Sell a fire- or water-damaged house as-is

Selling a fire- or water-damaged house in Rhode Island

You don't have to rebuild a Rhode Island house after a fire or a flood before you sell it. A buyer who takes it unrepaired prices in the work: the structure, the smoke and soot, the water left from putting the fire out, and whatever's hiding in the walls. I Buy Rhode Island Houses buys fire- and water-damaged houses for cash, and the cleanup and rebuilding become our job.

Selling before or after the insurance claim

You can sell a damaged Rhode Island house before the insurance claim is filed, while it's open, or after it's paid. The claim is under your policy, and the sale is a separate contract with the buyer, so if the claim is still open when you sell, the purchase agreement should spell out how it's handled, and that's a job for an attorney. Your insurer or adjuster can tell you how a sale affects the claim itself.

Rhode Island's standard fire policy form sets these terms, though your own policy's wording may differ:

• After a loss, the policyholder gives the insurer written notice right away, protects the property from further damage, and files a sworn proof of loss within 60 days unless the insurer extends that in writing.
• The insurer pays 60 days after it receives the proof of loss and the amount is agreed or set by an appraisal.

A public adjuster works for you rather than the insurance company, for a fee, and Rhode Island requires public adjusters to be licensed. I Buy Rhode Island Houses will put a cash offer in writing at any point, so you can weigh it against what the claim and the repairs would come to.

What happens to the insurance money and the mortgage

A fire doesn't change what you owe on your mortgage. The loan is still due, and most lenders require you to list them on your homeowners policy as the mortgagee, so a claim payment on a Rhode Island house can be made out to your lender as well as to you. Under Rhode Island law, a lender isn't entitled to share in a claim payment for a loss to the building of less than $3,500.

When you sell to I Buy Rhode Island Houses, your mortgage is paid off at closing out of the sale, the same as with any other house. Your lender and your insurer can tell you how the insurance money and the sale money get applied to the loan.

When the house is unsafe or sitting empty

After a serious fire, the building official in your Rhode Island city or town can declare the house unsafe and order it made safe or torn down within a set time, and a demolition order also goes to the mortgage lender. If the house is ordered secured, the owner has 7 days to board it up, or the building official can have it done. When the town does that work, the cost becomes a lien on the property, added to the property taxes and collected the same way.

A house that sits empty after a fire can also run into an insurance limit. Rhode Island's standard fire policy form doesn't cover a loss while a building has been vacant or unoccupied for more than 60 days in a row, or for more than 30 days after the local building official issues an unsafe-condition order, unless the policy adds that coverage. Ask your insurer how your policy treats an empty house.

I Buy Rhode Island Houses buys fire-damaged Rhode Island houses that are boarded up, tarped over or still smelling of smoke.

Mold and water damage

Water damage in a Rhode Island house can come from a burst pipe, a roof leak, a failed water heater or a flooded basement, and a fire leaves plenty of it behind from the hoses. The EPA's guidance is to dry water-damaged areas within 24 to 48 hours to prevent mold, and to fix the source, since mold that's cleaned up without fixing the water problem will most likely come back. No federal limits have been set for mold in a home.

Homeowners insurance doesn't cover flood damage. Rhode Island requires insurers to tell policyholders, when a policy is issued and at each renewal, that it may not cover flood and that flood insurance may be available through FEMA's National Flood Insurance Program.

You can sell a house with mold or water damage. I Buy Rhode Island Houses buys them for cash as they are, and you don't have to hire a mold cleanup crew first.

What you have to disclose

Rhode Island's seller disclosure applies to a damaged house like any other one- to four-unit home. The state form has lines for fire, for mold and its repairs, and for moisture penetration and damage, along with the roof, the basement and the rest of the house. You report what you know, before the purchase agreement is signed. Selling to a cash buyer like I Buy Rhode Island Houses doesn't change that, though executors selling from an estate and a few other sellers are exempt. What Rhode Island sellers still disclose when selling as-is.

Your options side by side

Three ways to sell a fire- or water-damaged house in Rhode Island: