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What makes the most financial sense for flooded homeowners?

HOUSTON – More than 130,000 homes in and around Houston flooded last month. If yours was one of them, you are probably debating what you'll do now. Consumer expert Amy Davis spoke with a real estate insider about the options.   

Many families are emotionally connected to their homes; but Senna Home Buyers' Sam Craven says when you take the emotion out of it, flood victims have three options.

Option one: Stay in the home. Use your insurance money, if you have flood insurance. Rebuild; and hope you don't flood again. 
Option two: Sell your house for lot value only. 
   
"So demo it out the way we have this one and get it nice and dry and sell it to a builder," said Craven, standing in a Meyerland home his company owns that has flooded twice in the last 2 years.    
Option three: Sell your home as-is for cash to a house flipper like Craven's company. 
    
"If you want to sell the house, things that are important to know are how much you owe on the mortgage, if you have insurance," Craven told Davis.

In one instance, Craven says a home was set to sell for $210,000 before the flood. Insurance is now paying $120,000 for the damage. Senna House Buyers (hyperlink to: www.sennahousebuyers.com) paid $80,000 for the home. The homeowner was able to pay off the mortgage and walk away with $20,000 in cash.

"Selling to us is not always the right decision," Craven said.  

Many homeowners in the flood plain are considering raising or lifting their homes. Craven says you can expect to pay between $50 and $75 a square foot. Raising a 4,000-square foot home would cost at least $200,000. When you sell your home, you will likely get that back, but not anymore.

"It looked to me that it was a break even scenario," said Craven.

When houses flood, they drop in value. The more your home is worth, the bigger the hit. Expect about a 20 percent loss for homes worth $400,000 or more. Homes priced between $100,000 and $350,000 will only drop between 5 percent and 15 percent.