6 Tips for Selling Your Home In a High-Risk Flood Zone

Location, location, location — one of those often quoted, sometimes overused, phrases people tend to equate to real estate. When you’re buying a home, it might be a determining factor. When you’re selling, what seems like a “bad” location to some might hamper your future plans. So how do you overcome the negative connotations attached to the words “flood zone”?

Selling your house in a flood zone doesn’t have to be a difficult chore. It all starts with having the right information and presenting it in the best possible light. Here are a few tips for selling your home

1. Know your information

You have to know your situation to sell it because today’s buyers will want to know all the ins and outs.

Let’s start out with the basics: What is a flood zone?

According to the Federal Emergency Management Agency (FEMA), “flood zones are geographic areas that FEMA has defined according to varying levels of flood risk. About 13 million homeowners live in the high risk 100-year flood plain, meaning they have about a 1 percent chance of flooding each year. 

You probably already know what flood zone you’re in, but here’s a quick reminder of what that means for selling purposes.

Flood zone tiers

  • If the code on FEMA’s map starts with an A or V, you’re in a high-risk flood zone, or Special Flood Hazard Area (SFHA), aka 100-year flood or base flood.
  • Zone B or shaded Zone X have a moderate flood risk, meaning there’s a 0.2 percent chance of flooding in that zone.
  • Zone C or unshaded Zone X have minimal chance of flooding.

If you’re unsure of your flood zone, you can look it up by your address using FEMA’s Flood Map Service Center.

High-risk flood plain homeowners often pay for flood insurance on top of the typical homeowner’s policy. FEMA oversees the majority of Americans with flood insurance (about 5 million) through the National Flood Insurance Program (NFIP). 

2. Be prepared to answer buyers’ questions

The first question you’ll probably get is whether flood insurance is a must.

Homes in a high-risk flood zone have a 1 in 4 chance of flooding during a 30-year mortgage. Homeowners in high-risk areas with mortgages through federally insured or regulated lenders (including FHA or VA and most other national financial institutions) must have flood coverage, under federal law.  

The second question you’ll likely get is: How much does flood insurance cost?

The cost, for the average homeowner, of flood insurance is about $700 per year. Locales hit hard by flooding sometimes see jumps in premiums.

Things that factor into NFIP insurance policies include a building’s elevation, age, coverage amount and deductible.

3. Be aware of what you must disclose

Laws on real estate disclosures vary from state to state. Talk to a local real estate agent about disclosure laws, or consult this list from HomeLight of the 50 states’ individual laws.

The basic rule of thumb, though, is not to hide material facts about your home from buyers.

4. Get proactive 

Making things easy for buyers can only benefit you in the long run. For instance, the buyer will likely need to provide their lender and insurance company with an elevation certificate that essentially shows whether a house would theoretically be above the height of estimated floodwaters should a major flood occur.

Buyers will need this because insurance agencies use it to determine their premiums. Going ahead and ordering an elevation certificate from the local floodplain manager could get you high marks with a potential buyer.

5. Offer financial concessions

Another baller move in buyers’ eyes is to offer to pay for a one to two year home warranty to help cover unexpected issues that might arise. 

Or, it’s not unheard of for sellers to offer the cost of the flood insurance for a year as a purchase incentive, either knocked off the sales price or as a closing credit.

6. Make some improvements

There is a possibility of lowering your flood insurance premiums by making improvements to your house that lower its exposure to flooding. They include:

  • Installing flood vents in the crawl space: Crawl space vents can allow water to flow freely, which reduces structural issues during flooding.
  • Relocating utilities: Moving the heat pump higher, like to an attic, might save buyers from an additional flood insurance surcharge.
  • Elevating the home: If it’s possible, elevating the first floor even one foot above base flood elevation could reduce flood insurance by 30 percent annually, according to FEMA.

Also, if you have flood insurance but have never had to use it, this simple fact can help put buyers at ease, so let them know. You are legally entitled to a Comprehensive Loss Underwriting Exchange (free from LexisNexis) that shows the past seven years of your claims history. Just request one online or call (866) 312-8076.

Regardless of what you decide to do, there are buyers out there for your house, you just have to find them.

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