By Ginger DeMent
For many, buying a beach house and living near the ocean is a lifelong dream. If you’re planning to finally buy that house by the sea, here are five questions you need to know the answers to before you take the plunge.
1. What is the Flood Zone?
First and foremost, check FEMA’s website to see what flood zone the property you’re interested in is located. FEMA’s website has a wealth of detailed information about the individual zones.
If the property is in a high-risk zone, all is not lost, but there are several things to keep in mind if you move forward with buying it.
2. Will You Need Flood Insurance?
If you’re planning on mortgaging your new home, flood insurance will be required for homes in high to moderate risk zones. The premiums will be determined based on the risk — the higher the risk zone, the higher the premiums.
What many new buyers don’t realize is that the premiums can start between $2,000-$5,000. Are you ready for the bad news? These premiums will absolutely go up every year without modifications to the property. In other words, if you don’t do anything to decrease your home's flood risk, your premiums will become exorbitant.
3. Is an Elevation Certificate Available?
The first step in getting an accurate flood insurance quote is to ask the homeowner or real estate broker for a copy of the elevation certificate. This certificate will allow the flood insurance agency to determine the home's elevation and foundation type. Homes built on crawl spaces with flood vents installed will be less expensive to insure than homes situated on slabs.
If there’s no certificate available, and you’re still seriously interested in the property, you have the option of asking the buyer to provide one or paying for an elevation survey yourself. This can cost anywhere between $250-$400. If, for some reason, you decide to purchase the home without a certificate, you will be required to pay for an elevation survey before the closing.
4. Are There Permits?
Before putting an offer in on a home, call the town to see if proper permits were purchased for any major repair work. This can be tricky because homes that were damaged in Hurricane Sandy, for example, have to follow certain protocols to repair water and electrical damage.
When major repairs have been completed without permits, it usually means the repairs were not done to code. Additionally, some towns will not allow a new buyer to move into the home without purchasing the required missing permits. For some, a few thousand dollars in missing permit costs may not seem like a deal-breaker, but the real problem lies in the fact that that you will not be granted permits until the work is done properly.
5. Is It Lifted?
A lifted home in a high-risk flood zone can reduce flood insurance costs from thousands of dollars to just a few hundred. However, if you’re considering lifting the house yourself, know this: The size of the home and the type of foundation will determine the cost of the lift itself. Although many contractors advertise a $30,000 lift, it’s important to be aware of hidden costs. For example, a house originally built on a concrete slab will need new flooring when it’s raised. Other hidden costs include new stairs, reattaching decks, and relocating utility connections.
Even the best contractors make mistakes, so it’s a good idea to plan for mild to moderate damage to walls, tiles, countertops, etc. Of course, there’s the cost of finding another place to live for 3-6 months while your home is being lifted.
Buying a beach house is a dream come true for many. Asking the right questions can keep your dream from becoming a nightmare. Happy hunting!
Images used with permission, courtesy of www.dreamstime.com