Flood zone appraisel

[vracer77]

How do you appraise a property now in a flood zone where there is no flood insurance available (county won't join the FEMA progam)? No comps available.

 

[Lobo Fan]

I would assume that all the comps have the same problem so value should be fairly simple to acertain. Getting a loan my prove problematic however.

 

[Tim The Enchanter]

You find a local appraiser experienced in that type of property. I'd guess there's not too many that fit the bill, but this is a good place to look for one. :new_llying:

 

[JRS at OBX]

I have a couple of neighborhoods in my area that are in COBRA zones where federal flood insurance isn't available. If the property is in a flood zone, it's an adverse marketing condition. I can usually extract an adjustment, but I try to use other comps that are in similar situations.

Flood insurance is available from private sources. It can be very expensive, sometimes up to $1000/month. There is a possibility of a LOMA which is a letter of map amendment. A LOMA is decided on a case by case basis and effectively puts the subject out of the flood zone, depending on elevation among other things.

 

[vracer77]

Hi, thanks for the come-back. I have talked to three reputable appraisers between here and Chattanooga and they say that without comps, they can't appraise. This problem has basically showed its ugly head here since 2008. I guess we need to hear from someone who is from a place where this has happened before--a flood occurs for the first time (100 yr flood) and FEMA changes the maps to include newly affected areas and no flood insurance available. Thanks again

 

[Atlanta CG]

At a minimum get the present value of the annual (or semi-annual or monthly) cost of the insurance, even if it has to be from private sources, times the anticipated holding period of the asset (home) and add a risk factor. At least it gives you something to hang your hat on in the absence of any comparable data.