How to Help Your Client Sell Their Home in a Flood Zone

Compared to selling other types of properties, selling a property in a flood zone is always more difficult. These properties are located in areas that FEMA considers high risk due to their risk of flooding and low elevation. If a property is located in a flood zone, FEMA estimates that there’s a twenty five percent chance that the property will be flooded in a span of the standard three decade mortgage.

Selling A Home in a Flood Zone

Help Your Client Sell Their Home in a Flood Zone

What this means for the buyer is that they’re going to have to pay extra for flood insurance which is generally a bit more costly compared to the standard homeowners insurance policy. Depending on where the property is located, there are cases when finding affordable flood insurance is just not possible. Add to that, the extra costs typically involved in buying a home and purchasing property located in high-risk areas can feel unattainable and overwhelming. As a seller’s agent, buyers need to be fully aware of the specific challenges involved in flood zone houses so they can effectively keep every party involved in the process moving towards the closing table.

Here are some of the most common challenges you and your customers will most likely face when it comes to selling a property in a high risk flooding zone.

Challenges to Selling a Property in a Flood Zone

If you want to sell your property that’s located in a high risk flooding area, the buyers need to consider buying extra flood insurance. This can end up costing them 1000s of dollars per annum, meaning that the cost of owning the property will significantly increase over the years.


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Many banks require buyers to purchase comprehensive flood insurance, which is not only a lot more costly, but also harder to find. Subsidies for the NFIP were reduced in 2012 while insurance rates have increased by up to twenty five percent. What this means is that in the next few years the cost of flood insurance premiums may end up being up to four times higher.

Legislation to bring back subsidies to cushion the cost of premiums has been stalled in Congress, making it very difficult for sellers to estimate how much potential buyers may end up paying for their insurance premium.

The Responsibilities of Sellers for Flood Zone Property Sales

Full disclosure is the main responsibility for sellers who want to sell their property. This information can also be found on the internet and it’s regularly updated. To check the floodplain maps in your area, all you need to do is go to FEMA.gov.

It is highly important that your client’s listing price reflects the extra costs that purchasing flood insurance for the property will create. This is very important if you want to make your client’s property competitive with other properties that aren’t located in a high risk flood zone.

Methods for Selling a Property in a Flood Zone

Even though there are many challenges associated with selling property in a high risk flood zone, that doesn’t mean you cannot sell yours.

Below are the top 4 methods you can use to help your client sell his property, while putting the buyers at ease.

  1. Reduced insurance costs for a year. You can show good faith to potential buyers by offering them a discounted insurance cost for a year from the buying price. Doing so can convince them to purchase the property and help prepare them for next year’s flood insurance premium bill.
  2. Prove to the buyers the risk is minimal. If the area hasn’t been flooded for a year and the sellers never had to pay a claim for flooding, be sure to request a report from the CLUE and show it to potential buyers.
  3. Make the required improvements. In case the property is just a few inches outside of a flood zone, then your client may want to elevate the property outside the floodplain. He can do so by using pilings. Sure, it’s a time consuming and costly process, but if they’re having a hard time selling the property, this method can be well worth it.
  4. Challenge the flood zone designation. If you think that the home shouldn’t be categorized as high risk, then you can instruct your client to appeal through FEMA in order to remove the designation. Decisions can take up to 60 days.

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Below is a video to share with your first time home buyers on Home Insurance Tips. Visit our Coastal Insurance Video Library to find even more helpful video’s explaining everything from, how to save money on Homeowners Insurance to an easy explanation of Flood Insurance. Call today (631-782-3175) to speak with one of our underwriting experts.  Fast Quotes, A.M. Best Rates & Free Advice.



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