Area Home Auctions Can Invite Nail-Biting Risk

Even though the housing market continues to trace an upward path, foreclosures do still occur—and Charleston home auctions are sometimes the result. It means that there are still some good distress bargains to be had, particularly if you are interested in buying a home at auction.

Market Awareness Bolsters Charleston Home Buying Negotiators

With Labor Day behind us, the serious fall Charleston, SC home buying season is upon us. If you will be scouring the market for a new residence, you are likely to be in luck: across the nation, more sellers are being coaxed off of the sidelines. According to the Associated Press, “A fourth straight monthly increase of sales in existing homes provided the latest evidence…that the U.S. housing market is rebounding…” The rise comprised “the highest annual rate since September of last year.”

With temptingly low interest rates and batches of homes hitting the market from sellers motivated to complete their sales before the holidays, Charleston home buying consumers have ample reason to think their timing is good. Once the right property has been found, success in home buying negotiations determine what happens next: 

The Asking Price

When the subject property is one that has just recently come onto the market, the asking price may or may not be negotiable. The odds of encountering more price flexibility increase once a property has lingered on the market for 60 days or more: depending on their own timing requirements, sellers may be more inclined to entertain a lower offer as time passes. In today’s market, if a property falls into that category, many buyers will offer 1% to 10% below the asking price—especially if recently closed comparables provide support.

Extras

If the seller isn’t budging on price, consider negotiating through other aspects of the transaction—seller-paid closing costs, repairs to the home, moving costs, or asking that appliances be included in the deal. This won’t lower the asking price, but the resulting savings can have the same effect.

Market Awareness

Being prepared to work with your agent by taking advantage of the research that is made available. By becoming aware of the Charleston area’s home buying conditions in each of your target neighborhoods, you’ll be well prepared for gauging the range of offers likely to be found acceptable. Is new housing construction underway that will increase the supply of homes? Are there many homes that have sold quickly in recent history? Or is the neighborhood less in demand? It’s important to understand the climate you will be negotiating in so you can land a superior home and at a superior price.

If you’re preparing for the home buying process in Charleston, SC this fall, I’d like to invite you to give me a call to discuss current and upcoming inventory. We can set out a home buying strategy that you feel comfortable with—one that puts you in your next Charleston area home!

Interested in selling your Charleston area home? Visit: www.jeffcookrealestate.com
Interested in buying a Charleston area home? Visit: www.discovercharlestonareahomes.com

-Jeff Cook

Jeff Cook Real Estate

Selling Your Home in Charleston Area’s Fall Sales Season

Springtime is correctly known near and far as the peak season for selling your home—in Charleston, SC; elsewhere in the U.S.; probably on Mars, too. Everybody knows it. This has created a most unfortunate side effect: namely, the notion that if you missed the spring home sales binge, you’d best cancel all plans and hold your house off the market until next year (even if you’re actually ready to list).

So…should you give up on selling your home in Charleston, SC as we move into the cooler months?

Far from it! In fact, many agents with years of experience under their belts have done the math and consider autumn to be the second best season to sell a home. When you think about it, it’s logical. For one thing, there certainly are prospects who won’t wait—buyers who will be happily mowing their new lawns by the time next spring rolls around. Weather is another reason: fall brings many moderate, perfect-for-home-touring days. Then there’s the calendar itself, providing extra motivation to buy (e.g., everyone who wants to be in their new home before the holidays, or who needs to complete the sale in tax year 2014).

For those who aren’t falling for the wait-until-spring notion, here are a few tips that will help you spruce up your Charleston area property for the fall sales market:

First off, make sure all of the personal summertime clutter—the kids’ camp gear, pool floats, the by-now thoroughly bent croquet wickets—are out of sight. Put the yard into tip-top condition with grass cut, shrubbery tamed, and lawn raked. You should be able to step out the back door and view an uncluttered vista. As always, the object is to enable anyone who visits to readily visualize their own family’s stuff in the cleared outdoor space.

Shorter days means waning natural light, so selling your Charlestonarea home in autumn requires a little extra attention to lighting touches. To guarantee the home looks its best even in late afternoon, open the draperies, blinds, and shutters, and make sure lights and lamps are all turned on. Outside, anywhere the summer’s growing season has resulted in plantings that have overgrown windows, now is the time to trim them—it’s always amazing how less than an hour of snipping can brighten up a home’s interior. You may also consider adding some lighting along walkways, or a well-placed floodlight over the driveway. As we move deeper toward winter, those features will give a subtle boost to after-workday early evening showings.

You don’t have to have hired a professional stager to take advantage of the positive seasonal touches that go with the advent of autumn. Colorful mums, warm-hued candles, pumpkins (or just about any harvest-themed table décor items)—all are familiar details that have the predictable effect of helping people feel more at home. A few well-placed accents don’t take nearly as much effort as some other aspects of selling your Charleston home, but taken together, all contribute to a welcoming presentation.

Where is the nearest pumpkin patch? Where are the closest autumn-themed school or community festivities? Selling a home in fall can benefit when you leave some material about our local seasonal activities in the entryway. Sometimes the charm of a neighborhood winds up being the deciding factor for a waffling prospective buyer.

If you’ve been undecided about whether selling your home now—or waiting until next spring—is the best course of action, why not contact me today for a preliminary walk-through and pricing evaluation. I think we can put together a plan in action to get your home sold for top dollar sooner rather than later!

Interested in selling your Charleston area home? Visit: www.jeffcookrealestate.com
Interested in buying a Charleston area home? Visit: www.discovercharlestonareahomes.com

-Jeff Cook

Jeff Cook Real Estate

Charleston, SC Home Showings Keep Busy Households Hopping

Selling your home quickly and for the highest price possible demands that the Charleston showings be proactively appealing: that is, more than just a passive display of the residential “merchandise.” To make the most of the advantageous situation that any showing or open house should be, both you and your Realtor^® must adopt the approach of any successful salesperson—namely, being certain every potential customer is shown the best aspects of the product. When it comes to Charleston area home showings, that means staging.

Time-Savers for Buying a House in Charleston, SC

According to last month’s National Association of Realtors^® announcement, existing home sales are up across the U.S., at the same time that home inventories are on the rise. In Charleston, SC, it may point to a brisk fall market, with more prospective buyers deciding the time is right for buying a house.

New Homeowners Should Factor in Charleston, SC Home Improvements

You’ve done it: found what’s soon to become your family’s new Charleston home! It’s in a great neighborhood…reasonable commute…decent kitchen (size is right; definitely upgradeable). All this and it fits the budget! Congrats! Looks like your housing hunt is over...

As Summer Wanes, Charleston Home Maintenance Time is Here

It seems just yesterday that the beach towels were coming out of the closet—alas! With back-to-school specials ending and Labor Day Weekend upon us, it’s time to admit that summer is just about done for. Whether you’ve just purchased a new property, are sprucing up your Charleston area home with thoughts of putting it on the market this fall, or are just getting ready for the change of seasons, now is time to take a critical look at your abode as you prepare for cooler temperatures.

Fireplace If you are lucky enough to have a fireplace, it’s unlikely to have gotten much use for quite a while. Now is the time to make sure your fireplace and chimney are clean and free of debris or other buildup (think ‘abandoned bird nest’). If it’s been a few years, calling in a pro to do a clean sweep is probably the best idea.

Carpet or Paint Whether or not you are planning to sell your Charleston,SC home, if it’s likely you will be tackling any interior painting, carpet replacement, or major deep-cleaning, handling these projects while the weather is still mild will speed drying and maximize ventilation—making those jobs considerably more pleasant!

Tree Trimming Now is a good time to cut back branches that have overgrown your Charleston home’s roof—and one of the last chances to remove defective limbs while they still are easy to spot. Reducing the volume of leaves that will be clogging your roof’s gutters is a side benefit; another is eliminating an inviting pathway for the assortment of rodents who might seek refuge in your home as the temperature drops.

Yard Cleanup Also on the topic of pests: firewood, ladders, and toys stacked against the house can also attract spiders, mice, and other undesirables. It’s a good time to do an end-of-summer inspection stroll around your Charleston area home to double-check that the walls are clear of anything that may have been temporarily leaned against them.

Once all is done, you deserve to sit back, relax, and prepare to enjoy some football (that’s what fall is for, isn’t it?). Sweater weather may not be here for a while, but you don’t have to wait until then to call me to discuss any of your Charleston home real estate plans!

Interested in selling your Charleston area home? Visit: www.jeffcookrealestate.com
Interested in buying a Charleston area home? Visit: www.discovercharlestonareahomes.com

-Jeff Cook

Jeff Cook Real Estate

Charleston, SC

Should You Invest in Home Staging?

“If you are selling a town home this fall, engage a town staging professional to make your house look its best.”

If cost weren’t a factor, most everyone would agree with that advice. But is staging really worth the price? Can staging in Charleston, SC actually help you sell your home? Of course, without being able to predict the future, a definitive answer isn’t possible. But there are at least three convincing reasons why a Charleston home seller should at least consider making the investment:

·         Money  

A recent study by a leading national real estate company found that staged homes sold for over 6% more than did unstaged homes. We’re used to seeing this kind of statistic offered by staging professionals themselves, but this time it’s confirmed by a less-interested source. One reason could be that a staged home feels like more than an empty box. A Charleston area staged home can help buyers to imagine themselves living in the home. The result is higher perceived value—the key to more motivated offers.

·         Time  

The same study showed that staged homes sold twice as quickly as their non-staged counterparts. Well-executed staging can subtly communicate the kind of professionalism that instills trust: these people know what they’re doing. Chalk the swifter sales up to eager buyers whose sales resistance is lowered by the staged home environment.

·         The Online Factor

Imagine this: You are comparing two online listings for homes. Although they have similar features in the same price range, one seems sterile and empty, the other well-maintained and impeccably designed. Which home would you want to buy? With the prevalence of online listings, it’s becoming more and more important to have a photogenic home—one staged to draw attention to features like fireplaces, or that showcases kitchens or beautiful windows. These features might otherwise fade into the woodwork if they lack the bit of furniture and the few artistic touches designed to draw the eye. 

By personalizing what would otherwise feel like empty space, a well-staged home can appeal to the emotional side of buyers, inviting them to imagine their life in your home. And a staged home is obviously well-kept—an important cue that will help it stand out in a crowded market.

Whether you decide to stage the home yourself or invest in a Charleston staging professional, the evidence is clear: a staged home is more likely to become a sold home. If you will be listing your home this fall, why not contact me today for information on reputable home staging companies?  I can also offer a host of other current marketing ideas to put a ‘sold’ sign in front of your property!

Interested in selling your Charleston area home? Visit: www.jeffcookrealestate.com
Interested in buying a Charleston area home? Visit: www.discovercharlestonareahomes.com

-Jeff Cook

Jeff Cook Real Estate

Charleston, SC 

Understanding the 'Qualified Mortgage' or QM and Why It's Important to New Home Buyers

Are you shopping for a home or a new mortgage? If you are interested in finding the best possible financial product, it is important to consider the benefits of selecting a Qualified Mortgage. With so many different types of loan products to choose from and financial terms to learn, schooling yourself on the mortgage market before you buy your first home or apply for your first refinance mortgage may seem like a daunting task. Luckily, there are resources that are designed to help you learn the basics of products and terms so that all consumers have the power to inform themselves before securing a loan.

What is a Qualified Mortgage?

There are many different categories of home loans that individual loan products can fall into and one of these categories is simply referred to as a Qualified Mortgage. Qualified Mortgages, also referred to as the QM in the industry, is a product that has been approved as a qualified product because it has stable features that benefit you as a borrower. All lenders who are interested in offering a Qualified Mortgage must make a good-faith effort to assess your income and your debt-to-income ratio to ensure that you are able to repay the loan before you take the loan out. All lenders must meet a long list of certain requirements that are free of harmful features that could affect a borrower's ability to pay.

Common Requirements of Qualified Mortgages

The main purpose of a qualified mortgage is to protect borrowers from forms of predatory lending. The standards that the loan must meet are set by the Federal government. In addition to assessing the borrower's ability to pay before approving an application, lenders must meet loan product requirements that are very specific in nature. Some of the harmful features that a QM product is not permitted to have include:

• Negative Amortization: This feature affect consumers by allowing principal to increase over time. 
• Interest-only Periods: Where payments are only applied to interest on the money borrowed. 
•  Balloon payment requirement: A requirement where borrowers must pay a large payment at the end of the loan term. 
• Long Terms: Loans cannot have terms longer than 30 years. 
• A Large Debt-to-Income Ratio: There is a limit in how much income that can go to monthly debt payments. This limit is 43% for a QM.

How Can a QM Benefit a New Home Buyer?

As you can see, there are safeguards built into a Qualified Mortgage that are designed to protect you from entering into a long-term binding loan contract that puts you in an unfair position. There are also legal protections that are designed to protect lenders who are committed to designing qualified mortgage products. You can sign a loan that you can afford to repay, have payments applied to your principal as well as interest, and become a homeowner without unnecessary stress. If you are interest in learning more, contact your mortgage professional to review interest rates and loan terms.

Interested in selling your Charleston area home? Visit: www.jeffcookrealestate.com
Interested in buying a Charleston area home? Visit: www.discovercharlestonareahomes.com
 -Jeff Cook
Jeff Cook Real Estate
Charleston, SC

Summer's Coming: Why Adding a Pool to Your Home Can Drastically Increase Its Value (And Its Fun!)

Value is defined as the importance, worth or usefulness of something; to estimate the monetary worth of something. When the subject is a home, and what adds value to it, then breaking it down into its most common denominator is necessary.

A family looking for a home decides that it has enough space, that there is room to expand perhaps, and that the home would be handy for entertaining guests. Adding a pool to the mix greatly improves the form and functionality of a home. Below, we'll explain why there are few home renovations or additions that add more value than a swimming pool.

Pay Attention To The Area

Both HGTV and Better Homes and Gardens agree that homeowners make an error in adding a pool when the area or region is not supportive of pools. Homeowners living in hot humid climates and with pools all around them will benefit from the addition of a pool - but would you install a swimming pool in Alaska? In warmer climates not only will a pool be cool and fun on a hot summer day, but it will be worth something to the next buyer.

Those living in areas not so warm and muggy would only benefit from the addition of a pool if the neighbors had one - a phenomenon known as the 'social proof' effect. Regardless, the National Association of Realtors, or NAR, reports that pools add 7.7 percent to the average property value. The figure jumps to 11 percent for hot humid areas, so if you're in a humid area, installing a pool might be a worthwhile expenditure.

Outdoor Renovations Are A Hot Trend

The outdoors has made a comeback whose scope is unbelievable. The popularity of outdoor rooms, cascading decks, patios with pergolas and landscaped walks bears this out. Homeowners are adding trendy outdoor rooms in addition to lush landscape, hardscape and water innovations for many reasons:

- Enjoying nature reduces stress

- Families are spending more time together

- Networking is more fun over a burger than over a phone

- Many outdoor rooms are sustainable

Few will argue that these points are important. A high-quality pool can serve as the focal point for a yard or greenscape. Many homeowners build pools to highlight the architecture, for example, with stones and waterfalls to complement the landscape. The object is to make the whole package useful and worthy to the next buyer.

In Short: A Pool Will Lead To An Increase In Value

Factors vary in calculating the pool's effect on property values. The size, a diving pool vs. a play pool, the configuration, (i.e. square, oval, kidney-shaped, etc.) and the extent of the landscaping and decking are such factors. Appraisers reflect that a pool will add between 10 and 30 percent to the home's resale value.

Folks love a pool for swimming any time they wish, in the privacy of their home. For some, that alone is the only impetus they need to add a pool. Other buyers appreciate a pool because of the enjoyment it brings their children. Thus, value and applicability are much the same.

A qualified real estate agent can help you determine how much value a new pool will add to your home. Contact your agent before making this investment to ensure it will prove worthy.

Interested in selling your Charleston area home? Visit: www.jeffcookrealestate.com
Interested in buying a Charleston area home? Visit: www.discovercharlestonareahomes.com

-Jeff Cook

Jeff Cook Real Estate

Charleston, SC

The 'Must Have' List: Why Deciding Your Must-Haves Before Viewing Homes is a Great Idea

Knowing what you want before you start looking is a big help when house-hunting. Giving the list of 'must-have' items to your real estate professional a few days before you begin touring listings is a great idea because they can find homes that meet as many of your criteria as possible.

It also helps on a more personal level, since being organized and knowing what you want will help you quickly identify whether or not homes meet those standards.

Is it a 'Must-Have' or a 'Nice-to-Have'?

The debate between "I need it" and "I want it" is as old as time. Thinking back to childhood, when the desire for a cookie was met with mom's stern "not before dinner," some children seem to develop a magical ability for reasoning that voiced a desperate need for cookies before dinner, but mom was never fooled. The same goes for the 'must-have' list for your home search.

There are items that you want and certain 'deal breakers' that you cannot live without. An absolute 'must-have' might be proximity to work or certain schools, whereas desirable features could include a shed or a built-in barbeque pit. Knowing the difference between something you want and something that is absolutely required can save you a lot of time and money.

How to Organize an Effective List

Write down everything your dream home would have, then ask yourself how necessary each item is. Rate them by priority, whether an absolute requirement, something you would definitely prefer, something for which you would consider a compromise, and something that you don't really care that strongly about. That first group is your 'must-have' list. The second is your 'nice-to-have' list, which is a great guiding star for choosing between homes that meet all of your 'must-have' items.

Some Suggestions for a Great List

Location, location, location - The top of any good 'must-have' list should be location. No matter what else is changed in a home, the location will always remain a constant. Decide what you want to be close to or far away from and make sure the grounds and neighborhood are all acceptable.

Bedrooms and bathrooms - Does everyone need their own room? Do you need a guest room? Could everyone share one bathroom? Ask yourself what you need at a minimum to facilitate everyone in your home.

Energy-efficient windows and good insulation - It may seem technical, but an energy efficient home can save you a lot of money in the long run. Don't let money seep through a poorly insulated home.

Space for pets - Not everyone has pets, but for those who do it is a good idea to think of them in your 'must-have' list. After all, your new home is going to be Fido's new home too! A fenced yard or a dog run might be a good idea, but also consider whether the space would allow you to add your own later.

Call your real estate professional today to start house-hunting, and don't forget your new list!

Interested in selling your Charleston area home? Visit: www.jeffcookrealestate.com
Interested in buying a Charleston area home? Visit: www.discovercharlestonareahomes.com

-Jeff Cook

Jeff Cook Real Estate

Charleston, SC 

Giving and Getting: Why the Terms of a Home's Sale Are Far More Important Than the Price Paid

One of the most significant factors home buyers and sellers focus on when buying real estate is the negotiated sales price in the purchase contract. While the sales price is undeniably important, the fact is that other terms in the sales contract may have more far-reaching and significant effects on the transaction.

In fact, with a closer look at some of the most important terms, you will see why you and your agent should actively negotiate for improved terms rather than a lower sales price.

Closing Costs

Some buyers and sellers will haggle over a few thousand dollars in the sales price without paying attention to the closing costs, but the fact is that the closing costs for a typical transaction may cost the buyer between two to five percent of the sales price on average. A sales contract may be negotiated so that the seller assumes some or most of the closing costs, and this can result in considerable savings the buyer. Likewise, when a contract is negotiated in the interest of the seller, the seller may save thousands of dollars at closing if the contract states that the buyer is responsible for these costs.

The Appraised Value

In an ideal world, a home would appraise for the contracted sales price, but this is not always the case. A sales contract may be written with terms that allow for the sales price to be renegotiated after the appraised value is confirmed, and this may benefit both parties. Some sales contracts, however, state that the negotiated sales price is final regardless of the appraised value.

The Property Inspection

Many home buyers opt to obtain a property inspection to determine if there are hidden issues with the property structure, foundation, roof, air quality and other components. Some inspections reveal that a home is in fairly good condition, but others may reveal that a property needs thousands or even tens of thousands of dollars worth of repairs. Some sales contracts may be written so that the buyer may back out of a contract within a certain period of time after receiving the property inspection report or so that the terms of the sales contract may be re-negotiated once the property inspection report has been completed.

Special Contingencies

A real estate transaction may extend for several weeks or even months while the buyer contracts with a lender, an appraiser, a property inspector and other third parties. During this period of time, many events can occur that may adjust the interest level or even the ability of the buyer and seller to fulfill the contract. Some sales contracts are written so that the buyer may opt out of the contract within a certain period of time with minimal expense and regardless of other factors related to the appraisal and inspection.

Generally, there are standard terms found in many real estate sales contracts, but these terms can be adjusted by either party to benefit buyers or sellers. Those who are preparing to buy or sell property should actively communicate their needs and desires with their real estate agent so that the contract may be negotiated with terms most favorable to their needs.

Interested in selling your Charleston area home? Visit: www.jeffcookrealestate.com
Interested in buying a Charleston area home? Visit: www.discovercharlestonareahomes.com

-Jeff Cook

Jeff Cook Real Estate

Charleston, SC

Credit Score Changes Could Spur Charleston Area Mortgage Activity

For any Charleston, SC resident who has ever been stymied by seemingly arbitrary (or, put another way, nutty) lowering of his or her all-important credit score, next month’s beginning rollout of Fair Isaac’s new credit score model should be welcome news. It will be known as “FICO 9”—and promises to correct a few of the previous model’s inadequacies.

First Time Buyers Look to Tap Alternate Funding Avenues

In an improving residential real estate market, first time buyers may flinch at the greater loan amounts that accompany larger price tags. Lending standards have also put some first time buyers through a tougher gauntlet than faced during many previous eras. Although some easing is now beginning to take place, some Charleston first time buyers can still find it difficult to secure the level of funding they seek. For them, there are a number of alternative funding possibilities that first time home buyers in Charleston, SC may wish to explore. Here are some of the assistance programs that can serve buyers as they go about buying that first home:

Charleston, SC Luxury Home Sales Ramp Up for a Bustling Fall Market

With summer drawing to a close (say it isn’t so!), it’s time to cast an eye towards the prospects for this year’s fall home sales market. Fall can be a great time to list a home, but it can be especially opportune for luxury home sales in Charleston, SC. It’s a season that traditionally brings out serious buyers—those looking to find a home and complete the move before the holidays. If you are selling a property that falls into the luxury home category, before you roll up your sleeves and get to work in earnest, here are some broad-brush pointers real estate writers cite most often: 

Make Sure You Work With the Right Agent

Before you even begin other preparations, you can make the most efficient use of your time by first being sure you have recruited the right agent. Aim for a professional who has earned a reputation for successful luxury home sales in Charleston. A solid portfolio is the best demonstration that you’ve identified someone with the know-how (and the right contacts) that so often make the difference in luxury home sales.

Details Matter

Even more than with an average listing, Charleston luxury home sales depend on every detail being well handled. Don’t just have the windows cleaned—scour the screens, too. Don’t just put out a vase of flowers in the dining room—where tasteful, think about placing them by the beds; in the bathrooms, too. Make sure the entryway is always clear at every showing. In short, sell the dream of the picture-perfect luxury home. By treating every detail with care, you validate your luxury-level asking price!

Highlight Features

You know your property best—which gives you valuable insight into the features that make your home a standout. Make a list of additions, enhancements and luxury touches you have added, and other elements that would make any new owner proud. Where is the light most magical? When do the gardens burst with color? Your agent can determine which details will have the most impact in the each of the marketing media.  

Know What to Expect

With luxury home sales, it’s a good idea to always keep the nature of the market in mind. Luxury home sales in Charleston, SC can happen quickly, but more often than with an average property, success can take a little longer. A good agent will let you know how long similar homes have taken to sell in your price range—it’s useful background knowledge. Most often, the key to luxury home sales is the quality of showings rather than the quantity.

If you’d care to hear more about what we can expect for this fall’s luxury home sales in Charleston, SC, contact me today. I’ll be happy to share an up-to-the-minute market analysis—the best way to project the outlook for the upcoming market.

Interested in selling your Charleston area home? Visit: www.jeffcookrealestate.com
Interested in buying a Charleston area home? Visit: www.discovercharlestonareahomes.com

-Jeff Cook

Jeff Cook Real Estate

Charleston, SC

Mortgage Budgeting 101: How to Determine What You Can and Can't Afford

When taking on a new mortgage, it is important to know that you can afford to carry the debt load involved, as many people find themselves in financial trouble by spending more on real estate than they can comfortably maintain. Your mortgage budget can be calculated to determine just how much you should spend on your next mortgage.

Getting Ready to Retire? Six Tips for Downsizing from Huge House to Efficient Condo

If you're getting ready to retire, you may be thinking about downsizing. Having a large house makes sense when you're raising kids, but once you reach your golden years, it usually makes sense to move into a smaller, more efficient condo. While downsizing may seem impossible, these six tips will help you reach your goal.

The 5-Minute Guide to Flood Insurance: What It Is, How It Works, and Whether You Need It

You've got house insurance, and assume your property is covered for any type of detrimental occurrence that can possibly take place.

However, not all homeowners are aware that home insurance policies don't necessarily cover damage related to a flood, as the risks are too great. As a result, homeowners must purchase flood insurance through a private company.

Floods are one of the most common hazards in the US, costing billions of dollars in damage to properties every year.

What Is Flood Insurance?

Flood insurance policies are typically made available to homeowners in flood-prone areas. The majority of insurance policies cover some form of water damage, from things like leaking faucets to bursting plumbing pipes.

However, such policies don't cover water damage as a result of flooding of rivers or sewers that cause water to ruin a home.

Specific flood protection is provided by the National Flood Insurance Program (NFIP), which is run by the Federal Emergency Management Agency (FEMA). Standard flood insurance policies cover "direct physical damage" to a property resulting from floods.

A separate policy must be purchased to protect the belongings inside the home or building. Homeowners can buy up to $250,000 in coverage for the home, and up to $100,000 in coverage for possessions. Even renters are permitted to purchase flood insurance to cover their possessions.

How Does Flood Insurance Work?

Flood insurance isn't sold by FEMA directly, but rather is sold to customers through private insurance agencies. Premium rates are determined by the government, and they remain consistent from one insurer to the next.

How much a homeowner pays for their own specific flood insurance depends on a number of factors, including how prone the neighborhood is to floods and how much coverage a homeowner wants. The average annual premium is approximately $520 for $100,000 worth of coverage for a property with no basement, and approximately $615 annually for a property with a basement.

Filing A Flood Insurance Claim

The claims process is like any other insurance claim. Once the claim is filed, the damage will be analyzed by an adjustor assigned by the insurance company. A "proof of loss" form will need to filled out and submitted to the insurer within 60 days of the flood occurrence.

Do You Need Flood Insurance?

It's necessary to find out if you are eligible for flood insurance before buying it. For residents of a community to be eligible, the community needs to enforce floodplain statutes to lessen the chances of flood damage, after which FEMA ensures that such regulations are followed.

Only those who reside in a community that participates in NFIP can buy insurance—today, about 20,000 communities across the country participate in this program.

FEMA offers maps that outline what areas are at high risk for floods, and those that are at moderate-to-low risk. The law requires homeowners to have flood insurance if the properties are located in a high-risk zone and have a federally-backed mortgage. This is because properties located in these high-risk areas have a 26 percent chance of suffering flood damage during the 30 years that it would take to pay off a mortgage.

Homeowners are not required to buy flood insurance if they reside in a moderate-to-low-risk zone, though it may be a good idea to purchase it anyway. Properties outside the high-risk areas make up over 20 percent of NFIP claims. Homeowners in these areas can purchase up to $200,000 in flood insurance.

The bottom line is, even if you don't necessarily live in a high-risk zone, this doesn't mean your home won’t ever get flooded. Many conditions can result in flood damage, including clogged drain systems, flash rainstorms, and damaged levees.

If you're contemplating whether or not to buy flood insurance for your home, call your trusted real estate professional today for more information.

Interested in selling your Charleston area home? Visit: www.jeffcookrealestate.com
Interested in buying a Charleston area home? Visit: www.discovercharlestonareahomes.com

-Jeff Cook

Jeff Cook Real Estate

Charleston, SC