Wednesday, April 15, 2009

NORTHWEST AUSTIN HOMES: How does hail effect the purchase or sale of your Northwest Austin Home?

NORTHWEST AUSTIN HOMES: How does hail effect the purchase or sale of your Northwest Austin Home?
On March 25th, there was a thunderstorm which included some of the biggest hail seen in Northwest Austin in about 10 years according to some residents. Hail the size of golf balls or in some areas, baseballs rained down on homes and cars throughout the NW Austin area as well as parts of Cedar Park and Round Rock. The storm left debris all over roadways and sidewalks. The area that was hit hardest was Jollyville. Some people don't even know where Jollyville is but it includes the areas of Hunters Chase, Milwood, and Anderson Mill. Many homes were damaged by the hail. Some had severe hail damage to their roof and windows. Many cars were damaged to the point of the car being "totaled". I was fortunate enough to be driving west on 620 toward the storm and pulled under one of the metal roofs at Sonic just in time. How does this hail effect a home that is currently under contract or those that are thinking of buying or selling? If you have a home with previous hail damage, what can you do? Let me tell you.
Those that had a home under contract when the hail storm hit are covered in their Texas Association of Realtors 1-4 Family Residential Contract-Resale (TAR 1601).
In paragraph 14 it basically says that if any part of the property is damaged or destroyed by fire or other casualty between the effective date of the contract (when all parties agree and sign) and the closing of the property, the seller, at the sellers expense needs to restore the property to its previous condition as soon as reasonably possible. So, if a house is under contract and a big hail storm comes through the area, it is the sellers responsibility to repair it to the condition it was in when the parties agreed to the terms of the contract. If the seller fails to make the repairs, the buyer has a few choices of what they want to do.
  • A. The buyer can terminate the contract and the earnest money will be refunded to them.
  • B. The buyer can grant the seller an extension of the time of performance and closing.
  • C. The buyer can accept the property damaged and receive all insurance proceeds AND receive a credit from the seller at closing in the amount of their deductible.
It will be interesting to see how this plays out in the future as well. I have had a case where I was working with a buyer to purchase their home in Southwest Austin and in the inspection, there was noted roof damage that was done possibly from a hail storm a few months before. The seller contacted their insurance company, had the roof inspected and agreed to replace the roof. In this case both parties paid one half of the deductible but, one half of a deductible for a brand new roof is a great deal! Buyers beware!!! If you are looking at homes in any of these areas , I hope you are working with a professional that has already told you about this unusual circumstance. Practically any home you buy in that area should have a new roof or at least a thorough inspection to prove there is no damage.
Sellers beware!!! Don't go spending those insurance checks on big screen T.V.'s or a BMW at a "hail sale" because buyers will have the roof inspected and if they are working with someone that is knowledgeable, they will expect the roof at this point more than ever to be in tip-top shape.
***If you have found this information useful and are thinking of buying or selling your home, contact me today so I can help you to save money by making smart decisions.

Posted by Brian W Martin REALTOR for The Pinnacle Group of Keller Williams specializing in educating buyers and sellers to make smart decisions about their homes in Northwest Austin, TX


  1. Great advice about the storm in Northwest Austin!

    I had some buyer close this morning with the exact issue in 78729. They got a brand new roof in record time a week before closing!

  2. Congrats on the closing Garreth! Now your buyers have a new roof too!

  3. My wife and I are going through this right now, here in NW Arkansas. A recent hail storm (beginning of May) damaged the roof of a house we are under contract to purchase, the closing was to be tomorrow. Luckily we have a friend who is a roofer, and he warned us of the probability of damage. So we got an inspector out there today and it was damaged. Now the closing will have to be pushed back in order to fix the roof. Should we, as buyers, offer to pay half of the owner's deductible?

  4. Hi Patrick,
    Thank you for the comment. I am not sure of the laws in your state but here in TX it is the sellers obligation to repair the property in cases of hail storm, fire, and other catastrophes. If the storm happened previously (before being under contract to sell) and the seller had not made a claim with his insurance, it would be negotiable during an option period. My advice is to speak with your REALTOR and/or someone with the local board of REALTORS that will know your state laws better than I to get clarification on the way it is spelled out in your purchase contract. Good luck and congrats on your new home!