NFIP Flood Claim Payment & Selling My Home in Florida – Seeking Advice
I’m in urgent need of some advice regarding a situation I’m currently facing, and I would greatly appreciate any insights or experiences others may have. Thank you in advance!
I own a home in Daytona Beach, Florida, which suffered flooding during Hurricane Ian and again recently in Milton. Fortunately, I had flood insurance. Following the first storm, I completed my claim and received over $100,000 about six months later, allowing me to fully repair the home within 10-12 months. I listed the property for sale in August 2024 after getting it into good shape.
Unfortunately, the home flooded again due to the Milton incident in October 2024. I paid out of pocket for the cleanup and demolition (around $20-25k) and have since stripped the house down to the studs, awaiting resolution on my flood claim. After several months, I received a small $20k cash advance, which helped me pay off credit card debts incurred for the work. The house has been waiting for repairs, with the damage extending up to four feet.
I recently received an offer to buy the home “as is,” fully aware of the flood damage and history, but at a significantly low price of $215k. I initially aimed to sell it for around $350k after renovation last year. If I could retain approximately $100k from the flood claim, given the substantial loss in value, selling it at that price would bring me close to my original goal.
I’ve reviewed my NFIP policy and consulted with my insurance broker, who hasn’t found any restrictions that would prevent me from proceeding with this sale, especially since I’m selling at a loss. I also spoke with an online legal service, as I couldn’t locate a local attorney for a paid consultation. They indicated that because I’m not profiting from the flood claim and I’m transparent about the flood history, I should be fine since nothing explicitly prohibits this in the policy.
I would love to hear from anyone who has faced a similar situation or has pertinent advice I should consider. I’m eager to move on from this home, especially as it belonged to my ex-wife and me. I want to purchase a new home in a non-flood zone with my fiancé and put this behind me. The stress of dealing with unreliable contractors from the previous restoration was overwhelming, and if I can take a manageable loss and sell quickly to a cash buyer (who is ready), I am willing to do so.
I also need to figure out how to structure the remaining bank payment into an escrow/title contract, contingent upon the sale of the house, and I hope the bank will be agreeable. I will ensure that the contract clearly states the home’s flood history and that the new buyer indemnifies me and my flood insurance company.
Once again, thank you for any assistance or guidance you can provide. I truly appreciate it. God bless!
It sounds like you’re in a challenging situation, and it’s great that you’re seeking advice to navigate it. Here are a few points to consider based on your questions and circumstances:
NFIP Policy Terms: While you’ve already consulted your insurance broker and an online attorney, it’s crucial to keep in mind that NFIP policies can have specific clauses regarding claims and selling a property that’s been affected by flooding. If you haven’t done so already, consider reaching out to your flood insurance carrier directly for clarity on your specific policy and circumstances. They may provide written documentation to confirm that your intentions align with their guidelines.
Disclosure: Be transparent with prospective buyers about the property’s history, including the flood damage and repairs. This can protect you from future liabilities and will help build trust with the buyer. Make sure you include all necessary disclosures in your sale contract.
Escrow and Bank Coordination: It’s wise to communicate with your bank regarding the sale and how the flood claim proceeds will affect your mortgage. Since you mentioned the bank has already released some funds for repairs, it’s important they are aware of your selling plans and can work with you on how the remaining funds will be handled at closing.
Cash Offer Considerations: A cash buyer can be a strong advantage since it often leads to a quicker and less complicated transaction. Ensure you have a solid agreement that outlines sale conditions, specifically addressing the repairs needed and including a release of liability for you as the seller.
Consulting a Local Real Estate Attorney: While the online service gave you helpful insights, a local real estate attorney might provide more tailored guidance based on Florida’s real estate laws and any local regulations that could impact your sale. Even a brief consultation might give you additional peace of mind.
Timing: Given your urgency to sell, make sure you balance speed with thoroughness. Ensuring all documents and disclosures are in order can prevent potential delays or issues down the line.
Future Property Purchase: If your goal is to purchase a new home that’s not in a flood zone, start looking into financing options as part of your long-term plan. This will help you stay on track for your future with your fiancée.
While it’s understandable you’re feeling desperate, taking a little extra time to dot your i’s and cross your t’s could save you headaches in the future. Best of luck with the sale and your new beginning!