Selling A House With Water Damage

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Selling A House With Water Damage

Selling a house with water damage can be a tough task. Water damage is only sometimes apparent and may only be uncovered once it’s time for a home inspection. The water damage may be so severe that your buyer walks away. 

Then, you’re disappointed and left with the arduous task of selling a house with water damage. 

There is no doubt that water damage can negatively impact your home. But we’ll review some helpful information about water damage and what steps you can take to make selling a house with water damage a success. 

A teal bucket catches water from a leaking pipe in the ceiling of a house with water damage

Causes of Water Damage

There is a litany of circumstances that cause different types of water damage in your home. Some of the most common instances of home water damage occur from: 

  • Faulty appliances
  • Gutters
  • HVAC units
  • Leaking pipes
  • Plumbing issues
  • Sewage
  • Weather

Any amount of water can cause damage, so it’s best to know what to spot and how to mitigate a water damage emergency.

Faulty appliances

Hot water heaters and washing machines are the most common appliances that cause water damage. That shouldn’t come as a surprise since an average household uses 63 gallons of hot water daily; that’s almost 23,000 gallons annually! A washing machine uses more than 5,600 gallons per year. All that use adds to a lot of wear and tear on hoses, connections, and cracked pipes which causes water leaks. 


Clogged gutters don’t drain water properly. Sometimes debris like leaves or branches causes water to pool in a gutter, then flow over the edge and down the side of your house. Over time, the water may damage or crack your wall and seep into your foundation.

HVAC units

Your AC unit needs proper maintenance. Without the correct upkeep, moisture accumulates on the pipes and the condenser. That moisture builds into starts a slow, steady drip that causes unseen damage around the HVAC unit and fouls the air with mold growth and mildew. 

Leaky pipes 

Burst or leaking pipes are a common source of water damage. Pipes can leak or burst from too much water pressure from the water supply line, changes in temperature, or erosion. 


Plumbing issues are difficult to uncover because those pipes are built into your walls and foundation. It’s hard to find the water source without a professional. Some clues that you have plumbing issues include dripping faucets, leaking or overflowing toilets, and leaking or overflowing showers and tubs. It’s usually not clean water and can have a foul smell.


Sewer systems sometimes have trouble dealing with sudden heavy volumes of water caused by severe weather. The increase in volume may come after heavy rain. Or it may be that the main sewer line connecting your house to the city’s sewage is blocked. When that happens, sewage may back into your home through your drains, sinks, and toilets. This type of flood water is sometimes called blackwater. It’s toxic, untreated sewage waste.


Flash floods and other natural disasters can cause water buildup. Once the soil around your house can no longer absorb water, then flood damage may occur. Standing water seeps into your home and has no way to escape. 

A young couple of homeowners sit on a couch while trying to catch water falling from a busted pipe in their water damage house

Challenges to Selling a Water-Damaged Home 

There are several challenges to selling a water-damaged home. Some of the most common difficulties include the following: 

  • Continued water damage: Your home may be located close to a body of water or in a flood zone. Future storms can continue to cause flooding and impact your home before it even has a chance to dry out. When a buyer knows that a home is in a flood zone and you’ve had previous water damage from floods, they may seek a deep discount. 
  • Reducing the sales price: Your home might be water-damaged, and the buyer may want a reduced price to cover their repair and renovation costs. 
  • Safety: Water damage may make the home unsafe if it infiltrates the home’s electrical system. The affected areas are at a greater risk of causing an electrical fire or electrocution. In addition, water damage usually causes mold to propagate, which can be toxic and cause health issues.

Are you required to disclose a property’s water damage history to buyers? 

Disclosing is both a moral and legal question. Morally, should you disclose the water damage to a potential buyer? 

The answer is probably yes. Imagine if you bought a home and the seller had misled you or failed to mention the pool of water seeping into your drywall, causing unseen structural damage. You’d be understandably livid at the hassle and money you’d need to spend making the home livable. 

You’re probably still legally bound even if you don’t feel morally bound to disclose. 

In virtually every US state, there are laws mandating that sellers provide buyers with information about the condition and other material facts about the home. To help sellers fully disclose and avoid lawsuits, many states developed a standard form called a seller’s disclosure form. 

On that form, you’ll have to provide information about the home. If you knew about water damage, it’s probably easier to disclose the fact. Otherwise, the buyer may have the legal right to sue you for the cost of repairs. 

Each state has different rules for disclosures, but the general trend is toward protecting the home buyer. Sellers have more information on the property and know the property’s condition better. 

The exception to this is if you live in a caveat emptor (let the buyer beware) state. Those states are: 

  • Alabama
  • Arkansas
  • Georgia
  • North Dakota
  • Virginia
  • Wyoming

Carry the proper home insurance coverage

According to the Insurance Information Institute, water damage is the second most common claim, accounts for 20% of losses, and averages $11,650 per insurance claim for a typical homeowner. 

In general, your homeowner’s insurance policy covers water damage if it’s sudden and accidental. 

Different insurance company policies cover different things, so you want to get the right mix of coverage and deductibles that will work for you. A good rule of thumb is if the water comes from the top down, like in the case of burst pipes and heavy rainfall, your homeowners insurance covers the cost of repairs. 

Most policies do not cover sewage and drain backups. Still, you can get coverage by purchasing a sewer backup rider

If the water comes from the ground up (flooding), your homeowners insurance will not cover you. The federal government has the National Flood Insurance Program (NFIP), or you can choose a private insurance provider. 

A young home buyer smiles to the camera after closing a deal with two home sellers for their house with water damage

Get a cash offer or real estate agent 

Like with fire-damaged homes, your options to sell a water-damaged home are to either commit to repairs before selling the home or sell the house as-is. 

If you decide to go through the process of water damage restoration services, you may end up selling the home without any discounts on the sales price. When looking for a contractor, it might be helpful to check if they’re IICRC certified. Make sure you keep all your documents and proof of water extraction and repair if a question arises. 

You can also sell the home as-is to a cash buyer or get in touch with a real estate agent. 

Selling a home to a cash buyer comes with immediate and decisive advantages, including: 

  • You can avoid the drying process and attempts to deodorize the home.
  • You don’t have to deal with the hassle of a water restoration company or the restoration process.
  • You don’t have to worry about finding a contractor specializing in mold remediation.
  • You can avoid the combative process of finding an agent who’ll take your home and find buyers who want huge discounts.
  • You can sell your house fast with a cash buyer. 

If you decide to find a real estate agent, keep a few things in mind. Above all else, the commission drives a real estate agent’s actions and decisions. You’ll have to pay both the buyer and seller commission which will end up being about 6% of the total sales price. 

Also, since the commission controls, an agent may encourage you to invest money into repairing the house to improve the asking price. A higher asking price means a higher commission. 

That means you’ll most likely be on the hook for costly:

You’ll need to pay these costs and inspect your home before a real estate agent even thinks about taking your home to market. 

Sometimes there are better solutions than selling with a real estate agent. As you are well aware, there are a lot of challenges in dealing with and selling a home with water damage. It’s a massive pain in the most significant asset you own. 

You have to clean, repair, find an agent you trust, do unending piles of paperwork, wait for the right buyer, conduct negotiations, pay closing costs, and endure the continued hassles of holding on to a troublesome home. 

Days turn into weeks, and weeks turn into months as you wait to sell your home. That can cause stress. But it doesn’t have to be that way. Selling to a cash buyer might be just the answer you need! 


Selling a house with water damage can be a daunting task. The best way to deal with water damage is to avoid it. So it’s helpful to remember the cause of water damage: 

  • Faulty appliances
  • Gutters
  • HVAC
  • Leaking pipes
  • Sewage
  • Weather

If you decide to sell your home with water damage, you might face a few challenges, including reducing the home’s sale price. 

Another option for selling your home on the open market is to use a cash buyer. Let us help. 

We help property owners like you sell your house on your terms. We buy houses in Knoxville, Tennessee, Georgia, and surrounding areas.

Maybe you inherited a house with water damage and want to sell it. If you need to sell your home fast and want a fair price, contact us, and we’d love to get some information from you. After that, we can make a fair obligation-free offer and unburden you from a house causing you problems. 

Get an all cash offer on your home