In the days leading up to Hurricane Harvey’s landfall, many Houstonians and Texans living along the state’s southern border faced the tough choice of leaving their homes, or riding out the storm. A little over a month later, homeowners now face another decision: whether to repair their flood-damaged properties, or sell them as-is.
The Houston area is no stranger to rapid flooding or hurricanes, but Harvey’s severity, coupled with the general lack of federal flood insurance, has left many homeowners in a precarious position. While many home insurance policies account for wind damage, there are few flood provisions since it’s difficult for insurers to fully assess risk, as flood zoning changes over time. As a result, flood insurance policies are purchased directly from the federal government through the National Flood Insurance Program.
According to recent FEMA data, though, only 17% of homeowners living in the eight counties most affected by Harvey have a flood insurance policy. Those without a policy or a feasible way to repair their homes may decide to recoup whatever money they can through an as-is property sale.
This is a very daunting decision for affected homeowners, regardless of whether they decide to sell or renovate. To give a little guidance, we’ve assembled several strategies for each choice.
Tips for Selling a Flooded Property As-Is
Selling as-is is the least ideal option, but there are several steps you can take to streamline the transaction, but before all that, your first step should be dealing with any water damage as soon as possible. The longer water stagnates inside your home, the greater the chance of mold growth, so while it may be an unwelcome expense, hiring a home restoration specialist is a wise investment.
From there, your next step is to determine the pre-flood market value of your home and use that as a base price; then, schedule property walkthroughs with several reputable contractors to determine how expensive renovating your home would be for a prospective buyer. After you’ve received multiple quotes, you’ll have to judge whether to subtract the lowest or highest quote amount from your pre-flood price to arrive at your asking price. The former option will potentially net you the best closing price, but the latter will bake in more of your home’s renovative expenses and make it a less risky, transparent investment.
Transparency is your greatest asset when selling as-is. Unless your buyer is swiping up multiple properties to flip them later, you’ll have to mitigate a lot of risk, or at least be as upfront about those risks as possible, to usher your buyer to complete the sale. One important thing to be clear on is the risk for future flooding. In coastal cities like Houston, Baytown and Victoria, there will always be flooding risks, but reviewing your neighborhood’s flood zoning will give a sense for their exact severity. Flood zoning maps can be found online using FEMA’s Flood Map Service Center. These maps are constantly changing due to land erosion, new construction development and recent storm activity, so make sure to refer to this resource often, even if you’re not selling your home.
Tips for Remodeling Your Home Before Selling
Many homeowners struggle prioritizing the items on their renovation checklists, trying to strike the ideal balance between cosmetic and functional. When remodeling a recently flooded property that you intend to sell, your updates should be primarily focused on flood-proofing. Luckily, there are many interior and exterior renovation options that will help you do just that.
Your first step should be elevating your home’s critical appliances, such as furnaces, central AC units and water heaters. The initial cost of a tankless water heater or ductless HVAC system may be imposing, but it pales in comparison to the financial headache of continuously repairing old, waterlogged equipment. One of the biggest threats a flood imposes is severe damage to these key home systems, so removing this risk for potential buyers will instantly distinguish your property from the competition.
Any time a hurricane or severe storm system comes through Houston, windows and doors are often the primary concern because they’re exterior-facing, and provide a clear visual representation of how badly a home has been damaged; but even greater structural risks can be found in the home systems you don’t see. Often, excess water can flood sewage mains and create unwanted backflow. One of the most effective ways to flood-proof your home is to give your home ways to evenly distribute and drain floodwater. One method could be having a plumber install a backflow prevention valve to reduce stress and wear on your sewage main. Another could be re-landscaping your yard with absorbent mulch, or converting an asphalt driveway into a gravel one.
Moving Forward After a Flood
Selling a flood-distressed property is a time and effort-intensive process, but it’s not as insurmountable as it may seem in the wake of a powerful storm. Above all the cosmetic facelifts you can make for your home, the most important thing you can do as a seller is give your buyers assurance that, if they purchase your home, they’ll be equipped to deal with future storms and manage excess floodwater. There’s no way to completely remove all risk from a buyer’s investment, but these methods will help mitigate them.