Selling a Home with Mold or Water Damage

The most common reason a house sale falls apart is due to issue with water intrusion, water damage and mold. When a buyer hears these words, most of the time they run. Some buyers will review the Ohio state mandated Residential Property Disclosure Form and will cancel the in-person tour of the house. Water damage and its consequences are scary and in most cases are very expensive to repair. Home buyers that intend to live in the home rarely want to take on the hassle and the expenses of repairing the issues.

Selling a house that has issues with any type of water intrusion issues or mold is especially difficult. Water damage must be addressed immediately and is often very costly. Aside from addressing the damage itself, the cause must be addressed as well as any resulting mold. Surprisingly, in a perfect environment, mold can begin to grow within 24-48 hours. And once mold is visible, it will need professional remediation that often costs thousands of dollars.

Water damage can occur due to many issues under many scenarios; the most common causes are:

• Severe weather storm.
  Damage due to severe weather is very common. The damage may present itself as a leaking roof, damaging the roof shingles, insulation and the interior drywall. If the damage is severe enough and is not addressed immediately, structural issues may arise with needing to replace parts of the roof and support beams or columns.
• Flooded basement.
  The basement may flood due to a weather storm or a city sewer backup. In either case, insurance may or many not cover the losses. The costs of damage repair can range from a few hundred dollars of superficial damage such as the carpet, to thousands of dollars in flooring, drywall and wood paneling repair to electrical issues. If the water intrusion is not addressed immediately, mold will most certainly develop on most porous surfaces.
• Storm Water or Sewer backups.
  Unusually heavy rains or sewer system glitches can cause the plumbing to malfunction sending the storm water, or worse, raw sewage into your home. Once this happens, the expense of addressing the damage can add up quickly.
• Leaking Pipe.
  Something as simple as a leaking pipe can cause a surprising amount of water damage. We had a case with a homeowner that had a leak from their dishwasher. The leak was discovered fairly quickly within 12 hours, but it was enough to flood the kitchen flooring, the subfloors and the joists and beams in the basement. At first the homeowner though they would just let it dry on its own, however they quickly learned that the humidity in the home was just right for the mold to begin to grow. The flooring and the subfloor needed to be torn out, remaining parts to be dried with commercial dehumidifiers and a professional mold remediation company had to treat the affected areas as well as majority of the basement that became affected with the spreading mold. The homeowner did not have the cash to fix the problem and we were able to help by purchasing their home and addressing the issues.
• Slow but steady pipe leak.
  A slowly leaking pipe is a silent enemy. A slow but steady leak can go unnoticed for weeks or even months and by the time it is discovered, the damage can be substantial. A slow leak on a second story home can damage interior of the walls – the drywall, support studs, electrical, flooring and cosmetical finishes. Many times the homeowner will notice some minor drywall damage and during the repair will discover major destruction that was not visible for many weeks.
• Burst pipe.
  Vacant homes are most prone to a burst pipe. An inherited property or a vacant rental that was not winterized properly may not have sufficient heat to prevent the water pipes from bursting. In most instances, once one pipe bursts, so do others. Often inside the interior of the walls. The damage can easily add into thousands of dollars.
• Roof Leak.
  There are two types of roof leaks. A sudden wind or storm damage that results in a roof leak can cause minor or major interior damage. Some is covered by insurance and sometimes (due to age). If the roof leak was bad enough (many shingles torn off during heavy rains), the water damage may affect not only the interior drywall but also the cosmetics of the home and result in mold if not addressed quickly. The worst are the neglected roof leaks. Unaddressed roof leaks can be due to a house being unoccupied and the house owner simply being unaware of the issue or due to the house owner not having the cash necessary to repair or replace the roof.
• Attic mold.
  Mold in the attic is more common then people think. Most often mold in the attic results from old type of construction when the shower exhausts were vented into the attic instead of the outside. The humidity from the bathrooms collects in the attic and during the winter collects on the roof sheathing turning into water droplets that cannot dry. Very quickly this humidity turns into mold presenting health hazards.

What are the options… The first option is to repair the cause, the damage and any consequences to the direct damage, such as the development of mold due to a leak. Sometimes the amount of work and the associated expenses are costly but worth it. In other instances the house owner may not want to deal with the contractors and the headaches of the necessary repairs or simply may not have the cash to spend on the repairs.

Selling a home on the open market through a realtor will be difficult and in some cases not possible. Majority of home buyers will want to move in fairly quickly and will not want to deal with something as major as water damage or mold. Most will not want to purchase a house that has known problems.

Which leads us to another question, are you required to disclose any water damage, leaks (past or present) or any mold issues. The answer is yes. Per Ohio Revised Code, every hose owner must disclose any known issues, defects, damages (past or ongoing) to a house buyer (Source). Not disclosing a known issue opens the house owner to legal liability and will most likely result in a lawsuit.

So what happens when a homebuyer applies for a mortgage? Well, as we mentioned previously, it might be impossible to sell some houses with water or mold damage. In some cases the house will simply not qualify for a mortgage. The lender will review the property disclosures and if there is any mention of water damage or mold, the lender will deny the loan. Additionally, if the buyer applies for a mortgage, the lender will send an appraiser to the property to determine the value of the home. If there are any signs of water damage, or mold, the appraiser will notify the bank and the bank will deny the loan. In some cases the only way to sell a house with water damage or mold is to sell it to a cash buyer.