We're under contract to buy a house. Two weeks before closing, a contractor performing agreed-upon presale repairs caught the house on fire. We've got a lot of questions about what happens next.
It's not gutted, but there's fairly extensive damage, especially to the top floor.
Our lender's appraiser was there the day before the fire. Consequently, there's very good documentation of what condition the house was in before. It appraised at $10k over the sale price.
We can't get conventional financing for the house in its current condition, and our lender doesn't offer rehab loans. The listing agent expressed to us that if we stick with the contract through repairs, we might wind up with a better house, including perhaps a head start on some remodeling we had been planning to do. So far we haven't found any other property we want more, so we're staying the course so far to see what happens.
It's now been three weeks since the contractor's insurance adjuster performed an inspection. So far we have had no official news. We also know the owner has lawyered up.
We've read this previous AskMe
, so we have some idea of what has to be done to a house that's been through a fire.
So, our questions:
- What can we expect if we see this through? Has anyone gone through an experience similar enough that they know in what order things should happen and what we will need to do?
- We have been inside and there are business cards from restoration companies. We had heard that the contractor responsible for the fire wanted to perform the repairs, but as far as we can tell, they're not professionally qualified to do restoration jobs. How much power do we have to get involved in monitoring the restoration process? Can we help pick the company? Can we oversee the work? At the very least, are the sellers required to communicate with us about what they plan to do?
- We want to do some fairly extensive remodeling. How much of that does it make sense to try to request while the house is being fixed prior to sale? We don't want to overcomplicate things legally or sink a ton of money into extras on a house we don't yet own, but we also don't want to wind up ripping out walls right after they've been put up. If we ask them to fix the structural damage but have them stop short of installing or painting new walls or ceilings, is it possible to negotiate having a check cut to cover a percentage of the work not yet done at closing, given that the work otherwise would have had to be done to restore the property to pre-loss condition? If so, would that check go to us or the sellers? Anyway, is it theoretically possible to get a house appraised for close to its actual value if one of the floors is gutted down to studs?
We're in Oregon, in case that matters.