What Should You Do If Your Home Is Damaged Under Contract?

By Ressie Krabacher

As a local resident and top performing REALTOR® in Chicago, Ressie Krabacher is relentlessly focused on helping her clients move forward. She serves as an advocate and advisor for buying or selling, overseeing relocation, or adding home ownership to their financial goals.

Buying or selling a home is an exciting process, but unexpected property damage can complicate things. If a home under contract is damaged, both buyers and sellers need to act quickly to assess the situation and take the right steps. To provide expert insight, insurance professional Aaron Millington shared valuable advice on handling these situations. From determining the extent of the damage to filing an insurance claim and completing repairs, here’s everything you need to know:

Immediate steps for buyers. If a home sustains damage while under contract, the first step is to inform the seller through the real estate agent. Before filing an insurance claim, it is best to have a contractor assess the damage to determine the extent of repairs needed. After evaluating the situation, a plan should be put in place to complete the necessary repairs before closing. The goal is to resolve the issue so the transaction can proceed without complications.

What sellers should do. Sellers should follow a similar process when dealing with property damage. The priority is identifying what happened and determining if the damage is covered by insurance. If it is, contacting the insurance agent and filing a claim is essential. Afterward, a contractor should be brought in to complete the repairs. Whether representing a buyer or seller, it is crucial to assess the damage quickly and take the proper steps to resolve it.

Common insurance claims. Some of the most frequent insurance claims include hail damage, fire, and water-related issues. Water backup, sewer issues, and sump pump failures are common concerns in many areas. Additionally, burst pipes can lead to significant damage. These types of claims are typically covered under a homeowner’s insurance policy, but verifying coverage details is always recommended.

Turnaround time. The time required to process and resolve an insurance claim varies based on the extent of the damage. Minor issues may be repaired within a few days, while more severe damage can take several months. For example, a burst washing machine pipe on an upper floor can cause water to leak through multiple levels of a home, resulting in extensive repairs. In cases like these, buyers need to ensure that all claims are resolved before moving in. An open insurance claim can also create challenges in obtaining a new policy, making it even more important to complete repairs before closing.

Understanding how to handle property damage during a sale can help buyers and sellers avoid delays and unexpected hurdles. Taking immediate action, consulting professionals, and ensuring repairs are completed before closing will keep the process on track. If you have questions or need guidance, please reach out. You can call or text me at (773) 965-4100 or send an email to ressie@kw.com. I look forward to hearing from you.