Before sitting down with my buyers and writing an offer on their Spring Texas dream home, I will contact our in-house insurance agent and find out if the home is located in the 100 year flood zone. If a home is located in the 100 year flood zone it means that in any given year there is a 1% chance that a major flood will occur. I want my buyers to know going into the negotiations if the home is located in the 100 year flood zone because it impacts resale value, their home ownership costs, and in some instances their ability to sleep soundly at night.
Some buyers I have represented did not want to proceed any further with an offer after discovering the home was located in the 100 year flood zone. And if you are the type of individual that every time we have a heavy rain you would be worried that your house would flood, then DO NOT purchase a home in the 100 year flood zone. The home is not worth the mental anguish it would cause you. No matter if it is your dream home.
Before you purchase that Spring Texas home located in the 100 year flood zone, consider the following:
* Homes located in the 100 year flood zone DO NOT appreciate in value at the same rate as other homes. Why? Because of less demand for the homes. I have had potential buyers ask me at an Open House if the house was in the 100 year flood zone. After I said Yes, they turned around and immediately walked out the door. They had NO interest in viewing the home any further. The pool of buyers for homes located in the 100 year flood zone is smaller than for other homes. So when you go to resale the home, it will take you longer to get it sold and the appreciation in price that you will receive will be less.
* It will COST more to insure the home. If the home is not located in the 100 year flood zone, your lender WILL NOT require you to purchase flood insurance. The decision to purchase or not purchase flood insurance will be solely yours.
But if the home is located in the 100 year flood zone, your lender WILL require you to purchase flood insurance. The cost of the flood insurance will be between $350 and $2,500 annually. The factors that determine the cost of the flood insurance are the home's elevation which will be determined by the elevation certificate and the deductible on the insurance policy.
An insurance agent will not be able to provide you with a flood insurance quote on a home located within the 100 year flood zone without an elevation certificate. One last thing to remember is that flood insurance is in ADDITION to your Spring Texas home's homeowners insurance. For more information about flood insurance, risk of flood and tips for homeowners, visit FloodSmart.gov
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If you are looking to purchase a home or are interested in selling your Spring Texas home, call Jill Wente & Company at 281.804.8626.
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