How to Find Risk Factors for a Home
It’s not fun to review risk factors for a property though it should be done to help you make educated decisions about protecting your family and your investment - whether you own the property already or you’re thinking about buying. In this post, we’ll share an example of a risk factor and a tool you can use to assess multiple risks.
The map below is a flood insurance rate map (FIRM) from the Federal Emergency Management Agency (FEMA). You can look them up online though no one ever seems to do so. We tend to think about risk as immediate - only what we can see while on a property.
This map shows flood zones crossing an area and there are fingers or risk: the black patterned areas that extend from the turquoise areas of the flood zone. These areas in black are at risk of flooding in major rain events though they don’t appear to be at risk if you visit the property.
Flood Insurance Rate Map (FIRM) from FEMA
The following image is a closer view of the FIRM above. Though a property may be a block away from a known flood zone, it may be low enough in elevation to be flooded during a significant rain event. That’s what happened to the property at the tip of the red arrow on the image.
Water in flood zones backs up during significant rain events. The water finds its way into areas that don’t often flood because the creeks and rivers that normally flow water from the area are inundated with too much water.
In this case, water spread through the neighborhood to the house at the end of the arrow. The flooding displaced a family of seven and caused significant damage. The damage caused displacement of the family and they incurred costs for renovating the lower level of their home. Even the vehicles on site were damaged.
Closer View of the FIRM Shown Above
Flooding is a significant risk though there are other risks such as fire and heat. You might ask why heat is a risk factor. The unfortunate answer is heat waves kill more people in a typical year than other disasters.
Flooding, fire and heat are risks that you can explore using the Risk Factor website. Its tools are integrated into real estate platforms that agents and brokers use to analyze properties. If you’ve ever wondered where they get their data… this is one of the sources.
The site is relatively easy to use. You can search for a specific address, zip code, county or city. The last three options are helpful if you’re interested in or live in an area and want to see a property in context. As the earlier story of flooding illustrates, it’s best to know what’s happening in the area rather than just on or immediately around a property.
Listen to Locals Though Expect Changes
Long-time residents of an area can be a very valuable resource for risks if they’ve lived in the area during significant events. They may have seen flooding and other events so they can offer additional perspective to help you prepare.
It’s important to remember that risks like flooding, fire and heat evolve. They’re not static so you need to assess your risk on a regular, perhaps annual, basis.
Flooding is a good example. Communities tend to expand their floodplains as more land is developed. Development typically adds impervious areas like buildings and parking that cause more runoff. While projects should anticipate this with storm water management areas, they may not be able to cope with an unusual event.
Counties tend to update their flood maps on a regular basis. These updates may be frequent if the county is growing quickly and density (leading to storm water runoff) is increasing.
In Conclusion
We can plan to mitigate almost any risk: flooding, high winds, fire, etc. The key is anticipating them and planning ahead so you can make the educated decision we mentioned earlier.
In some cases, that educated decision might be to pass on purchasing a property. You may decide it’s not going to be worth the trouble.
In other cases, you might use the risk profile to negotiate a better deal, especially if you’re going to incur costs dealing with the risk. For example, you might negotiate a better deal that leaves you with money to pay insurance premiums and a deductible so you’re protected from significant financial loss.
Leave a comment below to let us know if you checked for risk before you bought a property - how you do it? We’d also like to know if you’ve ever had an issue with flooding, fire or heat risks. How’d you handle it/them?