Selling a home that was damaged in a fire can present a greater challenge but isn't impossible. While it takes a combination of factors to sell any property, fire-damaged homes attract both investors and homebuyers looking for a bargain. Renovating a burned home before putting it on the market is an option, but requires disclosing all fire damage whether severe or minimal in nature.
Playing Up the Location
Homebuyers want convenience; therefore, a property's proximity to employment opportunities, shops, schools and public transportation are strong selling factors. Consequently, a partially burned home in a prime location can be restored to its previous or a higher value. Even if a burned house is damaged beyond repair, the location of the lot alone can still make the property a good investment for a potential buyer who wants to build a new house.
Taking Advantage of Low Inventory
Low inventories help push housing prices higher. In locations where homes are slow to come on the market, a low housing inventory creates more demand for the homes that are available. If a property has been damaged in a fire, the time to push to sell is before the inventory of homes for sale in the area increases -- usually, in the spring. A real estate agent with experience in selling fire-damaged properties can help locate potential buyers with cash who won't need financing.
Taking Advantage of High Demand
For homes damaged by fire, a growing demand coupled with low supply is usually good news for sellers. Burned homes located in areas where the housing market is in high gear often sell at a fair price. In a market where homebuyers can't wait to purchase a property, the availability of fewer choices can be an advantage, especially if the home is located in a desirable neighborhood. But even if the home comes at a bargain, a buyer will consider the condition of the property before making an offer.
Prospects for "as-is" fire-damaged properties include cash buyers and buyers who qualify for a renovation loan. Before putting a home that was damaged by fire on the market, it's a good idea to have qualified home inspectors assess the extent of the damage. In fact, state laws require sellers to provide a property condition disclosure statement to buyers. Additionally, providing a potential buyer with an estimate from a reputable contractor on the cost to repair the damages could help sell the property.
Pricing a home low to start can be an effective sales strategy. Although a low selling price usually generates quick interest and may even lead to competing bids, selling a burned home "as-is" could mean selling it at a deep discount. A buyer who plans to restore the property will be looking for a lower sale price to compensate for the costs to renovate it. To get a higher price, it may be necessary to repair the damage before selling the home. Before putting the home on the market, hiring a licensed appraiser to give both "as is" and repaired values of the home is helpful in setting a fair price.