How to Sell a House After Fire or Water Damage

Smoke in every room. Ceilings soaked from the fire hoses. A notice taped to the front door. If that's where you are, take a breath. Burned-out kitchen, wet basement, holes in the roof? You don't have to fix any of it before you sell to us. Just tell us what happened, and we'll take it from there.

Can you sell a house with fire or water damage?

Yes. At Vivid Properties, we buy fire- and water-damaged houses as-is in Philadelphia, its Pennsylvania suburbs and South Jersey. That includes a small kitchen fire, a house that's been gutted, a twin with smoke and water damage from a fire next door, and a basement that took on water from a burst pipe or a storm.

What should you do in the first days after a fire?

Take care of people first, then the paperwork, in this order:

1. Stay out until it's safe. If firefighters or L&I say keep out, keep out.
2. Find a place to stay. Ask your insurance company whether your policy pays for somewhere to live while the house can't be lived in. In Philadelphia, if you have nowhere to go, the Office of Homeless Services runs intake centers, and the City says anyone who needs shelter can go to one.
3. Report the claim. Call your insurance company and write down the date, the claim number and who you talked to. That date starts the insurance clock below.
4. Order the fire report. In Philadelphia, it comes from the Department of Records, through its online portal or by mail. You'll need the date and location of the fire. The mail-in form lists a $20 fee that isn't refundable and says to allow 6 to 8 weeks. Questions go to (215) 686-2266, or stop by City Hall, Room 170.
5. Take pictures of everything before anything's thrown out, and keep every receipt the fire costs you, from meals to boarding up.
6. Read any notice on the door. L&I notices come with deadlines counted in days, not months.
7. Call your mortgage company. Ask whether forbearance, a pause or cut in payments that you pay back later, is an option while you sort things out.

The U.S. Fire Administration's free booklet, After the Fire: Returning to Normal, covers the first 24 hours, insurance, valuing what you lost and replacing documents.

What's the clock after a fire in Philadelphia?

Three clocks start at once: yours, your insurance company's and the City's. Put them side by side and nothing sneaks up on you.

What does your insurance company have to do, and how fast?

More than most people realize. Beyond the deadlines in the clock above, Pennsylvania's claim rules say:

• It has to answer you. Other letters and calls that expect a reply get one within 10 working days.
• Any denial comes in writing. If a denial is based on part of your policy, the letter has to point to that part.
• It has to warn you about time limits. If you're handling the claim without a lawyer, it has to tell you in writing at least 30 days before a time limit in your policy or the law may run out.

Your proof of loss is the signed form listing what you lost. The 15-working-day decision clock starts when the insurance company gets it, so send it as soon as it's complete.

If your insurance company misses these, you can file a complaint with the Pennsylvania Insurance Department through its online Consumer Services portal or at 1-877-881-6388. These are Pennsylvania's rules. If the house is in South Jersey, New Jersey's rules apply, so ask your insurance company or a New Jersey attorney.

What can L&I require after a fire in Philadelphia?

Quite a bit, and quickly, but none of it stops you from selling. We buy houses with open L&I violations, including ones marked unsafe or imminently dangerous. Here's what the City can ask of you in the meantime:

• Appeal fast if the notice is wrong, by the deadline in the clock above. You can also ask the Board of Building Standards for more time to make the repairs, and there's no appeal fee for that request.
• Get a Make Safe permit within 10 days. It covers only the dangerous condition, not a full renovation, which needs its own permits. A report from a Pennsylvania-licensed engineer can stand in for plans. If the work would remove two-thirds or more of the framing and change the outside of the building, the City treats it as a demolition, and that needs a different permit.
• If the City does the work, you get the bill. When L&I or its contractors seal or tear down a building, they bill the owner, and the City says title companies often need those bills or liens cleared to finish a sale.
• An empty house needs a license. If it sits empty and isn't being renovated, get the vacant license. Without one, you can be fined.

Our guide to selling a house with L&I violations covers looking up violations, appeals and condemned houses in more detail. Outside Philadelphia, call your township or borough about any notice you get.

Can back taxes or local rules take part of the insurance money?

Sometimes, yes, so it's better to know now than to be surprised by a smaller check. Pennsylvania's fire insurance escrow law works like this:

• Back taxes get paid first. Before it pays a larger fire claim, your insurance company needs a certificate from the local tax office showing any past-due taxes or charges on the house, plus what the town spent securing, repairing or removing it. Anything owed is sent to the tax office straight out of your claim.
• Part of a big claim can be held. When the loss is large compared with your policy limits, a town with an escrow ordinance holds part of the claim until the house is repaired, secured or taken down. Then it comes back to you, minus anything the town spent.
• Only towns on the state's list. The state's Department of Community and Economic Development says insurance companies don't have to hold back money for a town that never filed its ordinance with the state. It keeps the list, county by county.

Ask your adjuster how this applies to your claim, and ask your city, township or borough whether it has an ordinance on file. Selling? The law also lets the town and the owner agree to release held money when there's another reasonable plan for the property. If you sell to us, any back taxes still owed are paid off from the sale at closing, like any other lien. Our guide to selling with liens or back taxes shows how that works in Philadelphia.

Should you repair, rebuild or sell as-is?

It depends on the damage, the claim and how much you want to take on.

Our price will be less than a fixed-up, rebuilt house would list for, because we take on the rebuild, the permits, whatever's hiding behind the walls and the months all of that takes. If rebuilding and listing would put more money in your pocket, we'll tell you. No pressure either way. See how we calculate our offer and how selling to us compares with listing.

Can you sell before the insurance claim is settled?

Usually, yes. Settled claim, open claim or no claim at all, tell us where it stands and we'll talk it through. The real question is who keeps which money, and your policy, your mortgage and the sale agreement decide that.

• Talk to your adjuster first. Ask what's been paid, what's still coming, and what happens to the rest of the claim if you sell.
• Talk to your mortgage company. While you still owe them, ask how they want claim checks handled.
• Put it in writing. The sale agreement should say plainly who gets any claim money still to come. Have a Pennsylvania or New Jersey attorney look it over before you sign.

At closing, the title company pays off your mortgage and any liens from the sale, and the rest goes to you.

What do you have to tell whoever buys the house?

What you know, in plain words. You don't have to hire inspectors or open walls to find more. When you sell to us, we're buying the house as it is, and what you tell us helps us make a fair offer.

In Pennsylvania, a seller fills out the state's property disclosure statement and hands over a signed copy before the agreement of sale is signed. The law doesn't make you investigate, but you can't leave out a defect you know about or say anything you know is false. A fire or a flood usually touches these questions on the form:

• Past or present water leakage, and roof leaks while you've owned it
• Water or dampness in the basement, and drainage or flooding problems
• Problems with walls, foundations or other structural parts
• Additions, structural changes or other alterations you've made, which can include rebuilding after a fire
• Housing, building safety or fire code violations that haven't been corrected

When you explain a repair, the form asks where the problem was, how big it was, when it was fixed and who did the work, if you know. Selling as an executor, administrator, trustee or guardian? Pennsylvania's disclosure law doesn't apply to those sales. In New Jersey, sellers say on the state's property condition disclosure statement whether the house is in a FEMA flood hazard area and what they know about its flood risk, before the contract is binding. See selling a house as-is for more on disclosure, or selling an inherited house in Philadelphia.

What about water damage, mold or flooding?

Not much changes when you sell to us. Burst pipe, sewer backup, storm damage or water from the fire hoses: we buy the house wet or dry, mold included. Do what you safely can to stop new water from getting in, but don't sink money into repairs just to sell. Ask your insurance company, in writing, which kinds of water damage your policy covers. If the damage has you falling behind on the mortgage, our guide to being behind on mortgage payments covers the free help.

How does selling a damaged house to us work?

1. Tell us what happened. Text or call (267) 551-5554, or use the form on this page.
2. We take a look. Once it's safe to go in, we walk through with you, or meet whoever has the key.
3. You get our written offer, usually within 24 hours. It shows what you walk away with after any mortgage, liens or back taxes are paid off.
4. The title company checks the house. It finds any mortgage, City bills, liens and taxes, and lines up the payoffs.
5. We close on the day you pick. We pay all the closing costs, and the open violations, the boarded windows and the cleanup become our problem.

We're a local, family-owned real estate investment company. We buy houses across Philadelphia, Delaware County, PA, Bucks County, PA, Montgomery County, PA and South Jersey. There are no fees and no commissions, and when you call or text, a real local person answers.

Get my cash offer Text or call (267) 551-5554

Questions about selling a damaged house

This guide is general information, not legal or tax advice. For your situation, talk to a Pennsylvania or New Jersey attorney or tax professional.