You drive by the house and you know immediately that you have found your dream home. You get ready to make an offer and then you hear the word, “sinkhole.” Are you dreams shattered? Should you walk away? Before answering these questions, here are some points to consider:
- If the previous owner of the house has had the sinkhole repaired, he or she can provide you with a copy of the warranty. In most cases, sinkhole repair warranties are transferable to a new owner for a fee. Before you make an offer, however, consider talking to the sinkhole experts at Helicon Property Restoration. Sinkhole repair companies are not created equal. You want to make sure that the company who did the repairs is reputable and will stand by the warranty. Also, ask to see all repair-related documentation, including the engineering reports which can be quite lengthy.
- If the house you want to purchase has a sinkhole that has not been repaired, obtain a copy of the engineering report. The engineering report contains the repair plan recommended by an engineer. You can present the engineering report to your lender to see if the lender is willing to give you a loan. Be aware that the vast majority of mortgage lenders will refuse to provide a loan on a house that has an unrepaired sinkhole. Sinkhole repairs are costly. Unless you are prepared to fund the repairs yourself, you may want to reconsider the purchase. Also, make sure that the home can be insured. Homes that have unrepaired sinkhole damage are generally not insurable.
If you are willing to buy a home that has a confirmed sinkhole that has not been repaired, you have some advantages. You can make an offer on the house that takes into consideration the cost of repairs. Contact a few sinkhole repair companies and ask for a quote.
- If the previous homeowner filed a sinkhole claim but sinkhole activity was not confirmed, you may not have problems finding a lender or getting insurance coverage, but you may have to make minor cosmetic repairs.
If you purchase a house in Florida, particularly in Pasco, Hernando, and Hillsborough Counties, be aware that sinkholes are always a possibility. Just like hurricanes, sinkholes are a Florida fact of life.