Do Your Due Diligence Before Buying In A Flood Zone: Four Elements To Investigate
If you have always dreamed of living along the coast or near a river bank, a buyer's advocate can help you find the house of your dreams. Before signing the mortgage and making the house your own, however, you need to do a bit of due diligence. With the help of your buyer's advocate, you need to gather information on the property, its history and any potential costs related to it being in a flood zone.
Once you have that information gathered, you will have the facts and figures you need to make a financially responsible decision. Here are four of the critical elements you need to investigate:
1. Potential For Future Flooding
No one can predict with certainty whether or not a flood is going to strike, but weather experts around Australia have worked hard to give residents estimates of potential flood risks in certain areas. Before buying a home in a flood zone, contact the relevant flood management authorities in your area to get an interactive flood map.
The same maps used by insurance adjusters, these maps help you assess potential risks. They give you the tools you need to estimate how often flooding may occur and the potential extent of its severity.
2. History Of Flood Damage And Structural Integrity
Looking at the area's potential for flooding is certainly not enough due diligence. You also need to know if the area has flooded in the past, and you need to know the effect it had on the home. Sadly, in some areas, homeowners and their real estate agents are not required to disclose everything about the house to potential buyers.
Namely, sellers in some areas are not required to disclose termite damage and whether or not the structure complies with local building codes. If the home's wood is damaged or if the home is not structurally sound, it will struggle to weather a flood successfully.
Have your buyer's advocate check the disclosure laws in your territory. If the seller is not required to disclose things to you, do not base your decision on what they are willing to tell you. Instead, hire an inspector to look at the property before you purchase the home. Your inspector can assess past damage as well as the home's likelihood of standing up to to a future flood.
3. Flood Insurance Quotes
The increasing number of flood insurance claims in Australia is causing flood insurance rates to increase. In some cases, premiums may be so high they make the cost of owning a home in the area unaffordable for some homeowners.
Before buying a home in a flood zone, investigate this cost. Get a quote from several insurers and make sure you can lock in your rate for as long as possible.
4. Additional Costs
Flood insurance premiums may not be the only ancillary cost you need to consider. If you are buying a home in a neighbourhood with shared driveways or common areas, you may have to pay fees to a owner's co-op. Before buying, look at the monthly or annual dues to this organisation, but also consider additional costs.
If flood brings down trees or washes debris into the common areas, will your co-op costs increase? Make sure you know the answers to questions like this one before buying your new home.
Don't necessarily assume you can avoid extra costs by moving to a remote area. In some cases, homeowner's sidestep owner's co-op fees, but they end up paying infrastructure contributions in areas that are growing. If you are responsible for growth costs in a developing area, you may end up paying for all sorts of community flood mitigation strategies. For more information, contact a company like WBP Property Group.