• Bretton Chatham

Underwater?: What to Consider When Selling Your At-Risk or Flood-Damaged Home [Spec Clip]

Updated: Jul 22

The creek in the backyard was so charming when we bought the house. It was so small it didn’t have a name. It was so shallow I could step across it on dry stones.

But five inches of rain in an hour turned our babbling brook into a troubling risk. Suddenly surrounded by rising water in the middle of the night, we evacuated to higher ground.

My family was safe, but my mind was overwhelmed with questions: What next? What’s left? Will we ever be able to sell after this?

If your home has flooded or is at risk of flooding, you may feel up a creek about selling.

In this article, we’ll cover:

Keep reading to protect your investment from going underwater.

Who’s at risk of flooding?

I had assumed our home was not at risk of flooding since it was inland and outside a Special Flood Hazard Area (SFHA), which is determined by the Federal Emergency Management Agency (FEMA). I had no idea how incomplete FEMA’s flood maps are: in 2020, research from the First Street Foundation found about 70% more properties are at substantial risk than FEMA currently designates.

Your home, like mine, may be one of those six million undesignated homes at risk. You can search your address on the First Street Foundation’s Flood Factor website. Climate change and urban development will only exacerbate flood risks over the next 30 years, and not just in coastal areas.

However, if you’d rather sell than wait out the storm--or if you’ve already been impacted by one--you don’t have to feel stranded.

How much should you spend before selling?

While you cannot entirely eliminate the risk of flooding, you can take actions, such as flood-proofing and insurance, to reduce risk.

Flood-proofing can involve expensive fixes, such as elevating your home, raising your HVAC unit, or even relocating the entire building out of a hazardous area. There are more affordable solutions as well, such as reducing runoff and installing a sump pump.

These improvements can reduce your risk of flood damage and lower your flood insurance premiums--which, depending on your property’s FEMA designation, may be required. You should know that standard homeowner’s insurance does not cover flood damage due to external factors, and it’s a good idea to have coverage even if it’s not required.

If your home has flooded already, you’ll need to make several financial decisions before you sell. (Hopefully, you took immediate action afterward to minimize the damage and stabilize the situation.)

It’s worth your time to get estimates from remediation specialists, contractors, and other professionals before making any further decisions. You can’t weigh your options if you don’t know how much they’ll cost you.

Once you have some numbers in hand, you can better weigh your two options: invest in repairs or sell “as-is.” Whether or not you invest your time and money in repairs will depend on the extent of the damage, your willingness to make some repairs yourself, and your ability to pay for or finance renovations or repairs made by contractors. Or you may realize you’d rather just move on as soon as possible and sell without repairs. Keep in mind, though, that selling “as-is” will cost you, too, in lower and fewer offers.

What documentation will you need before selling?

Once your home is ready to list, you’ll also need to make sure it looks good on paper. You should consider the following documentation:

  • Disclosure Statement: Depending on your state, you may be legally required to disclose whether your property has ever flooded in the past, is in a FEMA flood zone, and/or requires coverage through FEMA’s National Flood Insurance Program (NFIP). (In fact, you may already be living in a flood-damaged home without knowing it.)

  • Insurance Policy and Claims Records: If you have flood insurance--regardless of whether it’s required--you should provide a copy of your policy’s declarations page, which outlines the terms and conditions of coverage. You should also provide a record of any claims you’ve filed after a flood event.

  • Elevation Certificate: If your home is in a high-risk zone (SFHA), an Elevation Certificate could significantly lower your flood insurance premium by proving that your lowest finished floor elevation is above the base flood elevation. You may be able to get a free copy from your local government if your home has been surveyed for one in the past. Otherwise, you can hire a licensed surveyor, engineer, or architect to complete an Elevation Certificate for you.

  • Mold Remediation Certificate: In the wake of major water damage, you should assume your home has a mold problem until a certified remediation specialist can confirm otherwise or remove it. If the damage is minimal, you may be able to clean it yourself. Either way, a licensed professional can provide the documentation you need to prove to buyers you’re in the clear. (You should know that, in most cases, NFIP policies will not cover mold damage so cleanup should begin as soon as possible.)

  • Renovation/Repair Records: If you chose to make renovations or repairs, you should show buyers line-item receipts and invoices of all the work you’ve done to restore any damage and/or to mitigate the risk of flooding.

Disclosing flood risk or damage will turn some buyers away, but you can restore some trust by preparing and providing the documentation above.

Who can help you sell your at-risk or flood-damaged home?

You may have entertained the thought of listing your house “for sale by owner,” but after all we’ve covered, it’s more likely you’re overwhelmed by the many considerations of selling your at-risk or flood-damaged home.

You don’t have to sail solo. To guide you through rough waters, you can find an experienced real estate agent near you through, the web’s most trusted realtor referral service.

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