How will Hurricane Irene Affect Real Estate and Mortgage Loans in Maryland?
I have a purchase loan scheduled to close on Friday. The final condition is a copy of the new homeowner's insurance policy and invoice. I contacted the insurance agent and was told that she has no "binding powers" due to the potential damage expected by Hurricane Irene's landfall. This means that until the severe weather system passes, and the insurance companies assess the areas of damage, they are not able to provide the insurance policy.
As most lenders are too busy to review conditions sent piece meal, not having the Homeowner's policy until next week will push back the final review and therefore the closing date.
Many folks in Maryland remember the devastation cause by Isabelle and the storm surges that caused flood damage where no one ever imagined flooding! You sure can't blame the insurance companies!
I began to think about other Real Estate and Mortgage Loans that may be affected by Hurricane Irene.
1. Wind, Rain, Flood, Fallen Tree Damage, etc. on properties that are under contract or on the market
According the the Uniform Commercial Code of Conduct, Risk of Loss remains with the seller. I believe this extends to Maryland Real Estate.
2. If the property is vacant, does the homeowner's policy remain in force? What about flood damage, is it covered? There are limitations to homeowner's policies, be sure to check the policy.
3. What if the owner doesn't have the money to make the repairs or pay the deductible?
4. Lenders, and even buyers may require re-inspections prior to close on homes in any areas determined to have sustained damage.
5. Lenders may require drive-by or full appraisals to verify the property did not sustain damage. The buyer may be responsible for this cost and should discuss it with their lender and their agent.
6. Will your buyer be interested in purchasing a home, even one spared from damage, should there be other homes nearby that weren't so lucky? If we learned anything from New Orleans, we learned that it takes time to re-build.
Maryland Realtors, Buyers, Sellers, and even those refinancing....TAKE HEED...As you prepare to batton down the hatches, and clear out the grocery shelves, and mix up the cocktails, Don't be surprised if the closing is delayed (at best) depending on the wrath of Hurricane Irene.
Hopefully the weather people have it wrong (as usual) and Irene will turn back out to sea or will hit land with little more than a sputter...we can all say an extra prayer! Stay safe out there. As they say...This too shall pass!
How will Hurricane Irene Affect Real Estate and Mortgage Loans in Maryland?
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