Last year I wrote an extensive blog (or two?) about how our challenge of the year was getting solid Internet access in the rural areas of the county. That “always something” is still in effect. We must have good, high speed Internet to get top dollar on our homes. And the buyers (be sure to ask!) are running into issues with a certain phone/internet conglomerate with telling them one thing and then not providing service. As I write this I am thinking it might be timely to write yet another blog regarding Internet in the hills. I digress.
What I am excited to share is the best information that I can find about our current (January 2019) availability to fire insurance. To explain: We are in the foothills of the Sierra Nevada Mountains. Much of our county is forested land. We love it! But we are forested and there are hills. That can be a poor combination when there is dry weather, heat, and wind. The recipe is just plain ugly and has shown its ugliness in spades the past few years with enormous fires all over our state.
Insurance companies in California have taken extraordinary hits. This challenge is being passed on to the consumer in higher rates (which we did expect) and home owners insurance getting CANCELLED. Having higher rates is moderated by the state of California. The insurance commissioner has had a tight hold on the ability for insurance companies to make small annual increases. I am told that in order to have a rate increase, it takes over two full years of jumping through hoops. In their desire to help the consumer keep costs down, the insurance commission has put everyone in a terrible bind. Most rates in the Nevada County area have been so low in the past ten years that there is just no way the insurance companies can assume catastrophic risk any longer. Just the damages for the fire in Paradise, Ca have amounted to nearly TWO BILLION DOLLARS. So how does this play out for you as the seller? We are predicting that the homes in the more rural areas are going to be sold for less than their like for like value (if they were located closer to town) due to the buyer having to pay for increases in insurance IF they can even get insurance.
So what am I doing about this? I am conducting careful meetings with my sellers to price their homes well, and to explain in detail how it is going to affect their property. So what is the good news? We do have companies that are willing to insure MOST properties. But we need to find out who they are up front. We cannot expect a buyer to wait around for the seller to provide them with a company to insure the home. BUYERS: It is always something that holds up an escrow. Insurance has become the hold up this last couple of months. I strongly urge all buyers to get their insurance budgeted into the cost of the house in the very beginning. Don’t think online mortgage lenders are going to be helpful. Be smart, talk to local lenders and insurance brokers/providers so you can get the most up to date information.
And of course call Deb St John. “It is always something”! Has been a readiness cry since I began my business life. I try to be up-to-date with all local issues so that I can see the bumps in the escrow road prior to hitting them. Better to be ready than to be surprised in a negative way. It is just one of those things right now that we are dealing with in real estate sales. We will help you find and secure your next home. We will walk you through the challenges of the day.