Case Study: How We Won a Bidding War on an ‘Uninsurable’ Los Gatos Hills Home

The Dream Home with a Red Flag

My clients, a tech executive couple from Mountain View, had been searching for months. They wanted what many Bay Area buyers dream of: a home with privacy, character, and a view. They found it in the hills of Los Gatos—a stunning mid-century modern property with panoramic views of the Silicon Valley. The price was reasonable for the location, and they were ready to write a strong offer. But there was a major problem that had scared off other buyers: the property was located in a state-designated High Fire Hazard Severity Zone.

The Challenge: The “Uninsurable” Label

In today’s market, particularly after the insurance carrier pullouts of recent years, this label is a deal-killer. Their previous agent told them to walk away. Lenders won’t fund a loan without a homeowner’s insurance policy in place, and mainstream carriers were quoting astronomical premiums or, more often, flat-out refusing to cover the property. The sellers, who had lived there for 20 years, were frustrated with offers falling through due to insurance and financing issues.

This is where a typical real estate transaction stops. But our work was just beginning. As a broker with real estate, mortgage, and insurance licenses, I view this not as a roadblock, but as a structural problem to be solved with the right strategy.

The Golden Gate Realty Solution: Insurance, Mortgage, and Offer Strategy

We didn’t just hope for the best; we engineered a solution. We tackled the three critical components in a specific order.

Step 1: Confronting the Insurance Hurdle Head-On

Before even thinking about an offer price, I leveraged my insurance license. We didn’t waste time with mainstream carriers. I went directly to the two-part solution for these situations:

• The California FAIR Plan: We secured a quote for basic fire coverage. This is the state’s insurer of last resort, and it’s a critical first step.
• Wrap-Around Policy: A FAIR Plan policy is not enough; it doesn’t cover liability, water damage, or theft. We worked with a surplus line broker to find a secondary “Difference in Conditions” (DIC) policy that fills these gaps.

Within 48 hours, we had a complete, bindable insurance package. We knew the exact annual cost, which allowed us to factor it into my clients’ total housing budget with precision. The uncertainty was eliminated.

Step 2: Fortifying the Financing

With a bindable insurance policy in hand, I switched to my mortgage broker role. I presented the full picture to one of our trusted lenders who understands the complexities of the Bay Area market. By providing the insurance binder upfront, we satisfied a major underwriting condition from day one. This allowed us to get a fully underwritten loan approval, not just a pre-approval. Our financing was no longer a question mark; it was a guarantee.

Step 3: Crafting an Irresistible Offer

Now, we were ready to act. We submitted a strong offer, but the price wasn’t the only compelling part. We attached the fully executed insurance binder and the underwriter’s loan approval letter. We removed the insurance and loan contingencies. Our offer sent a clear message to the seller: we have solved the single biggest problem that makes your home difficult to sell. We are not a risk; we are a certain closing. We beat out two other offers, one of which was slightly higher on price but filled with contingencies and uncertainty.

Alan’s Pro Tip

In a high-risk insurance zone, never write an offer contingent on finding insurance. Solve the problem before you write the offer. Spend the time and nominal fee to get a bindable insurance commitment. Submitting proof of insurability with your offer package demonstrates a level of preparation and certainty that 99% of other buyers lack. It can make your offer more attractive than a higher-priced one and gives the seller immense peace of mind.

The Result: A Closed Deal Against the Odds

We closed the transaction in 21 days. My clients are now enjoying their dream home in the Los Gatos hills, a property others deemed impossible to buy. This case is a perfect example of why our integrated approach is so critical in the Bay Area. Navigating real estate here isn’t just about finding a house. It’s about structuring a resilient financial, insurable, and transactional strategy to secure it.

Disclaimer:
The market trends, interest rate data, and policy interpretations provided in this article are for informational purposes only and do not constitute legal, tax, or investment advice. The real estate market and mortgage rates are subject to rapid change. Please contact us directly for the most current information and personalized advice.

Real Estate and Mortgage Services provided by:
Golden Gate Realty and Finance Inc.
CA DRE License #02361979 | NMLS #2776762
Principal Broker: Alan Wen | CA DRE #01812220 | NMLS #356521

Insurance Services provided by:
POM Peace of Mind Insurance Agency
CA DOI License #0N02495
GA Principal: Alan Wen | CA DOI License #0E21429