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COBRA vs FEMA

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Workbox

Thread Starter
Elite Member
Joined
Mar 2, 2005
Professional Status
Certified Residential Appraiser
State
Colorado
Doing a second row beach lot appraisal. When calling on the local Realtors for additional data. I was told that because the development is under COBRA, than FEMA, it makes it insurance higher. Also, that I should be using similar developments that are under COBRA. ..........UuuH, Yeah, Right........so I took that info and visited the land sales of the comparable COBRA lots. Nope, way to different in quality control in construction and elevations and much more higher end development. They want to steer me to use those, but I will analyze their impact.

My question is, does it really make a difference if either is in one than the other? They both will be effected by any major storm.
 

wickedness1

Senior Member
Joined
Jul 12, 2007
Professional Status
Certified Residential Appraiser
State
Ohio
I'm really confused now...

I thought COBRA was Continuation of Health Coverage — COBRA under federal laws...Does someone have their terms mixed up or did I miss something in my appraisal education classes?:new_newbie:


Oh..sorry..I just found this that explains the COBRA term, lol
Coastal Barrier Resources Act-- here's a link :)

http://www.fws.gov/laws/lawsdigest/coasbar.html

I love appraisersforum, I learn something new everyday :)


This statement in the law seems profound

"Areas so designated were made ineligible for direct or indirect Federal financial assistance that might support development, including flood insurance, except for emergency life-saving activities."

I'm no expert but it sounds like you would almost have to compare apples to apples here.
 
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Couch Potato

Elite Member
Joined
Mar 15, 2004
Professional Status
Certified Residential Appraiser
State
North Carolina
Doing a second row beach lot appraisal. When calling on the local Realtors for additional data. I was told that because the development is under COBRA, than FEMA, it makes it insurance higher. Also, that I should be using similar developments that are under COBRA. ..........UuuH, Yeah, Right........so I took that info and visited the land sales of the comparable COBRA lots. Nope, way to different in quality control in construction and elevations and much more higher end development. They want to steer me to use those, but I will analyze their impact.

My question is, does it really make a difference if either is in one than the other? They both will be effected by any major storm.
It affects the costs of owning the property; therefore, it affects what people will pay for the property. One can calculate the effects and adjust, or one can simply use similar properties for comparison.
 

JRS at OBX

Elite Member
Joined
Jun 13, 2006
Professional Status
Certified Residential Appraiser
State
North Carolina
The cobra zones often have to place flood insurance with private insurers which can get extremely expensive. I try to use cobra zone properties with cobra zone properties if I can, otherwise I'll figure out an adjustment which can be quite significant. Then I explain my butt off since most underwriters don't have a clue about this stuff.

If you are doing improved properties it is not quite so bad. If it is vacant land then you need to make sure (or appraise subject to) that the lot is buildable. Lots of property in a cobra zone is wet.

If I needed flood insurance on my house in a FEMA zone It would maybe cost me $100/month. If I was in a COBRA zone it might cost me $1000/month.
 
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Workbox

Thread Starter
Elite Member
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Mar 2, 2005
Professional Status
Certified Residential Appraiser
State
Colorado
So now I have to contact all the sales out there and confirm them.
 

wickedness1

Senior Member
Joined
Jul 12, 2007
Professional Status
Certified Residential Appraiser
State
Ohio
wow...this is good info for a newbie northerner, lol. Thanks for helping me learn new stuff!

we don't have any kind of extra snowbelt insurance & boy could we use it today :):rof:

"If I needed flood insurance on my house in a FEMA zone It would maybe cost me $100/month. If I was in a COBRA zone it might cost me $1000/month."
Thats a huge difference!
 

JRS at OBX

Elite Member
Joined
Jun 13, 2006
Professional Status
Certified Residential Appraiser
State
North Carolina
"If I needed flood insurance on my house in a FEMA zone It would maybe cost me $100/month. If I was in a COBRA zone it might cost me $1000/month."
Thats a huge difference!

Thats because it is going through Lloyds of London or some similar company. $$$$$$$$$$$$$$$$$$$$$$$ :new_multi:
 

Ted Martin

Senior Member
Joined
Jan 17, 2002
Professional Status
Certified General Appraiser
State
Kansas
Basically COBRA areas are guaranteed to be washed away in under 100 years, no if and or but. The FEDs are saying we'll still try to save your butt, but we told you not to build there and it's on your head if you do. I can't imagine any lender's making anything but signature loans based on the cash flow of the borrower in a COBRA area since the improvements and or the elevation of the underlying dirt is subject to flooding / wave action or both.
 
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