On Sunday I am planning on showing million dollar properties to an out-of-town client who is ready to buy. One of the properties will require flood insurance. It is a beautiful log home in the middle of a pecan grove. My question is, “Why bother?” The listing agent has not bothered to return my calls because she must recognize that at this time in the game, the property cannot be sold unless someone wants to pay cash. You cannot get a mortgage loan on the property because the lender will require flood insurance — which is nowhere to be found.
Here is the current state of affairs as reported by the National Association of REALTORS® in an update date June 1, 2010:
Congress, for the third time this year, allowed the National Flood Insurance Program to expire on May 31, 2010.NAR has launched an all-member Call for Action to urge Congress to take immediate action on a lasting NFIP extension. Additional, information regarding NAR’s policy position are available at www.realtor.org.
After May 31, the NFIP will not have the statutory authority to issue new or renewal policies until Congress reauthorizes the program. This will not affect existing policies, renewal policies within a 30-day grace period, or policies purchased prior to the program’s lapse. Also, FEMA allows buyers to “assume” the seller’s existing policy without having to re-issue it (http://www.fema.gov/pdf/nfip/manual201005/03gr.pdf). The purchase requirement for flood insurance may be met with non-NFIP policies; for instance, Lloyd’s of London, Chubb and AIG have offered such insurance, but it can be very expensive and is limited to a certain number of states, with other conditions.
NAR has been working with FEMA, FHA, Fannie, Freddie and the VA to provide guidance, similar to what it provided in April, for lenders as to the steps they may take to meet flood insurance purchase requirement during an NFIP lapse. With updated guidance in hand, lenders should have the assurances that they need to continue to close loans. FHA has already issued updated guidance. Fannie Mae, Freddie Mac, the VA, and other lending authorities are expected to release guidance shortly, and NAR will post the guidance at www.realtor.org.
We encourage you to visit or direct your members to the following resources for additional information:
As I said, it is a drop dead gorgeous piece of property with perhaps a few extra mosquitoes per square foot. I still would like to show it and sell it. But why even bother if the buyers cannot obtain flood insurance?
What happens if your barn burns down or is burglarized? Is it insured? What about the contents? Can you name everything you own and how much is each item worth? Making a claim is much easier if you know this.
Moreover, have you ever videotaped the contents of your home and barn so you can prove what you own?
What You Own is a simple program for creating your home inventory. It allows you to go room by room through your house and your barn.
There are plenty of options for cataloging valuable items. Record purchase prices, serial numbers and estimated replacement costs. You can attach photos to any item.
You can also include pdf files and Excel or Word documents. This lets you include things like scanned receipts. Print out custom reports for the insurance company, police or your records.
What You Own will work on Windows XP, Vista and 7, Mac OS X
Mineral Rights Disclosure Law Blocked by Oklahoma Association of REALTORS®
Buyers of surface rights are not being protected in Oklahoma. The REALTORS® have once again blocked legislation to disclose information regarding mineral rights ownership. While in many parts of Oklahoma the surface estate has been separated from the mineral estate, the fact is that in northeat Oklahoma many landowners do in fact still own their minerals. The REALTORS® are flat out wrong in opposing legislation that would disclose knowledge of mineral rights ownership.
According to a recent (6/6/10) legislative recap by the Oklahoma Association of REALTORS® Government Affairs Committee:
For the second year in a row, OAR fought against legislation which would have required surface right owners to disclose mineral rights information to buyers. HB1291, by Rep. Jerry Shoemake, D-Morris, would have required sellers to give buyers disclosure statements on past or current oil and gas production on the property, current oil and gas lease agreements affecting the property and any abandoned wells or lease roads. OAR was concerned about this legislation, because in most cases the surface owner is not aware of this information (especially when they’re not the mineral rights owner) – and this information is not part of the public records filed at the county courthouse. OAR protected sellers from being liable for this information.
As a REALTOR and a Professional Landman, I take a stand for landowners and the purchasers of surface rights. Every prospective landowner deserves the opportunity to purchase the entire bundle of rights available to them when they purchase the surface. If the seller has knowledge of mineral rights ownership, then it should be disclosed. If they have no such knowlege, then that should also be disclosed. REALTORS® should not arbitrarily, whether out of ignorance, unwillingness to learn, or fear of litigation, be severing mineral rights or keeping the mineral estate from being rejoined to the surface estate.