FIFE, Wash. -- Tracy Berg and Michelle Crosslin met last year while house shopping.
“We were so looking forward to living next to each other,” said Berg.
The two found their dream homes next to each other in the Fife housing development called Valley Haven.
“It just seemed perfect,” said Crosslin.
But it wasn’t. The reason why?
“It was in a flood zone,” said Berg.
But was it really? Valley Haven was built by Highmark Homes. The property’s issues are tied to an incorrect map that the builder hasn’t fully addressed.
“I am out roughly $5,000 for my upgrades, my earnest money, the $2,500 flood insurance for one policy, the $500 flood insurance for the other policy,” said Crosslin.
Russell Blount, Public Works Director for the City of Fife, said a previous developer fixed the flood issue.
“Those properties are not in the flood plain, in the physical reality of the world,” explained Blount.
But in FEMA’s world, the development is in a flood zone. That’s important because lenders only use the FEMA map when financing homes. Tracy and Michelle said they were told it wasn’t a flood zone by Highmark Homes’ real estate agent. But when lenders saw the FEMA map, trouble washed ashore.
“We didn’t find out about it until May 17, when my lender pulled the flood cert in preparation for the final docs,” said Crosslin.
Tracy and Michelle were fighting separate battles. Michelle’s lender wanted to balk on her financing. Tracy was told she now needed flood insurance. How could this happen? In the sellers disclosure statement, Highmark Homes answered “don’t know” to all environmental questions including flooding, fill dirt and wetlands. The City of Fife said that’s not the case.
“We did discuss it with the developer and the builder on the property. The records, the FEMA maps, are record and we actually conduct predevelopment meetings,” said Blount.
Highmark did ask FEMA for a map revision in March, months after Michelle and Tracy made their offers. In an email, FEMA told me the request was denied because Highmark did not follow the required process which left Michelle and Tracy on the hook.
“My lender threw up their hands in frustration and couldn’t close,” said Crosslin.
We called Highmark which refunded Michelle and another potential buyer the money they put down. Tracy has her home but must now pay for flood insurance.
“It’s not right,” said Berg.
I contacted Highmark and the builder told me he’s willing to make this right but feels it’s up to Fife and FEMA to do more. FEMA told me there are no open cases involving Valley Haven.
“I don’t want somebody to go through the same problem we had,” explained Berg.
If you’re looking to buy new construction, don’t assume that it’s free of issues. Hire an inspector and check with the planning and development department of your municipality or county. You don’t want any hidden surprises sinking your investment.