The Hidden Hurdle in Buying Your Dream Home in Manhattan Beach, Hermosa Beach, and Redondo Beach: Property Insurance

Introduction

You’ve found your dream home in one of the idyllic beach cities of the Los Angeles South Bay—Manhattan Beach, Hermosa Beach, or Redondo Beach. Your offer has been accepted, and you’re elated. But before you take that exhilarating step of sending in your deposit, there’s a critical, often-overlooked aspect you need to consider: Property Insurance.

The Changing Landscape of Property Insurance

The home insurance landscape is undergoing seismic shifts that could directly impact your home-buying journey. Major players like State Farm and Farmers have exited the new policy market, leaving potential homeowners in a bit of a bind. This isn’t just a footnote; it’s a headline. Imagine going under contract, getting your offer accepted, and then discovering you can’t secure a new policy from your current insurance company, or the new policy is more expensive than you can afford. It’s a hiccup that could turn into a full-blown issue, especially when you’re out of the inspection period and your deposit is at risk.

The Mortgage Lender’s Perspective

Mortgage lenders and savvy Realtors are increasingly advising clients to secure homeowners insurance quotes the moment their offer is accepted, if not before. It’s not just a suggestion; it’s becoming a prerequisite. The reason is simple: mortgage lenders require a 12-month insurance policy to be in place before you can close on your new home, and it’s becoming increasingly difficult to find a new policy. Gone are the days when insurance was a last-minute checkbox. In today’s market, it’s a foundational element of your home-buying strategy.

The Real Estate Agent’s Advice

As a seasoned real estate agent specializing in Manhattan Beach Real Estate, Hermosa Beach Real Estate, and Redondo Beach Real Estate, I can’t emphasize enough the importance of early insurance planning. Properties near the beach may be subject to unique risks, such as adverse weather conditions and flooding, that could affect your insurance options. If your real estate agent isn’t making this a priority on their home buying checklist with you, it may be time to reassess your relationship with them.

The Cost Factor

Budgeting for a new home involves more than just the mortgage and down payment. Insurance premiums can be a wildcard in your financial planning. A higher-than-expected insurance cost could not only affect your mortgage pre-approval but also significantly impact your purchasing power. It’s not just about whether you can afford the policy; it’s about how that policy fits into your overall financial landscape.

Final Thoughts

In a market as dynamic and competitive as the South Bay area, being proactive is not just advisable; it’s essential. We need to plan early in the process to avoid unpleasant surprises. And if you have any questions or need further information, don’t hesitate to reach out.

Have a look at my video below where I talk with a leading Southern California mortgage lender about this topic and the danger of procrastinating.