Most rivers overflow about twice a year. However, there are some locations that experience floods much more often than others. Sometimes, floods completely destroy houses while in other cases, a flood might only leave a house with minor damage.

If your house has been flooded, you might be wondering if you can sell it. The answer will depend on a variety of factors, but in most cases, you can get away with selling a flooded house. Learning how to sell a flooded house isn’t hard, but there are some things you need to look out for and consider. 

Keep reading and learn more about what you need to think about when selling a flood damaged house.

What You Need To Know About Selling a Flood Damaged House

Figuring out how to sell a house that has flooded, of course, is much more complicated than selling an ordinary house. You will also need to ask yourself a few questions when selling such a house. For example, is it better to repair the house and stay in it or just sell it?

More importantly, how much will a flood decrease the value of your home? Is it even worth selling a flooded home from a financial standpoint? What if no one wants to buy the house due to the extent of the damage?

In terms of home repairs, you will need to consider a few different factors. Depending on the extent of the damage, repairing the house may actually be impossible for you. In this case, the only option would be to sell the house. 

However, if the damage is only minor, you might be able to do some repairs and keep from selling the house if you don’t want to. You will also need to think about if it is even possible to continue living in the house after the flood damage. For example, if your house went through a bad flood and several parts of the house were destroyed, you may not be able to safely live in that house anymore and you may have no choice but to sell the property. 

The Change in Value

But what about the value of the house? You might be wondering, “Can I sell my flooded house and still make a profit?” Unfortunately, flood damage can take a good chunk out of your property’s value. 

Even if your home was only slightly damaged by a flood, the water damage alone will decrease the value of your home. If much of the house was destroyed by the flood, the value of the home will go down even more. Of course, the worse the flooding is, the more drastic the decrease in value will be. 

In some cases, the property’s value might decline as much as 30%. While this is certainly bad news for you, it isn’t all bad. You can still make some money by selling the house. This is in contrast to the money that you would need to spend to repair the house so that it is liveable again. 

But if you do plan to sell your flood-damaged house, where should you start?

Find a Service to Help You

When it comes to selling a house that has been damaged by a flood, the last thing you should do is try to sell it on your own. If you try to do that, you will find that you won’t get very far and you might not even know where to start. That’s why seeking someone who can help you sell your house is so important. 

Keep in mind that you will want to avoid your average real estate agent. An ordinary agent likely won’t know what to do with your flooded house either. Instead, you will want to seek out a very experienced and high-quality service or seller to help you like iBuyer. 

Such a service will likely have experience selling flooded homes before and should be able to help you as much as possible. Besides having experience selling flooded homes, you should make sure that this service also knows all about the laws behind selling damaged homes and homes that may have structural problems. Preferably, the service should also have plenty of knowledge regarding the price of renovations for flooded homes as well as how to make a flooded property look appealing to potential buyers and real estate investors.

As long as you find a reputable home selling or buying service with this kind of knowledge and experience, you will be in good hands and you shouldn’t have to worry much about anything. Hiring a good service like iBuyer will also help put the price of the property into perspective. Be prepared for the service to tell you that you won’t be able to get very much money for your damaged home. 

The Benefits of Finding a Good Service

Many house-selling services are trained at being able to come up with the right price for homes, including flooded or badly damaged homes. While you could try listing your property for a higher price, you will find that most people will not be willing to spend very much for a flooded home. The higher the price of a damaged piece of property is, the harder it will be to sell. 

If you don’t mind sitting on the property for months at a time, this might not be a problem for you. However, if you want to part with the property as fast as possible, then it is best to go with the service’s recommendation and go with a lower price. Besides, a good service will also do all the work of communicating with potential buyers. 

A skilled home-selling service can make even the most damaged of properties seem appealing. This is not to mention that you won’t have to communicate with the potential buyers yourself. This will give you more time to consider other factors concerning the sale of your flooded property. 

But remember that such a service will mainly function to guide you through this process. If the service says something that you don’t agree, with you are free to disagree and do something else. 

Be Sure To Disclose the Severity of the Damage

If you try to sell your home without disclosing that it has been flooded to the buyer, you could get in serious legal trouble. If you’re not careful, you might end up paying some very hefty fines and the buyer might even file a lawsuit against you. This, of course, is not something you want to deal with when you’re just trying to sell your house. 

For that reason, you will need to be as clear as possible when disclosing the damage of the property. Again, a good home-selling service like iBuyer can help with that. In particular, your service should know all about the disclosure laws in your state and what you need to do to follow those laws when selling the property. 

Keep in mind that disclosure laws for properties differ from state to state. What might be alright in one state might be illegal in another. Most states will require you to disclose certain information such as if the property has been flooded before, how often it has been flooded before, and so on. You might also have to disclose the location of your property such as if it is built on a floodplain or if it is near a reservoir. 

You may also need to disclose whether or not your property is covered by flood insurance. If not, this may complicate matters further and may be difficult to financially deal with. Keep in mind that when you disclose all of this information to potential buyers that the information doesn’t have to be written in a scary way. 

The Details

While disclosures can be offputting for some buyers, you can word them in a way that doesn’t make them sound as threatening. After all, you don’t want to deter potential buyers by making the damages sound worse than they really are. However, you will also not want to undermine the damages either. 

Instead, it is best to list the damage exactly as it is. That way, you won’t run into legal trouble if the buyer thinks that you were not honest in disclosing information about the property. For example, it is important to disclose how much water affected the home. 

A few inches of water may not be anything for potential homebuyers to worry about. On the other hand, if three to four feet of water flooded your house, then this is a much more serious problem since the water penetrated a great deal of your house. You will also need to disclose any renovations you made after the flood, even if they were minor. 

If you did not make any renovations or repairs after the flood, you will need to specify this as well. That way, the potential homebuyers will understand the full situation concerning the property. Then, they can make a decision whether to buy the home or not as it is. 

Consider Making Some Repairs on the Property

If your house has been seriously damaged by a flood, you might find it very difficult to sell, even with the help of an experienced real estate service. After all, most people will not want to buy a property that is completely destroyed. Instead, some might be willing to buy a property that has only a bit of damage. 

This might sound like a hopeless situation for you if your property has been significantly destroyed by a flood. However, you can improve the situation by doing some repairs. It might sound counterintuitive to repair a home that you’re going to sell, but doing so can actually make the whole process a lot easier for you. 

Keep in mind that you should not repair your entire house. Instead, you just need to make it habitable so that potential homebuyers will have more of an interest in it. It is best to stick with relatively minor repairs. 

That way, the condition of the house will increase but you won’t have to invest too much money into it. Keep in mind that you might even be able to make your money back on certain repairs since some repairs can actually increase the value of your home. Again, it is important to have a good service on your side to help you decide what repairs are important to make. 

Choosing the Repairs

For example, having the floors repaired is very important, especially if the home is full of carpeting. Flooded carpeting will only contribute to mold in the home. Once mold takes hold, it can become a health hazard for those with asthma or bad allergies, and mold, in general, will make it much less likely that people will consider buying your home. 

For that reason, it is best to repair the floors before selling the house. A mold remediation certificate may make the property more appealing to potential buyers or investors. If the walls have visible signs of water damage, consider repainting them. 

Repainting isn’t expensive and it can make the property look much better and fresher. 

How To Sell a Flooded House With Ease

Learning how to sell a flooded house doesn’t have to be difficult as long as you know what to do and where to start. You should always start with a good home-selling service like iBuyer.com on your side to walk you through the disclosure laws, necessary repairs, and so on.

You should also make sure that you disclose everything to potential buyers so you don’t get into legal trouble.

The post Selling a Flood Damaged House appeared first on iBuyer Blog.

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Buying a house. It is likely going to be the biggest financial investment you will ever have to make in your life. Once you own the house, you are likely going to be there for the new few decades. 

Because this is such a big investment for an individual or couple, there is a lot of paperwork and a lot of time that goes into this process compared to a normal purchase. The average closing time on a house varies from 30 to 75 days. 

One thing new home buyers struggle with is how to read a closing disclosure. Some buyers may not even know what this is. 

While it can admittedly be a lot to take in at one time, this is not as complicated as you might think to understand once you start to break it down. 

Do you want to know how to understand a closing disclosure before you are ready to lock down your dream home? This is the closing disclosure explained. 

What Is a Closing Disclosure? 

Before we can break down a closing disclosure for you, you need to understand what a closing disclosure even is. To put it quite simply, it is an overview of all of the expenses, rates, and fees that come with your loan and for buying a house. 

These can include but are not limited to the loan rate and interest fees, what you will make in mortgage payments each month, finance charges, and any other closing costs that you might incur for your mortgage. 

How Long Do You Have to Respond to Disclosure? 

When you receive a closing disclosure, you will have three days to respond to it and review it. 

Why three days? This is the requirement under the TILA-RESPA. It helps protect buyers from being pressured into an immediate purchase without going over all of the details. 

The time gives buyers a chance to review all of the documents and review all of the charges. Then, they can decide if they are willing to accept all of the payments agreed upon and all of the rates agreed upon. 

A buyer needs to look this over thoroughly because once they sign a disclosure, they cannot change the mortgage rates and interest that were agreed upon. 

Be careful with how long you take to do this though. If you take the full three days, there are some instances where the price of say a mortgage rate can be changed by the lender. Also, you could possibly lose the home to another bidder in that stretch. 

Loan Terms 

Ok, so you have the closing disclosure and you are going over the overview of costs. Something you need to make note of is the loan terms that are going to be in the documents. 

Some of the biggest examples of this include the loan amount, the interest rate, the monthly principal and interest, plus any other additional payments or penalties. 

With the loan amount, the closing disclosure will lay out how much money you are going to receive from the lender. This is the money that should pay for the purchase of the house besides the down payment that you put up. It can also potentially cover other fees that may come up during the purchase. 

The interest rate is essentially how much the mortgage rate is going to be from the lender. This can vary significantly depending on when you get a mortgage. 

In 2022, the average mortgage rate is over 5%. This time last year, the average mortgage rate was less than 2.9%. It is important that you look at this closely because when it comes to the mortgage rate, the difference between 2% can be thousands of dollars. Make sure you know what the average rate is before you sign any disclosure papers. 

As for principal and interest monthly, these are the expected payments that you will make to your lender every month. This will be put towards your total mortgage plus the interest on top of it for not being able to pay all of the mortgage off in one payment. 

Make sure you know what both of these numbers are before you sign anything and make sure that the principal and interest payments are ones that you can afford to make monthly compared to your expected monthly income after taxes. 

Possible Additional Payments 

Besides the explanation in the loan terms above, there may be some additional payments there that you need to be aware of. 

One of those payments is a possible prepayment penalty. Some lenders charge this if you pay off your mortgage earlier than what was outlined in the closing disclosures. 

This can arguably be used as a way for lenders to ensure that they are going to keep getting the interest payments along with your payments towards the principle of the mortgage. Luckily, this practice seems to be phasing out from lenders compared to past years. 

Another possible payment that you need to be aware of is something called a balloon payment. Again, this is not something that all lenders do these days, but it is a possibility with certain lenders. 

Basically, with balloon payments, you would be required to pay one large lump sum payment at the end of your mortgage payments. If this is the case with your mortgage payment plan, you may have to pay less per month on your monthly payments leading up to it. 

Be careful if this is in your disclosures without realizing it. While it may benefit you in the short term, you will need to save up the money to pay that balloon payment off in the long term because you can escape your debt with the lender. 

These are not usually ideal payments for a buyer to have in a closing disclosure. Some may have no choice if they want a mortgage to be accepted in the short term. However, if you have a problem with these items in your disclosure, do not be afraid to send them back to the lender and see if you can get them removed. 

Possible Payments 

The next section on how to read closing disclosure focuses on other payments that you may have to make regarding your mortgage. Here, the lender will break down everything that goes into the payments mentioned above plus any possible payments that relate to that. 

One section is going to estimate the total monthly payment that you are going to have to make. That section will mention the monthly principal agreed upon along with the interest payment on the mortgage that was mentioned above.

Along with those two, you will have to factor in mortgage insurance plus a possible escrow payment. When it comes to mortgage insurance, this will most likely only be a factor if you are paying a low percentage of the mortgage off on a down payment.

Usually, the baseline for this is to pay around 20% of the mortgage as a down payment to avoid mortgage insurance payments. 

The other part of this payment that may be outlined here is the escrow payment you could be responsible for. For those unfamiliar, the escrow is the amount of money a buyer will set aside to pay initial homeowner’s insurance payments along with the initial property tax payments. 

In other words, you are paying those taxes and insurance plans in advance. The sellers and the lenders want to make sure that you have the financial means to live in this home after your loan. 

However, it is not mandatory to put those payments in escrow. If you do not do this, then estimated expenses such as homeowner’s insurance and property taxes will be laid out in this section. 

Closing Costs 

When you are closing a deal to buy a home, do not forget that there is a closing cost fee to wrap all of this up. That fee usually covers the work done by real estate agents and even real estate attorneys to get all of the paperwork set up for purchase as soon as possible. 

It can even cover other things such as application fees to get this home purchase through smoothly. 

So, how much should you expect to have to pay in closing costs? Well, the answer varies from 3-6%. In most cases, the more expensive areas such as New York and Washington D.C. are going to have higher closing cost percentages than moving to states such as Oklahoma or New Mexico. 

Additional Costs 

In case you are not tired of seeing additional small costs that go into purchasing a home, we have a few more to throw your way. 

Because this is everyone’s favorite thing to deal with, you need to factor in the possible taxes that come with making this purchase. The main one is the minor transfer fees that are involved when you are purchasing the deed of a house from somebody. 

The government is going to want their piece of the pie, and you are going to have to pay a tax to have the deed transferred over to your ownership. 

Depending on where you live, you could see a lot more additional taxes on top of this. If you live in a state like California, New York, or New Jersey, the state and property taxes on a deal like this can be significant. 

On top of this, you have to think about taxes on top of state taxes if you are buying a condo in a big city such as New York City. There, you could get hit with significant city taxes. 

Then, there are smaller additional costs that you may end up being responsible for such as homeowner’s association fees. This is relevant if you live in a neighborhood where a homeowner’s association already exists. 

In addition to that, you need to prepare money for things such as a home inspection fee and a home warranty fee. 

Disclosures in Loan 

This part of the closing disclosure will outline the exact agreements that you made as terms of your loan. An example can be a situation where you end up being late on a monthly payment. This section will outline if the lender has the right to kick you out of your house immediately or give you a certain timeline to come up with the money for your payment. 

Another example can be coming up with an agreement if you do not have all of the money for a monthly payment to pay at one time. With this, you can have a disclosure that says that partial payments of a monthly payment are accepted if a minimum amount is met and there is a set timeline to come up with the rest of the money. 

Then, you need to be aware of what happens if you are late on a payment. Will the lender take your home from you? Or will they charge you a significant amount in interest as a late fee to make you not want to be late again? 

Also, with these types of disclosures, a lender can put one in there that can require a buyer to come up with the entire loan balance anytime they choose. 

Learn More About How to Read a Closing Disclosure

These are just some of the things that you need to know about how to read a closing disclosure. Make sure that the terms are what you agreed upon, read all of the clauses and rates, plus be prepared for all additional costs. 

What if you are on the seller’s side of this equation and want to sell your home quickly and painlessly? What if you can do the entire thing virtually with an iBuyer that can make you an offer online? See how much your home is worth today.

The post Closing Disclosure Explained: How To Read and Understand One appeared first on iBuyer Blog.

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