Current best practice with flood insurance:
REALTORS® always get a seller disclosure and owners association addendum (SCR230, SCR231). Seller Disclosure (LLR RPCDS Question #19 asks about water issues (e.g. floods, leaks, mold, wood destroying organisms, plumbing issues) during the seller’s ownership.
https://www.screaltors.org/wp-content/uploads/Forms/230.pdf
REALTORS® always have buyers sign SCR233 Flood Insurance Disclosure form.
https://www.screaltors.org/wp-content/uploads/Forms/233.pdf
Buyer reps should recommend that buyers always use SCR311 due diligence addendum and investigate flood insurance costs during due diligence (or better yet…investigate flood insurance costs prior to contract).
Investigating flood insurance prior to closing can avoid issues like paying due diligence fees. Can make the earnest money payable after the due diligence period to avoid earnest money disputes. Can enter into an escrow agreement with a law firm that the earnest money is disbursed to the buyer upon due diligence termination or 30 days after a failed closing date with no seller lawsuit filed in those 30 days.
Per SCR233, the buyers should ask the flood insurance rep about factors that increase flood insurance (e.g. repetitive flood claims).
Posted by : Byron King on 8/13/18 (This information is only accurate as of 8/13/18. You must contact SCR for updates and changes to this information after 8/13/18 as laws and regulations may change over time. SCR 803-772-5206 or email info at screaltors.org)