There is no single source of reliable information buyers, sellers, owners and real estate agents can rely on when they’re pondering how to deal with a property in a coastal community now experiencing or soon to experience sea level rise flooding. That’s why they have to practice due diligence and turn to multiple sources for answers regarding the flooding status of a property to make informed decisions that protect their financial futures.
Due diligence is discussed in detail in my recently updated book “7 Sea Level Rise Real Estate Questions for Buyers, Sellers, Owners & Real Estate Agents”. If you watch this video, you’ll get a more general sense of why performing due diligence is critical and the strengths and weaknesses of several informational resources, including sellers, real estate agents, flood insurance providers, and neighbors.
As an example of why due diligence is necessary, let’s take a look at sellers and real estate agents as sources of information. Often buyers believe sellers are legally obligated to tell them if a property floods, but the fact is that every state has its own seller’s disclosure law. The state regulations range from very strict to so loose buyers are essentially on their own. Even real estate agents don’t always know flooding is impacting a specific property or neighborhood, and they might be pressured by a seller not to disclose what they do know to a buyer. (Note: This is a risky practice that may result in a costly lawsuit.)
With the limits of every informational resource, buyers who want to purchase property in coastal communities must perform due diligence and use several sources to determine if a property floods, how soon it might flood, and even whether the road out front floods, which can make it hard to access a property. Sellers should practice due diligence to determine their obligation to disclose flooding to a buyer. Owners should use it find out what they can do to address flooding or the threat of flooding and to decide whether it’s even worth the effort. Real estate agents should understand what due diligence is so they can tell their buyers and sellers how to gather more information to make informed decisions.
When you get down to it, you never can have too much information about a piece of real estate. In coastal communities experiencing or at risk of experiencing sea level rise flooding the more information the merrier.