February 27, 2023

Selling a House With Water Damage

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Selling a house with water damage may seem like a challenge. The good new is, it is possible! If you're interested in selling as-is with no repairs and no fees, fill out the form below. We’ll get started on your FREE cash offer today!

Selling a House With Water Damage

What Qualifies as Water Damage in a Property?

Whether water damage in your property is caused by a simple pipe leak or massive flooding in your area, it can leave you stressed and possibly broke when you make repairs. This is problematic especially if you plan to sell your real estate in the local market. But all hope is not lost for your house with water damage.

Water-damaged homes can be very challenging to sell when you opt for the traditional way. Buyers consider risks of future flooding and other safety concerns so they delay putting in an offer. A good alternative to selling with a realtor is getting a cash offer. Cash buying companies buy houses as-is no matter their condition and that includes those with water damage. 

Eager to learn more about selling a house with water damage? Check out the rest of this blog!

What Qualifies as Water Damage in a Property?

According to Forbes, water damage makes up 29% of home insurance claims annually. These damages include rotting wood, steel rusting, bacteria growth, mold growth, material de-lamination, wood swelling, and short-circuiting among others. 

Water damage can also be categorized into three depending on its effects on human health. 

Category 1: Clean

Selling a House With Water Damage

Clean water damages are free from toxins. In other words, they are less severe and they do not pose health risks to humans. They are also easily prevented.

Clean water damage has no long-term effects and can easily be dried by the homeowner.

Typically, clean water damage is caused by:

  • Overflowing sinks and bathtubs
  • Leaking pipes and broken supply lines
  • Leaking appliances like washers, dishwashers, etc.

Category 2: Gray

Gray water damage is a bit alarming since it poses some health risks to the homeowner. Usually, the liquid that damages the house contains bacteria, chemicals, or molds.

Gray water damage may be caused by:

  • Toilets
  • Washing machines
  • Sump pump backups

Category 3: Black

Black water damage is the most severe as it comes with toxins and possibly disease-causing organisms. These damages should be addressed immediately since they can affect human health.

Here are the common causes of black water damage:

  • Natural disasters or rising flood waters containing rat and other animal feces
  • Sewer backflow
  • House floods due to broken toilet bowl

Can You Sell a House With Water Damage?

Yes. You can sell a house with water damage although it can be quite challenging, especially if you sell with a realtor.

Most retail buyers are looking for houses they can readily move into. Thus, you should have the water damage repaired so they would put in an offer and won't try to haggle with you.

While it seems there's no more hope for your water-damaged property when you can't make repairs, there is actually a better route— getting a cash offer. Cash buyers purchase houses as-is so you won't have to stress about repairing all the water damage to your home, whether it is minor or extreme. 

Challenges When Selling a Water-Damaged House

Water damage isn't a full barrier to a successful real estate transaction. If you list in the local market, you can still find a buyer but it would take longer and the process can be more troublesome.

Here are the three most common reasons why selling a house with water damage can be extra challenging:

Flood Zone

Flood Zone

A house that is submerged in water, situated in a flood zone, or located in an area where a natural disaster often hits is very risky to purchase.

There is no guarantee that a simple hurricane won't cause future water damage again even after you made repairs. Buyers usually consider this when deciding to buy a home. After all, they are making a lifelong investment.

Health Risks

Healthy Risks

If a house has long-term water damage, chances are, it already has an unpleasant odor, growth of toxic mold and mildew, and poor air quality. All these can cause long-term health risks unless the house is renovated before being listed on the market. 

Houses that were affected by flooding are even riskier because flood water, as mentioned earlier, can carry animal feces, lawn fertilizers, and other toxic waste.

Safety Concerns

Long-term water damage also causes weakened structures and faulty electrical systems. Of course, who would want to live in a house that is at high risk of collapse and fire? These issues are identified during a home inspection and can lead to a failed home sale.

How Much Does Water Damage Devalue a Property?

How Much Does Water Damage Devalue a Property?

Water damage, just like fire damage, can significantly devalue a property. Data suggests that the market value of houses with water damage reduces by 20% to 30%.

Of course, this house devaluation can be affected by the severity of the damage, the repairs needed, and whether or not the real estate is located in a flood prone area or a flood zone.

To illustrate, if the market value of a house pre-water damage is $428,700 (similar to the median asking price of properties in the U.S. in the first quarter of 2022), then expect that it would only sell for $300,090 to $342,960 if you do not make repairs.

Options When Selling a Water-Damaged House

To get rid of a house with water or flood damage, you have two major options— selling as-is to a cash buyer or selling with real estate agents. Among the two, selling to a cash buyer is more suggested since it is faster and hassle-free.

Let's look into your two options to determine which path fits your selling goals.

Sell As-Is to a Cash Buyer

Sell As-Is to a Cash Buyer

Cash buyers or home investors buy houses of any condition, including those damaged by water or flooding so they won't be your problem anymore. These cash buyers have enough money to pay in cash, therefore, eliminating the mortgage lender in the picture.

Many of these cash buyers are flippers— they'll repair the flood-damaged house and sell it at a much higher asking price. They may also hold onto the house and use it as a rental to gain monthly income. They then sell when the house value appreciates.

Cash buyers typically cover closing costs as well and they don't charge any realtor fees.

Should you decide to sell to a cash buyer, here are all the steps you have to take:

Get a Cash Offer

Getting a fair cash offer from a real estate investor or cash buyer is fairly simple. You just have to fill out a form on their website or give them a call.

Most cash buyers give cash offers within 24 hours so if you are after a fast home sale, they're a perfect choice.

If you are unsure about a cash buyer's reputation, you can ask them for proof of funds.

Welcome the Cash Buyer Into Your Home

Welcome the Cash Buyer into Your Home

Many cash buyers schedule visits to the house to assess the flood damage and the repairs needed. This is to help them formulate an accurate offer. They won't require you to repair the flood damages, but typically discount its costs to their preliminary offer.

Sign the Contract

If the cash buyer's offer seems fair enough for you, you can make the deal official by signing a contract. They will send it to you electronically so there's really no issue if you are extremely busy. 

After you've gone over the terms of the contract, sign and send it back to the cash buyer.


When you get a cash offer, you get full flexibility over the sale's timeline. This means you can close on the date that is convenient for you.

During closing, there would be less paperwork since no mortgage lender is involved. If the cash buyer wishes the flood insurance of the house to be transferred to their name, this is when you talk about it as well.

When everything is signed and settled, you'll get the money in your bank and the property's deed will be transferred to the cash buyer's name.

Bring a real estate attorney with you if you aren't confident that you can handle the closing on your own.

Moving Out

Sell With a Local Real Estate Agent

If you are still living in a flood-damaged house and haven't found a new home, you can communicate to the cash buyer when you would be ready to move so they can adjust when to repair the property. If it would take months, request a sale-leaseback agreement.

Sell With a Local Real Estate Agent

Selling with a local real estate agent is the typical way to sell a house, but it is not exactly suggested for a flood-damaged house. 

Nevertheless, if you decide that this route is for you. In that case, some of the things you should expect are home appraisal, home inspection, making necessary repairs, staging, listing, marketing, open houses, showings, negotiating, and more.

Tips for Selling With Real Estate Agents

Decide Whether to Make Repairs or Sell As-Is

When selling to the open market with a local real estate agent, you have the option to make necessary repairs or sell the property as-is. If the water damages are minor, you can try and make remediations so you can sell at a good asking price. Of course, choose repairs that can increase the value of your house.

Meanwhile, for severe water damage that requires total rebuilding of your home, it is better to sell as-is. Note, however, that selling a house as-is to the local market is a lot harder than a cash sale. Potential buyers prefer move-in ready homes so offers would possibly be close to none.

Make Repairs
Safety Concerns

How deep you want to go when repairing your flood-damaged house before reaching out to a contractor. Select the improvements you'll do wisely if the damages are just minor. Think of innovative solutions to save you time and energy when you decide to repair.

Most experts suggest prioritizing restoring flooring and wet carpeting, repairing the walls and repainting them, and dealing with mold problems as this can help you set a higher price.

Document the Repairs and Remediations

Documenting all the necessary repairs and remediations you did for your water-damaged home is key to a successful sale with a realtor as suggested by many homeowners. The majority of potential buyers want to be reassured that the house is perfectly okay and back to the way it was.

They need a clear understanding of what caused the water damage and proof that you did your best to repair the damage immediately.

Aside from getting the buyer's trust, documenting repairs can also help you set a higher asking price. Some of the things you should document are a record of the repairs, invoices and receipts, insurance claims records, and a black mold remediation certificate.

Acknowledge Market Value Depreciation

If you do not have the resources to repair your severely water-damaged real estate since it will require more money from you, expect a drop in its market value. You have to acknowledge this depreciation so you can set a good and appropriate asking price.

Pricing your house according to its pre-water damage value can make potential buyers run away from the home sale. 

Transfer Flood Insurance to the Potential Buyer

Transferring flood insurance to your potential buyer can sweeten the deal. When you mention this in your listing, more potential buyers will take interest in your house, especially those who want to avoid underwriting requirements and the initial price of flood insurance which can cost thousands.

Frequently Asked Questions

Should You Disclose Water Damage History to the Buyer?

Yes. Homeowners should disclose the previous water damage to a property since it is required by many states. But even if your state doesn't require disclosure, do not hide water damage and what you did to repair them from the potential buyer so you can avoid being litigated later on. Full disclosure is especially needed if the home seller is aware of the health and safety risk of the properties.

How to Minimize House Damage Caused by Flooding?

Homeowners can reduce or minimize the impact of flooding on their homes by cleaning the gutters, identifying trouble spots around the property, planning for mold remediation, planning the landscape, sealing foundation cracks, installing flood vents and sump pump, purchasing a flood alarm system, and keeping all your essential appliances, equipment, and upholstered furniture off the ground.

Can You Transfer Flood Insurance to the Home Buyer?

Yes. You can transfer existing flood insurance to the buyer of your home. The National Flood Insurance (NFA) calls this policy assumption and this is very cost-effective and beneficial to the buyer because they can avoid meeting the underwriting requirements of the home insurance company.

Key Takeaways: Selling a House With Water Damage

Selling a house with water damage is definitely not a walk in the park. There are a lot of hoops you have to go through, especially if you are selling in the open market. There's no guarantee that a retail buyer would take an interest in your water-damaged property.

If you want to sell your water-damaged house fast, your best option is to get a cash offer. This can help you avoid expensive water damage repairs and all the stress it brings.

Here at House Buyer Network, we'll give you a fair cash offer for your house with water damage, whether it be minor or extreme. We'll do all the work for you, including the inspection and repairs so you can sell quickly!

Give us a call at [phone] or fill out our form below to start selling your house with water damage.

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catherine mack
Author: Catherine Mack

Catherine Mack is a seasoned real estate investor and enjoys sharing her expertise through writing on relevant real estate topics. Catherine aims to educate home sellers, so they can make the best decision for their real estate problems.

She’s been featured on a plethora of publications including Better Homes & Gardens, Acorns, Realtor.com, Apartment Therapy, MSN, Yahoo Finance, HomeLight, and Business.com.

House Buyer Network™ since 2004. We buy houses nationwide. As house buyers, we offer cash for houses to homeowners looking to sell their house fast. Our cash offers are free and come with no obligations. See what we can offer and get cash for your house!

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