How to Sell Land Located in a Floodway

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How to Sell Land Located in a Floodway

Bart Waldon

Trying to sell vacant land or acreage located in a designated floodway poses immense challenges for property owners. Due to extensive development restrictions and risks, finding qualified buyers willing to purchase floodway properties proves extremely difficult in most cases.

This blog examines the notable hurdles sellers encounter when attempting to sell land plotted within FEMA or municipally designated floodways. We’ll look at why traditional sales methods falter, creative strategies on how to sell land located in a flood way to boost appeal, and options like contacting direct cash land buyers who purchase floodway acreage at heavily discounted prices.

Understanding Floodways vs. Floodplains

First, it’s important to distinguish between floodway land and broader 100-year floodplain land. Floodplains encompass wider regions assessed as having a 1% annual chance of flooding. While flood zones are still high-risk, portions of the overall floodplain allow limited development if precautions are taken.

But floodways represent the hazardous central spine of waterways like creeks and rivers that undergo fastest, deepest flooding. Floodways serve as overflow drainage channels during peak events.

FEMA designates regulatory floodways where development is banned or extremely limited in high risk flood zone. Municipalities also zone local floodways with their own ordinances further restricting uses.

Floodway properties represent the most hazardous, unbuildable land during floods. Thus making sale to traditional buyers extraordinarily difficult.

Key Restrictions on Construction in Floodways

The greatest challenge selling floodway lots is the extensive development limitations legally imposed on these high-risk parcels:

  • No buildings, residential dwellings, or habitable structures allowed.
  • No storage of hazardous or volatile materials permitted.
  • No fencing that obstructs water flows.
  • No grading, excavation, filling or earthworks that reduce conveyance capacity.
  • No roads, bridges, culverts or utilities without certified engineering and floodway permits.
  • Septic systems, wells, and drain fields prohibited.
  • Extremely strict regulation of any live agricultural operations like feedlots.
  • Limited vegetation clearing only if permitting approved.

These stringent restrictions aim to avoid impeding flood water flows and maintain full flood zone drainage capacity. But the impacts on property use and value are immense for floodway landowners.

How Floodway Restrictions Make Sales Difficult

The severe limits on developing or utilizing floodway parcels create a miniscule pool of buyers for these properties:

  • No residential dwellings allowed eliminates demand from individual home builders.
  • Prohibitions on agricultural buildings and confined animal operations scratches ranchers or farmers.
  • Lack of commercial development takes retail, industrial, and office investors out of the mix.
  • Bars on above-ground infrastructure keeps utilities, solar/wind energy companies away.
  • Environmental agencies rarely allow recreational amenities like parks.
  • Buyers cannot store valued equipment or materials on site due to flood risks.
  • Properties become real estate black holes with almost no legal economic uses.

Outside of deeply discounted sales to adjacent landowners seeking acreage with flood mitigation buffers, few buyers exist for vacant floodway land.

Why Floodway Land Carries High Risk

Beyond strict use regulations, floodway properties pose innate risks that further deter serious buyers:

  • Fast-moving floodwaters can destroy assets stored onsite unless removable.
  • Deep unpredictable flooding presents safety hazards.
  • Flood insurance is extremely expensive, with coverage limits as low as $8,000 on buildings.
  • Floodwaters carry debris that can dent vehicles, tear down fencing, and damage equipment.
  • Clean-up costs like silt and mud removal add up after each flood event.
  • Standing floodwaters drown vegetation and hinder access until waters fully recede.
  • Repeat flooding degrades land value long-term even if some short-term uses manage to occur between floods.

Savvy buyers steer clear of the high liability, costs, and uncertainty inherent with land plotted in hazardous floodway zones.

Creative Strategies to Boost Floodway Land Appeal

Despite exceedingly limited demand, some creative approaches could help attract a buyer:

  • Research possible conditional use variance options through local floodplain administrators. For example, certain types of open-air sheds for equipment may be allowed if engineered to withstand flows.
  • Splitting into multiple parcels could appeal to different adjacent owners seeking acreage buffers but not needing buildings or intensive use.
  • Tout recreational attributes like hunting access, horse trails, hiking paths. Some buyers may pay moderate amounts for recreational holdings.
  • Contact adjacent owners first to gauge interest, as they have most incentive to expand their properties.
  • Repurpose as pollinator fields, wildlife habitat, or wetland mitigation banks if approved by regulators. Eco-focused non-profits may take interest.
  • Floodplain lands farther from the floodway core potentially can be elevated and developed with sufficient permitting and engineering. If allowed, subdivide and create buildable home sites on portions outside the floodway itself. This can prove complex and costly.
  • Be upfront in disclosures about restrictions, don’t hide floodway status. Transparency builds trust.

With out-of-the-box thinking, some niche buyers may emerge at reasonable prices. But compromises on initial asking prices will likely be required.

Patience Required for Sales of Large Floodway Acreage

Parcels over 5 acres in size see buyer interest drop even lower. Smaller lots offer options like accessory use structures or buffers for adjacent properties. But expansive floodway acreage has limited appeal to traditional buyers.

Some key tips for selling large floodway tracts:

  • Consider owner financing or land contracts to incentivize buyers through creative terms. Few buyers can pay cash.
  • Market primarily to adjacent landowners where extra acreage holds most value. Casting a wider net is unlikely to attract qualified buyers.
  • Invest in written legal opinions from floodplain experts to confirm restrictions. Avoid misrepresenting allowable uses.
  • Pitch for recreational buyer niches like hunting clubs, fishing access, trail riding if regulations allow those uses.
  • Research viability of splitting off floodplain but non-floodway portions if any exist. These may allow residential or commercial use after extensive consultation with local officials.
  • Cut asking prices deeper on larger acreage. Budget several years of taxes, upkeep and insurance costs while finding the ideal buyer.

Patience, reasonable expectations, and creative deal structuring help sell large floodway tracts that otherwise may sit idle indefinitely.

How Floodway Listing Descriptions Influence Buyers

When marketing floodway properties, carefully framing the public listing descriptions proves vital. Savvy sellers should:

  • Disclose floodway status upfront rather than burying deep in the listing details. Don’t surprise buyers.
  • Note possible conditional uses based on consultations with local floodplain administrators. Even if limited, discuss potential options.
  • Clarify adjacent parcels also within floodplain are potentially buildable with mitigation, though at high cost. Don’t wrongly imply entire area is undevelopable.
  • Include general disclaimer that all development requires extensive floodplain permitting and engineering.
  • If improvements like gravel driveways, fencing, or surface parking are already present, highlight these in amenities.
  • Emphasize broader recreational attributes for fishing, hunting, hiking, horseback riding etc. if a unique parcel for these pastimes.

With transparency on restrictions paired with creativity highlighting potential conditional uses, buyers gain a full picture of floodway land opportunities and challenges.

How Pricing Floodway Parcels Impacts Buyer Interest

Given the strict development limits and high flooding risks, most buyers offer deep discounts for floodway land. Owners hoping for top dollar pricing face prolonged sale timelines.

Realistic sellers accept tradeoffs that come with pricing floodway parcels competitively:

  • Attract more potential buyers by pricing land based on limited conditional use values rather than comps for dry developable land.
  • Sale happens quickly upfront rather than holding out years for top dollar that never materializes.
  • Avoid added carrying costs like taxes, upkeep and insurance premiums during lengthy listing periods.
  • Reduce liability exposure by transferring land quickly before additional flood events potentially damage the property.
  • Receive funds sooner to redeploy into other opportunities rather than tying up capital long-term.

While emotionally difficult, pragmatic floodway sellers focus on transacting quickly at reasonable prices rather than chasing maximum payouts.

How Marketing Exposure Influences Floodway Land Sales

Reaching the few buyers motivated to purchase floodway acreage hinges on casting a wide net through diverse marketing channels.

  • List the property on MLS through an agent but also use aggregator sites listing FSBO land like Lands of America and LandWatch.
  • Run print classified ads in local newspapers, agricultural publications, and circulars distributed at feed supply stores where farmers and ranchers browse.
  • Post in online forums and social media groups focused on interests like hunting, fishing, horseback riding, hiking, rural living, etc. where recreational buyers discuss potential acreage buys.
  • Contact adjacent land owners directly via mailings and flyer boxes alerting them to opportunity for acreage expansions.
  • Network with land brokers, water rights brokers, and large acreage specialists - they sometimes encounter buyers suited for floodway property niche scenarios.

With extensive outreach across multiple channels, sellers leverage their best chance of encountering the ideal buyer amid limited prospects.

How Financial Motivation Affects Floodway Pricing

Sellers under financial distress tend to price floodway parcels most reasonably. Motivated scenarios include:

  • Inherited an unwanted floodway property and want to exit quickly.
  • Facing foreclosure and need urgent cash from a sale to salvage equity.
  • Relocating and unable to oversee maintenance on a distant floodway parcel.
  • Facing retirement and want land sale proceeds to supplement limited retirement savings.
  • Paying taxes and insurance but unable to use land restricted from development.
  • Recently purchased adjacent buildable lot and now seek to offload the floodway portion acquired in the same bulk deal.

These pressured sellers recognize the money tied up in floodway property could be redeployed more productively elsewhere or to urgent needs if freed through a sale.

Understanding Flood Insurance Requirements on Floodway Parcels

Due to the high inherent risks, flood insurance is mandatory for structures located in floodway zones, and premiums are expensive compared to lower-risk floodplain properties.

By federal law, federally backed mortgages require flood insurance policies for buildings situated in mapped flood hazard zones. Some key considerations around floodway flood insurance:

  • Annual premiums often exceed $2,000-$5,000 per year for modest residential buildings depending on risk variables like depth of flooding.
  • Maximum coverage limits are low - only $250,000 for residences and $500,000 for businesses in highest hazard zones.
  • Claims payouts are capped below loss amounts in major flood events, leaving uninsured losses.
  • Rates increase steeply after claims are filed, disincentivizing rebuilding in hazardous areas.
  • Coverage does not apply to land value losses, only insured structures.

Due to insurance costs and claim limits, insuring any buildable property in floodways provides minimal protection relative to the underlying risks.

How Flood Zone Status Affects Property Uses & Value

FEMA designates flood zones representing varying levels of risk, which dictate development allowances. Key flood zone classifications include:

  • Floodway zones where development is banned or extremely limited.
  • 100-year zones with 1% annual flood risk - development allowed with precautions.
  • 500-year zones with 0.2% annual flood risk - fewer use limits.
  • Unmapped low-risk zones outside formal floodplains.

Obviously floodway zones impose the harshest restrictions that crater land value. But even 100-year floodplain zones limit uses compared to properties outside floodplains. Understanding precise zone classification is crucial when assessing property value and development feasibility.

Overview of the National Flood Insurance Program

The National Flood Insurance Program (NFIP) provides federally-backed flood insurance policies to property owners in flood hazard areas. Some key attributes:

  • Created in 1968 to offer affordable flood coverage since private insurers shunned flood risks.
  • Sets floodplain mapping and development standards communities must adopt to qualify residents for flood insurance.
  • Flood insurance required on mortgages in high-risk flood zones.
  • Policies sold through private insurers but backed by federal government.
  • Overall program insolvent, requiring ongoing multi-billion dollar subsidies from U.S. taxpayers.

The NFIP remains vital for enabling floodplain properties to obtain insurance at reasonable rates. But the insolvency shows the deficiencies of subsidizing development in inherently flood-prone zones.

Contact Land Boss if Seeking a Cash Offer on Floodway Land

For property owners seeking a cash sale of floodway land, contacting a direct buyer like Land Boss provides a convenient exit strategy. We specialize in buying rural floodway properties across the U.S. and making fair cash offers.

Our company thoroughly researches local floodplain restrictions and makes appropriate discounted offers accordingly based on limited development potential. While pricing is heavily reduced compared to buildable land, our goal is providing a simplified sales process without you having to market for years to find one of the few buyers open to floodway property.

We handle everything from due diligence to closing. And we pay all closing costs for a smooth, hassle-free transaction.

Contact us today if you own floodway land you want to sell for cash quickly and efficiently without the flood risk, waisting time with a real estate agent, or worrying about flood insurance coverage with hefty flood insurance premiums!

About The Author

Bart Waldon

Bart, co-founder of Land Boss with wife Dallas Waldon, boasts over half a decade in real estate. With 100+ successful land transactions nationwide, his expertise and hands-on approach solidify Land Boss as a leading player in land investment.


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