How to Sell Your Sinkhole House
Sinkholes are an absolute nightmare for homeowners. Major sinkholes can swallow up an entire house. The damage is catastrophic, and you’re suddenly stuck with a property that is worth very little.
Even minor sinkholes create situations that make it hard to maintain the house. Insurance premiums might go up, and it’s a problem all around.
If your house is located on a sinkhole, you might want to sell it. That’s a viable option, but sinkholes make home sales a bit more complicated. It’s important that you know a few things before you dive in.
Fix the House
Sinkhole damage can be repaired, and it might be covered by your insurance. That’s a great starting point. If the insurance company is going to cover all or most of the repairs, it’s worth considering. Repairing the sinkhole will dramatically raise the sale value of your house. A repaired sinkhole house is usually worth about 90% as much as the same house without a sinkhole.
An unrepaired sinkhole house will be worth 50% of the value or less. So if you can get it repaired on the insurance company’s dime, you stand to gain a lot of value in the home.
If the insurance company isn’t covering enough of the cost, it might not be worth the money to repair the home. It will come down to whether or not you can afford the repairs.
Know Your Legal Obligations
Whether you are planning to repair the damage or not, if you want to sell the house, there are some laws you need to know about. First, you are obligated to disclose the sinkhole and any damage to prospective buyers.
Even if there was a loophole where you don’t have a legal obligation, the existence of the sinkhole is public knowledge. There is an engineer’s report on the issue, and other public information also makes it clear just how big or small of a problem the sinkhole is.
A second legal obligation involves insurance payouts. Depending on the insurance contract, you might be obligated to use the money for repairs. In other cases, you won’t have this obligation. It can get pretty complicated, so it’s best to consult with a legal expert to know which case applies to you.
If you are not obligated to perform any repairs, it is sometimes better to pocket the repair money and sell the house for what you can get. Other times, the repairs more than pay for themselves in home equity value. It’s a simple matter of comparing the cost of the repairs against the home’s value before and after repairs.
Consider How Banks Feel About Sinkholes
There is one more thing you need to know about trying to sell a sinkhole house. Unless the hole has been fully repaired and documented by government engineers, banks aren’t going to issue a mortgage for someone to buy that house. Likewise, insurance companies won’t insure a house that sits on an active sinkhole. (Your existing coverage has to continue, but a new owner won’t be able to get coverage until the hole is repaired.)
These factors can make selling the house very difficult. You have to find a cash buyer who can afford to repair the hole. Or if it is repaired, you still need a cash buyer who is willing to take the risk. Finding a cash buyer can feel difficult, but it turns out that there is already someone interested in buying your sinkhole house. We Buy Houses, right here in Vegas, will offer you cash for a sinkhole house, with or without repairs. If you want to sell your house fast, we can get the job done in a matter of days. You can get a no-obligation offer to see how much you can get for your house. Contact us today. We buy houses in all conditions, so the sinkhole will not be a problem.