Selling A Flooded Home: What to Look for In an Investor

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If your home is a victim of the recent flooding in the Houston area and you have decided to move forward and sell your home to an investor, there are a few things in which you should be aware.

In times of distress many people help each other. Unfortunately, there are also those that are looking to take advantage of people’s circumstances. Need to sell your flooded home to an investor? Avoid getting scammed by asking and becoming aware of the following things.

To begin to understand what you should be looking for in a home investor, it is helpful to understand what a legitimate home investor is looking for at this time so you can better asses if they are the right fit for you.

Home ARV

Home investors  determine the value of a home when they look at it. They start by looking at your property’s value in a repaired and updated condition. This is called ARV (after repair value). They find the ARV by researching the sales price of similar properties nearby (also called “comps”).

As Is or Repairs

Next, they look at what types of repairs need to be done in order to generate top dollar for a home. They look at if the majority of the repairs are more structural or more cosmetic. Structural damage must be fixed to preserve the integrity of the house. They will also look at the area that the house is in and assess the overall damage to that area. If a home is in an area that is 50% flooded, for instance, then the whole market is going to fall because there is now a stigma and a fear associated with the area. However, is it hard to say exactly how much the market has fallen if there is no history established yet.


To help determine this market value, which is the lot value less the lot, investors need local knowledge of the area to assess how home values have either increased or decreased over time. They need to know the flooding history and if flooding again is likely or not. If the home is not in a flood plain, then the house will be more desirable to the investor since the demand will be greater.

To move forward in this process, an investor will need a contractor and if there is mass flooding, then the demand for reliable contractors will go up and there may be a longer wait period to get one out to a home.

What to Look For

As a seller, there are a few things that you need to be looking for in a home investor to ensure that you are not taken advantage of during this time.

  • You will want to know what their exact plan is for what they are going to do with the property. Are they going to fix the property and lip it? Rent it out? Sell it to another investor? What are the contingencies in their offer?
  • Ask if they are from the Houston area and if they are familiar with it. Make sure that they have a professional business card and/or website.
  • Ensure that they are accountable to someone (investors do not fall under a government entity like realtors do).
  • Ask if they have any rewards that reaffirm trust, such as if they are recognized by the Better Business Bureau (BBB).
  • Talk to your those who live near you to see if they are dealing with this investor or others to learn more about your neighbor’s experience.
  • Look at any potential ways that a home investor could get out of a contract. It is important to note that under Texas real estate law, a buyer can get out of a contract in this circumstance but a seller cannot.
  • Ask for proof of funds. Request that they provide proof that they can in fact buy the property. Call the lender and verify this.
  • Get in touch with the appropriate title company to see if they need to inspect the home or not.

Finding A Legitimate Home Buyer

It is important to be aware of what an investor is looking for when they are considering buying a flooded home and to know how to determine if they are legitimate or not.

At the end of the day, you always want a sale to be a win-win. An investor is going to be taking on a project and a risk and will want to assess the situation to see if that risk is worth it or not, and the seller wants to avoid being scammed and relieved, to an extent, of a difficult situation.

For more information on what investors are looking for when buying a flooded home and how to avoid scammers, please contact Big State Home Buyers.


To get a no risk, free quote from your friends at Big State, contact us. We can have your quote within 24 hours.

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