Buying Flood Damaged House
Buying a house with water damage is a risky investment indeed. The water may have caused considerable structural faults and safety hazards in the home, such as unsound walls and mold, and the problems may continue even after the existing damage has been mitigated, especially if the source of the damage has not been properly identified and correctly fixed. Yet, you can easily avoid most of the risks and make sure your investment will be worth it, if you know what to look for and what precautions to take before closing the deal on a water damaged house.
buying flood damaged house
In North Carolina and many other states, sellers don't have to tell home buyers if a house has ever been damaged by flooding. A new study says that lack of disclosure can mean unexpected and costly future damages.
He said the risk is heightened in today's real estate market where there's pressure to close deals quickly, sometimes without inspections. And while an inspection might spot water damage, it won't tell you if a house is likely to flood again.
And then there's climate change, which is expected to increase future flood damage through rising seas and more intense storms. The report considers three scenarios, including one where we fail to reduce greenhouse gas emissions fast enough.
Real estate agents are familiar with the process of buying and selling water-damaged homes. They can help you navigate the process and find the best deal on a property. They are also the experts that can help you negotiate a price reduction, if applicable, based on the damage. Often, remediation expenses can be built into closing costs. Talk to your agent about this option if necessary and be sure to find someone you can trust to work with you through the final deal.
Water-damaged homes can be a major financial investment, but they can also be a great deal. By keeping these things in mind, you can make an informed decision about whether or not buying a water-damaged home is right for you.
Since 1999, Storm Water Services has purchased over 400 flood-prone houses, apartment buildings and businesses that were in floodplains throughout Charlotte-Mecklenburg. Over 700 families and businesses have moved to less vulnerable locations outside of local floodplains. 185 acres of public open space has been "undeveloped" to allow the floodplain to function during heavy rain and provide a long term community asset. Storm Water Services also estimates these buyouts have avoided $25 million in losses and will ultimately avoid over $300 million in future losses.
Though Hurricane Harvey produced devastating effects, investors still believe flood-damaged homes can turn a profit. This is due to the economic strength of Houston itself. The city boasts a rare combination of lucrative job opportunities, a low cost of living, and phenomenal population growth. Despite the storms, the Texas real estate market holds firm. In fact, fix & flip properties pop up now more than ever. Investors could find themselves with not only one potentially profitable house to flip but ten or twenty!
If floodwaters damage the home, you may be eligible for government assistance to get it back into good shape. The Federal Emergency Management Agency (FEMA) will help you receive money to repair or replace damaged property, though there may be rules around occupancy timeframes before you can flip it.
You help reshape a torn community. So many people think real estate investment is inherently unethical when nothing could be further from the truth. Taking the initiative to help rebuild a damaged community can do a lot of good for a lot of people.
Things to Consider When Purchasing Flood or Water-Damaged HomesThough you can take advantage of many investment opportunities in flooded areas, you need to consider some important facts first.
More than two months since Hurricane Harvey made landfall in Texas and historic flooding damaged tens of thousands of houses in the Houston area, many homeowners who got hit are in a bind. Their now-gutted homes are financial drains.
"I've seen plenty of flood houses at this point, so I had a pretty good idea what we were walking into," he says before unlocking a gate outside a rose-brick rambler in Humble, Texas, just north of Houston.
For a house that could have been worth as much as $350,000 before Harvey, Boyer says he has it under contract at $135,000 and estimates it needs at least $60,000 in repairs. He wants to make sure this flooded home can come back to life and become marketable again.
A broken vacuum and other flood-damaged items wait for pickup outside Jimmie Sue Mayes' mid-century rancher in Houston. Mayes is trying to sell her property for essentially the value of the land. Hansi Lo Wang/NPR hide caption
Many homeowners have to make various types of repairs before selling their home, and those dealing with how to sell my hurricane or flood-damaged house in Florida will likely have to fix up their home more before putting it on the market. Your insurance agent will help you sort everything out before listing.
When asked how to sell my hurricane or flood-damaged home, many real estate experts recommend holding off. Not putting your home immediately on the market will let you take the time you need to get your home back in shape.
Whether you do repairs or not, or go through an all-cash buyer or real estate agent, the price of your home damaged by flooding will likely take a hit. Some agents report seeing between a 20% to 30% value reduction. In Florida, any price reduction also depends on whether your home is in an area particularly prone to flooding. Sometimes, a hurricane strikes an area that rarely experiences natural disasters or flooding. The extent of the damage matters, too.
To provide you with the best information about selling a flood-damaged house, we spoke with top real estate agents Steven Kinne of Houston, Texas, and Nathan Strager of Las Vegas, Nevada. We also consulted with flood restoration and mold remediation experts, Michael Rubino, President of All American Restoration, and Sophie Williams of Splendor Flood Damage Restoration.
How difficult it will be to sell a flood-damaged house depends on the extent of the damage, future flooding risk, and your willingness to negotiate. The first step is to contact a local real estate agent who has experience selling a water-damaged home. Having an expert in your corner will make the process of selling your home a lot easier.
Partner with a Top Agent to Sell Your Flood-Damaged House If you are selling a flood-damaged house, consult with a top local real estate agent about the best way to proceed. Doing so could save you significant time and money. An experienced agent can also help you know what to fix, and what repairs you can skip.
Buying a house with water damage is possibly a risky investment, but knowing what precautions to take helps limit your potential loss. Water damage to a house may be caused by many different problems, including flooding, a burst pipe or a leaky roof. Other defects and hazards may be present in the home due to the water damage, such as unsound walls and mold, and the cause of the water damage needs to be examined to ensure the problem will not continue once the existing damage is addressed.
Look for flooring on the property that is twisted, buckled, or cracked. Floods wreak havoc on all kinds of floors, including hardwood, concrete, and linoleum. Some of these are more expensive to replace than others. Moreover, if your house has a history of flooding, you might not want to invest too much in expensive floors and carpets.
Yet many people flout that requirement, and less than 4 percent of households nationwide have flood coverage through the National Flood Insurance Program, which is run by FEMA and is the main provider of U.S. flood coverage.
Friedlander of the insurance institute said that homeowners who live outside of flood zones will have to pay only a few hundred dollars for flood insurance, which will be less costly than dropping their Citizens policies and buying insurance from a private company.
Although the previous owners are legally obligated to disclose information about water damage in the house, hundreds of homebuyers discover such extremely unpleasant surprises as mold, damaged walls, and stains after they have already moved into the house.
If floods damaged the house, it might be located in one of the floodplain areas, and therefore the disaster may come back next season in a couple of years. In this case, it is essential to have modern flood control devices like flood barriers for doors, garage gates, and basement passages.
Suppose the basement or other part of the house were damaged due to faulty pipes or during the seasonal snowmelt because of cracks in the foundation. In that case, you need to make the necessary repairs and replacements to avoid such events in the future.
As a general rule, renters insurance will not cover damage to your belongings caused by water coming from outside the house, as this is considered flood damage rather than water damage. So if there were a storm surge that flooded your neighborhood, ruining your belongings, your insurer would not reimburse you for the damage. That also applies if sewage overflows and enters your home.
We recommend that you get renters flood insurance if you're a renter living in a moderate to high flood risk area and encourage you to consider buying it even if you live in lower-risk areas. Renters on the Florida coast, for example, may need flood insurance more than most tenants, but unless you're living in an elevated apartment or home, you don't want to underestimate your risk. To find out whether you live in a high-risk flood zone, you can go to the Federal Emergency Management Agency (FEMA) website and look up your address. FEMA divides areas based on their elevation and proximity to water and gives them five levels of risk. In the riskiest "V" zone, you have a 1% chance every year of having a flood in your home and a 25% chance over 30 years. However, flood damage can also happen in lower-risk areas, with nearly a quarter of all flood claims coming from homes in the lower-risk B, C and X zones. 041b061a72