Friday, September 29, 2017 / by Priyanka Johri
This weekend, I have been visiting different communities in Houston, trying to help people figure out what they need to do with their flooded homes.
The home that I’m currently standing in was flooded. It's in Cypresswood and Champion forest area, and the owners have called me for help.
I’ve also met several neighbors, in this neighborhood, who are trying to figure out their options…
Can they sell?
Should they repair?
Should they sell it to an investor?
Do they pay the mortgage company?
...So I figured that I’d write this quick post to help others who may be in a similar situation.
Each Flood Case Is Different
The answer is not the same for everyone. It truly just depends on your situation.
To complicate matters even more, some people have insurance - and some don’t. Others have a mortgage that’s almost paid off - and some just moved in or refinanced. Furthermore, a lot of these people can't find materials and contractors to repair their homes, even if they want to stay here. Their money is running out because they are living in hotels. And they can't stay there forever. They need to find a place to live. They still have a mortgage to pay.
If they decide to stay here, they need to pay the rent, pay the mortgage, pay for repairs. It's really overwhelming.
Should You Sell To An Investor?
In some cases it’s wise to sell to an investor, but there’s one major drawback: investors are not going to pay you market value.
Here’s why… Flooded homes get dinged. If it's flooded once, the value goes down. So, you're not going to get the same price for the home that you would have gotten before Hurricane Harvey. If the home was supposed to sell, say, for $100,000, now it will sell maybe for $85,000, after repairs. So, you have a ding that goes along with the house once it floods.
And a lot of investors are taking advantage of the situation.
They're going door to door and talking to sellers directly. And it goes a little something like this... "Hey, I would like to buy your house, and this is all I can pay. If you don't sell me your house, I'll go and buy neighbor's house."
So, what we are doing, is we are putting together neighborhood groups, talking to neighbors, and telling them their options. We are bringing multiple investors to come in and make offers on the house. When they're competing with each other, they tend to pay little bit higher. So, we are trying to push the price as high as we can for our sellers, so they get the money, and we are waiving all our fees from the sellers.
Should You Repair The Property?
Even if you update it, put everything back together, it will not sell for the same value right now… But it will in a few years. So many flood victims are trying to figure how long should they should hold a property for - If they put the money in, and sell it to recover their money down the road.
We have formula for that. So, we are sitting down with everybody and trying to figure out what they should do.
Right now, there is a shortage of contractors, but that does not mean that our clients have to suffer. We are doing anything and everything to help our clients.
We have contractors that we have called from Louisiana that are coming over. They have flood experience. So, they can get these homes, and start to put them together the right way. They have learned a lot of lessons from Katrina.
Should You Do A Short Sale Or Foreclosure?
We have certain situations where they have flood insurance, they have a mortgage, and after talking the insurance company, and looking at the mortgage, they are short. So, I've already started talking to banks, for my clients, to see if we can do a short-sale.
A short sale is where you sell the property, but it's not enough to pay off the whole mortgage, and bank has to agree for that.
There are some people who are also talking about foreclosure. Problem with foreclosure is, once you foreclose on a house, it will be on your credit for seven to eight years. That means you won't be able to buy another house.
We heard about cases in Katrina, where people had good credit, and they bought another house. They were thinking of repairing their first home, and selling it to recover some money, but there was such a large shortage of labor and material, that they were sitting, waiting for seven, to eight, to nine months and paying mortgage.
By that time, they had run out of money to pay for the repairs. We don't want our clients to go through that. So, we're trying to get people to sit down with us and figure out.
Can You Finance Repairs With FEMA Or Loan Programs?
Of course, you have FEMA's assistance, but then you can also get a SBA loan. Which is usually for small businesses, but, right now, they're lending money for repairs of homes.
The only thing you have to think about is, you will be paying your mortgage, and then you're going to be paying down this loan. Interest rate is really, really low, around 1.5 to 2%. It's not bad at all, if you can get it.
There's also a 203k loan that is available for repairs. We can sit down and figure out different options for you, to see what is the best option.
What About Reverse Indemnification?
We have people who whose home are flooded, not because of the hurricane, but because the water was released from dam and reserves.
So, we have put together a group that are filing for reverse indemnification. Lawyers are filing paperwork to help them get the money from the state and the government. It's kind of like imminent domain, where government has to take your property for a greater good.
A lot more homes have been saved because they released this water, but they have to pay you for that, taking over your property, and flooding your property.
So, if you don't have flood insurance, don't worry. There's a way to get some money from there. There are other ways that people are getting money.
We’re Also Talking To Insurance Companies, Contractors, and Banks
This started happening after one of my clients called me with an evaluation they received that was low. I said, "What the heck? No. You should be getting more for your home, based on what your home value was before it flooded."
So, we're trying to help in that way too. If you guys need help, just let us know...
Maybe, you need help finding a contractor.
Maybe trying to talk to your insurance company.
Or maybe your banks, about getting more money, or doing a short-sell.
Maybe finding an investor to buy your home, and selling it at the right price.
Sellers Do Not Have To Pay Our Realtor Fee
We're only charging buyers for buyer fees. I would rather charge the investor just the buyer's fees. Versus charging seller and buyers, like we do in traditional case. That way, at least sellers are pocketing little bit more money.
I Will Do Whatever I Can To Help You
If there's anything else that you need help with, I'll be happy to help. We have connections. We have relationships with different people. We have experience in real estate. We have experience with mortgages.
Just let me know what you need help with. I have fantastic group of people who are willing to help anybody and everybody. So, just give us a call. My phone number is 832-277-3577. If I'm not available, you can call my office, 832-955-8100. Tell my assistant, Michelle, that you need to talk to me.
If you're watching this video, and your home is flooded, please give me a call if you need help. If you're watching this video, and know somebody who needs help, please ask them to give me a call. Or, if you want me to go and visit someone, I'll be happy to do that.
You Don't Need To Be My Client
If there's any way I can help you, answer questions, or connect you with somebody who can help you - I will.
I'm sorry this happened, but our community is strong. We have all come together. So many people have stepped up and helped their neighbors and strangers. So, let's keep this going.
So, let's rebuild Houston. I wish everybody best of luck.
Thank you, everyone. Bye.
PS: If I'm not available, you can call my office, 832-955-8100. Just tell my assistant, Michelle, that you need to talk to me.