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Flood Help Needed

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MAXWELL SMART

Freshman Member
Joined
Feb 4, 2003
I WORK IN AN AREA WHERE I RUN ACROSS A PROPERTY IN A FLOOD HAZARD AREA EVERY 10 YEARS OR SO. I HAVE A PROPERTY WITH A FLOOD ZONE OF "AO" AND WOULD LIKE YOUR ADVICE REGARDING HOW TO PROCEED. WHAT MORE DO I NEED TO DO OTHER THAN REPORTING THE ZONE AND CHECKING THE FLOOD BOX? ANY HELP WOULD BE MUCH APPRECIATED. :eyecrazy:
 

Carnivore

Elite Member
Supporting Member
Joined
Jan 15, 2002
Professional Status
Certified Residential Appraiser
State
North Carolina
Max,

How is your 'girl friday' from Get Smart :lol:

Scan in a copy of the flood panel with the report. Let the LO worry about it.
 

Mountain Man

Elite Member
Joined
Jan 15, 2002
Professional Status
Certified General Appraiser
State
Georgia
That's no bid deal, just report it as you see it. Mark "Yes" in the little box, put "AO" in the flood zone area, and include a copy of the map. I also make a short comment in the site section that the subject is in the flood hazard area.

Other than that, it's the LO's job to get a flood certification and require flood insurance.
 

jeff samolinski

Senior Member
Joined
Apr 18, 2003
Oh oH!!!!

Better check to see what the additional insurance premium costs. Remember definition of market value assumes knowledgable buyer acting in own self interest. What if the additional premium is significant enough to affect marketability/value?
 

Mountain Man

Elite Member
Joined
Jan 15, 2002
Professional Status
Certified General Appraiser
State
Georgia
Jeff, that's a very good observation! I come from an area where building in the flood plain is no big deal. They want to be on the river, then will pay ANY price. :huh: :rolleyes:
 

Caterina Platt

Senior Member
Joined
Jan 17, 2002
Professional Status
Certified Residential Appraiser
State
New Mexico
My whole valley is riddled with AE, A, and AO zones. The elevation of the home is most important when the rates are determined. The paper maps from FEMA have the assumed elevation of the flood waters scattered on the affected zone. Say for instance the elevation of the flood waters is 435' above sea level, if an elevation certificate for the home shows the foundation to be at 433', your insurance rates will be significantly higher than if the foundation sits at 438'. AO is the zone that is supposed to have estimates of 1-3 feet of sheet flow on sloping terrain. All this is info for your war chest only. You don't need to make any of these determinations for your report. It's between the LO, homeowner and insurance agent. The elevation certificate is obtained from a licensed surveyor.

From your post I wouldn't figure so, but possibly, any other sales in similar flood zones to determine if there was a negative market reaction?? It shouldn't matter how old the sale or if it was even similar to your subject. The adjustment for flood zone affected property (if applicable) is all you're after. Here, as in Mel's area, it makes no difference usually. It's a fact of life if you want to live in the Valley.
 

jeff samolinski

Senior Member
Joined
Apr 18, 2003
About 2 years ago I did an appraisal on home built below below minimum flood elevation for court case. This was an extreme example but it taught me to have some caution in this area cause after I capitalized the additional insurance premium for a typical holding period it wiped out the value of the improvements!!!

Reminds me of some appraisers around my area in central florida who don't evaluate the effect of special assessments ie.. some comps they use have paid assessments and subject's are not paid. No adjustment made. Me thinks if a typical buyer were to make an offer on 2 similar properties one with paid assessments and one with unpaid, it would affect their offer? Being that market value definition assumes knowledgable buyer don't ya know.
 

Restrain

Elite Member
Joined
Jan 22, 2002
Professional Status
Certified General Appraiser
State
Florida
If the property is in an "AO" flood, can it be repaired or rebuilt if flooded? Is there any federal mitigation activity (i.e., buyouts, etc) taking place in the area? Have you looked at market resistance to being in a flood area vs. outside? What is the frequency of flooding in the area?

I suggest these questions because I have seen communities where the entire subdivision or area was bought out by FEMA because of repeated flooding - it was cheaper than paying off every couple of years. I have seen homes in flood zones nowhere close to a river, etc due to subsidence and significantly affected by the market. If the home is in an area that is going to be flooded every couple of years, would you want to buy it?

Roger
 

Stone

Elite Member
Joined
Feb 1, 2002
Professional Status
Certified General Appraiser
State
Wisconsin
Roger and Jeff have hit on two very important issues. I have done work for FEMA for buy-out purposes. Depending on what the insurance rate is, it can be pretty expensive when capitalized out. Also, if the property is in a zone where it can't be re-built, it doesn't have to be destroyed by flood for the loss to occur. Plus, it is also important to know what amount of damage the municipality considers a complete loss. Sometimes they simply won't ok any sort of building permit to houses in the floodplain, so any damage can be irreversible. Sometimes damage would have to exceed 50%. Just some things to consider.

Michael
 

Caterina Platt

Senior Member
Joined
Jan 17, 2002
Professional Status
Certified Residential Appraiser
State
New Mexico
Hmmmm....

After reading you gentleman's posts about your floodzones, I'm even hotter under the collar than I usually am about our supposed floodzone. Evidently, there are real bonafide flood concerns in some of these locations as the municipalities recognize and react to the risks, ie. no further construction allowed. FEMA buying subdivisions out?! Very interesting.

My family has lived in this valley for 30 years. In that time in heavy rainfall/runoff years, the highest I have ever seen the waters didn't even reach the top of the conservancy ditch levee which borders the river. Today, I could drive smack dab in the middle of the river bed in a 4WD and rarely hit spots where there wasn't a dry sand bar. VERY LOW water levels for a number of years. We're arguing with the feds (City of Albq.) over water that was paid for years ago, somewhere near $45 million in water rights that can't be used by the city due to the Silvery Minnow. We're heavily encouraged to conserve, plant xeriscape, landscape with crushed rock, and fight with Texas annually over the miniscule amount that still flows in the Rio Grande. Elephant Butte is at the lowest level most can remember in 50 years. Speaking with local old timers, the last flood anyone can remember was turn of the century and that was all prior to any existance of the Middle Rio Grande Conservancy, flood control ditches and levees, and about 10% of our current water consuming population.

Our current municipalities allow construction in these supposed floodzones to continue completely unchecked except for requiring the site build up to meet the elevation guidelines. Ditch water is doled out and on a rotation basis whenever it is available.

Yet each residence in these affected zones continues to pay anywhere from $500 to $1700 per year in annual flood insurance. I know there are areas that this is truly a reality and a bonafide concern, I just have the strong suspicion that areas such as mine are utilized to broaden the income sources for FEMA and insurance industry expenditures in others.
 
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