Effective October 1, Federal Emergency Management Agency or better known to most of us as FEMA has come out with new maps and rates for homes in flood plains…now did you hear anything about this? I didn’t and I’m a Realtor! I have a Seller, home sold the weekend it went on the market, ready to close last week when the buyer finds out from their lender that they are required to have flood insurance…okay, so we’re thinking $1,000 a year or so…no, it’s $5,000 per year and may go up every year! Are you kidding me???????
This home has not flooded…ever, it’s a beautiful brick Tudor in Irvington, across the street from Ellenberger Park and the homeowner has NEVER carried flood insurance…and suddenly, my Seller’s plans are in jeopardy, the Buyers LOVE this home and now would have to add $416.66 to their monthly payment? My Seller even offered $30,000 off contract to still take it and they declined!
So now I have this home to sell…again! I’ve been l looking at what little information is available about these changes…there are people who paid $600 a year now being told it’s going to be $6,000 a year…this will create a huge foreclosure crisis as the average person isn’t able to suddenly start adding $400 – $600 per month to their mortgage payment…these are homes where the mortgage payment was likely only $700 a month, they are nearly doubled…could you find it in your budget to double your mortgage payment?
The good thing about this property is that it is in a very desirable area and since re-activating the property on Friday I’ve had 6 calls and 2 showings, but I’ve had to include information on the flood insurance requirement if the Buyer is going to finance. But what happens to those people who were carrying reasonably priced insurance suddenly faced with this astronomical increase.
Unfortunately, these changes went into effect October 1…the same time as the new Health Insurance Exchanges went active and all the hoopla surrounding it started as well as the Government Shut Down…where was MIBOR in all this?
I’m hosting a meeting on Tuesday in our office with an Insurance Agent who has graciously agreed to talk to us about the changes and what it means for homeowners who are ready to sell and those Buyers we hope to attract…but check it out before you decide to buy or sell a home!