A floodway is a portion of land that is affected by flooding and typically carries the highest level of regulations for development. Landowners with property located within a floodway face stricter restrictions for building, require higher flood insurance premiums and may experience lengthy sale timelines due to buyer hesitation and risk-aversion. With transparency on restrictions and creative selling tactics, real estate agents can help sellers sell land located in a floodway.
The first step is to determine the exact flood zone designation of a particular piece of land. An agent can check FEMA’s Flood Map Service Center to see which flood zone a property is in and can also discuss the matter with a local floodplain manager if there is one. The manager can explain how to interpret the FEMA flood zone mapping.
Generally, the FEMA flood zone is divided into three sections: A, B and X. A floodway is the main water course’s floodplain area with a high hazard and reserve for passage of floods. A floodplain fringe is the land surrounding the floodway and carries less stringent requirements for development.
To determine the exact location of a home in relation to the floodway, an elevation certificate must be obtained by a certified surveyor. These certificates typically note the lowest floor of a home’s structure and its height above the base flood elevation BFE.
If a home is built in a flood zone, a mortgage company will likely require flood insurance. In addition, homeowners who wish to renovate or add a fence must obtain an elevation certificate.
An appraisal can provide insight into the value of a home in a flood zone, but it is important to remember that the most accurate valuation is achieved by using a professional surveyor’s report. A professional will not only determine the lowest floor of a structure’s foundation, but will also identify any improvements made by previous owners and will provide a detailed description of those items.
In some cases, severe damage caused by sell land located in a floodway encourage residents to relocate from their homes and businesses to higher ground. This is often possible, but in many areas, it’s simply impractical. For example, the small town of English, Indiana, was founded on a river floodplain and suffered significant damage from repeated flooding events. In response, the town center was relocated to agricultural land several kilometers away.
With the right strategies, agents can reach buyers willing to purchase land located in a floodway. Providing transparency on restriction and limitations paired with creativity highlighting potential conditional uses, real estate professionals can help clients sell large tracts of land that would otherwise be sitting idle indefinitely. Selling land located in a floodway also allows for the quick transfer of ownership, which reduces liability exposure and frees up capital to redeploy into other opportunities. Sellers can also avoid carrying costs like taxes and insurance premiums that accumulate during prolonged listing periods.