Most of my first-time buyers know their rate, their down payment, and their monthly payment down to the dollar. Almost none of them know what it'll cost to insure the house they're about to offer on.
That's the mistake. It's not a dramatic one, and it rarely kills a deal outright. What it does is quietly squeeze a budget that was already tight.
The usual advice is to shop for insurance once you're in escrow. I don't agree with it, at least not here. California's insurance market has changed a lot over the last few years. Some carriers stopped writing new policies, others pulled back from certain areas, and quotes can swing a lot between two homes a mile apart. If your number turns out to be wrong, your inspection contingency is ticking away while you figure it out.
Oceanside makes this easy to see. Take two buyers with the same budget. One is looking at a single-story on a flat street off Mission Avenue. The other loves a place on a canyon edge out east, where the backyard drops into brush and the view is gorgeous. Those two homes can get very different answers from an insurer, and the second buyer may end up on the FAIR Plan with a separate wraparound policy on top of it. That's two premiums where they'd budgeted for one.
Flood is the other piece. Parts of town along the San Luis Rey River sit in a mapped flood zone, and if a lender requires flood coverage, that's another line on your monthly payment. Buyers tend to find out from the lender's disclosure, which is a bad time to find out.
Here's what I ask my buyers to do now:
- Once a house makes your short list, send the address to an insurance broker and ask for a ballpark. - Look up the flood zone yourself. FEMA's map is free and takes about two minutes.
That's all it takes. If it's an extra hundred or two a month, you'd rather know before you write your offer than after.
Sellers, this matters to you as well. If your home is in a spot that's harder to insure, buyers will learn that during escrow, and some will try to renegotiate or walk. Get a quote yourself before you list so you can share it up front. A buyer who already knows the number is much less likely to panic.
If you're house hunting in Oceanside and want a second opinion on a specific address, email me at mayra@blacklabelrealty.com. Send the address first, and we'll look at the insurance before the countertops.