Selling a Flood Damage Home
Published on 29 August 2022, 07:22:56 AM
Storm waters and rising tides create a high water mark for flood damage home sellers.
Slow moving ice jams, the spring melt, and flash flooding from rain storms can take the value right out of your home.
Take steps now to rescue and sell a flood damage home, before the next sudden storm surge plunges your property’s fair market value below what you owe.
Quick Read
What is the effect of a flood in a house?
Homeowners’ liability for a flood damage home
Does living on a floodplain affect the value of a house?
Selling your home if you’re on a floodplain
Repairs that sell a flood damage home
The High Cost of a Flood on Your Property Values
Flood damage homes dropped in value by a shocking 15% to 60% after some storms. That’s $131,250 to $525,000 off an average $875,000 property. University of Waterloo discovered post-flood homes in Toronto, Burlington, and Ottawa sold at an overall 8.2% discount. Read the Intact Centre on Climate Adaptation Treading Water report.
Ontario homeowners got some of that back from a proper flood insurance policy, if they have one and after subtracting the deductible. And Ontario gave out over $7.5 million in municipal disaster recovery assistance after widespread flooding in 2019.
But while Build Back Better raised roads, improved bridges, and overhauled catch basins, it won’t rebuild a flood damage home. Selling a home in a flood zone.
Is your home in a floodwater zone? Check the Ontario flood map.
How Flood Risk Affects Ontario Home Prices
Amazingly, living near a floodplain has little effect on property values and sales prices. Researcher Steven Yeo arrived at that conclusion after comparing Canada, New Zealand and U.S. data.
Other studies agree. Having your neighbourhood designated a floodplain or subjected to floodplain regulations makes no difference on home prices. What does affect property values are your home’s lot and physical size, nearness to waterfront and amenities like schools, local home prices, past floods, and how media reported on those floods. Appraise a house in a flood zone.
Regardless, only 6% of Canadians living in floodplains know they are at risk, a 2020 study by Waterloo professor Jason Thistlethwaite found. That could be because disclosing flood damage when you sell is voluntary unless requested.
How to Market a Floodplain Home
What can make a difference to selling a home in a floodplain are:
- Timing listings with homeowner grant announcements, so buyers can redo your flood damage home to their own tastes.
- Using clear language about floodplain risk, like “flood probability”, not “flood recurrence interval”.
- Using photos to show high water marks and maximum probable flood levels.
- Showing favourable photos of how your home fared in past floods.
- Briefing realtors on repairs to your flood damage home.
Find floodplains in your area. Understand your home seller’s legal liability for a flood damage home. See more on buying a house in a flood zone.
Recovering the Value of a Flood Damage Home
You can recover from owning a flood damage home with serious issues. Cambridge homeowner owners flushed out of their homes by a 1978 storm saw repaired homes climb in value.
4 simple steps to recovering your flood damage home’s value:
- Dry out your home, and treat or rip out damp, mouldy wallboard, baseboards, insulation, or exterior finishes. Hire a home restoration service to do the dirty work.
- Give your interior and exterior a new coat of paint, but don’t cover up damaged surfaces that could expose you to legal liabilities.
- Buy new appliances. Flood and sewer water contaminate and short circuit major appliances. The “ick” factor alone will lower home buyers’ offers.
- Finally, have a professional home inspector and property appraiser assess your home’s value after repairs. The buyer certainly will.
Bring these documents to your real estate lawyer appointment.
Why You Need a Real Estate Lawyer
When you’re the seller of a flood damage home, we review offers to purchase for clauses that could affect your property’s selling price, like home inspection conditions that allow buyers to pull out without forfeiting their good faith deposit.
Axess Law confirms with mortgage lenders that your buyer has an obligatory fire insurance binder for a condo purchase, or homeowners’ insurance to protect their investment. We include a 48-hour escape clause that allows you to entertain other offers while your potential buyer arranges mortgage financing or a professional home appraisal. What a real estate lawyer does.
When your buyer lifts their conditions, Axess Law finalizes the agreement of purchase and sale, and arranges to discharge any existing mortgages you may have. We liaise with your lender for you to sign new mortgage loan documents, and transfer title to your home to the buyer. Made major repairs to a flood damage home? Your Axess Law lawyer checks for financial claims or contractor construction liens that can prevent or hold up your home’s sale.
Why do I need a lawyer to discharge a mortgage in Ontario?
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How to use a remote real estate lawyer.
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Access lawyers for less in Greater Toronto Area, Ottawa, or anywhere in Ontario when you buy, sell, or transfer property. Axess Law’s flat fee real estate lawyers are affordable, and our rates are all inclusive (excluding taxes, disbursements, and third-party charges). Axess Law offers you only the legal services you absolutely need. Your final invoice includes no surprises or hidden charges. Your itemized statement of adjustments is explained when we deliver it, and we answer any questions you have about it.
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Finding appointment times that work for you is easy with our online web booking form. Dial our 1-877-402-4277 lawyer line (647-479-0118 in Greater Toronto Area), for personal assistance making remote real estate lawyer appointments anywhere in Ontario. We have day or evening appointments at our conveniently located Axess Law offices in Greater Toronto Area and Ottawa.
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