Just Saved Myself A Costly Mistake

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brisbane 04

Hi All,
Just thought I would share this. I have just put in an offer on a 3 bedroom property that has a granny flat at the back. Just waiting to hear back from the agent. Today I read through the Section 32 and for some reason I remembered a piece of advice from my builder friend who conducted a recent building inspection for me on another property. Its about the house insurance and to check whether it's in a flood area. When I contacted RACV the property is in a flood area and I was quoted $3700 p.a rather than the $600-$700 I was expecting. Now I'm not sure whether you can choose to have or not have flood insurance, I'm looking into it. I will also have to consider as to whether I continue with the properties with a good negotiation chip or give it a miss. The 30cent phone call certainly saved me some heartache. Just a quick question what would you ask for as a discount?
 
Once you lower your current offer, I doubt you’re much of a chance. But, stranger things have happened.

You might be best to ring around and get quotes from other insurance companies. You may be surprised the amount some vary. I work in many “flood affected” areas. And some insurers don’t like flood prone areas.
 
brisbane 04 said:
Just a quick question what would you ask for as a discount?
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Nil.

...just because you finally twigged about the flood zone, doesn't mean the Seller is that doey as well. They've known about it for years, that why the price was posted so low in the first place.

They have already factored that into their asking price already....the discount has already been given, so nothing more will be given, no matter if you ask or not.

I guess you either now buy or walk.
 
Hi Dazz,
I dont remember saying the place was priced low Dazz, unless you think you're psychic. The house and unit were reasonably priced with a gross return of approx 6.1% with some work required to bring the house up to scratch. Bendigo up until only a few years ago didnt have issues with flood damage, this is the first time I have encountered a property that is considered a flood risk in the 10+ properties I have purchased in Bendigo over the past 20+ years.
 
brisbane 04 said:
Bendigo up until only a few years ago didnt have issues with flood damage, this is the first time I have encountered a property that is considered a flood risk in the 10+ properties I have purchased in Bendigo over the past 20+ years.
Click to expand...

Did Bendigo sink or subside? Methinks Bendigo may have the same issues with flood as it always had, but perhaps the flood maps are now better and more insurers are covering flood (albeit at a cost).
 
brisbane 04 said:
Hi Dazz,
I dont remember saying the place was priced low Dazz, unless you think you're psychic.
Click to expand...


Maaaaaaateeeeyyy......once a slide inta me fav Kaftan, and start chuggin' on a good bit of jamacian blue, you'd be amazed at the possibilities !!!
 
brisbane 04 said:
Hi Dazz,
I dont remember saying the place was priced low Dazz, unless you think you're psychic. The house and unit were reasonably priced with a gross return of approx 6.1% with some work required to bring the house up to scratch. Bendigo up until only a few years ago didnt have issues with flood damage, this is the first time I have encountered a property that is considered a flood risk in the 10+ properties I have purchased in Bendigo over the past 20+ years.
Click to expand...

Just because an insurance company says it is a flood prone area doesnt mean it is a high risk, as they generalize and are clueless about specifics. What is a flood risk with one insurance company may not be with another. I think the reason some of the properties are declared flood risk, is a con to extract a higher premium. Do you own research. It is just a joke how they can declare properties a flood risk after not even looking threatened after a 1 in 200 year event.
 
Hi Buster,
The first quote was from RACV, I have an insurance broker looking into it at present. As for the property it is located near a creek but so was another property I owned a number of years ago. Our region got hit by floods a few years ago and this seems to have been a catalyst to a number of insurance companies to increase their premiums.
 
brisbane 04 said:
Bendigo up until only a few years ago didnt have issues with flood damage, this is the first time I have encountered a property that is considered a flood risk in the 10+ properties I have purchased in Bendigo over the past 20+ years.
Click to expand...

You might also want to find out the exact height of the block and home. This height is the distance above sea level.

I think the 1 in 100 flood level in Bendigo is around 6 meters above sea level. So, if part of the block is 5.8 meters above sea level, the property will still be classified as flood prone, even if the house itself is above this height.

When the home was built, its living floor (kitchen & bedrooms) would have had to be built above the 1 in 100 flood level. Although depending on the year it was built, the height could have changed since then.

Regardless, you are never really safe unless you live on top of a mountain. I always say to worried clients that if they believe in global warming, the melting ice caps will get them before rain does.
 
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