Home Buying in 23188>Question Details

Jm, Home Seller in 23188

Our buyers want out because of required flood insurance.

Asked by Jm, 23188 Sun Jul 5, 2009

A week before we were to close on our house, our buyers learned that our house has been zoned as being in a flood zone (w/ less than 1% chance of flooding). We were never informed and had no knowledge of this. We didn't have flood insurance (and are financed), nor did the previous owner (to our knowledge). We renegotiated, providing more $ at closing in compensation, but two weeks after those forms were signed and the close was to occur, they decided they want out altogether, requesting all of their earnest money. This is made more frustrating because they requested an lengthy time allowance for close--so we're out almost 6 months! Do we have any recourse anywhere? What to do? JM

Help the community by answering this question:


The best answer is, "Call an attorney!" In this environment of a buyer's market, there maybe other motivations behind their request for a release of contract. Make sure your agent understands the difference between a termination of contract and a release of contract. These are two very different actions to ending a contract. One allows you to go after the buyers in the event you suffer damages and it is determined there was no cause to end the contract.

First start with your attorney. Also, ask your agent to escalate this to his managing broker or principal broker. Many times contracts are terminated that should not be terminated.

-Good Luck,
Carl Pautlitz,
Sheeran Sotheby's International Realty
901 Richmond Road
Williamsburg, VA 23185
1 vote Thank Flag Link Mon Jul 6, 2009
This was posted several months ago. I am courious how it was resolved.

I know personally that if I found out a house was in the 300 year flood plain I would not buy it. That is enough to stop the purchase. If it truly is in a flood zone and it was not disclosed I would think that material loss of disclosure would have protected the buyers. am I right?
0 votes Thank Flag Link Sun Nov 8, 2009
Contact a Real Estate Attorney to look at the contract and look at the terms, and if they were followed or not. A consulation should not be too pricey. Also, ask your Realtor, Of course. Sometimes FEMA re-draws lines
( when they need money) and homes are put into a flood zone for one reason or another. And if your mortgage company missed it, then that would be why you are not paying (maybe). I had a listing once that this exact thing happend. Also, if the premium affects the buyers $$ qualifying ratios, that can make it so the lender won't lend, and ergo~ the buyer is no longer qualified. You may also want to have a new Survey done to make Sure of the Flood rating. I did that on a home we owned in Memphis, and the premium went down because the FEMA survey was off. Take Care. Laura C

Laura Chapman, Realtor William e Wood lIcensed in Virginia
0 votes Thank Flag Link Thu Jul 30, 2009
Sometimes things don't work out in real estate closings. It seems as though no one was aware of the flood zoning. Buyers should not be coerced into purchasing a property when they learned of the issue that might cost them more than they could afford---Irregardless of how long it took to close.
Elaine Chadwell
0 votes Thank Flag Link Wed Jul 8, 2009
Best advice is to check with your realtor's broker. Perhaps they have a relationship with a specific attorney whose specialty would be this issue for your area. Not knowing how the purchase contract is written ther may be extenuating circumstances for your area for this situation. By involving the broker, he may have the ability to help by contacting the "other side". If they still want the property things may be worked out. If they don't want the house he maybe able to negotiate your keeping at least part of the earnest money to make up for time lost on the market. You'll also find out where the broker is on the issue and he may be willing to help in other ways should the house have to go back on the market. In our market, earnest money release requires the approval of all parties-if you say no it stays in the trust account and can't be released.
0 votes Thank Flag Link Tue Jul 7, 2009
If they really wanted the house, the flood insurance issue would not be a deal breaker. Good Luck
0 votes Thank Flag Link Mon Jul 6, 2009
Get an Attorney involved ASAP. I would also ask the agent to get his/her Broker talking to the Broker of the other agent. Many times this can be resolved and it's nothing more than a miscommunication.

Call the County to confirm the flood zone you are in and find out if it does or does not require additional insurance.

Good luck!

Troy Deierling
EXIT Realty Deierling & Assoc.
Williamsburg VA 23185
0 votes Thank Flag Link Mon Jul 6, 2009
One question you'll want to get clear: "Exactly what flood zone are you in?"

The flood zone of interest is the 100 year flood plain, meaning that flooding can happen in the kind of storm that is supposed to happen only once in 100 years (but, having seen 5 of them and being substantially short of 500 years old, I'm personally not so sure of their statistics). If you're in the 100 year flood plain, you need flood insurance. If you're outside it, it shouldn't be required by a lender of you or your buyers. If the insurance person or lender is saying that your property requires flood insurance, you might want to have a surveyor make sure that it's really the case, because these determinations are sometimes derived incorrectly from inaccurate maps.

Hopefully, you'll find this to be a simple education issue, and not buyers who no longer want to buy for other reasons.
0 votes Thank Flag Link Mon Jul 6, 2009
Follow Frank's advice and hire an attorney and I agree with his choice of attorneys although Brian Lytle would be my first call. If the buyer signed of fon the agreements and made a contract that had no remaining contingencies, you might sue for specific performance. However you still need to sell the house. And Brian might tell you it's easier to force a seller to sell than force a buyer to buy. Verify the claim of flood insurance being required-your homeowners insurance company can probably help you with that-or have your settlement agent/attorney confirm it. If the buyer can no longer qualify for the mortgage with the increased payment and that is why they want out, you may be out of luck unfortunately.
0 votes Thank Flag Link Mon Jul 6, 2009
Hi Jim,

Typically, the buyer's lender would have discovered if a property is in a flood zone *long* before one week before closing, but flood elevations can change while you reside in the proeprty.

But have you or your Realtor verified the information true, or are you completely relying on what the buyer, their lender, or their agent has told you? Are you represented by a Realtor, and was the offer written on a local standard real estate contract (REIN contract?). Are you using your own attorney to close your side of the deal? Although you provided a lot of detailed information about your situation, you left many important parts out.

Either way, I suggest that you hire a "real estate" attorney to see you through this, and Jones-Bleckman, Shaheen Law Group, or Lytle Law group are three law firms that I recommend.


Frank Biganski, Realtor
EZ-Vest Realty, Inc.
Newport News, VA 23602
(757) 303-0517
0 votes Thank Flag Link Mon Jul 6, 2009
Ugh! I don't have any answers for you, just wanted to tell you I'm sorry. You must be so frustrated! Ugh, ugh, ugh!
0 votes Thank Flag Link Mon Jul 6, 2009
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