Hi Prospects & Friends!
When buying a property it's always wise to know if its in a flood zone or not, this automatically happens when the mortgage company orders the appraisal, since the appraisal shows whether its in a flood zone or not, but many who pay cash option not to get the appraisal or even ignore having a real estate broker provide the flood zone information. If your paying cash its always wise to get the flood zone information in hand, before you negotiate the contract, because it doesn't make since to do an option period just to have it done, when in reality you can have the information in hand before you negotiate the contract. Not knowing a property is in a flood zone until after you buy it, can cost you money in future if you try to sell it, since majority of properties in flood zones have to have a negative adjustment to their values when formulating their appraised values. So in conclusion if paying cash, it would be smart to know this information the minute you see it hit the market, since it bullet proofs your future appraised values. Example of this would be:
Mary has cash and sees her neighbors condo pending for $175,000 which is down the street from the property she is monitoring, she isn't paying any attention to anything other than informing the title company her contract will be all cash and will be a quick close. Mary doesn't realize her property is in a flood zone, because it's a private seller, and she only is concerned that she gets this property closed quickly at the title company in order for her to remodel and flip. The seller doesn't disclose to Mary its in a flood zone, because they don't even realize it. So to sum all this up Mary ends up buying the property from the seller in a all cash deal, and they both go their own way. After Mary remodels the property she decides to hire a real estate broker to sell it for her. The real estate broker provides her all the necessary disclosures she will have to provide to the new buyers, and she signs off saying her property isn't in a flood zone, and that she wasn't aware it was. As things get good for Mary, she accepts an offer, and then her broker is contacted by the buyers agent informing them the buyer has rejected and terminated the offer under their option period, due to lender not providing additional financing because of the appraisal coming lower because of having to adjust for being in a flood zone. Mary gets angry, and pulls the property off the market, and sells it to another private party, which was what was done to her, and the cycle starts all over again, meaning somebody being naive too will offer her cash and she will accept to just get out. So in conclusion don't let this happen too you, and be very alert about flood zones.
