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5 FAQs About Natural Hazard Disclosure Statements

The State of California requires that sellers provide potential home buyers with a Natural Hazard Disclosure statement that divulges the home’s proximity and susceptibility to natural disasters like earthquakes, fires, floods, and more.
The State of California requires that sellers provide potential home buyers with a Natural Hazard Disclosure statement that divulges the home’s proximity and susceptibility to natural disasters like earthquakes, fires, floods, and more.

Depending on the state, city, or county your real estate transaction takes place, sellers are required to disclose certain facts about the property in question or risk legal action or a canceled sale.

In addition, it is considered illegal in many states to hide known problems about the property in order to secure the sale. Avoid a lawsuit by relying on a knowledgeable real estate agent who can help walk you through your state’s disclosure requirements.

What is a Natural Hazard Disclosure statement?

California law stipulates that home sellers or their agents provide a completed Natural Hazard Disclosure statement to potential buyers prior to closing. This form advises potential buyers of the home’s proximity to areas prone to natural disasters.

California is constantly making headlines with earthquakes, wildfires, and floods. Much of the state’s natural beauty comes from these extreme acts of mother nature. While tumultuous geologic and seismic activity can create beautiful landscapes, it can wreak havoc and create danger for homeowners in close proximity.

What is included in the NHD statement?

According to Disclosure Source, a Natural Hazard Disclosure statement includes your home’s proximity in relation to the following:

  • Flood Hazard Area
  • Potential Flood Hazard Zone (dam failure)
  • Fire Hazard Severity Zone
  • A Wildland Area That May Contain Substantial Forest Fire Risks And Hazards
  • Earthquake Fault Zone
  • Seismic Hazard Zone

In addition to these natural hazards, this form also commonly includes disclosures about the following:

  • Radon Gas exposure
  • Airport influence area
  • Megan’s Law disclosures
  • Military ordinance

How much does a NHD cost?

On average, an NHD report costs around $125. The seller most often pays this fee with whatever closing costs they are responsible for. This report is essential in ensuring a straightforward, legal home sale.

While sellers and buyers usually divide up closing costs, the cost of this specific report is almost always provided by and paid for by the seller.

How do I request a Natural Hazard Disclosure statement?

Most experienced seller’s agents request the Natural Hazard Disclosure report from a third party. If an error exists or a mistake is made in the report, neither the real estate agent nor the seller are liable.

Your real estate agent may suggest legitimate, reputable companies to order reports from or will offer to order one for you. There are myriad companies offering legal NHD reports. You can call or visit their websites to order the required report.

Can I still buy a home in natural hazard zones?

Absolutely. This report is generated in order to give potential home buyers a broader picture of how their new property can be affected by its locality, topography, and climate. However, they also need to be reviewed and considered with solemnity.

Natural disasters that occur within these zones can cause irreversible damage to your property, causing great financial and emotional loss. If your potential dream home is in one of these zones, it’s vital that you take extra caution in safeguarding your investment and your loved ones.

If you intended to resell your property at some point, you will also have to disclose the property’s susceptibility to natural hazards. As natural hazards continue to dominate the news cycle and global warming concerns increase, this could create a more difficult sale down the line.

California realtors have plenty of experience ordering and analyzing Natural Hazard Disclosure reports. They will also be able to help you sign the statement and provide it to potential buyers.

Even if your home is in a natural disaster zone, an experienced realtor will know how to highlight the positives of your property while downplaying the negatives, but always making sure the home sale is on the up-and-up.

Top-rated, Clever Partners Agents throughout California are ready to help you market and sell your home, for a fraction of the cost of traditional realtors. Their flat fee of $3,000 or 1% if your home sells for over $350,000 saves home seller much more money than the standard commission rate. Connect with Clever today for a no-obligation consultation.

 

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Jamie Ayers

Jamie is the Director of Content at Clever Real Estate, the free online service that connects you with top real estate agents and helps you save thousands on commission. In the past, Jamie has managed columns for clients in a variety of leading business publications, including Forbes, Inc., CEO World, Entrepreneur, and more. At Clever, Jamie's primary goal is to provide home sellers, buyers, and investors with the information they need to successfully navigate the ins and outs of the real estate industry.

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