Can you sell a house with fire, water or mold damage in Washington?
Yes. You can sell a house with water damage, fire damage or mold in Washington as it is, partly repaired or fully restored. Two things shape the sale: Form 17, the seller disclosure, asks about leaks, flooding and fire damage you know of, and any open insurance claim has to be worked out with your insurer and your lender.
It takes about a minute, there's no obligation, and your details are never sold.
or call Jason (425) 242-4673
Can you sell a house with water damage that hasn't been fixed?
Yes. Most water damage changes who can buy the house and what they'll pay for it. A house with an active leak, missing drywall or a soft subfloor can sell as it is to a cash buyer or as an as-is listing, as long as the buyer knows what happened.
The kind of water damage you have decides most of what comes next. A sudden leak, such as a burst supply line, a failed water heater or a split washing machine hose, usually starts an insurance claim and a drying job. A slow leak under a sink, a roof that dripped for a few winters or seepage through a foundation tends to show up later as stained ceilings, swollen floors or rot, and insurers usually treat it differently. Water from outside, like a creek over its banks, is another kind of loss again. Whatever the source, a buyer wants three answers before agreeing to a price: where the water came from, whether it has stopped, and how far it spread into the subfloor, the framing and the crawlspace. When you can answer those with invoices, photos and the adjuster's notes, the house is easier to sell in any condition.
Around Puget Sound, a lot of water damage is the slow kind. Rain finds a gap in the roof or the siding, a crawlspace stays damp all winter, and nobody notices until the floor above starts to feel soft. Cold snaps bring the sudden kind, when a pipe in an outside wall or an unheated crawlspace freezes and splits.
What buyers check under a house, from a torn vapor barrier to damp joists, is covered on the page about selling a house as-is.
Do you have to disclose water damage in Washington?
Yes, when you know about it. Washington's seller disclosure statement, Form 17, asks about roof leaks, a basement that has flooded or leaked, plumbing defects, standing water and drainage problems, and material damage from fire or floods. You answer from what you actually know when you fill it out (RCW 64.06.020).
The Form 17 questions that touch water and fire
- 4.A: Has the roof leaked within the last five years?
- 4.B: Has the basement flooded or leaked?
- 5.A: Are there defects in the plumbing system, including pipes, faucets, fixtures and toilets, when it's included in the sale?
- 7.A: Have there been any flooding, standing water, or drainage problems on the property that affect the property or access to the property?
- 7.C: Is there any material damage to the property from fire, wind, floods, beach movements, earthquake, expansive soils, or landslides?
- 9.A: Are there any other existing material defects affecting the property that a prospective buyer should know about?
Two of those questions look back in time. Question 4.A covers any roof leak in the past five years, including one that has since been repaired, and the wording of 4.B sets no time limit at all. Every starred question answered yes gets an explanation on an attached sheet, which is the natural place for the repair invoice and the permit.
Unless the contract sets another time, the form goes to the buyer within five business days after you've both signed the purchase agreement. The buyer then has three business days to approve it or rescind the agreement in writing (RCW 64.06.030). A seller isn't liable for an error in the form they had no actual knowledge of, and, unless they knew better, isn't liable for an answer taken from a licensed engineer's, contractor's or inspector's report (RCW 64.06.050).
If the house changes after you fill in the form
Say a supply line bursts a week after the buyer receives your disclosure. The law has you amend the statement and deliver the amendment, unless the damage is corrected at least three business days before closing, and the buyer then gets three business days to accept the amendment or rescind (RCW 64.06.040).
Can a cash buyer waive Form 17?
A buyer can waive the disclosure statement, and some cash buyers do. One limit matters on a damaged house: when any answer in the form's Environmental section would be yes, the buyer can't waive that section (RCW 64.06.010(7)). Flooding, standing water and fire or flood damage are all asked there, so a house with that history gets the Environmental section either way.
A few sales are exempt from the form altogether, including a sale by the personal representative of an estate and a transfer by a trustee in bankruptcy. If the damaged house came to you through an estate, the inherited-house guide covers that sale. When you aren't sure how to answer a question for your house, ask a real estate attorney before you sign.
Does homeowner insurance cover water damage?
Usually for sudden leaks, and usually not for slow ones. Washington's Insurance Commissioner says a homeowner policy usually covers sudden and accidental leaks, like a broken washing machine or a burst pipe, and usually doesn't cover gradual leaks, mold or rot. Flooding generally takes a separate flood policy.
| Usually covered? | What the office notes | |
|---|---|---|
| Sudden and accidental leaks (leaking plumbing, a broken washing machine) | Usually yes | Report the leak quickly and follow the insurer's advice on fixing it |
| Burst pipes, frozen ones included | Usually yes | The house has to have been properly heated |
| Storm or accident damage to the roof | Check your policy | Fix it quickly: water that gets in because repairs were put off isn't covered |
| Gradual leaks (a dripping faucet, a leaking foundation, cracks or gaps in the walls) | Usually no | These are the office's own examples of gradual damage |
| Mold, fungi, rust and rot | Usually no | Insurers often treat them as the owner's responsibility unless they come from water damage the policy covers; some sell limited mold coverage |
| Flooding, mudflows included | Generally no | It takes a separate flood policy |
Before you file, the Insurance Commissioner's office suggests asking your agent or company whether the loss is covered, so you don't end up with a claim on your record for something the policy won't pay. If the water came from outside flooding, contact your flood insurer too, whether that's the National Flood Insurance Program or another company. For questions about how an insurer is handling your claim, the office runs a consumer advocacy line at 800-562-6900.
What happens to the insurance claim when you sell the house?
Selling the house doesn't by itself close a claim you've already filed, and the buyer doesn't take over your policy. What matters is who receives any payment still owed for the damage, and that turns on your insurer, your mortgage company and the wording of the purchase agreement.
Your mortgage company has a stake in the claim as well. The Consumer Financial Protection Bureau notes that many mortgage agreements require insurance checks to be made out to both you and the mortgage company or servicer, and that the mortgage company may release the money in portions as repairs move along. When the house sells, the loan is paid off at closing, so ask your servicer what happens to any claim money it is still holding.
Questions to ask
- Your insurer: is the claim settled, what is still to be paid, and does any part of the payment depend on finishing the repairs?
- Your mortgage company: is it holding claim money, and how is that money handled when the loan is paid off at closing?
- A real estate attorney: how should the purchase agreement word who keeps a payment that arrives after the sale?
- Any buyer: tell them at the start whether a claim is open and what it has paid so far.
Should you use the insurance payout to repair before you sell?
Sometimes. Repairs paid by the claim can bring the house back to a condition most buyers' lenders will finance, which widens the pool of buyers. They also mean months of contractors, permits and payments on a house you can't live in, and the claim may not cover everything the work uncovers.
- Repairing first tends to fit when
- the damage stays in a room or two, the claim covers the work, and you can carry the house while it's done.
- Selling first tends to fit when
- the damage runs through the house, the claim is disputed or short of the contractor's estimate, or you'd rather not manage a project.
If you do repair, two pieces of paper matter later. The CFPB suggests asking each contractor for a lien waiver at the start and at every phase, a document saying the contractor has been paid and gives up the right to file a lien for that work. An unpaid contractor's lien is one of the claims a title company has to clear before closing, as the liens guide explains. And a rebuild can bring in Form 17's question 4.C, which asks about conversions, additions or remodeling and whether all building permits and final inspections were obtained.
Can you sell a house with mold in Washington?
Yes. Mold is one more condition of the house, and it nearly always traces back to water: a leak, a damp crawlspace, a bathroom without a working fan. A buyer prices the cleanup together with the fix for the moisture, so the source of the water is the part to understand first.
Form 17 doesn't use the word mold. The water behind it falls under the leak, flooding and plumbing questions, and question 9.A asks about any other existing material defects a buyer should know about. How to answer for mold in your house is a question for a real estate attorney.
On the insurance side, the Insurance Commissioner's office says homeowner policies usually exclude mold, fungi, rust and rot unless they come from water damage the policy covers, and that some insurers offer limited mold coverage. Cleanup is work for a mold remediation contractor. Repainting a stained wall leaves the moisture, and the disclosure question, exactly where they were.
What changes when the damage is from a fire?
Most of this page still applies, because a house fire is nearly always a water job too: the hoses that put it out soak floors, walls and insulation. On top of that come smoke and soot, possible damage to the framing, and Form 17's question 7.C on material damage from fire.
The first days after a fire, smoke damage, pricing and the demolition rules each need more room than this page has, so I wrote a separate guide on how to sell a fire-damaged house in Washington. The claim, the lender and Form 17 work the same way they do above.
Where a sale fits
A sale is one choice. Plenty of owners repair with the claim and stay, and others repair and then list. How far the damage goes, what the claim pays and how long you can carry a house nobody can live in usually decide between those and an as-is sale.
- Repair it and stay
- When the claim covers the work and you want to keep the house, that's often the simplest path. Your insurer and your mortgage company set how the repair money is paid out.
- Repair it, then list
- Once the work is done, permitted and inspected, the house can go to buyers with ordinary loans. I can list it for you as your broker, and I'll tell you when the numbers point that way. Jason Bryant is a licensed broker with Windermere Real Estate (license 101377).
- List it as-is
- Priced for its condition, the house reaches renovators, builders and buyers who want a project. Their inspection may still turn up more than anyone expected.
- Sell it as-is for cash
- A cash sale skips the repairs and the lender's appraisal. I make a written offer only when the numbers work for both of us; it shows every cost line by line, and the closing date goes into the contract. It usually means a lower price than the restored house would bring.
- Ask before you decide
- If the claim is disputed or you aren't sure what your policy covers, start with your insurer, then the Insurance Commissioner's consumer advocacy line at 800-562-6900.
What I look at on a house with water or fire damage
When we walk a damaged house, we're after the same answers a careful buyer would want, and we'll tell you what we find as we go. Bring whatever paperwork you have, from the adjuster's estimate to the drying company's invoice; none of it has to be organized.
- Where the water or the fire started, and whether the source has been stopped or repaired.
- How far it reached: the subfloor, the framing, the insulation, the crawlspace or the attic.
- What has already been torn out, dried or replaced, and by whom.
- Where the claim stands, what it has paid, and whether your mortgage company is holding any of it.
- What else the house needs apart from the damage, since a roof or a furnace near the end of its life changes the numbers too.
From there it's a written cash offer when the numbers work, or a listing with Windermere Real Estate when the house would bring more on the open market. Sometimes there's a middle route: if light work would help the house show and there's equity, I may pay for it up front and be repaid from the sale at escrow, on terms we agree in writing before anything starts.
Questions sellers ask
Do I have to fix water damage before selling my house?
No. You can sell it with the damage in place, to a cash buyer or as an as-is listing priced for the condition. What you can't skip in most sales is telling the buyer what you know on Form 17, unless the buyer waives it, and even then not its environmental section when an answer there would be yes. Stopping an active leak is still worth doing, because running water keeps adding to the damage.
Can a buyer get a mortgage on a house with water damage?
It depends on the lender and how bad the damage is. Lenders want a house they can appraise and insure, so missing drywall, an active leak or a kitchen that doesn't work can hold up a loan until repairs are done. A buyer paying cash doesn't face that step.
Does homeowner insurance cover flooding from a creek or heavy rain?
Generally not. Washington's Insurance Commissioner says damage from flooding, mudflows included, generally isn't covered unless you bought a separate flood policy, such as one through the National Flood Insurance Program. A pipe that bursts inside the house is a different kind of loss and is usually covered.
Do I have to disclose a roof leak that was already repaired?
Form 17's question 4.A asks whether the roof has leaked within the last five years, so a leak inside that window is a yes even after the repair. The form asks you to explain each starred yes on an attached sheet, and the invoice belongs there. A real estate attorney can help with the wording.
Can the buyer back out after reading my disclosure?
Yes. Unless your contract sets a different period, the buyer has three business days after receiving Form 17 to approve it or rescind the purchase agreement in writing, and gets the deposit back on rescinding (RCW 64.06.030).
Who gets the insurance money if I sell before the repairs are done?
That's settled between you, your insurer and your mortgage company, and the purchase agreement should spell it out. In some sales the seller keeps the payment and the price allows for the damage; in others the money goes toward the buyer's repairs. Ask your insurer and your lender how they handle it before you sign.
What if a pipe bursts after I've accepted an offer?
Call your insurer about the new damage and tell the buyer. Under RCW 64.06.040 an adverse change after the disclosure means an amended Form 17, unless you correct it three or more business days before closing, and an amendment gives the buyer three business days to rescind.
Sources
- RCW 64.06.020, the seller disclosure statement (Form 17) and its questionschecked
- RCW 64.06.010, sales exempt from the seller disclosure, and the waiver limit for the Environmental sectionchecked
- RCW 64.06.030, delivery of the disclosure and the buyer's three business dayschecked
- RCW 64.06.040, amending the disclosure after an adverse changechecked
- RCW 64.06.050, a seller's liability is limited to what the seller actually knewchecked
- Washington Office of the Insurance Commissioner, leaks, water damage and moldchecked
- Washington Office of the Insurance Commissioner, steps to take after home damage or a losschecked
- Washington Office of the Insurance Commissioner, filing a homeowner insurance claimchecked
- Consumer Financial Protection Bureau, start recovering and rebuilding your financial life (homeowner's insurance)checked
Tell me what happened to the house
Send the address with a line about the damage and where the claim stands. We'll walk the house as it is, put any offer in writing, and tell you plainly when repairing or listing would leave you with more.
It takes about a minute, there's no obligation, and your details are never sold.
or call Jason (425) 242-4673