How to Buy a House in a Flood Zone

Written by carlie lawson
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The major difference in the home buying process for a house in a flood zone is the need for additional research and report gathering as well as the requirement that you purchase flood insurance. The additional reports inform the buyer of past flooding incidents while the inspection uncovers any existing damage in need of repair.

Skill level:

Things you need

  • Flood zone rating
  • Comprehensive loss underwriting exchange report
  • Transfer disclosure statements
  • Home inspection report
  • NFIP flood Insurance

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  1. 1

    Contact the local city planning office to consult the local floodplain maps to learn in what flood zone the property rests and if flood insurance is required of homeowners in that zone.

  2. 2

    Order a Comprehensive Loss Underwriting Exchange Personal Property (CLUE) report which provides a seven-year history of a home including date of loss, loss type, amount paid, policy number, claim number and insurance company name. You can purchase the report directly, your insurance agent can order it or you can purchase it in combination with a natural hazards disclosure report.

  3. 3

    Request a Transfer Disclosure Statements (TDS) and Seller Property Questionnaire (SPQ) from the seller. Some states require sellers to disclose previous property problems such as incidences of flood. For those that do not require this, the TDS and SPQ protects the buyer.

  4. 4

    Get the home inspected by a qualified home inspector. The inspector will conduct a visual inspection to determine if it has sustained water damage or evidences mould growth. If inspection turns up evidence of damage you can cancel the contract, get a refund of the earnest money and cancel the sale. You can require the damages be repaired before the final sale. The possibilities available to you will vary by state.

  5. 5

    Some real estate brokers suggest playing on sellers' knowledge that homes in flood plains are harder to sell. Play up your concern about a flood zone designation to negotiate a better price, pointing out that fewer people will want to purchase a home in a flood zone.

  6. 6

    Close on the home. Ensure that the items turned up in the inspection have been corrected before the final sale.

  7. 7

    Purchase flood insurance at least one month before your move-in date if it is required for property. Most policies have a 30-day waiting period before they go into effect.

Tips and warnings

  • Don't make a final decision on whether to enter a contract until you've researched the flood zone rating and studied the CLUE report, TDS, and SPQ.
  • Living in high risk flood zones such as AE or VE, presents an increased danger to life and property. Before moving into the new home, learn flood safety procedures and make a family emergency plan.
  • Homes constructed before 1968 were constructed before the laws requiring building to Base Flood Elevations were passed. Check with your local planning office to learn if future renovations or additions to the property will be allowed and under what conditions.

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