trying to resell this home?

A: You bet. A real estate purchaser in a given price range typically has many choices, so why would someone give a second look to a home that has a tainted location when the same dollars can buy a property not threatened by a potential dam failure?

Is a dam failure likely? Not hardly, but that's not the point. As flooding in New Orleans and elsewhere has shown, even one deluge can produce catastrophic results that can impact a household for years.

If there is a dam failure somewhere, anywhere, then all dams can suffer from a negative public perception. That perception may be neither real nor fair with regard to individual dams, but if it takes hold it will surely impact property values, especially for a home that "sits below a dam."

Before going further, speak with local insurance brokers. Can you get coverage for such a property? At what cost? How does the insurance expense for this property compare with other homes of equal value in nonthreatened locations?

Also ask about financing. Homes are "security" for mortgages, and many lenders may not want to finance a property with such an unusual potential for risk. Some may provide financing but only with a steep rate.

CTW Features

Need real estate advice? Peter G. Miller, author of "The Common Sense Mortgage," would love to hear from you. Send your questions to peter@ctwfeatures.com