Selling a House With Mold Problems (and What to Disclose After Mold Remediation)

1) Sell to an Investor

A cash home buyer is a company composed of real estate investors. These investors help homeowners who face difficulties in selling their property such as addressing mold issues.

Cash house buyers purchase property AS IS—regardless of condition. They may handle mold removal, any other repairs, and then resell the house for profit.

Real estate transactions with investors take much less time than traditional transactions. And investors pay homeowners with cash at closing.

Advantages of Selling to a Home-Buying Company

To sell a house in perfect condition is no easy task. To sell a house with black mold growing in the basement seems nearly impossible.

One of the biggest advantages of selling to a homebuyer is that they buy houses in any condition. You don’t have to worry about professional mold removal. Sell your house AS IS. And you can walk away at closing with cash on hand.

Another advantage of choosing to sell a house that has mold to a professional homebuyer is the speed of the sale. Typically, the entire real estate transaction can be completed in just a matter of days.

Homebuyers pay for your property with cash. You get all the cash specified in the cash offer. There are no real estate commissions, no closing costs, and normally no hidden fees if the company is legitimate. You leave the closing with cash in hand.

Selling to a home buyer has a minimum amount of paperwork. Because it‘s a cash transaction, there’s much less paperwork in the closing process.

Now, let’s look at the disadvantages so that you make an educated decision on whether or not you should sell to a home investor.

Disadvantages of Selling to a Home-Buying Company

The ability to walk away from a problem property with cash in hand comes at a price. Because real estate investors will buy your moldy home AS IS, you will not receive the full market value.

Their cash offer factors in all the costs they expect to incur in buying, rehabilitating, and re-selling your house.

Due diligence is important when selecting a home buyer. Mixed in with all the reputable home buyers, many scammers want to prey on unsuspecting sellers.

How to Find the Right Home-Buying Company

As with any industry, the home investor market has newcomers who lack experience. If possible, avoid those who are new to the industry. Instead, ask for offers from established and reputable home investors.

The home investor market also has more than its share of scammers who want to take advantage of uninformed homeowners. Do not allow scammers to fool you. A little research about the home-buying industry can help you recognize the scammers.

To have the best possible selling experience, make sure to do your homework. Put together a list of cash home buyers in your area.

Go to their websites and study whatever reviews you can find. Pick out the top three or four and schedule a meeting. Request a cash offer on your house from each, compare them, and select the highest one.

However, beware of investors who make offers too close to the market value of your house. If it looks too good to be true, it’s either a fraud or the investor is inexperienced.

2) Traditional Sale With a Realtor

In a traditional real estate sale a prospective realtor will look at your house and discuss its sale.

They will show you comparable properties to give you an idea of what your house might be worth.

If your house needs some minor updating they will make suggestions that will help you get a better offer. And they will also talk to you about staging your home to advance its appeal to buyers.

A good realtor will assist you with the sale of your home from setting the asking price to the final closing.

Advantages of Selling With a Real Estate Agent

Houses that have had mold issues are sold every day across America through traditional sales. But it takes an experienced realtor to help walk you through the process. A good realtor becomes your partner for the duration of the sale.

An experienced agent who knows how to sell a damaged house will also know the right contractors to refer you to.

They will refer you to companies who can help with mold remediation and any other repairs. And they will know the kind of remediation that will satisfy the average buyer.

A good real estate agent will spend time and money advertising your home to give it maximum exposure. They will reach the most potential buyers through the MLS (Multiple Listing Service).

They will tell you how you should stage your house for the best possible presentation. And they will show your house to potential buyers.

In a traditional real estate sale you can sell your home for the approximate fair market value (adjusted for your home’s condition). When a potential buyer’s agent makes an offer, your realtor will negotiate on your behalf to get the best possible price.

They can work with the buyer’s agent to help set the buyer at ease about the past mold problems.

Disadvantages of Selling With a Real Estate Agent

You will be responsible for the costs of any mold inspection and remediation. You will also be responsible for fixing whatever caused the mold.

In some cases, even HVAC updates for better indoor air quality are required, such as fixing duct insulation or purchasing and installing a dehumidifier.

No traditional buyer will close on a house with existing mold problems. If your property has other issues, they also should be fixed before the sale.

Any staging or updating will be an added expense in a traditional sale.

Although the realtor will show your house, showings are disruptive—especially if you have small children.

The traditional sale can take several months to complete, especially if the house has a mold disclosure attached.

Traditional sales have added fees in addition to the real estate agent’s commission. Closing costs will be due at closing. Be prepared to also discover hidden fees and other unexpected costs when selling a house with a realtor.

How to Choose the Right Real Estate Agent

The right real estate agent will be easy to work with and will help you get the best possible price for your house. If you have a house with mold issues, you will need a realtor who will put forth extra effort when advertising and showing your property.

Consider asking family and friends who have recently sold properties to agents they would recommend. Websites such as Zillow can also help with agent recommendations.

Contact a few of the recommended agents and talk to them about your project. Compare their suggested asking prices. Agents who know what they are doing will suggest similar asking prices. So, drop any agents who recommend a significantly higher or lower asking price.

3) Sell It Yourself (For Sale by Owner)

If you aren’t happy with how much you lose selling a house as-is and neither do you like the prospect of paying an agent commission, going FSBO is what you need.

You have probably seen FSBO (for sale by owner) signs in your neighborhood. While it’s a tempting thought to save the real estate commission, trying to sell your mold-damaged house yourself traditionally is the most difficult option of all.

You will be responsible for everything, from setting the asking price to the closing.

You don’t have to go it alone, though. For a fee, you can advertise your home on multiple websites. And you can still use the limited services of a real estate agent.

Advantages of Selling by Yourself

Selling your house yourself appears to be the best way to get the most money. After all, you are saving the entire real estate commission. But it’s only a possibility and not a guarantee. Take a close look at the disadvantages before deciding.

Disadvantages of Selling by Yourself

You have to set the asking price yourself. To do this, you have to find the fair market value of your home. If you set the price too high, your house will not sell. If you set the asking price too low, you risk losing money unnecessarily.

It is unrealistic to expect to sell your house to a typical buyer without fixing any mold issues to prevent future mold growth. And your cost for remediating the mold and repairing the underlying causes will be the same as they would be in a traditional sale.

If you are also selling a house with water damage that causes mold, it may cost you from $3,000 to $35,000, depending on your state, to repair it, according to the national water damage claims statistics.

There won’t be a realtor to ease a buyer’s fear of mold exposure, mold-related health risks, or a future occurrence. You will have to convince the buyer that the cause of any mildew or black mold has been permanently fixed.

And when that mold in the basement was only minor to start with, you will be the one to convince the buyer that there have never been any real health risks.

You will have the same staging and updating expenses as you would if using a realtor.
You will have to show the house yourself, which can be time-consuming. And it can be extremely uncomfortable to stand by as a buyer criticizes your property.

You will need to get all the proper disclosure and release forms yourself. They will all need to be signed prior to closing. This is a critical protection from future lawsuits.

You will have all the same fees as you would with a traditional sale—minus the real estate commission.

Consider the following illustration:

You have successfully carried out professional remediation of mold in your house.

You have identified the source of the moisture, and that source has been eliminated—whether a leak, excess humidity, or something else. Even though your house has mold in its history, you know that the issue will never reoccur.

Two possible scenarios:

1. Your traditional buyer loves everything about your house except the mold disclosure. What do you say to this buyer to set their mind at ease?
2. Trying to alarm you with the seriousness of your home’s mold history, an investor makes an extremely low cash offer for your house. How do you make the investor understand that you know better and you expect a higher cash offer?

Keep this simple fact in mind as you talk to any potential buyer. No moisture—no mold! Mold will not form without moisture. Once the mold and the source of moisture are eliminated, mold will not return.

As an example, ductwork in a crawl space will sweat (on the cooling cycle) if it’s not insulated. If the HVAC contractor carelessly attached a piece of uninsulated duct to a floor joist, black mold could have formed from the condensation.

With a good understanding of mold remediation, this example is an easy fix. First of all, reduce the humidity in the crawl space by installing a dehumidifier. Or put down a vapor barrier on the floor of the crawl space. Then clean the mold from the wood and insulate the ductwork.

The mold will not return (this is not the same kind of issue as a musty smell and spongy sheetrock with gray and black spots throughout the house. Such a house might even be a tear-down property).

Do not panic. And do not think of an isolated spot with black mold as a reason to condemn your entire house (however, even selling a condemned property is possible). Remember: no moisture—no mold!

Understand both the remediation process and the cause of mold before ever trying to sell your house.

No real estate investor will be able to get you to accept a lowball offer by overstating past mold problems. And you’ll be in a position to reassure a traditional buyer that your house’s mold issues are in the past—and will stay there.

Is It Legal to Sell a House With Mold?

It is not illegal to sell a house with mold—even toxic black mold—to anyone. There are no legal restrictions against this. But some states have legal restrictions against selling a residential property without disclosing mold issues (past or present) to the potential buyer.

Sounds complicated? It is. For example, cash house buyers buy houses AS IS. When the seller accepts the buyer’s cash offer the seller is no longer responsible for any existing defects in the property.

What would happen if the seller purposefully hid black mold from a real estate investor prior to accepting their cash offer? Regardless of the documents signed between the investor and the homeowner, the cash-buying company could initiate a lawsuit for purposeful non-disclosure.

The issue is not about selling a house with mold problems. The issue is about disclosing mold and its potential health hazards to a potential buyer.

It is legal to sell a property with mold, but you have to report mold when selling a house, and a toxic mold disclosure form must be properly filled out.

It’s safer to disclose any mold issues (past or present), as verified by a professional mold inspector, for the benefit of both the buyer and the seller.

What Is a Toxic Mold Disclosure?

A toxic mold disclosure form is typically both a mold disclosure and a release document. No standard form exists. The purpose of the form is to fully disclose the existence (past or present) of mold (possibly toxic) by the seller to the buyer.

In turn, the buyer acknowledges this disclosure and releases the seller from any responsibility (past, present, or future). Some forms only pertain to mold-related issues while others include additional home defects.

Make sure that your real estate transaction is protected from future legal action. Regardless of your state’s laws, be certain to get both mold disclosure and release documents signed by your buyer prior to closing.

Toxic mold disclosures for homeowners are available as an online download. But you would be better protected if you used one furnished by a local attorney familiar with your state’s real estate laws.

Do You Have to Disclose Mold When Selling a House?

Federal law does not require the disclosure of mold. Each state has jurisdiction over its own disclosure laws. But mold litigation is on the rise.

Regardless of the laws in your state, protect yourself from future lawsuits when selling a home with past or present mold issues.

For example, in many states, the buyer is responsible for discovering defects in the home (buyer beware).

In other states, the seller is required to disclose any mold issues (past or present). And some states not only require the seller to disclose but also the real estate agent and the appraiser.

What about a seller who doesn’t know about a mold infestation, and that problem is only discovered after closing? Obviously, the seller did nothing wrong. But ignorance of mold problems is not an effective deterrent to a lawsuit.

In conclusion, disclose any mildew or mold in the basement—or elsewhere. Disclose any other defect in your house. Make sure the buyer signs off on your disclosures. And make sure the buyer releases you from any other known or unknown issues with your house.

Ready to sell your house with mold? HouseCashin works with legitimate investors who buy damaged properties in any condition.

Request an all-cash offer on your house now and get several no-obligation quotes from vetted cash buyers near you.

There is no obligation to accept any of the offers and no fees to pay!