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.
Every year, cities along the Atlantic, Pacific and Gulf of Mexico coastlines spend millions of dollars on beach nourishment projects. In my hometown, Delray Beach, Florida, a massive offshore dredger just started pumping slurry — sand and water — onto the seriously eroded beach to replenish it. The $8 million project is expected to last weeks. (You can see how it works by watching the video I created of the project.)
This type of dredging to replenish a beach has benefits and costs. In our case, the cost of beach replenishment is easily offset by the tourist dollars it attracts to the community. Without a beach, it’s unlikely people would come here and spend money to stay in hotels and dine and shop in the bustling downtown district. The beach also lures real estate buyers into purchasing single family homes, townhouses and condos.
Beyond the economic advantages, the replenished beach also acts as a barrier that protects valuable real estate from storm surges and erosion.
Despite the many positives, beach replenishment has some downsides. It can be harmful to marine animals and shore birds. If the causes of erosion aren’t (or can’t) be addressed, it will have to be repeated on a regular basis. And it can be expensive; and the costs are growing, especially in areas where sand is not in abundance and it has to be trucked in.
Sea level rise is sure to exacerbate the challenges faced by towns that rely on sand replenishment to maintain their beaches. Every inch of sea level rise increases the force of tides and wave action on beaches. The higher and more powerful storm surges that come with climate change and sea level rise will also be problematic.
For now, most cities and towns that rely on beach replenishment appear committed to the practice to protect their tourism trade and valuable real estate. Whether they will be able to foot the bill when the seas get higher and their beaches require more frequent nourishment projects is an X factor that all real estate buyers and owners in coastal areas prone to erosion need to consider.
Sea level rise flooding is real. Property owners and governments all along the Atlantic, Pacific and Gulf of Mexico coastlines are spending millions of dollars to hold back the rising waters.
Individual property owners are raising docks and seawalls and elevating their property to prevent flooding that’s occurring now or expected in the years to come. Governments are busy planning for sea level rise flooding and implementing projects, such as building seawalls, raising seawalls, installing pumps, and elevating critical infrastructure, including roads and pipes.
With all this activity, it’s clearly dangerous for real estate agents in most coastal areas to deny sea level rise is a threat to their buyers, sellers and community. Now is the time for them to educate themselves about sea level rise in general and to identify areas that currently flood or are at risk of flooding in their communities. They also need to know how sea level rise flooding is affecting specific properties, neighborhoods, flood insurance premiums, tax rates and homeowners association and condo association fees. The mortgage market, too, will determine the fate of entire communities.
Real estate agents who turn a blind eye to sea level rise flooding ultimately put their own financial futures at risk. Buyers who unwittingly purchase properties that flood could easily sue agents for negligently not knowing their own farm areas.
This Sea Level Rise Real Estate video explores the risks sea level rise flooding presents to real estate agents. It’s the fifth and last in the introductory series. All the videos — an introductory video and episodes that focus specifically on buyers, sellers, owners and real estate agents — can be binge-watched here. For even more in-depth information, take a look at our book: “7 Sea Level Rise Real Estate Questions for Buyers, Sellers, Owners & Real Estate Agents.”
In the fourth Sea Level Rise Real Estate introductory video, we take a look at the challenges owners face when sea level rise flooding shows up in their communities or at their doors. The challenge for owners is to conduct a cost-benefit analysis that considers the extent of the flooding and what they and their local government can do to address it.
Owners also have to consider their ability to absorb higher costs for home maintenance, flood insurance, homeowners association and condo association fees, and taxes — revenue the government will need for resiliency or retreat. Every property owner has to decide for themselves — based primarily on their age, financial resources, and ability to manage property that floods or is at risk of flooding — how to proceed.
Many buyers in coastal areas are purchasing second homes or vacation properties. Too often they’re submitting offers without first finding out if the property or street out front is experiencing sea level rise flooding or if the property is in a neighborhood or community at risk of sea level rise flooding.
This failure to perform due diligence when buying real estate can prove costly. Properties that flood can have high maintenance costs and could actually lose value. In addition, owners of properties that flood or that are in the vicinity of flooding could face high taxes — as their communities struggle to deal with the flooding — flood insurance premiums and homeowners association or condo association fees.
In this video, I give buyers tips on how to find out if a property experiences sea level rise flooding, is at risk of flooding, or is in a neighborhood or community that floods. Then I discuss the risks the flooding can pose should they go through with the purchase.
Surprisingly, finding out if a property floods, itself, can be a real challenge. For instance, often the flooding only occurs during the fall king tide season or when a storm is whipping up the water so buyers won’t see it. Furthermore, in some states sellers don’t have to disclose the flooding problem to buyers.