Realtor.com Now Tells Home Buyers a Property’s Flood Risk

As the seas rise and rainstorms become more powerful, millions of homes will increasingly be vulnerable to the damaging impacts of flooding. Homeowners, home buyers, and prospective renters deserve to know whether their dream home is at risk. Realtor.com’s decision to provide flood risk information for millions of properties helps address a major problem: property-specific flood data is notoriously hard to find.

The website will now display a property’s flood score based on data from First Street Foundation, which is a score between one and ten that represents a property’s cumulative risk of flooding over a 30-year mortgage. The website will also display whether a property is in a FEMA Flood Zone. Realtors.com will provide both homeowners and home buyers access to previously hard-to-find information, but it will not provide all the information needed to make informed decisions about flood risk.

Unfortunately, nonexistent or weak real estate disclosure laws make it extremely difficult for home buyers to learn of a property’s flood history. Many states do not require sellers to tell prospective home buyers whether a property has been damaged by a flood. Limiting access to such information prevents people from making smart decisions about where to live.

The problem with the nation’s flood risk disclosure laws

Many Americans who are about to make one of the biggest financial investments of their lives have zero knowledge of whether a house has flooded. In 21 states, there are no statutory nor regulatory requirements for a seller to disclose a property’s flood risks or past flood damages to a potential buyer. For example, Missouri, a state well known for damaging floods, has no statutory nor regulatory requirement that a seller inform a buyer whether the house has ever flooded.

And a house that has flooded is likely to flood again. The National Flood Insurance Program (NFIP), the largest provider of insurance in the United States, has paid out multiple claims for more than 100,000 properties.

However, this problem could be solved simply by having access to information—information that the seller of the home may have. Home buyers and renters should have the right to know a property’s history of flood damages, whether there is a legal requirement to purchase flood insurance because of past owners’ receipt of federal disaster aid, and the amount of that insurance coverage.

There are states that require such information. For example, Louisiana requires a seller to divulge whether:

• any flooding impacts the property, and if so, the nature and frequency of flooding;
• the property is in a flood zone, and if so, the flood zone classification;
• the home has suffered flood damages, and if so, how often and to what extent;
• there is flood insurance on the property, and;
•  the seller or a previous owner had ever received federal disaster aid that would require all future owners to maintain flood insurance on the property, and if so, the type of aid and the amount received.

And Louisiana is not alone. Since Hurricane Harvey, Texas has enacted one of the most robust laws on flood risk disclosure in the country, which ensures home buyers are fully aware of a home’s flood history and future flood risk.

Flooding is only getting worse

Flooding is already the most common natural hazard in the United States. Climate change is only exacerbating the threat. States with nonexistent or weak disclosure laws should follow Texas’s lead, and enact laws that require a property’s flood risk and flood history be provided to home buyers and renters. Congress could also act by reforming the NFIP to require robust disclosure laws as a condition of community participation. Providing home buyers and renters information about a property’s flood history could not only protect them, but the broader community. Floods create a heavy burden for the country’s disaster response budget and the financial stability of the NFIP. As climate change fuels sea level rise and more extreme weather, the need for greater transparency of flood risks will become only more imperative.

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