Episode 8 | PropertyLens answers questions about House Fire: To Buy or Not to Buy?
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In This Episode
Hosts: Bob Frady & John Siegman
Topics: homebuying housefire inspection realestate propertyrisk
Episode Summary
Thinking about buying a home? Don’t overlook critical red flags! In this episode, Bob and John answer a key question: Should you buy a house that previously had a fire? They explore the risks, the importance of investigating repair history, and what buyers need to check before making an offer.
They also discuss legal considerations when backing out of a home purchase, whether due to financing issues or changes in market value. Learn how to protect yourself with the right contingencies and avoid costly surprises.
Key Takeaways
✅ Fire History Matters: Investigate past fires—what caused it, how severe it was, and who handled the repairs.
✅ Permits & Repairs: Verify that all restoration work was properly permitted and done by a qualified professional.
✅ Hidden Issues: Fire damage can lead to structural problems or mold due to water exposure. Look beyond surface-level fixes.
✅ Backing Out of a Home Purchase: If your financial situation changes, know your rights under the contract.
✅ Locked-In Home Sales: Sellers generally can’t back out of a contract just because property values rise.
Resources
🔹 Try it: Propertylens.com
🔹 Questions? Contact us: support@propertylens.com
Transcript
[00:00:00] Bob Frady: Hey everyone. Welcome back to PropertyLens presents. This week we're going to do a little something different. We get a lot of questions from people about the home buying process. And between John and I, we've bought a few houses in our day and we've seen a lot of houses in our day. So we want to give our opinion on what some of these questions are that pop up in the world of real estate.
[00:00:28] So John, you're ready for this?
[00:00:30] John Siegman: I am ready for this.
[00:00:31] Bob Frady: For those of you who don't know, I'm Bob Frady. That's John.
[00:00:34] John Siegman: I'm John Siegman.
[00:00:36] Bob Frady: We started PropertyLens together. Click the subscribe button if you're into that kind of thing, because we do this content every week.
[00:00:43] John Siegman: Now please click the subscribe button. It helps our egos.
[00:00:46] Bob Frady: Yeah, if you do as well, that listen, nothing helps here. All right. Fine. Hit the subscribe button. Okay. Here's the first question, John. And John I know you're going to like this question because I know you have experience with this question.
[00:00:59] So. Buying a house that previously had a fire. The person says, I'm interested in the house that says they had a garage fire two to three years ago, the original owners of the house built in 2010. The listing for the house states that everything was restored and they made the updates to the house at the same time. Is this a deal breaker, John, what's your opinion?
[00:01:24] John Siegman: Depends. I know we were looking for a yes or no answer and it depends. Is not that yes or no answer, but it depends.
[00:01:31] So if you have a fire at your house. You know, and it's noticeable. I mean, you know, you had to repair stuff. The fire department came, they put stuff out. There's a lot of water. There's all sorts of things associated with a fire. So the first thing is who did the work, right? Did they pull the permits? They've pulled all the right permits. You would think that because it was a fire that they had to, but there are some parts of the country that permits might not be necessary because maybe the damage. Wasn't more than a given dollar amount.
[00:02:11] So I'd want to know who did the work, was it permitted, you know, what's their, you know, overall score is, did they choose somebody really cheap or did they choose somebody who actually would come in and do a really good job? So, or did they do the work themselves?
[00:02:33] These are all the questions that I would want to know. And you know, I liked the builder and I liked the house. I liked the location. Then, I would have no problems, but I'd also want to know one really important thing. What caused the fire?
[00:02:49] Bob Frady: Yep.
[00:02:50] John Siegman: Was that a meth lab in my garage or, you know, was somebody tinkering around working on a car, spill a little gasoline and you know, there are different things that are going to cause a garage fire.
[00:03:04] Those are the things that I want to know.
[00:03:07] Bob Frady: With the house built in 2010, you would think the wiring was pretty good, but you just never know, I suppose sometimes.
[00:03:13] John Siegman: So, you know, if you, if you decide to put in a lift out in your garage. Those draw a lot of amps. If you don't have the right circuit for your garage.
[00:03:24] Bob Frady: Yep. The term garage fire is an interesting one because if you just Google garage fire and look at some of the videos, it's like, it might've started in the garage, but it, it garages sometimes are detached, which is one kind of garage fire, most modern houses, they are attached and integrated to the house.
[00:03:48] Like we drive right into our garage in this house and then walk in the house. So a garage fire may actually be much more involved than just a garage fire. so you need to discover what exactly was the intensity of the fire. Now, what, one of the things you could do very interestingly is take the address and then just say fire and Google it and see what comes up. And maybe you can get some video of the previous fire.
[00:04:17] But I, so I would not say that this is a deal breaker. I would say what it is is a giant blinking red light that says you need to investigate more. Like you can't just say, okay, everything's great because we've had this happen before. So friends of ours wanted to buy a house in Los Angeles and they said, Hey, can you run a report for this property we're thinking about?
[00:04:41] And we said, sure. So we did. And we saw that there was a permitted work for fire repair. And then we said, go up and check upstairs. It was a dryer fire. And they go in and when you move some of the stuff, you could still see the burn boards. So it was repaired, but it was really just covered up. And they said, I don't know what else is going to be in this house, but I don't want to buy it and they walked from buying the house.
[00:05:05] So I would say not a deal breaker, but definitely an opportunity to investigate more about the fire. Cause, it is the house in 2010 burning down. Maybe somebody was just, I don't know, maybe they're doing something unsavory in the garage. Who knows, but it's definitely a cause for concern. You agree?
[00:05:29] John Siegman: Absolutely.
[00:05:30] Bob Frady: Okay. So previous fire, not a deal breaker. But investigate. Okay, here's another question. Comes in from the world. Can I back out? Is the question. My wife and I signed a contract last month in Texas. We found out we're pregnant. She's wanted to take time off work. Won't allow us to get financing since they're still not 100 percent approved.
[00:05:57] can they back out of the purchase? Is the question.
[00:06:03] John Siegman: What's your take on
[00:06:03] Bob Frady: That?
[00:06:04] John Siegman: Well, it's a little bit beyond what we normally stick our nose into, and depends upon how the contract was written, what the contingencies are in the contract, but as a buyer, you want to make sure that you've got outs the entire way through the process.
[00:06:27] So whether, you know, in this case, somebody is taking off work for a while, income shift, financing shift. If you find things with the property that you don't like, you know, all sorts of things along the way, all of the possible contingencies, you want to make sure as many of those things are written in your favor in the initial contract.
[00:06:50] So can they back out? you can always, they can't force you to buy a house. You may have to pay a penalty depending upon what the contract said. But they can't force you to buy a house. But depending upon how the contract is structured, you should be able to get out of it.
[00:07:07] Bob Frady: Yeah. Generally, if you can't afford the house, if you can't get financing, you don't have to buy the house.
[00:07:12] There's, there's no one holding a hatchet to you that says by this house, you know, you have to be able to, you have to be able to get financing. So if your situation changes and you can't get financing, then you can walk from the house, but there is, so it's a pretty straightforward question. It depends on the state, depends on the contract you use. This is why you use an agent because an agent will help you in situations like this and not go solo.
[00:07:39] But here's a related question. So, a buyer bought a house, a seller sold a house, and then the value of everything went up. It just skyrocketed. The neighbor got hot, the neighborhood got hot, but they had signed a purchase agreement. And they want us to know, can they get out of this signed purchase agreement because now they think they can get a hundred K more for the house. John, what's your opinion on that?
[00:08:07] John Siegman: That one, I think, is a little bit more tricky.
[00:08:11] Bob Frady: Yeah, I know the answer to this question because I've lived the answer to this question.
[00:08:15] John Siegman: You've signed the contract. You've agreed to sell at that price. Things got happy. People started jumping up and down, which is great for sellers, bad for buyers. I think you gotta go through with the deal. But I don't know for sure.
[00:08:34] Bob Frady: Ding, ding, ding. Well, listen, every state is different. Every situation is different. But generally. Once you've signed a purchase and sales agreement, you're committed, it's a legal document. So if they can come up with the money, you got to sell it to them. I know this because I just sold a house where this exact scenario happened, where we agreed to sell the house, neighborhood values just exploded all around us.
[00:09:01] And I thought, maybe I can get out of this. So I went to my real estate agent and they said, unless you're an attorney, or want to deal with a long, long legal situation, you're committed. Now you hope, maybe, that the buyer can't perform, that's a different story. From a seller standpoint, you're stuck. You signed it.
[00:09:22] So, there you go. Alright, I think that's enough of us dropping our carnival of knowledge on the world, John Siegman. got anything you want to add towards the end there?
[00:09:36] John Siegman: No, I just think that, you know, the better you are informed as a buyer, the better off you're willing to be. And I'd say an informed buyer is also better for the seller.
[00:09:51] Bob Frady: Yep. No surprises. You don't want to buy with surprises. You don't want to buy blind. You want to know before you make an offer exactly what you're getting yourself into. You want a PropertyLens Report www.propertylens.com All right. For PropertyLens, I'm Bob Frady.
[00:10:07] John Siegman: I'm John Siegman.
[00:10:09] Bob Frady: Until next time.
