Flood Zone Marketability

[Zephyr999]

Your concern probably reflects peer concensus, although the HBU analogy is specious because HBU analysis is prescribed whereas research into the potential impact of flooding is one of a million factors that might affect valuation, e.g., fire zones, earthquake zones, Superfund zones, etc., etc.

My perspective about the relative awareness of a potential buyer--regardless of how theoretical the point was meant to be--goes to "market reaction," which as the basis of the Sales Comparison Approach to appraisal valuation is by definition based upon the collective perspective of market participants; and if a theoretical buyer isn't aware of, or concerned with, flood information when making their "informed" decision, why would that factor be taken into consideration when cumulative market reaction is determined? And if not, why would it be included in an appraiser's analysis (for the sake of argument of course).

Two words...due diligence.

 

[glenn walker]

All lend

Assignment was exterior-only of a large residential parcel elevated above the neighborhood standard at an orientation that doesn't appear to be prone to flooding, although the FEMA Flood Zone appears to apply to a very large area, so elevation within a Flood Zone might not be a factor; and it would be interesting to learn how flood zones are determined. It was interesting to find that 4 of the 8 comps in this assignment that were in Zone X were located at a higher elevation, but within 1/2-mile, with the D/X border in-between. The website I use to obtain the info at msc.FEMA.gov/portal/home is user-friendly although search results provide map#, and map date, but not the zone, per se, which is displayed on a nondescript map. An easy fix to address the issue in the "Site" template, but more work--why always more but never less?????

All lenders funding Fannie-Freddie-FHA-VA loans are required to obtain a flood certificate prior to funding the loan, also FEMA maps are highly inaccurate and I don't use them anymore- I use a flood map service and if not sure I request the lender to send me their flood cert. As far as buyers it all depends some flood insurance is fairly inexpensive, others very high So far in 35 years i have never had any issues selling a home in a flood zone.

Whats crazy is some were placed in certain zones years before and FEMA never changed or amended their maps to show they are not in a flood zone. there is one section I work were FEMA missed a entire 8 lane freeway, one of the most bloated , incompetent, goverment bureaucracies.

 

[jay trotta]

All lend

All lenders funding Fannie-Freddie-FHA-VA loans are required to obtain a flood certificate prior to funding the loan, also FEMA maps are highly inaccurate and I don't use them anymore- I use a flood map service and if not sure I request the lender to send me their flood cert. As far as buyers it all depends some flood insurance is fairly inexpensive, others very high So far in 35 years i have never had any issues selling a home in a flood zone.

Whats crazy is some were placed in certain zones years before and FEMA never changed or amended their maps to show they are not in a flood zone. there is one section I work were FEMA missed a entire 8 lane freeway, one of the most bloated , incompetent, goverment bureaucracies.

Agreed, but there is always the Option of an Engineers Certificate which may indicate the non-requirement of the so-called Flood Insurance;

Some years back did a Refi on a Lake, the Lenders Flood Cert. company noted it was in an "A" zone and required very expensive Flood Insurance. As requested and for a Fee the Owner and his attorney asked if I would check with the company. I did and provided the Cert. Co with "photo's" that they never get, which showed where the lake was located in regards to the dwelling by the number of stairs to get down to the dock & lake. My question was if the Lake could rise some 80 ft (+/_) then most of the East Coast would be under water, therefore, how was the Flood Zone determined when the dwelling was far above the elevation 12 required for that area ? The Certificate was corrected.

 

[TMG]

In most cases, the flood zone affects the entire neighborhood...and the comps, so the value and marketability issues are already addressed, in numbers anyway.

I just add a blurb that the flood zone is typical for the entire neighborhood, and has a neutral to minimal effect on marketability and value.

Of course, their are the nightmares when just the subject is in the flood zone...

 

[Carnivore]

All lend

All lenders funding Fannie-Freddie-FHA-VA loans are required to obtain a flood certificate prior to funding the loan, also FEMA maps are highly inaccurate and I don't use them anymore- I use a flood map service and if not sure I request the lender to send me their flood cert. As far as buyers it all depends some flood insurance is fairly inexpensive, others very high So far in 35 years i have never had any issues selling a home in a flood zone.

Whats crazy is some were placed in certain zones years before and FEMA never changed or amended their maps to show they are not in a flood zone. there is one section I work were FEMA missed a entire 8 lane freeway, one of the most bloated , incompetent, goverment bureaucracies.

I have had AMC PhoneMonkeys send me Flood Certs. Often they are out-dated. Who ever gave that to them are outdated also. I told one AMC they should ask for a Refund.

Here is what I use: https://msc.FEMA.gov/portal/search Its supposed to be Real Time. You also have a Choice of Aerial or Road Map that is in the upper right-hand corner.

You can print it off in PDF. Tip: It will give you two pages but really you only PDF Print the First Page

 

[Deleted member 152047]

I would probably utilize an EA and suggest that the client/borrower obtain an elevation certificate to properly assess the flood risk.

Lenders get worked up about the flood risk of properties, but if you are in a zone that has not been mapped and MAY have risk, it MAY also not be at risk of flooding.

Lenders from up north freak out when a property is located within the flood plain in Florida. For many properties and markets that is simply a fact of life. Much of my appraisal career was in Southwest Florida where it is unusual for a property not to be located within the floodplain. Flood insurance is not a substantial expense, it is the homeowner's insurance that gets jacked up due to other hazards such as being in a high wind zone.

 

[Deleted member 152047]

I'll add that in SWFL it is not unusual to raise the elevation of a site 4-5' before they start on foundation work. The on-site retention requirements are crazy, but that is what happens when you drain the swamp.

 

[Mejappz]

I have had AMC PhoneMonkeys send me Flood Certs. Often they are out-dated. Who ever gave that to them are outdated also. I told one AMC they should ask for a Refund.

Here is what I use: https://msc.FEMA.gov/portal/search Its supposed to be Real Time. You also have a Choice of Aerial or Road Map that is in the upper right-hand corner.

You can print it off in PDF. Tip: It will give you two pages but really you only PDF Print the First Page

If you press the button titled “Dynamic map” it will print the map only in PDF. You can insert the map into the report.

 

[Zephyr999]

I'll add that in SWFL it is not unusual to raise the elevation of a site 4-5' before they start on foundation work. The on-site retention requirements are crazy, but that is what happens when you drain the swamp.

And then there's places like Fargo...entire city redefined to Zone A until after dikes, etal complete then reported will be reclassified in some areas as Zone X.

 

[Elliott]

Oregon has lots of Flood Zone areas because it has lots of rain. Usually you can find other sales in similar flood zone and its usually difficult to justify any adjustment, comparing a property in a flood zone or outside of a flood zone. Funny thing about coast flood zones, it can rain like hell for 15-hours, the water level will rise, then the tide will go out and away goes all that water into the Pacific Ocean, which has a tremendous capacity to absorb a few inches of rain.