Hurricane Harvey dropped an unprecedented amount of rain on the Katy and Houston area, flooding over 100,000 homes in the process. While some residents chose to rebuild, others sold their flood-damaged homes to investors who remodeled the houses - with many of them going up for sale.
These homes can be a fantastic opportunity for buyers to get an upgraded home at a discounted price. But not all post-flood renovations are created equal. I'm not only an agent, but I'm also a real estate investor. I've purchased and remodeled several flood homes, which has given me a unique perspective and an in-depth understanding of the potential problems these homes can contain - as well as unfortunate shortcuts some people might take when rehabbing them. So, if your buyer is looking at formerly flooded homes, here are a few questions you should ask before you're locked into the deal.
Is this the first time the home has flooded?
Just because a listing notates a home was flooded during Harvey doesn't mean that is the only time it's flooded. Be sure to ask if the house has ever flooded before Harvey. If the current owner is unsure, you can ask your insurance agent to check if the home has ever filed prior flood damage claims.
Dulce Morales, a Houston, Texas area insurance agent says, "In most cases, the system will automatically tell us if the home is in the flood repetitive loss list. The system will let the agent know if the home had more than two flood losses in the last ten years." Morales says they can also dig deeper at times, "There are also cases where we will run a loss history on the Home Insurance quote to see the claims listed on the address in the last five years. Some of times 'Water Damage' claims will be listed, and those can be a good indication if it did flood if the loss date matches known flood dates."
Be sure to do your due diligence in researching the flood history of the home.
Was the house remediated and tested for mold before remodeling?
Mold is nothing to be dismissive about. It has the potential to cause significant health issues and create unsafe living conditions and can be expensive to remove. Any home that has flooded should have been remediated and tested for mold before beginning the remodel to help ensure you won't encounter any mold issues in the future.
There are two main types of mold inspections - surface sampling and air sampling. Surface sampling is done when there is visual evidence of mold. Air sampling is done when there is no visible evidence of mold, but you want to ensure nothing is hiding out of view. If I were purchasing a home for my family to live in that had previously flooded, I'd want to ensure a state-licensed mold inspector did air sampling of the house and gave it clearance before remodeling began.
You might be asking, "if the home wasn't tested for mold before remodeling, will getting a test done now find any issues even though the house has already been remodeled?"
I asked state-licensed mold inspector Adam Ehlen of AWA Environmental that very question. He responded, "For this question, there is, unfortunately, no definitive answer. I would say yes, that you should get a test done; but having already had new sheetrock installed could skew the results and not give you accurate readings concerning what is going on behind the walls. It will tell you the air quality for that given time in that space, but not what is behind the walls."
Ehlen continued, "That being said, it is possible to do in wall cavity air samples, but this is not as effective due to the way that the space behind walls is segregated due to the framing of the studs potentially being butted up against sheetrock moisture."
The long and short of it is that in an ideal situation the home would have been tested for mold before being rehabilitated. You'd want to speak with a licensed mold inspector before your option period ends and be cautious in moving forward with a purchase if that step was skipped.
Be sure to get insurance quotes during the option period
Getting insurance quotes is typically lower down the line on our to-do lists in a home purchase and is something people will sometimes do after the option period expires. But if you're purchasing a home that has previously flooded, be sure to get your insurance quotes while you still have time to change your mind if there's an issue.
I was looking to purchase a flooded home about eight blocks from another flooded home I already owned; both were first-time floods, within 100 SF of each other in size, both took on the same amount of water, and both were in the same subdivision. The cost of flood insurance post-Harvey on the home I already owned was $614 per year, so you can imagine my shock when the flood insurance quote for the second home came back at over $4,000 per year due to a slight difference in the elevation of the houses! So, be sure to get those insurance quotes early in the process to help avoid potentially unpleasant surprises in rates as closing approaches.