• Welcome to AppraisersForum.com, the premier online  community for the discussion of real estate appraisal. Register a free account to be able to post and unlock additional forums and features.

Home soon to be in flood zone.

Status
Not open for further replies.

Lee SW IL

Thread Starter
Member
Joined
Jan 15, 2002
Professional Status
Certified Residential Appraiser
State
Illinois
Im appraising a home for a re-fi, in an area that is flood prone. Some homes have been bought out by Illinois Emergency Managment Agency (IEMA). Property is not in a flood zone, per FEMA map from 1979. But, I have been told a new map, by IEMA & FEMA is coming out, and the property will be in a flood zone. I have a call into FEMA for the new zone code. (Since the old map of 1979, an Interstate has been constructed and probably contributes to the flooding). Per the person I talked with at IEMA, the homes that were bought out, were not being flooded as bad as they thought. He stated that other routes could have been taken, and maybe taken to prevent future flooding. But, stated with what they now know a buyout probably would not happen.

The property I am appraising is not being bought out, (I have no knowledge if an offer was made on the property), but properties all around the subject are being torn down, some will remain, about 6-10 homes will remain, (my guess). City will not give me details. The city is responsible for maintaining the land, past history of this city, is that they will not maintain the area. Sale history on other homes are exempt from reporting.

I can't go out of this market for comps. But no comps with a similar situation in this market. This market is very different than the rest of the region.

Suggestions? ?

Thanks
 

Dee Dee

Elite Member
Joined
Jan 16, 2002
Professional Status
Certified Residential Appraiser
State
Colorado
Run, or plan on writing up the addendum from hell. 8O
 

Mountain Man

Elite Member
Joined
Jan 15, 2002
Professional Status
Certified General Appraiser
State
Georgia
I ran into a similar situation in Macon, GA. Areas use to be in the flood zones were removed in later published maps. I remember those houses being flooded when I was a kid. Heck, they're located between I-75 and the river. Hello... :? :?: Low and behold, I was asked to appraise one. The house was a ranch with a second story addition to get the living area out of harms way. The original first floor is now an "unfinished basement". I made some comments to that effect, noted that I had personal knowledge of the area being prone to flooding, and my phone did not stop ringing for a week. :x I did NOT budge though.

After the flood of 1994, GEMA bought out several of the homes to be demolished. Hate to say it, but I told them so. Most homes were remodeled, with low interest rate gov'mnt loans, to nearly new condition. The homes that were not purchased by EMA, were bought and sold on the open market like nothing ever happened. We watched and studied the market for a while. Only noted an occasional extra sales concession, like the seller would pay first year flood insurance premium. Once the buyers got flood insurance, they figured that 1994 was a 500 year flood..... so that should not happen again anytime soon. :roll:
 

J. Parker Graham

Freshman Member
Joined
Jan 19, 2002
You might consider discussing with the lender BEFORE you write a report to define the Highest and Best Use of the site. Suggest that the lender secure an exact flood survey for the site prior to your inspection. The previous Higest and Best Use for the site as vacant could have changed since the improvments have been built. Buy outs of adjacent properties does not guarantee a subject buy out. The discount rate should at least equal the cost and availability of flood insurance. I would definatly get the lender to be proactive in this one, and have the lender decide on the approach. As appraisers we do not deal in multiple potentials unless the lender requests them and it is defined in the Scope of the Appraisal. Things change other than values. Reporting needs to reflect ALL changes that affect the subject.
 

Lee SW IL

Thread Starter
Member
Joined
Jan 15, 2002
Professional Status
Certified Residential Appraiser
State
Illinois
I received some assistance from a more experianced appraiser than I, who has done appraisals in the immediate area of the subject property.

He stated, unless you have something in writing from the city or agency ect, it is not fact. Appraise the property as is. This city has several plans that have not been completed as advertized. Take the stance if the property were to be bought out, it would be done at market value. Just mention the vacant homes(which is typical for this market), mention the what the city has told, and confirmed by IEMA.

Thank you all for your replies.
 
Status
Not open for further replies.
Find a Real Estate Appraiser - Enter Zip Code

Copyright © 2000-, AppraisersForum.com, All Rights Reserved
AppraisersForum.com is proudly hosted by the folks at
AppraiserSites.com
Top

AdBlock Detected

We get it, advertisements are annoying!

Sure, ad-blocking software does a great job at blocking ads, but it also blocks useful features of our website. For the best site experience please disable your AdBlocker.

I've Disabled AdBlock
No Thanks