Selling a House With Fire Damage in Garland, Texas: Repair It or Sell As-Is?

A house fire can leave a homeowner dealing with much more than visible damage.

Even after the fire is extinguished, there may be smoke damage, water damage, damaged electrical systems, structural concerns, cleanup costs, insurance questions, and city requirements to work through before the property can be safely repaired or occupied again.

If you own a fire-damaged house in Garland, you generally have several options. You can repair the property before selling, list it in its current condition, or sell directly to a buyer willing to take on the remaining work.

The right choice depends on the extent of the damage, your insurance situation, available equity, repair costs, and how much time and money you want to invest before selling.

Can you sell a house with fire damage in Garland?

A house does not necessarily have to be completely repaired before it can be sold.

Depending on the condition of the property and the buyer, a fire-damaged house may potentially be sold in its current condition.

The bigger questions are:

• Is the property safe to enter?
• How extensive is the fire damage?
• Has the property been evaluated?
• Is there an active insurance claim?
• What repairs does the City of Garland require before the house can be occupied again?
• Are there mortgages, liens, or other title issues?
• Is the buyer willing to accept the property in its current condition?

A homeowner commonly has three potential selling paths:

1. Complete the repairs and then sell
2. List the property as-is
3. Sell directly to a cash buyer who will handle the restoration

Each option has different costs and tradeoffs.

Start with safety before thinking about the sale

Do not enter a severely fire-damaged property simply because the fire has been extinguished.

Potential hazards can include:

• Weakened floors
• Damaged roof framing
• Unstable ceilings
• Exposed electrical wiring
• Broken glass
• Water-damaged materials
• Smoke and soot
• Damaged gas lines
• Structural instability
• Contaminated debris

A property that appears stable from outside may still contain dangerous conditions.

Follow instructions from the fire department, city officials, insurance representatives, and qualified professionals regarding access to the property.

Selling quickly is never more important than making sure people can safely enter the house.

Garland has a specific process for fire-damaged properties

Garland treats fire restoration differently from an ordinary cosmetic remodel.

The City of Garland Building Inspection Department currently has a specific Fire Damage Repair process.

Before a repair permit can be issued, Garland requires damaged sheetrock and debris to be removed and a pre-fire inspection to be completed. The purpose of that inspection is to identify repairs the City will require before the property can be occupied again.

After that inspection, the homeowner or contractor can move forward with the appropriate repair-permit process.

Depending on the severity of the damage, Code Compliance may also be involved.

Because requirements depend on the individual property, homeowners should confirm the current process directly with Garland Building Inspection before beginning substantial restoration work.

Gather your fire and insurance documentation

Before deciding whether to repair or sell, collect as much information about the property as possible.

Useful documents may include:

• Fire department reports
• Insurance policy information
• Insurance adjuster reports
• Contractor estimates
• Structural reports
• Electrical evaluations
• Plumbing evaluations
• Photographs and videos
• Temporary repair invoices
• Cleanup invoices
• City inspection documents
• Permit records
• Mortgage information
• Previous inspection reports

Garland also provides a process for property owners to request fire reports through the City's public-record system.

Keeping this information organized can make it easier to compare repair estimates and explain the property's condition to prospective buyers.

What if you have an insurance claim?

If the property was insured, contact the insurance company before making major decisions about demolition, cleanup, or repairs.

An insurance claim can affect the selling process in several ways.

For example:

• An adjuster may need to inspect the property
• The insurer may prepare a scope of covered work
• Payments may be issued in stages
• A mortgage company may have an interest in insurance proceeds
• Certain damaged materials may need to remain available until they are documented
• Emergency work may need to be distinguished from permanent repairs

Do not assume that selling the house automatically determines what happens to an existing insurance claim.

Insurance policies and claims vary considerably.

If you are considering selling before an insurance claim is fully resolved, speak with your insurance carrier and appropriate professionals about your specific situation.

Option 1: Repair the fire damage before selling

Repairing the property before putting it on the market may make sense when the damage is manageable and you have sufficient insurance proceeds, cash, and time to complete the project.

A fully restored house may appeal to a much larger group of buyers than a fire-damaged property.

Repairing first may be worth considering when:

• Insurance will cover a substantial portion of the restoration
• The scope of work is reasonably clear
• You have dependable contractors
• You can manage the project
• You are comfortable carrying the property during construction
• The expected increase in value justifies the cost and risk
• The property will be competitive with other retail homes after restoration

The important number is not simply the expected selling price after repairs.

You need to understand what it will actually cost to reach that condition.

Fire restoration can involve more than rebuilding what burned

The visible fire damage may only represent part of the project.

Depending on the severity and location of the fire, restoration may involve:

• Framing
• Roofing
• Drywall
• Insulation
• Electrical systems
• Plumbing
• HVAC
• Flooring
• Cabinets
• Windows
• Doors
• Paint
• Smoke remediation
• Odor treatment
• Water-damage repairs
• Structural repairs
• Debris removal
• Permits and inspections

Water used to extinguish the fire can create additional damage in parts of the house that did not burn.

Smoke and soot can also travel well beyond the room where the fire started.

Before committing to a restoration, obtain a detailed scope of work and understand what is included in each estimate.

Watch for repair overruns

Fire restoration projects can change as damaged materials are removed.

A contractor may discover additional problems involving framing, wiring, plumbing, moisture, roofing, or other systems.

When comparing repairing with selling as-is, consider more than the initial estimate.

Potential costs include:

• Contractor labor
• Materials
• Permit fees
• Engineering or professional evaluations
• Cleanup
• Temporary security
• Utilities
• Property taxes
• Insurance
• Mortgage payments
• Lawn maintenance
• Additional repairs discovered during construction

A higher eventual sale price does not automatically mean repairing will produce the highest net proceeds.

Option 2: Repair the house and list it traditionally

Once the restoration is complete and necessary city requirements have been satisfied, the property may be marketed similarly to other homes.

This route can potentially produce the strongest retail price when the restoration is completed properly.

However, you may still need to deal with:

• Preparing the house for sale
• Cleaning
• Photography
• Showings
• Inspections
• Buyer repair requests
• Appraisal
• Financing
• Buyer concessions
• Agent commissions
• Seller closing costs

You should also keep documentation from the restoration.

A future buyer may want information about what happened, what was repaired, who completed the work, and what permits or inspections were involved.

Option 3: List the house with the fire damage still present

A homeowner may also consider listing the property without completing the restoration.

This can expose the house to investors and other buyers willing to purchase properties that need substantial work.

However, a severely damaged house will usually have a smaller buyer pool.

Traditional buyers may also encounter difficulty obtaining conventional financing depending on the condition of the property.

Even when a property is advertised as-is, a buyer may still:

• Inspect the house
• Request additional information
• Obtain contractor estimates
• Renegotiate
• Request repairs
• Terminate under applicable contract terms
• Encounter lender or insurance requirements

An as-is listing eliminates the promise to renovate the house before marketing it. It does not eliminate the buyer's ability to investigate the property.

Option 4: Sell the fire-damaged house directly

Another option is selling directly to a real estate investor or other cash buyer willing to take responsibility for the remaining repairs.

Depending on the buyer and the property's condition, a direct sale may allow you to avoid:

• Completing the restoration
• Managing multiple contractors
• Replacing flooring
• Repainting
• Repairing cosmetic smoke damage
• Updating the property
• Staging the house
• Hosting repeated public showings
• Waiting for a buyer's mortgage approval

The buyer evaluates the property in its current condition and determines what it is willing to pay based on the repairs and risks it expects to take on.

There is an important tradeoff.

A direct offer on a fire-damaged house will normally be below the potential retail value of the property after a complete restoration.

The buyer has to account for repair costs, carrying costs, permits, uncertainty, and resale risk.

For some owners, completing the restoration produces the better financial result.

For others, selling without taking on a major construction project is more important.

Request an as-is offer for your Garland property.

How does fire damage affect the value of a house?

There is no reliable percentage that can simply be deducted from a home's value because it experienced a fire.

The effect depends on the individual property.

Important factors include:

• Extent of structural damage
• Location of the fire
• Smoke damage
• Water damage
• Condition of electrical and plumbing systems
• Roof and framing condition
• Required repairs
• Insurance proceeds
• Whether repairs have already started
• Overall condition before the fire
• Expected value after restoration
• Uncertainty surrounding the project

A buyer purchasing the property before repairs are complete will typically calculate what the house could be worth after restoration and subtract its anticipated costs and risk.

That calculation may include more than the contractor's basic construction estimate.

What if only part of the house burned?

A relatively contained fire can still create a complicated restoration.

For example, a kitchen fire may damage cabinets and walls while smoke affects other rooms. Water used during firefighting may damage flooring or ceilings elsewhere in the property.

The electrical system may also need to be evaluated even if the visible fire was concentrated in one area.

Do not determine the seriousness of the damage solely by looking at the burned portion of the house.

Obtain appropriate evaluations before deciding what needs to be repaired.

What if the house is considered uninhabitable?

If Garland or another appropriate authority has determined that the property cannot currently be occupied, do not allow anyone to move back in simply because part of the house appears usable.

Garland's fire-repair process includes inspections intended to determine what must be completed before habitation is permitted again.

A house does not necessarily have to be habitable for every potential buyer to consider purchasing it.

An experienced investor may evaluate a vacant damaged property specifically because it intends to complete the required restoration after closing.

The sale itself and permission to occupy the property are separate issues.

Should you clean out the house before selling?

That depends on the property and the buyer.

Some direct buyers may be willing to purchase a house with damaged materials or ordinary unwanted belongings remaining.

However, fire debris can be different from ordinary household cleanup.

Damaged building materials, chemicals, appliances, burned debris, or other potentially hazardous materials may require appropriate handling.

Do not assume everything can simply be placed in a dumpster.

If the property is being repaired, Garland's current fire-repair process requires certain damaged materials and debris to be removed before the City's pre-fire inspection.

If you are selling instead, discuss the condition of the property clearly with the buyer and establish in writing what each party is responsible for handling.

What if the damage is too extensive to repair economically?

Sometimes the cost of restoring a severely damaged property approaches or exceeds what makes financial sense for the owner.

In that situation, options could include:

• Selling the structure in its damaged condition
• Selling primarily for the land value
• Completing partial stabilization before a sale
• Demolishing the damaged structure and selling the lot
• Rebuilding

Do not demolish a structure without first understanding the financial, insurance, mortgage, and city implications.

The City of Garland requires permits for demolition as well as major residential repair and renovation work.

If demolition is being considered, confirm the current requirements before work begins.

How to compare repairing versus selling as-is

Run the numbers for both options.

Repair and sell

Start with the realistic expected sale price after restoration.

Subtract:

• Restoration costs
• Cleanup
• Professional evaluations
• Permit expenses
• Contractor overruns
• Property taxes
• Insurance
• Utilities
• Mortgage payments
• Maintenance
• Agent commissions
• Seller closing costs
• Buyer concessions

Then consider how long the project may take and the risk of unexpected work.

Sell as-is

Start with the actual as-is purchase price.

Then subtract:

• Mortgage payoff
• Liens
• Agreed seller closing costs
• Any other amounts that must be resolved at closing

Compare the expected net proceeds, not simply the two sale prices.

A repaired retail house and a fire-damaged house are two different products.

The cost and risk required to move from one condition to the other needs to be part of the comparison.

Questions to ask a buyer making an as-is offer

Before accepting an offer on a fire-damaged Garland property, ask:

1. Are you purchasing the property in its current fire-damaged condition?
2. Will you require any repairs before closing?
3. Have you inspected the property?
4. Are you purchasing with cash or financing?
5. Can you provide proof of funds?
6. How much earnest money will you deposit?
7. Is there an option or inspection period?
8. Is the contract assignable?
9. Who is responsible for closing costs?
10. Are any additional fees deducted from the purchase price?
11. Which title company will handle the transaction?
12. What happens if additional damage is discovered?
13. What allows you to cancel the contract?
14. What is the expected closing date?

Important agreements should be reflected in the written contract.

Do not rely only on verbal promises about who will handle repairs, debris, permits, or other property conditions.

Selling a fire-damaged house in Garland

A house fire can create a difficult property decision, but repairing everything before selling is not your only option.

You can restore the house and pursue a traditional retail sale, market the property as-is, or compare those approaches with a direct sale.

If maximizing the property's potential retail value is your priority and you have the resources to complete the restoration, repairing first may make sense.

If you would rather avoid managing contractors, construction, inspections, and a lengthy restoration, an as-is sale may be worth considering.

You can also read our guide to selling a house as-is in Garland.

Hank's Texas Homes purchases properties throughout Garland and the Dallas-Fort Worth area in a variety of conditions, including houses that need substantial repairs.

Call or text 214-701-1835, or request an as-is offer online.

Learn more about selling a property in Garland.

Hank's Texas Homes is acting as a buyer purchasing for its own account. We are not representing you as a real estate agent. Homeowners should review their options and conduct their own due diligence before entering into an agreement.