Why is it crucial when buying a property that you check if it’s located in a flood zone? Let me tell you a quick story.
I’m doing a loan for a couple who bought a 12-acre property awhile back but didn’t know that part of the property was in a flood zone. Since they only recently learned about this and we’ve pulled a flood certificate, they now have to pay between $100 and $200 a month extra for the entire life of their loan.
If you use a Realtor to buy a property, make sure they work hard to check for this kind of information. Most of the time, if a property is located within a flood zone, that fact will be listed in the seller’s disclosure.Some sellers themselves don’t even know if their property is located in a flood zone, though. This could be because they inherited the property, bought it at an auction, or the land was split off from another parcel. Sometimes, unfortunately, they can also be dishonest and just not tell you about it.
That’s why, again, you should always research if a property is located within a flood zone before you buy it. If you’re using a mortgage to finance the purchase, ask your lender to run what’s called a “flood cert” (or flood certificate), where they reach out to FEMA and FEMA reports back to them whether the property is located either partially or wholly within a flood zone.
Once you have that flood certificate, it will put your home into a certain category. You can then give this information to your insurance agent and they can tell you to what extent your flood insurance will cost you.
If the property is only located partially within a flood zone, you can ask a surveyor to provide an elevation certificate, which may show that the home site where you plan on building is not in a flood zone.
If you have any other questions about flood insurance or there’s anything else I can help you with, don’t hesitate to give me a call. As always, it doesn’t cost a penny to talk.