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Flood plain maps are not filed in the real estate title records in any jurisdiction I am familiar with. I DO NOT have any experience in Texas, so consider that as well. Title insurance companies assure clear, marketable real estate title based on public records effecting real estate title - matters that will give rise to an adverse claim to ownership of some interest in the property. A flood plain is a physical hazard - not a title defect. Now, if the "title company" is refusing to close due to flood plain designation I suspect that it's in their capacity as a closing agent, NOT as a title insurer. Presumably there's a requirement in the materials received from the mortgagee to not close if the property is in a flood plain and there is not proof of coverage under the national flood insurance program. Not a title problem...probably a mortgage problem.
That's about right where I am. Of course, I don't know why this is a title issue. It's an insurance issue in SC. If the bank is aware of it, they require the buyer to have flood insurance to protect their collateral. I've had this issue once before and it was not an easy resolution. Took a lot of legwork by myself and the other agent to get it closed. In the end, the buyer was required to get flood insurance and we couldn't find any other solution other than a new flood survey performed by an engineer that would have cost about 10k.
Our bank was/is not aware our property is on the floodplain. When we called them, the lender said the title company said everything was okay so the bank is blaming the title company for telling them something that isn't true.
I would think that the lender would double check but they act like they don't have a clue as to what's going on either. We were/are not required to have flood insurance.
Our agent and the buyers agent have been working there hineys off on this trying to get it closed and we're being told that a survey does need to be done either now or an agreement is to be written up that in the future, our buyers need to get one done.
As I was reading through this, I was preparing to tell you " It's a ploy to get you to lower your price by $10,000.00" and then I got to your 1:59 post where they did just that. And paying $10K for a new survey that will show it's not in the floodplain sounds suspiciously like a payoff into someone's pocket. Since when does FEMA charge homeowners???
It's a cash sale, it's now been disclosed it's perhaps slightly in the floodplain... the buyers have the option of backing out or buying it and getting flood insurance. Why should you lower your price? The property hasn't suddenly lost value. If you sell them the property for $10,000 less, I'm willing to bet they don't get any survey done.
There's no way we're paying 10K for another survey. The buyers attourney is a sleazy person anyway and I'm sure it's his pockets he's trying to pad.
One of the emails we received last week was that our agent and the buyers agent were saying that the buyers were talking to the county commissioner and trying to come up with an agreement that they wanted the house but were going to tear out the part that was in the floodplain. Supposedly this was agreed upon and to be put in writing and then we receive this paper that wants us to lower the price. We've also have already lowered the price when we went under contract.
Our agent and the buyers agent have been working there hineys off on this trying to get it closed and we're being told that a survey does need to be done either now or an agreement is to be written up that in the future, our buyers need to get one done.
IF you were to pay for the $10,000, you might ask if it would be possible for that sum, instead of being taken off the price, to be held in escrow by the title company until the survey is done and the receipt presented to them, at which time they will cut a check for that amount and, if there's any left over (if it cost less than $10,000, say), forward that on to you. Since you say this is a cash purchase and there's no lender on their part to satisfy, this might be the most workable way. I've never had something done like this for this large an amount, but have done it for smaller amounts (work that needed to be done to a house that couldn't be scheduled before closing for reasons outside the seller's control, never a survey issue, though).
Another option to consider would be, since this is a new development and something you were unaware of at the time you purchased the property, to split the cost of the survey - you would give a $5,000 credit at closing to the buyer and they would be responsible for the remainder.
The title company does order the survey, and they can require a good one for closing, so that may not work, but that's just a couple of possibilities of things to throw against the wall and see if they stick.
Our bank was/is not aware our property is on the floodplain. When we called them, the lender said the title company said everything was okay so the bank is blaming the title company for telling them something that isn't true.
So, is your bank questioning the title company about why they didn't mention this at your own closing when you bought the property?
Flood plain maps are not filed in the real estate title records in any jurisdiction I am familiar with. I DO NOT have any experience in Texas, so consider that as well. Title insurance companies assure clear, marketable real estate title based on public records effecting real estate title - matters that will give rise to an adverse claim to ownership of some interest in the property. A flood plain is a physical hazard - not a title defect. Now, if the "title company" is refusing to close due to flood plain designation I suspect that it's in their capacity as a closing agent, NOT as a title insurer. Presumably there's a requirement in the materials received from the mortgagee to not close if the property is in a flood plain and there is not proof of coverage under the national flood insurance program. Not a title problem...probably a mortgage problem.
They're both blaming one another as to whose problem it is. I'm glad at this point the bank hasn't told us to get flood insurance. 4K a year. Ridiculous.
As I was reading through this, I was preparing to tell you " It's a ploy to get you to lower your price by $10,000.00" and then I got to your 1:59 post where they did just that. And paying $10K for a new survey that will show it's not in the floodplain sounds suspiciously like a payoff into someone's pocket. Since when does FEMA charge homeowners???
It's a cash sale, it's now been disclosed it's perhaps slightly in the floodplain... the buyers have the option of backing out or buying it and getting flood insurance. Why should you lower your price? The property hasn't suddenly lost value. If you sell them the property for $10,000 less, I'm willing to bet they don't get any survey done.
I forgot to ask you, if FEMA doesn't charge homeowners, what's with all these surveys?
I forgot to ask you, if FEMA doesn't charge homeowners, what's with all these surveys?
Perhaps I misspoke. I meant "charge homeowners for surveys."
I was under the impression FEMA provided flood maps for communities for risk management support and insurance purposes, paid for with funds appropriated by Congress and local governments (so yes, in the end we pay through taxes), but wasn't in the business of providing private surveys for individual property owners. I thought a private engineer is hired by the homeowner to do the survey and then he or the homeowner can submit the Elevation Certificate or the Flood Proofing Certificate along with the forms requesting a Letter of Map Amendment or a Letter of Map Revision Based on Fill or a Conditional Map Amendment to FEMA, along with the FEMA fee (see below). ButwhaddaIkknow? Ya git wot ya pay for when you ask for opinions on a bulletin board.
According to FEMA, their fee schedule is:
Current Fee Schedule for Map Change Requests
Single-Lot or Single-Structure LOMA - Free
Single-Lot/Single-Structure CLOMA and CLOMR-F - $500
Single-Lot/Single-Structure LOMR-F - $425
Single-Lot/Single-Structure LOMR-F Based on As-Built Information (CLOMR-F previously issued by FEMA) $325
There are higher fees for special technical reviews of levees and such, going up to as much as $6500, but that section doesn't seem to apply to this situation. It appears to me the $10,000.00 is the fee charged by the private engineer, not FEMA. Perhaps the amount is negotiable, since the survey has already been done and paid-for?
OP says:
Quote:
we were told it would cost 10,000 by our agent and this title company.
Just wanted to thank you all for your input on this issue. Everyones opinion counts with me.
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