Problem

[Wellsie]

Ok here is my problem, I have been approved, found a home which I love, the appraisal come back good ect the kicker is that the bank found this home to be in a flood zone which was not disclosed before. I called and told the agent this she claims she did not know. Am I in a position to argue the price of the home due to the flood zone (A) which the flood insurance will be twice what the home owners insurance will be? Never mind the though of re-sale value. I know I have ground to break the contract.

[jst300z]

Depends on if you opted that contingency in your contract. Depending on the state, there should be an option something like "Contingent upon finding 'reasonable' homeowners insurance" that should have been checked in order to protect you in this situation. Without this checked, you may be entitled to purchase or lose your deposit.

 

If this was not disclosed, you need to review the 'Sellers Disclosure' or similar state required form to determine if the owner was legally required to fill it out. For example, if run by a POA or for an estate, the disclosure, which would have disclosed this fact, may not have been required to be completed.

 

Your agent, buyers agent, should have been on top of this since they are the expert and know the market. It takes all of 3 minutes to see if a home is in a flood zone.

[clambert1273]

Are you in Katrina area by chance? I was going to be transferred to Mississippi last year and let me tell you - the homeowners insurance would NOT even offer flood insurance and you had to get it from the government... not a cheap one either.. it was quite crazy adding wayyyy too much onto the housepayments.

[Wellsie]

No I am in NY

[redsox9547]

Are you in Katrina area by chance? I was going to be transferred to Mississippi last year and let me tell you - the homeowners insurance would NOT even offer flood insurance and you had to get it from the government... not a cheap one either.. it was quite crazy adding wayyyy too much onto the housepayments.

 

Just so you know..everywhere in the USA, the government ONLY offers flood insurance policies through FEMA...no conventional insurance company offers flood insurance...some companies like USAA sell it onbehalf of FEMA as their agent, but at the end of the day FEMA is the insurance company.

[clambert1273]

lol i wouldn't know I don't live in a flood area.... hell we barely get rain.. I like it that way

[Wellsie]

I have learned a lot about this flood stuff. The agent has paid for a elevation certificate-the house is 40+ feet above the water and 300+ feet back from the river. She has submitted this to the bank to see if they will waive the flood insurance (from zone A to zone C). This approval has to be done prior to the closing-at least this is what I am being told.