Selling Real Estate In Flood Zones
October 11, 2018
Rainy season is upon us and as each storm passes those homeowners in flood zones fear the worst. According to National Geographic, floods are one of the most common and most destructive natural disasters on Earth. The good news is that even houses located in high flood zone areas have just a 1 percent chance of ever being flooded.
Even with the extremely low chance of ever having a problem with flooding, homeowners often still feel discouraged. They are under the impression they would never get fair value for their home if they ever decided to sell. Most are thinking it is easier to just stay where they are at and avoid the agony. However, it is a common misconception that real estate in flood zones are losing investments.
Almost a third of all homes in the United States are located in a designated flood zone. Now there are some higher risk areas but the fact is that the number of real estate that are at risk of flooding is exceptionally high. To accept the delusion that all of those houses are losing investments would be ludicrous.
Flood Zones and Florida’s Housing Market
Let’s take a look at the state of Florida and see how the flooding risk affects the housing market. I am sure you agree that every house in the state is at some risk of flooding but did you know more than 66 percent of homes are labeled as HIGH risk? Keep that in mind as we go over how the real estate industry is doing in Florida.
August 2018 was the 80th month in a row that the median price of homes sold in Florida has risen. Compared to the same month last year houses were up 6 percent and condo/townhouses were up almost 8.8 percent. Nationwide the median price of homes rose 4.6 percent in that same timeframe. Obviously the flood zone scare is not as frightening to potential buyers as most would assume it would be.
4 Tips to Selling Real Estate in Flood Zones
- Simple Upgrades. There are plenty of easy things you can do in and around your house to make it less vulnerable to flood damage. Elevate your air conditioning units and gas tanks above the possible flood level. Install some precautionary backflow or gate valves to prevent drainage systems from backing up. Make sure all of these additions/modifications are revealed and explained to your potential buyers.
- Modify Landscape. The outside appearance of your property can make a huge difference of how a potential buyer asses the flood hazard. Adjust the slopes of your yard so water would flow downhill into the street. While this won’t be much help during a real disaster it will make your property look less flood prone.
- Flood Insurance Offsets. Your prospects are most likely aware of the requirement to have flood insurance in high-risk zones and the fact that normal homeowners insurance WILL NOT cover floods. You as the current homeowner should volunteer this information without worry. Rather than viewing flood insurance as a negative it should no doubt be viewed as a way to put your mind at ease. While this insurance does add to the cost of owning the property it would more than pay for itself if a flood was ever to occur. One trick to overcome the flood insurance objection is to offer discounts that offset the flood insurance for the first couple of years. There are also numerous different national and local programs that support flood victims that should give potential buyers that nice sense of security.
- Verify Flood Zone. If your home has never been flooded then you should make sure your house is still in a designated flood area. Contact the Federal Emergency Management Agency (FEMA) to see if you could get the designation removed. This process is actually very easy and only takes about a month to get a final response.
In closing you should focus on the positives that come with buying in a flood prone area. You obviously had your reasons for purchasing that real estate and potential buyers could have those same ideas. Maybe you were enticed my the low price or like the idea of getting away from overpopulated areas. Whatever it is it should be able to give you the confidence you need to selling your real estate in a flood zone.