breaks down different scenarios and covers the pros and cons.

Sell at Auction with Pre-Qualified Buyers

With this option, you work with an auction house and auctioneer to sell your home to the highest bidder. You’ll have to meet the same requirements as you would with a traditional real estate sale, which includes appraisals, disclosures, and a realistic price. Bidders also have to meet pre-qualification requirements, like proof of funds. An auction has a deadline, so you know your house will be sold by a certain point. And there’s a chance that the auction process will help drive the price up.

However, an auction is not free. The auction house gets a percentage, and you will need to pay marketing costs to get buyers to take a look without any guarantee that you will get the price you want. Bidders who consistently tour houses may not be looking for a fire-damaged home, especially if they know the estimate of repair costs beforehand. Even if you get a higher price, it could be eaten up in fees. An auction will also take about 70 days to complete, leaving you to live in a damaged house or a hotel for longer than expected.

The pros of selling at auction include:

• Have a deadline for sale
• May drive up the price with pre-qualified bidders
• No repairs needed

The cons of selling at auction include:

• Have to pay auction-related fees, including marketing
• No control over the final selling price
• Similar responsibilities with traditional real estate transactions
• Longer timeline than a cash buyer

Sell Through a Real Estate Agent for Expert Guidance

A real estate agent can use their expertise to sell your fire-damaged home. Not only do they help you through the complicated selling process, but they can also help with all the paperwork and legalities that come with putting a fire-damaged home on the real estate market. Real estate professionals may have experts who can assess your home’s value, as well as potential buyers who can see past the damage to your home, resulting in a successful sale.

However, this process costs money and is time-consuming. Realtors will take a 5% to 6% commission on the final sale price, and the marketing can take some time. You also have no guarantee that you’ll find a buyer and no deadline for when the sale will happen. You may have to continue dropping the price so that you can actually sell your home, and buyers may have difficulties in getting financing. FHA homes have a minimum standard requirement that homes must meet, and the fire damage to your home may be too extensive for the potential buyer to secure an FHA loan. You also may be asked to make repairs to improve the condition of the house and your chances of finding a buyer.

The pros of working with a real estate agent include:

• Expert pricing and marketing
• Skilled negotiations
• Manages complex paperwork

The cons of working with a real estate agent include:

• Commission paid of 5% to 6% of the sale price
• Longer timeline with no deadline for sale
• Financing challenges for buyers
• Need appraisals and complicated paperwork
• Could be asked to make necessary repairs or drop the asking price

Consider the Legalities

You face many legalities when selling a fire-damaged home in Florida, including:

• Disclosure requirements: In the state of Florida, sellers must disclose any known issues with the house that could impact the home’s value and are not easily seen by buyers. This is supposed to protect buyers by enforcing transparency and helping them make informed decisions about the house they’re choosing to buy. 
• Insurance implications: Homeowners’ insurance typically doesn’t cover fires started intentionally, also known as arson, to collect insurance money. Trying to do so can lead to serious legal trouble, including charges of insurance fraud and fines. Your insurance adjuster will likely be very thorough to prevent this from occurring. 
• Permits and regulations: You need permits and must undergo inspections for repairs on fire-damaged properties to comply with local and state building codes. Be sure you have the right permit, as the wrong permit can result in fines or complications during the sale. 
• Property taxes: Property taxes can be lowered in the case of a fire. This helps homeowners avoid unnecessary taxes when they’re already beginning to struggle from the loss of a home. Notify the property appraiser’s office in your county to see what kinds of fire damage would give you a break on taxes. 
• Title issues: If there are any legal claims related to the damage, it could affect the ownership transfer. Make sure that you resolve any outstanding issues before selling, as failing to do so can complicate the home sale and lead to legal disputes.

Seek Resources and Support If Needed

Experiencing the loss of a home to fire damage is undoubtedly a traumatic experience. Use these resources available to homeowners who have gone through a house fire:

• FEMA: FEMA provides financial help and services to eligible people for necessary expenses such as temporary housing, home repairs, and other disaster-related expenses when they are not insured or can’t otherwise meet these needs.
• Florida Department of Financial Services: DFS can provide guidance on how to file an insurance claim. They can also advise on how to choose between the different options they have with a fire-damaged home. 
• The Florida Housing Finance Corporation: Resources are available from the FHFC for financial assistance. These include low-interest loans or grants to help with repairs or rebuilding. 
• Support groups: Surviving a fire doesn’t just hurt you financially. You may need emotional help to allow you to grow and move past this event. Support groups are available online and possibly local to your Florida area as well.

Sell Your Fire Damaged Home As-Is

If you’ve surveyed the fire damage to your home and decided you want to sell, it’s time to choose an option that will give you the most money in the shortest amount of time. If you live in Florida, consider a cash home buyer. We buy fire-damaged houses, offering you a fair cash offer upfront without requiring repairs, renovations, or negotiations. Don’t let fire damage hold you back — reach out to Florida Cash Home Buyers today for a free quote.

Case Study – 2224 Farragut St.

Back in December 2016, Elliot F. reached out to us about selling his fire damaged home in Hollywood, FL. He inherited the property from his mom, and the A/C unit caught on fire and caused additional damage throughout the house. He called us and said he wanted to sell the property As-Is, without fixing the damage. So we went out to the house and examined the repairs needed. We estimated it would cost about $31,000 to fix up the property including the fire damage. The issue was that there were open violations with the city because of the fire, so we had to buy the property and assume those violations. We successfully closed on the deal in 29 days. Elliot was happy, and so were we 🙂

Similar to Elliot, since we’re known to buy properties As-Is, many owners of fire-damaged homes in Florida reach out to us to see how we can help them sell their properties. Since these folks are aware that we will have to pay a lower price for the home because of the damage, many times we end up buying their properties, and usually very quickly. So they’re happy to have gotten rid of their headache, and we’re happy for an exciting new project of bringing a fire damaged house back to life!

If you’d like to get an offer on your fire damaged home, or just get our expert opinion on your unique situation, feel free to reach out to us!

Author: Omer Reiner

Omer Reiner is one of the owners of FL Cash Home Buyers, LLC. Omer’s passion is to help homeowners out of tough situations by providing them with solutions that meet their unique situations.

Since he started investing in Real Estate in 2011, and because of his extensive knowledge and expertise of the Florida Real Estate market, he has been featured on many online publications such as Forbes, Yahoo, GoBankingRates, HomeLight, MSN, and many others.