A recent occurence in my life, so I thought I would share. So what does happen when a house floods prior to settlement…does the world as you know crash down and you void the contract?
I am happy to report…NO! (depending on the amount of damage and repairs)
I recently wrote a contract on a 10-year-old town house that this happened to. The connecting neighbors had done a beautiful kitchen remodel, complete with moving water lines to accommodate an island sink. No problem, right… well, something went askew because when the homeowners arose from a peaceful night’s rest, they found several inches of water in their basement. What happened they asked??? Well, the neighbor’s beautiful new island sink pipe had burst, releasing so much water that it caused the floor to cave in and flood not only the neighbor’s lowest level, but also their own (the house now under contract) as well.
Guess what the lemonade in this story is? Well, the buyer got to have the inspector come while the flooring was ripped out and the walls were completely opened! Wonderful…how many people get to see the inside of their walls when they buy a resale? Not many! Mold was present (from the incident we assume), and was noted on the inspection report. We requested the required repairs and remediation, and the insurance paid for all of it! Fantastic news…all is right in the world now.
If this ever happens to you…just make sure to get the inspector in as soon as possible, preferably while the walls are open and note anything that is a potential problem…then, ask for it to be fixed per the home inspection addendum and also request the documentation of the repair from the seller prior to settlement. Make sure to advise the lender of the problem in case the appraisal needs to be pushed back to when the floors and walls are replaced (often a requirement of VA loans and FHA loans). It also doesn’t hurt to have very kind and cooperative sellers and a fantastic listing agent :).
All in all, the whole ordeal was a total bummer for the sellers and the neighbor’s (whose insurance had to cover everything and their home was in serious disrepair) but no big deal for the buyers…who are still getting an amazing home.
Things go wrong all the time but you just have to make lemonade from lemons.