Is It Illegal to Sell a House with Asbestos?
Even though the information on this web page is provided by a qualified industry expert, it should not be considered as legal, tax, financial or investment advice. Since every individual’s situation is unique, a qualified professional should be consulted before making financial decisions.
This article is going to help you separate the manageable reality of selling a house that contains asbestos from the sometimes distressing perceptions you may have heard.
There are a lot of homes in the US that still contain asbestos in some form. In my more than two decade long real estate investing career, I’ve seen this issue dealt with successfully across the country.
So don’t worry, you can sell a house with asbestos. Let’s look at this question more closely and see how it’s done.
Can You Sell a House with Asbestos?
Can you sell a house with asbestos siding or other components containing asbestos? The answer is yes, you can.
Until the 1980s, thousands of products containing asbestos were being used by ordinary consumers in the US. This includes items that were used in the construction of residential properties such as insulation, tiles, and siding.
Over half of the single-family homes in the US that are occupied today were built before 1980. As you might expect, homes containing asbestos materials are being legally bought and sold every day.
Basically there are two ways in which a homeowner can sell their home when it has asbestos. One way is to fix the asbestos issue and then sell the house the way you normally would by marketing it to the general public. The other way is to sell the property as-is.
Do You Have to Disclose Asbestos when Selling a House?
Depending on the state in which the property is located, there are many rules regarding seller disclosure of material facts. Taken together, they point toward the full disclosure of the presence of asbestos.
Most states specifically require that you disclose the presence of asbestos in your home. You should take care to find out if your state is one of them.
Even if your state doesn’t have an asbestos disclosure law, they may have other disclosure requirements that a buyer, or their attorney, could believe would include asbestos.
Most states have a Residential Property Disclosure form that instructs you to reveal if there are hazardous or toxic substances in the house. Other states’ forms might ask if you are aware of environmentally hazardous conditions on the property.
Whether or not the form lists asbestos as an example, a buyer could expect that you would include the presence of asbestos when answering these questions.
Other than in the very few remaining caveat emptor states, sellers will be expected to make buyers aware of facts that are material to the sale of the property. This is a broad requirement that could be interpreted as including asbestos.
No matter where you live, if the buyer specifically asks you whether your home contains asbestos, you will have to answer honestly or be liable for misrepresentation.
If your buyer discovers that your home has asbestos and you didn’t tell them about it, they may decide that you are untrustworthy. Your conversation with that buyer could be over.
Will Asbestos Come Up During a Home Inspection?
In order to definitively state that a material contains asbestos, an inspector would have to make a microscopic examination of a sample of the material taken by drilling or performing other destructive action that needs a separate approval of the owner. For that reason, a typical home inspection would not say that the home contains asbestos.
However, inspectors know where asbestos was used in older homes. If they see components in a home built before the 1980s that could contain asbestos, they will certainly warn that asbestos may be present.
Appraisers will also note the possibility of asbestos being present in the property.
A final determination would have to be made by an EPA certified asbestos inspector.
How Should You Negotiate with the Buyer?
Buyers may reasonably believe that the presence of any asbestos is bad or they may see it as an opportunity to get a better price. Either way, you can expect them to ask for a credit or a reduction in the price because of the asbestos.
The perception of the risk of asbestos in a home is sometimes worse than the immediate danger posed to the homeowner. The harmful effects of asbestos are real, but asbestos doesn’t reach people in a harmful way until it is disturbed.
When materials containing asbestos are cut or broken open, the fibers are released into the air. This can be caused by demolition, sawing, or drilling into these materials during renovations. When this happens, the fibers can be ingested or breathed in by people in the home.
Some products that use asbestos are solid and, if left undisturbed, present little risk to the occupants of the home. Other materials, such as insulation, are more likely to become friable, or airborne.
If the asbestos materials are minimal and solid, then the risk can be managed by the buyer which greatly reduces any real danger of exposure.
These types of asbestos can often be neutralized by remediation instead of removal. Remediation costs less than removal and would not justify the same drop in price.
During negotiations, you can legitimately point out if the asbestos in your home is in a less dangerous form to try and minimize the impact on your price.
Where Can Asbestos Be Found in a Home?
If you have found asbestos in one area of your house, there can be more places where it’s also present.
Asbestos was widely used by many industries because it had beneficial properties for a lot of applications. It is lightweight, fire retardant, heat resistant, and adds tensile strength to products like paint. This is why asbestos can show up in a number of places in your home, including:
- Ceiling panels and tiles
- Floor tiles
- Insulation wrap that is placed around pipes, ductwork, furnaces, boilers
- Roofing underlayment or felt
- Shingles
- Exterior siding
- Decorative or soundproofing wall panels
- Textured paint
- Ceiling popcorn paint
- Wall and Ceiling insulation
How Much Does It Cost to Remediate or Remove Asbestos from a House?
First, you will need to have an inspection done by an EPA-certified inspector to determine whether you need to do remediation or removal of the asbestos materials. This will cost between $400 and $800. This can vary depending on the lab work that needs to be done.
This does not include testing for airborne asbestos particles. If this needs to be done, it will add another $400 to $1,000 to your inspection costs.
A final inspection needs to be done after the work has been performed and will cost from $200 to $400.
There are a lot of very specific regulations regarding the removal and disposal of asbestos materials. This makes removal more expensive than remediation. The purpose of remediation is to contain the material to make sure that it isn’t disturbed.
The most expensive materials to remove are insulation because they can more easily become airborne. Removing attic insulation can cost you anywhere from $10,000 to $25,000 or more.
Removing solid materials like tile or drywall will run a couple of thousand dollars per room. Pipes with asbestos paint can cost up to $5,000 to remove. Removing all the siding from a house can cost from $12,000 to $16,000.
Most removal companies will charge a minimal amount for small jobs that could be from $2,000 to $3,000 depending on your location.
Remediation will cost as much as 25% – 30% less than removal.
The Easiest Way of Selling a House with Asbestos
Who Will Buy My Home with Asbestos As Is?
Selling your house that needs repairs as-is would avoid all of these issues, but a homebuyer who plans to live in the house will probably not be willing to do that. There is, however, a type of buyer who not only will consider buying your home as-is, they are actively looking for properties like yours.
Real estate investors are individual professionals or companies that buy houses fast and for cash to resell or rent. They may fix any problems with the house and sell it right away, which is called “house flipping”. Other investors prefer to fix up the home and keep it as a rental property.
When buying houses, investors make business decisions without the emotional complications that can come from negotiating with a typical homebuyer. They will look at an issue such as asbestos much more objectively.
The best properties for their intended use are properties that need repairs or renovations like yours. They can manage the work being done to the home for themselves which saves money. Sometimes they even do some of the work themselves.
Investors have cash and don’t need to go through the process of borrowing money for the purchase. This helps the seller avoid being dependent on the buyer’s mortgage lender who may not issue them a loan on a house with asbestos problems.
Professional local real estate investors know market values, repair, and construction costs, and can determine the profitability of a project without having you order an official appraisal. They also perform their own inspections, sometimes accompanied by some of their workmen.
Benefits of Selling Your House to a Real Estate Investor
Compare the steps we’ve discussed for selling your home to a typical buyer with a sale to a real estate investor:
- You won’t have to pay for the inspections, removal, or remediation involved with asbestos in your home. The cost of this will be factored in the investor’s cash offer.
- Because an investor handles most of the details of the transaction for themselves, the process takes much less time than a traditional sale
- An all-cash purchase of your home removes the time-consuming lender’s underwriting process and the possibility that your buyer doesn’t get approved
- You avoid the time and expense of marketing your home to the public,
leaving your home during showings, and waiting to find a buyer who’s not afraid of dealing with asbestos - When you sell to an investor, you won’t have to pay typical closing costs including commissions which can be expensive
However, to make their desired profit margins, they need to buy homes below market value which is why they look for properties that need work. This means an investor will not pay market value for your home.
Depending on your situation and motivation, and the amount of work to be done on your house, selling to a real estate investor may be the best option for you.
How to Get the Best Offer from an Investor?
When selling your property with asbestos as is for cash to an investor, you still want to get the best offer possible and deal with a reputable investor rather than someone looking to take advantage of a distressed homeowner.
HouseCashin is the largest platform in the USA that connects home sellers with reputable real estate investors across the country.
Fill out our online form to get multiple cash offers on your property from the top-rated local real estate investors, choose the best one, and walk away with cash in 3 to 30 days.