By Marvin Jolly, 2021 Chairman of Texas Realtors
Texans are no strangers to natural disasters, facing the likes of hurricanes, tornadoes, flash floods and even wildfires. But the winter storm that raged through Texas in February was a first-of-its-kind event that touched every county in our state. According to economic analysts from Perryman Associates, the overall damage from Winter Storm Uri ranges from $85 billion to $128 billion — potentially even more than the financial damage of Hurricanes Harvey and Ike.
Whether you were born and raised in the Lone Star State or found your way here later, one thing is for sure: Texans are resilient and we look out for each other. Those of us in the real estate industry know firsthand what it means to support our neighbors and communities.
While the full extent of the storm is still being analyzed, there are steps we can take with our clients to help prepare for the next disaster.
A New Walk-Through
All agents, whether they are representing a buyer or a seller, should encourage clients to complete a new walk-through of the property after a disaster. Agents who are members of Texas REALTORS can suggest their buyers use the Buyer’s Walk-Through and Acceptance Form. Seller clients of REALTORS can fill out the Update to Seller’s Disclosure Notice. These forms are particularly helpful for people whose transactions are ongoing during a disaster. Essentially, the buyer form states whether they chose to walk through the property before closing. This protects homebuyers from purchasing a home with new damage.
It can also benefit buyers who have completed at least one inspection already to have an additional inspection done on the home before closing. The additional inspection will help prevent surprises down the line, such as excess moisture or hidden water damage.
Sellers who need to update their seller’s disclosure notice can use the update form, a one-page addendum disclosing any problems, such as busted pipes, flooding or electrical issues.
Timing is Everything … Even if Delayed
For sellers, damage from a natural disaster may be covered by homeowners insurance, though it depends on the specific coverage and the details of the damage. The sooner a client starts a dialog with their insurance agent, the better, and keeping other parties in the loop may keep the transaction on track.
Even when damage is covered, repairs that need to be made might not be completed by the original closing date. For clients in the process of closing, agents may want to recommend delaying until all repairs have been made. In this case, the seller could assign insurance proceeds to the buyer, which would apply to the deductible. This process is covered in paragraph 14 of the One to Four Family Residential Contract (Resale).
In a worst-case scenario, homes with substantial damage may need to be taken off the market until repairs have been completed.
Homes Near Essential Services DO NOT Have Higher Property Values
An item of concern that has rapidly grown in the wake of the winter storm is a rumor that homes are more valuable if located close to hospitals, fire stations and other first-responder campuses that are less likely to lose power in an outage.
It’s important to let clients know that this is unproven and just a rumor.
Resources for You and Your Clients
This is not an exhaustive list of guidance for working with clients during and after a natural disaster, but it is a good starting point. There are also other helpful resources to consider if you or someone you know is displaced due to a natural disaster.
FEMA has put together two helpful websites that still apply for Winter Storm Uri. The first details which counties are eligible for assistance, and the second is how to apply for FEMA disaster assistance.
As Realtors, we have a duty to our clients that goes well beyond just the transaction. We help people — on both sides of the “For Sale” sign — navigate a life-changing event to make the best decisions possible.
It is important for Realtors to equip our clients with the knowledge of how best to protect themselves, and if we don’t have the immediate resources, we know where to point them in the right direction.
Winter Storm Uri presented a new and devastating challenge not only for real estate, but for everyday life. Together, Realtors and other Texans will continue to rise above these challenges and support one another the next time we face the challenges presented by a natural disaster.
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