How to Sell a House in a Flood Zone: 2 Options to Consider

Real estate investors will tell you that you can successfully sell your house in a flood zone. There is an easy way and a hard way to go about it, each with its pluses and minuses. This article will explain the steps required to sell a house in a floodplain and outline your options so that you can do it confidently.

Issues with Selling a Home in a Flood Zone

The Federal Emergency Management Agency (FEMA) defines floodplains as special flood hazard areas, also called the 100-year floodplain. Over 13 million homeowners live in floodplains, according to the agency.

Properties in these zones are predicted to have a 25 percent chance of flooding in a 30-year period, which is the typical mortgage loan term. This is one of the primary challenges of getting a mortgage in a floodplain since lenders carefully approve such cases.

Selling a home in these areas is usually affected by the following factors:

  • History of flooding on the property
  • Actual flood damage to the home
  • Filing of claims for flood insurance coverage

This makes it pertinent to contact someone who understands the issue if you sell your home. If you’re going to market your home to the general public, you must address the issue regarding flood insurance. If your property is in an area designated as a high-risk flood zone, federal law mandates that you secure flood hazard insurance before selling.

2 Solutions to Consider

You have two options to go with: one, selling your house without addressing flood risk or damage, and two, making property improvements to sell the house to the general public. Let’s evaluate both options.

Solution #1: Find a Buyer and Sell Your House as Is

This is the easiest way to sell your house, but you may have to make do with limited potential buyers. The key is knowing who to market to.

The as-is buyer would have to be someone who understands the issues related to floodplains properties and can afford to pay cash for the property and effectively avoid the demands of a mortgage lender.

In essence, you eliminate typical homebuyers. You are looking for someone ready for a move-in and can easily finance the property with a mortgage loan.

Meanwhile, real estate investors buy residential properties all the time to get a range of experience with atypical properties, including those in floodplain areas. You can market to them, too.

Solution #2: Sell Your Home by Addressing the Flood Risk Issue

The traditional way of selling a home, especially property in a floodplain, takes time and effort. The upside is that you might get a higher price for your money if you address the existing risks.

If you want to sell your home in a flood-risk area, you need to eliminate the negative connotations about your property. Fix any damage caused by the previous flooding and reassure the buying public that future flooding will not be a problem. One way to fix the latter problem is elevating it above flood levels.

When finished, you can market it to the general public on your own or by contacting a real estate agent. The latter’s advantage is that you’ll gain access to the region’s multiple listing service (MLS), and they will handle all documents and requirements related to the sale.

While you might think it costs more to pay your agent in commissions after the sale, selling on your own still requires you to pay the buyer’s agent anyway.

How Should You Sell Then?

When selling your home in an area with heavy rainfall, the better solution depends on your individual needs. Note that the longer it takes to sell a home, the less likely you will get an offer close to your asking price. You may also need to continue paying utility bills and mortgages when it sits on the market. In this case, selling the traditional way might be the better option.

At Greenlight Offer, we understand that selling your house is a crucial decision for you. Unlike other house buying companies, we give you the best cash offer for your home. We handle all complicated details when selling your house, so you do not have to stress about the entire process. We will help you through every step of the way to get the most money possible for your property. If you’re looking for a house buyer in Texas, call us at (713) 558 – 5824 now!