Understanding “Flood Plains” in Real Estate

A flood plain is an area of land next to a river, lake, or other body of water that is likely to flood during heavy rain or storms. These areas are important because they help manage water flow, but they also come with risks if you’re thinking about buying or selling property in a space identified as a flood plain. Knowing the ins and outs of flood plain considerations is paramount for both buyers and sellers.

There are Different Flood Plains Categories

Flood plains are categorized based on how likely they are to experience flooding in any given year. These labels help buyers, sellers, and insurance providers understand the level of risk for a property. Here’s what the terms mean:

• 50-Year Flood Plain – A 50-year flood plain has a 2% chance of flooding in any given year. While that might sound small, it’s actually considered a high-risk zone. Properties here are more likely to require flood insurance, and flooding may occur more often than people expect.
• 100-Year Flood Plain – A 100-year flood plain has a 1% chance of flooding in any given year. This is the most commonly referenced flood plain in real estate and insurance. Properties in this zone are still considered high risk, and lenders will usually require flood insurance.
• 500-Year Flood Plain – A 500-year flood plain has a 0.2% chance of flooding in any given year. While the risk is lower, it’s not zero. Properties here are often not required to have flood insurance, but it’s still something to consider, especially with changing weather patterns that can increase flooding risks.

It’s About Probability

The “50-year,” “100-year,” and “500-year” labels don’t mean floods happen exactly once every 50, 100, or 500 years. These terms simply indicate the probability of a flood happening. A 100-year flood plain could flood multiple times within a few years if conditions are right (or wrong). It’s misleading to tell a prospective buyer that because a property flooded last year, it won’t happen again for many more years since it is in a 100-year flood plain.

What Buyers Need to Know When House Hunting

First, you need to know if the house you like is in a flood plain. It is also a good idea to know just how far away your home is to the nearest flood plain. Your real estate agent should  look up flood plain information on every property they show you as well. To look up on your own,  visit websites like:

• FEMA Flood Map Service Center
• Flood Factor
• Local government or county websites, which often provide flood maps and additional resources.

Then, if you find out a home you like is in a property in a flood plain, don’t totally despair. First, find out if flood insurance is required. Standard homeowner’s insurance doesn’t cover flooding. You need a separate policy, and these policies can be pricy.

Another note: Even if the property you are considering is not in a flood plain, you can still get information on any history of flooding. Read more about causes of water intrusion and flooding. 

Sellers Must Disclose Flood Information

As a seller, you’re required to disclose if your property is in a flood plain. Be upfront about any past flooding or insurance claims. This honesty helps build trust with buyers and avoids legal issues later. Highlight any steps you’ve taken to reduce flood risk, like installing drainage systems or raising the home’s foundation.

Rely on Your Agent

Your real estate agent should be checking every property for proximity to flood zone and keeping you informed. Nothing is more disappointing than liking a home and finding out afterwards that it’s in a flood plain!

Additional Resources