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Fire Recovery Updated January 2026

Fire-Affected Homeowners: Buying Your Next Home While Navigating Insurance Claims

If you've lost your home or suffered significant fire damage in the Altadena, Eaton, or other Los Angeles area fires, you need somewhere to live-often faster than insurance claims can be processed. Your options for purchasing a new home depend on your specific situation: whether you experienced partial damage, total loss, or are still navigating insurance determinations.

The Fire Recovery Timeline Problem

After a fire, multiple timelines collide in ways that create impossible decisions:

You need housing immediately: Temporary housing is expensive and limited. Post-fire rental markets become overwhelmed. Your family needs stability.

But insurance moves slowly: Claims take weeks to months. Total loss determinations can be disputed. Payout amounts may not be finalized for months.

And your equity is complicated: Land value remains. Insurance payout timing is uncertain. Your true equity position isn't clear until claims settle.

Understanding Your Equity Position After Fire

Scenario 1: Partial Damage May Qualify for BBYS

Your home is damaged but not destroyed. Structure remains, repairs are needed.

Buy Before You Sell possibility: Potentially eligible if home remains marketable. Equity Unlock Amount may be conservative due to condition, but the option exists.

Scenario 2: Total Loss Requires Alternative

Structure is gone, but you still own the land. Land value may be significant in LA hillside communities.

Buy Before You Sell possibility: Standard BBYS requires a home to sell. Land-only situations require different strategies-potentially bridge financing against land value plus expected insurance proceeds.

Scenario 3: Insurance Pending Wait for Clarity

You're still waiting to learn the extent of coverage. Your equity position is unknown.

Buy Before You Sell possibility: Not viable until situation clarifies. Focus on temporary housing and insurance documentation first.

When Buy Before You Sell Can Help

BBYS may be an option if:

• Your home has partial damage but remains habitable and saleable
• You want to relocate permanently rather than rebuild
• Insurance has provided clarity on your situation
• A buyer exists for your property in its current state

BBYS Is Unlikely to Help If:

Your structure is completely destroyed (no home to sell), insurance claims are unresolved, or you're planning to rebuild rather than relocate.

Alternative Paths for Fire-Affected Homeowners

Insurance Advance Programs

Some insurers offer advance payments against expected claims. Ask your insurer: "Can I receive an advance against my claim for temporary housing and relocation costs?"

SBA Disaster Loans

The Small Business Administration offers disaster loans to homeowners at low-interest rates (around 3-4%) with up to 30-year terms. These can cover costs insurance doesn't.

Bridge Financing Against Insurance Proceeds

Some lenders will provide bridge loans secured by documented insurance claims-higher rates due to uncertainty, but provides liquidity before insurance finalizes.

Let's Talk Through Your Options

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The Rebuild vs. Relocate Decision

Before exploring home purchase options, address the fundamental question:

Factors Favoring Rebuilding:

• Strong community ties to the neighborhood
• Land value is significant
• Insurance adequate to cover rebuild costs
• Willing to navigate 12-24+ month rebuild timeline

Factors Favoring Relocation:

• Desire for different location (closer to family, different geography)
• Insurance inadequate for equivalent rebuild
• Concerns about future fire risk in original location
• Need for housing sooner than rebuild timeline allows

Fire Insurance Complications for Your NEXT Home

If you're purchasing in Los Angeles County, especially in hillside or fire-prone areas, expect insurance challenges:

• Major insurers have reduced coverage in fire-prone California areas
• Premiums have increased significantly (40-100%+ in some zones)
• FAIR Plan (state's insurer of last resort) may be the only option

Before Making an Offer

Verify the property is insurable. Check what coverage will actually cost. Understand if it's in a Very High Fire Hazard Severity Zone. Being fire-aware doesn't mean avoiding all risk-it means understanding what you're accepting.

A Note on Timing and Pressure

You may feel pressure to make decisions quickly. Housing is urgent. Insurance timelines are frustrating. The uncertainty is exhausting.

But major financial decisions made under crisis pressure often don't serve your long-term interests. Temporary housing, while uncomfortable, allows you to make permanent choices thoughtfully. There's no deadline that justifies a bad decision.

Need Guidance on Your Situation?

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FAQ

Can I use Buy Before You Sell if my home was damaged by fire?

Potentially, if the home remains marketable and you have sufficient equity. Partial damage doesn't automatically disqualify you, but significant damage may reduce your Equity Unlock Amount.

What if my home was completely destroyed?

Standard BBYS requires a home to sell. If only land remains, you'll need alternative financing-bridge loans against land value plus expected insurance proceeds, or SBA disaster loans.

Should I buy before my insurance claim settles?

Generally, wait for clarity on your insurance position before making major purchase commitments. Exceptions exist if you have other liquid assets or if waiting significantly harms your family's wellbeing.

Related Guides

→ How to Buy Before Selling Your Home in Los Angeles → Who Qualifies for HomeLight Buy Before You Sell?

JB

Justin Borges

Realtor | DRE# 01940318

Disclaimer: This article provides general information for fire-affected homeowners. Every situation is unique. Consult with insurance professionals, real estate attorneys, and qualified agents for guidance specific to your circumstances. Information about assistance programs is subject to change.