Trying to sell a home that needs repair can be costly and stressful. Whether you know about the damage ahead of time, or you find out during the sale process, it can be a complex challenge to manage.
Legal Requirements of Selling a Home with Damage
Do I Need To Provide A Disclosure Statement?
Yes, you must provide a disclosure statement, even if the buyer is purchasing the home “as-is”, or has waived all purchase contingencies. The buyer has a right to cancel the purchase up to five days after receiving the disclosure statement, even if they had previously waived contingencies.
What Needs to Be Disclosed?
You will need to complete a written disclosure to the buyer, the most common of which is the Transfer Disclosure Statement. There’s no specific list of what needs to be included in the disclosure statement, but all “material facts” should be disclosed. Generally, this will include anything that would have dissuaded a buyer from making the purchase had they known about the issue.
We have listed the common types of repairs below, many of which would fall under the category of material fact. It is recommended that you work with an agent who is familiar with selling homes in need of repairs as they can guide you through the process.
When does the disclosure need to be provided?
Disclosure should be provided as soon as possible, both for the buyer’s benefit and yours. You don’t want to get too far down the process of selling your home only to find out that the buyer has canceled due to the disclosure. Because of this, it’s recommended that you get a home inspection done as early as possible to disclose issues to the buyer before everyone is too far down the process.
In California, a disclosure statement must be provided no later than seven days after the purchase agreement has been accepted.
Do I Need to Repair The Home Prior to Selling?
It’s not strictly necessary to repair a home before selling, it may be difficult to find a qualified buyer or get the sale price you want when selling a home that requires repairs.
You can choose to repair the home before you sell, but you still may need to disclose the repairs, especially if it was major remediation (like mold or water damage). Failure to disclose can be grounds for a costly lawsuit.
Do I Need A Home Inspection?
A home inspection is highly recommended to help avoid surprises before you list your home. It also helps you to understand the scope of the problems with your home and assist with creating a full disclosure for potential buyers.
Doing a home inspection can also help you decide if fixing your home is an investment you want to take on. While it can help you get a higher selling price, it may not be a feasible solution depending on your timeline and budget. For example, a lengthy renovation may not be in the cards if you have to move on a short timeline or sell to avoid foreclosure. If you would prefer to sell your home with the least amount of stress, then a cash buyer might be a good option for you. Click here to jump to our section on cash buyers.
What Are The Most Common Types of Repairs Needed?
Mold
Mold and mildew are common in many homes, especially those with crawl spaces and basements. There are also multiple types of mold which can make remediation more complicated. It’s also often difficult to figure out how widespread the mold issues are as it’s often behind walls, and in the home’s HVAC system.
While there are some DIY options out there, large-scale mold remediation should be handled by a professional company, especially if there’s already evidence of rot. Keep in mind that mold remediation can be a lengthy process, starting with an in depth inspection, and then testing before remediation can even begin.
Water
Water damage is one of the most common issues in Southern California, accounting for 29% of annual home insurance claims, often due to older damaged pipes, sewer issues, leaking faucets and toilets and backflow problems. Storm surges and hurricanes can also be a cause of water damage, especially in older homes with damaged caulk, door frames and cracks in siding and foundation.
Common signs that your home might have water damage include water stains on ceilings and walls, bubbling or peeling paint, discolored carpet, and cracks in the floor and walls. Water damage is also likely to result in mildew and mold growth if left untreated for too long.
Water damage can be extremely inconvenient and costly, especially if it’s not discovered until you’re putting your home up on the market. Often it’s necessary to replace the drywall, sheetrock, and insulation and address any underlying plumbing problems.
Foundation
California is located along a fault line which results in frequent seismic activity. This activity can cause foundation damage like cracks. Even small issues with the foundation can cause issues with the home's structure.
Addressing foundation problems can be costly and complicated, often requiring an engineer. Foundation repair also involves digging up the surrounding area, resulting in landscaping, driveways, and porches that may be disturbed. More serious foundation issues may also require that the windows and doors be replaced.
Fire
The past few years have resulted in fire damage in many California communities. Despite remediation, some homes can still suffer from fire damage years later. Fire damage can also be caused by faulty or old wiring, cooking, HVAC and electronics. An inspection can help determine if a home has any lingering fire damage.
Fires can cause serious structural damage to the home that needs to be accessed by a remediation specialist. The water and fire retardant used to put out the fire can also cause damage to the home and can cause mold.
Electrical
Electrical issues can be common in homes, especially older ones that were built before modern electrical needs. Homes can also commonly have faulty wiring caused by DIY or poor electrical work.
You should consult a home inspector and real estate agent with experience in selling older homes who may also be able to assist in navigating the process of updating the electrical in your home. Wiring upgrades should be done by a licensed electrician and can include upgrading the electrical panel, replacing old cables, adding surge protectors, and in some cases rewriting the home.
Roof & Gutter Damage
Homes in California can suffer roof damage because of the sunny conditions, proximity to salt water and regular rain and winds. Along with regular wear and tear, California homeowners should inspect their roofs for holes and missing shingles which can cause leaks and increase the chance of mold and mildew in the home.
Additionally, flat roofs are susceptible to pooling water, and trapping moisture and can create roof cracks, ceiling leads, and mold. Clogged gutters can also be a source of water damage, causing water to flow along the sides of your home and into the foundation rather than through the gutters away from your home.
Can I Sell My Home As Is?
Yes, you can sell your home as is, but it might be difficult to do so traditionally. At Haven Homebuyers, we buy homes in any condition so you don’t have to worry about covering the cost of repairs. We accept all homes, including those with fire damage, water damage, plumbing issues and mold issues.
No matter the current state of your home, you can expect an honest quote based on the current market value. We offer the highest cash value and can close in as little as 5 days.
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