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Realtors get creative as flood insurance costs swell

By Drew Harwell
Tampa Bay Times

The for-sale sign outside the “Cotton Candy Home,” a 1913 charmer in Florida known for its Halloween sweets, says nothing of its new kitchen, heart-pine floors or bucolic wrap-around porch.

Instead, the home’s sellers have chosen a single bragging right to catch buyers’ attention: no flood insurance required.

“It’s a big, big selling point,” said Nancy Driver, the agent who listed the home. “People driving the streets to pick the area they want will know it’s on there for a reason.”

It has never been harder, Realtors say, to land a buyer for a flood-insured home. The Biggert-Waters Act, which began revoking big federal subsidies for older flood-zone homes Oct. 1, has driven premiums skyward, spooking buyers and killing deals.

As storms have caused creeks, lakes and other waterways to swell more than usual in recent years, homes that don’t need insurance have suddenly surged into vogue.

Agents are touting the no-strings-attached message in online listings, yard signs and magazine ads for everything from a log cabin to a million-dollar mansion.

“That’s the big buzzword right now,” said agent Debra Bellmaine, who last month represented the buyer of a no-insurance-needed home. “Most of the buyers right now are saying, ‘Only show me places that aren’t in a flood zone.’”

Buyers’ attentions, many say, have changed almost overnight: Many buyers now ask about flood zones the same way they’ve always asked about nearby highways or school districts.

And agents are pointing out the distinction regardless of the home’s price. Agent Sandy Hartmann added no-insurance notes on every active home listing she could, from a $99,000 concrete-block rancher to a $2.5 million mansion with a six-stall horse stable and a “showcase for exotic automobiles.”

As attorneys talk of suing Realtors they say didn’t share information on insurance hikes, many agents have revisited their listings to alert buyers. Keller Williams listings say “it is unknown whether this property will be determined to require flood insurance,” and advise buyers to meet with insurance agents.

And those agents still in flood zones are getting creative. When insurers of one home said its $1,200-a-year policy was going to quadruple, freaking out a hopeful buyer, agent Jeanine Metts called out a surveyor to help lower the policy and hurried the closing to one day before the Oct. 1 deadline, helping keep rates low for the first year.

But some agents expect the insurance hikes could lead to a great shunting in the recovering housing market, as buyers speed away from flood dead zones and funnel their spending farther upland. If that happens, agents say, they want to be there to reap the benefits.

“So many things are up in the air, and there’s that fear of the unknown,” said Kathy Congdon, whose listing included a no-insurance-needed status with all capital letters and four exclamation points. “The things I can control – ha, with my type A personality – I control.”

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