What fire damage includes
Burned rooms are only part of the picture. A fire damaged house can have several kinds of damage at once:
- Fire and heat damage to framing, the roof structure, wiring, and finishes
- Smoke damage, including residue and odor that can reach rooms far from the fire and travel through the ductwork
- Water damage from firefighting, which can soak floors, walls, and ceilings and lead to mold if it dries slowly
- Utility damage to electrical, plumbing, and HVAC systems
What to have inspected
- Structure: framing, floor system, and roof structure, by an inspector or engineer who knows fire damage
- Electrical: the whole system, not only the burned area
- Plumbing and HVAC, including the ductwork
- Foundation and any water that reached it
- Mold and moisture where firefighting water sat
- Older houses: test for materials like asbestos or lead paint before any demolition
Price the full repair scope
Get written bids from contractors who have done fire repairs. Ask for the scope in writing. Fire jobs often go beyond the visible damage, so a contractor may need to open walls before giving a final number.
Do not budget for the burned area alone. Include smoke cleanup, drying, and any systems that need replacing.
Work out your maximum price
Start with the after-repair value (ARV): what the house should sell or appraise for once fully repaired, based on recent sales of similar houses nearby. Then subtract what you will spend and what you need to earn:
- Repair cost, including a cushion for surprises
- Holding costs while you repair (taxes, insurance, utilities, loan interest)
- Purchase and selling costs
- The profit you need for the risk
Permits and building code
Repairing fire damage usually needs permits, and the work may have to meet current code. Call the local building department before you buy. Ask what permits you will need and how long they take. This can change both your cost and your timeline.
Title, liens, and insurance
Have your own attorney or title company review the contract and the title before you close.
- Run a title search for liens, unpaid taxes, and other claims.
- Ask whether any insurance claim on the property is still open, and who it belongs to.
- Confirm who is allowed to sell the property and sign the contract.
- Check whether utilities are on or can be reconnected.
Know your exit
Decide before you buy whether you will flip, rent, or hold, and check that the local market supports it. A deal that works as a flip may not work as a rental, and the reverse. Your exit sets the after-repair value and the timeline you need to hit.
Red flags
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- No access to the property for your inspector
- A seller who cannot show they have the right to sell
- A price based on what the house looked like before the fire
- Pressure to skip inspections or the title search