To protect themselves from entering into a deal that could come back to bite them, homebuyers are advised to write contingencies into an offer, so they can pull out of a deal or renegotiate the price if an inspection or appraisal surfaces new issues. But what if a buyer ? This summer, the California Association of Realtors began including new language in its standard purchase agreement forms, used in most home sales around the state, to allow a buyer to back out of a deal if they can’t find an affordable insurance policy. This new standard contingency reflects a harsh reality for most homebuyers: Insurance in California is increasingly more difficult to come by as major insurers leave the state.
and State Farm this year stopped writing new insurance policies in California, citing rising construction costs and what they say are overly burdensome regulations from the California Department of Insurance. Brokers say that even before the California Association of Realtors made the insurance contingency standard, they were advising their buyers to add it to their offers or do research on policies ahead of time. “This is the first year that I’ve advised my buyers to look into buying insurance even before they write an offer,” said Cara Gamble, an agent with The Agency in Danville.
“They have to make sure they’re comfortable with that payment.” Gamble has worked with buyers who have decided against writing an offer on a house they were excited about after realizing how .