What does it mean if a home is in the flood plane? In most cases, not much at all. In certain areas of the country (i.e. New Orleans), this can be a more serious problem. In the metro Atlanta area where I work, it is not a big problem. Of course, there are different levels of flood plains. In most cases, a home would never be built on land that is prone to excessive flooding. However, often homes are built on lots that back to lakes, creeks, etc. that have not flooded in recent history and have an extremely low probability of flooding. However, if the probability is anything greater than zero, your lender will likely require you to carry flood insurance on the home. The cost of this will vary depending on the probability of the home flooding. On average, it is usually around $500/year; which is by itself an indication of how unlikely a scenario actual flooding is. If you owned an insurance company and had to rebuild all homes that get flooded, would you charge $500/year if the homes were flooding frequently? If you did, you’d be out of business pretty fast. The reason they can charge so little is that it is so unlikely to happen that there is a 99% probability that they will make $500 for nothing and once in 1,000 years; they may have to pay out a claim.
Some other things to consider about homes on flood plain lots:
1. You can look in your local tax records to see if a particular home is recorded in the flood plain.
2. Many homes are recorded as flood plain lots and really shouldn’t be. I recently had a listing that was in the flood plain according to the tax records; but both the seller and I questioned the validity of that. We ordered an elevation study on the lot from FEMA and sure enough, we got the home removed from the flood plain status.
3. There is a plus side to it. If the home is in a flood plain, it likely backs to a creek or some water nearby and often that goes hand in hand with a private lot that cannot be built on behind the house; so you can be assured your back yard trees will never be taken down in favor of a new subdivision or roadway; thereby guaranteeing your privacy for as long as you own the home.
So, before you eliminate a home just because it’s in the flood plain, know the facts. Find out what the flood insurance will cost. In all likelihood, it should not be a significant enough consideration to sway you from buying a home that you otherwise like.