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Buying a home with pending repairs?

tony • July 18, 2019

Almost every week we have customers call in who are looking to purchase a home, but the home has some existing damage or some component of the home is outside of insurance guidelines that would generally make the home uninsurable – such as an old roof.  The concern is that the customer doesn’t want to pay for pending repairs on a home they don’t own, but they feel like they’re caught in a “catch-22” because they’re unable to get insurance unless the home has a new roof. 

So what do you do?

The answer to this question is typically dependent upon on the extent of the pending repairs and the amount of time needed to remedy the situation.  For example, if the home is not currently insurable due to a number of deficiencies and is in need of a new roof, a replumb, a rewire, an HVAC swap out and let’s assume that the repairs are going to take 3-4 months to complete.  Most insurance companies will decline the request for a standard home insurance policy and will instead require a builder’s risk policy which would typically require the oversight of a general contractor. 

This would allow you to close on the home even though the repairs are done at the time of closing and then you can switch to a standard home insurance policy once the repairs are complete. 

What if the pending repairs are something small?

If the repair are relatively minor such as a new roof and the repairs can be done in 30-45 day, most insurance companies will give you a grace period to complete the repairs after closing.  In this situation you’d simply provide documentation, such as receipts and/or photos, once the repairs are completed and you’ll be good to go.

Want to see what insurance rate look like in your area?  Get a quote online at shopitnow.chrinco.com or give me a call at 321-586-3754.  Chrinco.com – insurance simplified.

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