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I am considering buying a home that was recently flooded in a 100 year flood, and in an AE Flood Zone is this a bad idea? Or is resale going to be ok in the future once the stigma has worn off?
Home has never been flooded until the May floods in TN. Home is move in ready and in our initial offer we got them to leave ALL appliances which are new, including the washer/dryer & they are paying closing. There was only 2 inches of water in the actual house the rest obviously was in the crawl space but was all renovated. We are concerned that we will not be able to sell it in the future as it has been on the market for about 2 months and we are the first and only offer. Any advice is helpful!!
This is the link to the property. (sorry don't know how to imbed)
Moderator cut: can only link to realtor.com
Last edited by SouthernBelleInUtah; 05-12-2011 at 01:25 PM..
lol Yes I own a tv. I know its a possibility that it COULD flood again. Though that would be awful, for now, I'm more concerned about resale and the stigma that will come with it being in a flood zone. With flood insurance I am covered anyways.
Resale is not the only reason to buy a house, you are correct but a big concern with a house in a flood zone. I don't want to be in the same position in the future as these people are now where 2 months has gone by and we are the first and only offer so....just concerning.
Who is to say that your flood insurance will be renewed or not go through the roof?
Buying a property in a flood zone that has recently flooded is highly inadviseable. There is too much out there on the market that is not in a flood zone. Is a property that has flooded and lies in a floodzone stigmatized? Absolutely! It is a material fact of the property that must be disclosed as well.
Everybody in the neighborhood is required to have flood insurance by the HOA. I have already spoken with the insurance company that currently insures the home and did through the flood. If my flood insurance goes up, so will everybody's in the state. It is a Federal standard not local or by agent.
In our area the market is not like other areas in the country. In our price range we have already had a ton of competition. We got outbid on 2 homes and have had 3 other ones swiped out from underneath us because people are buying here. It is in a good area and may or may not ever flood again in our lifetime. Yes it is generally inadvisable but...don't know if that is the case in middle TN yet or not since it just happened last year. Thanks for your reply!
This all depends on the rest of the area, and how widespread the flooding was. For example, we're currently under contract on a house in southeast Louisiana, where it's virtually impossible to find a neighborhood that's not in an "A" flood zone. The house is in an AE zone, despite the fact that most houses in the neighborhood only took on a few inches of water during Katrina. If we only looked for areas outside of a 100-year flood zone, then we'd either be looking until the end of time or buying a house 30 miles from our jobs. However, if most of the neighborhoods in the city are outside a 100-year flood zone, then most buyers are going to pass up your neighborhood unless the price is right. OTOH, if everything in Nashville is now in a 100-year flood zone, then it isn't going to make a difference.
This all depends on the rest of the area, and how widespread the flooding was. For example, we're currently under contract on a house in southeast Louisiana, where it's virtually impossible to find a neighborhood that's not in an "A" flood zone. The house is in an AE zone, despite the fact that most houses in the neighborhood only took on a few inches of water during Katrina. If we only looked for areas outside of a 100-year flood zone, then we'd either be looking until the end of time or buying a house 30 miles from our jobs. However, if most of the neighborhoods in the city are outside a 100-year flood zone, then most buyers are going to pass up your neighborhood unless the price is right. OTOH, if everything in Nashville is now in a 100-year flood zone, then it isn't going to make a difference.
Thanks that is very sound response! lol I didn't think about making sure the rest of the area is or isn't a flood zone for resale. That makes total sense.
I am going through the same situation like you are,that I m planning to buy house in NJ and its under AE flood zone after sandy , im so much worried if I m making a rite decision or not? As an investment will my properties price go up or not since its in AE flood zone?
With all the homes available in TN & NJ why would anyone even consider buying in an area that not only could possibly flood but is known to have flooded.
People get nervous about buying a house with a sump pump in the basement. A house known to have flooded? Really ! How do you explain away " It only had a couple of inches of water in the house". Seriously? These are simply dreadful conditions. These are terrible neighborhoods in which to purchase.
No, they're not good deals, no your investment is not likely to go up in value any time soon and yes, most buyers are going to run as fast as they can in the opposite direction.
Not only that but if you plan on financing your purchase through a lender be forwarned, that they are not going to be happy either. It will have to get appraised. Not only will the appraiser pick up on the flood zone, the appraisers, if they are local, will also know what areas have actually flooded and will make note of that on the appraisal report. Adverse environmental conditions do not make underwriters happy. Yes, flood insurance is available, bit the lender does not have to write the loan either.
TN & NJ are not states that are mostly bottom land. Most of those states have the majority of their land area high and dry. Protect your money and your investments. Just go find something else.
Everybody in the neighborhood is required to have flood insurance by the HOA.
That is frightening. This is something you do not want in your HOA CCR's. Your flood insurance could be $500 month in the future. A one-hundred-year flood is a flood event that has a 1% probability of occurring in any given year. It does not mean it will only happen 100 years from now, which most people think.
Personally, I'd never buy in an HOA, ever again.
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