Buying a Cabot Home in a Flood Zone
I normally use this blog to post detailed updates about the Cabot real estate market. This blog is used to inform buyers and sellers about real estate. I had something happen to me today that I felt would be helpful for anyone buying real estate.
I have a client that had been looking for a home for sometime and was getting frustrated about not finding something in their price range. They finally found a home they loved, but on the listing is said that flood insurance was required. I told the buyer that normally it is not a good idea to buy a home in the flood zone. You are required to carry flood insurance for the home. They said they loved the home and wanted to make an offer. I recommended that they get a quote for flood insurance before they proceeded any further. They did get a quote and it was $700 for the flood insurance per year. Based on that quote they still wanted to write an offer. The offer was accepted and title work began. When the title company needed to know who home owners insurance and flood insurance was going to be with the buyer called the insurance company to sign the paper work. The insurance company said they made a mistake and flood insurance would be $3500 per year. By then the buyer was freaking out. I said the only thing that could be done is have a surveyor come out and check for elevation. The buyer said they would like to do that and we had it done. After we had the elevation we checked with there insurance companies and the first quote we got was $297 per year. After that written quote we ordered the appraisal ($350 the buyer had to pay for). The next day the second and third quotes came in for the flood insurance and they were $2000 and $2800 per year. I new something was not with the first quote and called the agent that gave it. He assured me and the buyer that the quote was right, but he would double check. He did double check and the quote was supposed to be about $2000. I told him that we paid for a $350 appraisal based on what he said. All he could say was he was sorry that he was that far off.
The buyer had to back out of the deal because of the cost, not to mention how hard it would be to resale the property. The moral to the story is if a home is in the flood zone, do not attempt to buy it. Resale will be tough and flood insurance is not cheap. I hope this may help buyers not make the same mistake and go through the same roller coaster ride as my buyer did.
Good day