Selling or Refinancing Your Home After a Natural Disaster

Photo courtesy of U.S. Geological Survey

You were just starting to think about selling your house, or maybe you wanted to take advantage of the low interest rates soon in order to refinance your mortgage. But before you could do either, a natural disaster caused great damage to your dwelling. Whether your home was defaced, flooded, impaled, or completely destroyed, do you know what the protocol is for handling a sale or refinance after a natural disaster?

First things first: you’re going to need to find out how much of the damage will be covered by your home owner’s insurance policy.  You do have coverage, we hope! Under these types of circumstances, the damage caused by a natural disaster is deemed an “Act of God” and is predicted to happen only once in a lifetime to the average person, so most insurance companies will handle a great deal of the damage costs.

It’s important that you bring in a structural expert to ensure that your home is structurally sound after such an event.  Since huge natural disasters are newsmakers, any potential buyers are bound to ask a lot of questions about the remodeling and the stability of the home and any other buildings on the property.  A structural engineer can give you peace of mind knowing that all of your buyers’ questions can be answered honestly and with positive responses that will make selling your home that much easier!

It is extremely important that you are able to restore your home to the same, or possibly even better condition than it was in before the disaster struck. As you know, it is currently a buyer’s market, so any potential buyer will be looking to make sure that you have completely renovated and that you have properly documented all of the renovations.  Buyers want to know that the work was completed by a qualified contractor. Since each state has different laws about what you must disclose to a potential buyer, it is a good idea to have an experienced real estate attorney guiding you through the renovations.

If you were just about to refinance your home mortgage prior to a natural disaster, you will have to follow all of the above steps in order to ensure that your refi goes off without a hitch.  A step in the home refinance process is to have an appraisal completed to assess the value of your home. If your home was in the path of a recent natural disaster, appraisers will be looking very closely at the renovations that were completed as they assess your home prior to a lender granting you a refinance opportunity.

The good news is that you’ve survived whatever disaster has struck your town, and even if your home took a significant hit, it is still possible for you to sell it or refinance your current mortgage as long as you make the proper renovations. Take heed of your real estate attorney’s advice in order to make sure everything is done legally so that you don’t hit any unexpected speedbumps along the way.  Selling and/or refinancing is a long enough process already! By taking the time to make sure that your home is fixed properly and according to state law, you’ll prevent any further delays.

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One Response to Selling or Refinancing Your Home After a Natural Disaster

  1. Pingback: Cancelled Flight? Know Your Rights! | Veitengruber Law

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