Early estimates show that Harvey’s record rains flooded 100,000 homes in Houston alone. For those countless homeowners who faced a dramatic rescue by boat or who are still waiting to return to their homes because flood waters have yet to recede, the trauma of Harvey is far from over. It’s no wonder many of these Houstonians are questioning whether they want to restore and return to their homes at all. Amid chaos, however, it can be difficult for homeowners to make rational selling decisions. Big State Home Buyers has compiled a list of considerations to help flood victims think through their next move.
1. What is The True Motivation to Sell The House?
First, is the decision to sell your flooded house economic or emotional? No one is judging. Both are valid reasons to sell, but it’s smart to recognize your motivation. Are you considering selling your flooded home because you simply can’t imagine going back? Although getting the best value for your home may seem like a secondary concern when emotions are involved, you still need to think through your options. For most families, moving from a home means far more than just selling a flooded house. It can mean moving away from friends, relocating kids to new schools, or leaving behind a lifetime of memories. While Harvey may have temporarily displaced your family, if you have strong ties to your neighborhood it may be difficult for you to relocate. If so, what does the housing market look like in your area? Will you be able to find another home in the community you love? Will your friends and neighbors still be there when you return? Alternatively, if you are willing to move from your community, is there a comparable neighborhood that you can realistically afford? If you are nearing retirement, has Harvey made you consider relocating?
2. Considering Property Values After a Flood
If you are thinking about selling your home quickly to get maximum economic value, other considerations come into play. For starters, what’s your flooded home worth? If you can answer that trick question, you’re way ahead of everyone else in Houston. No one knows exactly where home values will land post-Harvey for areas like Bellaire, Cypress, Friendswood, Katy and Sugar Land. Some have projected that flooded homes could lose anywhere from 10 to 40 percent of their market value.
With so many displaced Houstonians in search of real estate, how well your neighborhood withstood Harvey’s unprecedented rainfall amounts will help determine your property value after the flood. Homes that never flooded before Harvey could still demand a good value. On the other hand, homes that were spared from flood waters only to be the island property in an ocean of flooded homes could still see discounted value. And not surprisingly, homes previously impacted by the Memorial Day Flood or the Tax Day Flood could now be reduced to lot value.
3. Approach the Sale of a Flooded House as Objectively As Possible
To objectively approach the decision to sell or not to sell, slow down and ask yourself a few more critical questions.
- Do you have flood insurance on your home? If your home is insured for flood damage, before you shift into seller mode, it is important that you take the time to initiate the claims process. Your flood insurance will pay up to $250,000 toward repairs, and potentially more for your home’s contents if you have ancillary coverage. Of course, as you might expect, the claims process is moving about as quickly as Houston traffic right now. With so many areas impacted, it could take up to two weeks before an insurance adjuster can get to your home to assess its damage, and three to five more weeks before the adjustor is able to return a quote. Be patient. And after you’ve filed your claim, if you still decide to proceed and sell your flooded house, be sure to work with a company or broker that fully understands the claims process.
- Do you have equity in your home? Your equity is the difference between the market value of your home and the amount you still owe on it. In the case of a flooded home, the more equity you have, the more options you have. You might qualify for a home equity loan to make needed repairs. But that additional debt, coupled with the loss in your home’s market value, could strike a severe financial blow. For that reason, many homeowners who have a significant amount of equity in their home may be inclined to sell it as-is rather than negotiate the cost of repairs with flood insurance adjusters or suffer through the hassle of restoration. In the end, homeowners need to carefully weigh the total cost of restoring or rebuilding a home versus selling a flooded home at a severely discounted price.
Harvey has left Houston hurting. While impacted homeowners are still trying to recover and relocate, they are also facing challenging and lasting decisions about where to go from here. Take a breath. Take your time. And when you’re ready, contact Big State Home Buyers with your questions. Like so many of your neighbors here in Houston, we want to help.