How to Sell a Fire-Damaged House in Virginia

A house fire turns your life upside down. On top of the shock, you now have an insurance claim, a damaged house and a lot of hard choices. One of the biggest is whether to fix it or sell it.

You can sell a fire-damaged house in Virginia, even if it is badly burned. Here is what to do first, how the insurance claim fits in, and how to decide between repairing and selling as-is.

We are not insurance agents or attorneys, so check the details of your policy with your agent. But we buy fire-damaged houses in Hampton Roads, and these are the questions owners ask us most.

What to Do Right After a House Fire

1. Stay safe. Do not go back inside until the fire department says it is safe. Smoke, soot and weak floors can all hurt you.
2. Get the fire report. Ask the fire department for a copy. Your insurance company will want it.
3. Call your insurance company. Report the claim as soon as you can and ask what your policy covers, including a place to stay while you sort things out.
4. Take lots of photos and video. Document every room and everything that was damaged before anything gets moved or thrown out.
5. Secure the house. Board up broken windows and doors and keep people out. Your policy may require this, and your city may too.
6. Call your mortgage company. Let them know what happened. They will be involved in the insurance money.

How the Insurance Claim Works With a Sale

This is the part that confuses most people, so here is the short version.

• The insurance money and the house are separate. In many cases you can sell the house as-is and still keep your claim money. Ask your insurance agent how your policy handles a sale before you sign anything.
• Your lender gets a say. If you have a mortgage, the check for the house is usually made out to you and your lender. The mortgage still has to be paid off when you sell.
• Some policies pay in two steps. You may get the actual cash value first, and the rest only if you rebuild. If you sell instead, you may not get that second payment. Ask about this.
• Your belongings and living costs are separate claims. Contents coverage and temporary housing usually are not affected by selling the house.

If you feel like the insurance company is lowballing you, a licensed public adjuster can help. They work for you, not the insurer, and usually take a percentage of the claim.

Should You Repair or Sell As-Is?

Fire damage is almost never just the burned part. Firefighters use a lot of water, so you may also have water damage and mold. Smoke gets into walls, ductwork and insulation. Wiring and plumbing may need to be checked or replaced.

Repairing it can make sense if:

• The damage is limited to one area, like a kitchen fire
• Your insurance will cover most of the work
• You have the time and energy to manage contractors for months
• You plan to move back in, or the house is worth a lot more fixed up

Selling as-is can make sense if:

• The damage is major, or the house is a total loss
• The insurance money will not cover the full repair
• You are paying a mortgage plus rent somewhere else
• You just want a fresh start somewhere new

Your Options for Selling a Fire-Damaged House

1. Fix it and list it. Usually the most money, but also the most time, work and risk. See what is worth doing in getting a house ready to sell.
2. List it as-is with an agent. Possible, but most buyers with loans cannot buy a fire-damaged house. Lenders usually will not finance a home that is not safe to live in. Your buyers will mostly be investors and cash buyers anyway.
3. Sell it for cash. No repairs, no cleanup and a fast closing. This is the simplest option for heavy damage.
4. Sell it as a lot. If the house is a total loss, some buyers will pay for the land and tear the house down.

Whichever way you sell, be upfront about the fire. Virginia is mostly a “buyer beware” state, but sellers still cannot lie about or hide known damage. It is also hard to hide fire damage from an inspector. Here are other things that fail a home inspection.

How Much Is a Fire-Damaged House Worth?

It depends on how bad the damage is and what the house would be worth fixed up. A small kitchen fire might only take a little off the price. A house with heavy structural damage may sell for close to land value.

Here is exactly how we figure out an offer. We work out what the house will be worth once it is fully repaired. Our offer lands between 70% and 80% of that number, and that range has to cover both what we pay you and what we spend on the repairs.

Say the house would be worth $300,000 fixed up and needs $90,000 of fire, smoke and water repairs. 75% of $300,000 is $225,000. Take out the $90,000 of work and the offer is around $135,000. In many cases, you would also keep your insurance claim money.

If the damage is small and you have time, fixing it and listing it will usually get you more than we can pay. We will tell you that on the walkthrough.

How We Can Help With Selling a Fire-Damaged House

We buy fire-damaged houses as-is. You do not have to clean anything out, make repairs or deal with contractors. We pay all the closing costs, there are no commissions, and we can usually close in 10 to 14 days, or later if your insurance claim needs more time. Here is how the closing process works.

If a straight cash offer will not cover what you owe, we can also look at creative financing, where we buy the house on terms instead of paying all cash up front.

We buy across Hampton Roads: Virginia Beach, Norfolk, Chesapeake, Portsmouth, Suffolk, Hampton and Newport News.

Common Questions About Selling a Fire-Damaged House

Can I sell my house after a fire?

Yes. You can sell a fire-damaged house in any condition. Most buyers will be cash buyers or investors, since lenders usually will not finance a home that is not livable.

Can I keep the insurance money if I sell my fire-damaged house?

Often, yes. The claim and the house are separate. But your mortgage gets paid first, and some policies only pay the full amount if you rebuild. Check with your insurance agent.

Do I have to tell buyers about the fire?

You should. Virginia sellers cannot lie about or cover up known damage, and fire damage is hard to hide from an inspector anyway.

Who buys fire-damaged houses?

Mostly cash home buyers, investors and builders. They have the cash and the crews to handle big repairs or rebuild from the ground up.

Do I need to clean out the house before I sell?

Not if you sell to us. Take what you want to keep and leave the rest. We handle the cleanup.

Dealing With a Fire-Damaged House?

Call us at (757) 337-2236. We will walk the house with you, give you a number within 24 hours, and tell you straight if fixing it up would get you more. No pressure.