What you need to know this week on how to buy a Carlsbad Home
Every week I take five questions from buyers and sellers and answer them straight.
This week all five were about buying. And I have to be honest, sometimes the questions come in and they're fine. Maybe somebody gets value out of them. This week was different. All five were good.
I leave the names off every time. That's on purpose. The number one piece of feedback I get is "I want to ask this, but I feel kind of stupid asking it." So the names come off, and people keep asking. That's the whole point.
Here's what came in.
Question 1: I'm buying an older home. What do I need to worry about?
My assumption is you're already under contract and sitting in your inspection period right now. So the real question is what should you ask the seller to address, and what would actually be worth canceling over.
Here's what I wrote down, in no particular order.
Aluminum wiring. Nobody is going to completely rewire a home for you during escrow. That's not happening. But I pay attention to it, and you should too.
The HVAC system. I don't have the exact percentage for Carlsbad, but I'd guess more than 60% of the homes here don't have air conditioning. They all have heat. Get it inspected either way.
The roof. Look at it. Really look at it.
Foundation and settling. Most of Carlsbad sits on a sand bed. So you want to check for slipping. The easiest tell is 45 degree cracks creeping out of the corners of doors and windows. If they look deep, there's probably settling.
Now listen. Every home settles. There's no way around it. If the house has been standing for dozens of years, it has moved. Don't freak out when you see it. Just get it inspected.
Single pane windows. This isn't really an inspection problem. Depending on the age and where the home sits in Carlsbad, it may not matter much. It doesn't mean the windows are failing. It doesn't mean they're bad. It means they're an old standard. Less insulation, less energy efficiency. Have them looked at.
Galvanized piping. Make sure it's intact. No leaks, none of that fun stuff.
Get the general inspection anyway
Every single time. Even if you already know you're buying the home. Even if it's an as-is sale, and in California every contract is an as-is sale unless it says otherwise.
Appliances, plumbing, wiring, roof, all of it.
The home warranty conversation
For a 2,500 square foot home in Carlsbad you're looking at somewhere between $550 and $750 depending on whether there's a pool and what else you add. As long as everything is documented in working condition at close of escrow, the warranty covers it.
I know there are two camps on this. One says home warranties are a total ripoff. The other says they're the best thing in the world.
My personal opinion after 20 years: I have never seen somebody buy a home warranty, make a claim, and then regret having it.
Does that mean you'll use it? No. Not always. I know plenty of people who bought one, let it lapse after a year, and then got the call. "Oh my gosh, I totally should have renewed that. The HVAC just went down and now I'm spending 15 grand." The warranty deductible would have handled it.
So if I'm your agent, here's the advice. Get the inspection. Review everything. Make sure it's functional.
And remember, we are not buying homes that get delivered to you in brand new condition. That's not how real estate works. We just want everything working.
So when would I actually cancel?
Severe sloping. We brokered a home a few years back on the corner of an entire development. You could clearly see the end unit of that condo was sloping. There was no real way to fix it. The HOA said yes, we know it's a problem, that's why it's so cheap, we'll get engineers out there eventually. But right now is not that time.
I told that buyer to cancel. If it's a headache now with no resolution in sight, it's a headache later.
Really bad cracks in the attic trusses. The kind where you look up and you just know. Where the repair number is so big it stops making sense.
That's about it.
Aluminum wiring? As long as the inspector says no imminent fire danger and no breaks in the wiring, I think that's fine. Address it long term.
Old HVAC? Can we warranty it? Is it functional? I'm not canceling a deal over that.
The roof is six in one hand, half a dozen in the other. It might be a $20,000 expense that's coming no matter what. There is no version of owning real estate where a roof magically gets better. So if a big replacement is coming, we either negotiate it into the deal or we get a credit to close.
And keep this in mind. Sellers often have no idea their roof has problems. There are no leaks. Nobody goes up on the roof except once a year for Christmas lights. So it's not always "oh, it's priced accordingly." Unless it's glaringly obvious from the curb, the homeowner probably knows exactly as much as you do.
We've seen some really bad inspection reports over the years. Most of them get solved with a credit or some simple back and forth.
I'd say 19 times out of 20, maybe 49 out of 50, we get past it. One to five percent of the time we can't.
But the homeowner wants to sell. The buyer wants to buy. When everybody's committed to the deal, we usually put it together.
Question 2: How much can I negotiate, and on what?
Good news. You can negotiate anything you want.
The better question is what actually moves the needle with the homeowner.
When we negotiate a deal, the first thing we do is call the listing agent and ask one question. What does your seller want?
Sometimes the answer is list price and a 30 day close. Just give me an offer. That's probably the right answer. But a lot of the time the listing agent will tell you they're motivated by X, Y and Z. Maybe they want to move faster. Maybe slower. There's usually something in there.
At the end of the day, money is money. Financed or cash, it's the same money. The number one motivator for most people is time and money. Compress one and give more of the other and you're in a better spot.
Here's the full list of what's actually on the table.
Price
Obviously number one. I have to mention it, but you already knew that.
Earnest money
One to 3%. One percent is on the low end. It's okay, but it may not show the seller you're serious.
I would never go above 3%. The arbitration limit in the contract is 3%, so there's no reason to give yourself added exposure past that.
Here's what most buyers don't understand. Earnest money does not affect the seller's net. They get the same check whether you put down $10,000 or $400,000.
You could make the argument, and you should make the argument, that in the event of a default the seller has more money available to them. That's true. So earnest money can motivate. But I would not expect it to be the difference between getting the deal and not getting the deal.
Closing timeframe
Some sellers want it fast because they believe less time under contract means a higher chance of closing. If you can do a 20 day close, or a 10 day close with cash or a portfolio loan, that's leverage.
Some sellers, believe it or not, want a longer escrow. Maybe they haven't found their next home. Maybe there's uncertainty on their end.
You find out by asking. Does what the agent says dictate what we do? No. But it tells us which direction to walk.
Down payment
We've done deals at 3.5%, 5%, 10%, 15%, 17%, 20%, 30%, 40%. We've seen it all.
Same as earnest money, the down payment doesn't change the seller's check at the closing table. But the more you put down, the more qualified you may look. Buyer one puts 3% down. Buyer two puts 30% down. More cash at risk, so statistically the second buyer might look stronger.
It's not always the case though. If you're a homeowner reading this, it's not that cut and dry. Some people put a lot down because they don't want a big mortgage. Some are rolling equity from another home and that's just how the math landed.
I've seen just as many all cash deals cancel as FHA and VA and 100% loans. I don't have the exact stats in front of me, but I'd bet the cancellation numbers aren't meaningfully different. Buyers get cold feet at every down payment level.
The one exception is a buyer who barely qualifies. That's a higher flight risk, because a lot more things have to go right for that deal to close.
Work with a seasoned agent and most of the time, eight out of 10, four out of five, maybe 19 out of 20, the deal closes. I know I'm using a lot of stats today that I normally don't. But with the right diligence and the right tenacity, you'd be surprised what's possible when people actually want to get a deal done.
The small stuff
Termite. Not expensive unless the home needs full treatment and the lender requires it, and then it can run five to $9,000. Who pays is negotiable.
The ALTA insurance policy. Home warranties. Little things in the $500 to $1,500 range.
Is any of that the difference between accepted and rejected? Probably not. It's probably going to be price and closing timeframe. But it's all negotiable.
Contingency timeframes
The California purchase contract gives you 18 days for due diligence. At the end you either accept the property and move forward, or you don't.
And believe it or not, in California it doesn't automatically expire. You have to notify the other side. You accept based on your due diligence, you reject based on your due diligence, or you conditionally accept if a couple of changes get made.
That third one is where the request for repair lives.
Let's say you wrote in good faith, and then something major came up during inspections that you had no way of knowing about. We go back to the seller with one of three asks. Fix it. Credit us for it. Or lower the price.
Any of the three is fine. We lead with the repair. If they can't do the repair, then we say okay, we'll accept money in lieu of it.
What we don't do is come back and say "we got an inspection report, there are 71 items on it, drop the price $100,000." That does not go over well. There's a specific strategy to this.
Once you ask, the seller has three moves.
They say yes. Everything moves forward. They're bound, they take care of it, we're good.
They meet you partway. Partial credit, or they fix some of it. Now you decide if that's acceptable. If either side says no, that becomes a cancelable event. You cancel, you get your earnest money back, everybody parts as friends. That rarely happens, because when somebody wants something done we usually get through it.
They say no. It's an as-is contract, we're not doing anything, take it or leave it. This happens about 50% of the time.
Don't get offended. Don't get upset. That's how California real estate works.
At that point you can cancel and get your earnest money fully refunded, because your due diligence didn't come back satisfactory. You made a good faith effort. Transaction's gone, we move on.
Or you can say okay, at least we tried, thanks for the response, we're moving forward anyway.
Waiving the appraisal
You can waive the appraisal contingency. What you're saying is: no matter what this thing appraises for, I'm buying it.
Your lender may not love that. They might tell you they need the contingency in there because of their algorithm.
And here's the risk. You waive the appraisal, the home comes in short, and now your lender needs another $6,000 down. That's a gray area. You may not get your earnest money back.
Sometimes it depends on how the decline happens. If it's a hard decline, you need another $1,000 and you don't have it and the loan gets denied, most of the time you get your earnest money back. But it could really go either way depending on the specifics.
So if you're considering waiving the appraisal and we're working together, we're talking that through in detail. If you're working with another agent, make sure you understand every risk before you sign.
Either way, run comps with your agent before you write the offer. You should feel comfortable that the number you're landing on is within the means of that neighborhood. If you are, I think waiving is okay. Just be educated so you don't get caught in a bind.
One more thing on negotiation
I have clients who come in and say "Steve, we're writing 50 offers, we're going hardball, we're getting a deal no matter what."
Listen, that's a strategy. It's not a bad one.
But if you can come to the table collaboratively, you do better. I don't mean playing fair. I don't mean everybody gets to win. I mean understanding this is a give and take.
And stay unemotional on the repair conversation. I've seen every type of buyer in 20 years and thousands of transactions. Some people are very emotional about real estate, which is okay. Some people are completely unemotional, which is also okay. There are pros and cons to both.
But this is the moment to keep the temperature down. Because the seller's reason for saying no is almost never the reason you think it is.
I had a deal a couple of years ago where something major came back on inspection. We asked for the repair. The listing agent called back the same day and said sorry, we're not doing it, we can't do it.
I went back to my client. They said let's cancel. I tried to talk them out of it. We submitted the cancellation paperwork.
The other agent called me immediately. Whoa, whoa, whoa, we can't cancel, we have to make this work, my sellers would love to help you. They're out of money. No resources. No lines of credit.
Had we known that going in, maybe we handle it differently. We did go back and forth on that one, and there really wasn't a path forward. But the reason those sellers said no was nowhere close to what my buyer assumed. My buyer thought they were just being difficult. Thought they didn't really want to sell. Got frustrated and moved on.
That's not what I'd want for you.
And here's the last thing. There is almost no amount of money you're going to remember in two years. If you paid $1,000 more or $1,000 less, or even 10 to $15,000 either direction, in two years you're just going to remember that the price was a million nine forty five, or a million nine sixty.
You're not going to feel it. So if it's your home, go for it and give it everything you've got. Two years from now you'll be grateful you did, assuming it's the right property.
Question 3: What does the full process and timeline look like?
It's actually pretty simple. If I'm timing this perfectly, here's what I wrote down.
3 to 5 days for negotiation. Could take longer with multiple offers, or if you and the list price are far apart.
Get all of it in writing. Purchase contract to the seller, counters back and forth. You would be surprised how many times people say things verbally and then act completely differently when there's an actual contract in front of them that they can sign right now. Put everything on paper. Do the verbal stuff on the back end. Make it real.
Earnest money due within 2 to 3 days of acceptance. Don't play with this. Stretching earnest money after a contract gets accepted puts a bad taste in everybody's mouth and starts the deal on the wrong foot.
18 days of contingencies. That's your due diligence window.
12 to 20 days for the lender to close on a traditional loan.
So from identifying the home to keys in hand, allocate 28 days at the fastest, up to 45 or 50 days depending on the lending process and how clean your underwriting is.
The day of closing belongs to the buyer
Write that down. Once the home records, you can take the keys and move in that day.
But you cannot and should not take possession earlier than recording.
Yes, there are pre-possession addendums. Yes, there are times I'd recommend one. But I can't tell you how awkward it gets when somebody moves in early and something random happens. Lending gets goofed up. You have to switch loans.
Twice in my career I've had deals completely fall apart on the day of closing with the buyer already moved in. Once on the listing side, once on the buy side. Uncomfortable for everybody.
So don't move in early. Once the home physically records and we get the notification, it belongs to the buyer. Keys any time after that.
For all of our clients we hand you a timetable up front. What money is due when. What you have to do by when. What's due at the start. What the closing costs are. We're detailed about it, so you know exactly what to expect.
Question 4: How competitive is the market? Will I be in a bidding war?
The answer is maybe.
The Carlsbad market is always competitive. For homes priced right, in a good location, close to the water, it's going to be competitive for the next 100 years. That's never changing.
What changes are the decisions a homeowner makes.
Check this out. We've been doing this a long time, and I can almost predict with 100% certainty when a home is going to get multiple offers. Same on the buy side and the sell side.
Every buyer has four challenges they're solving for. Location, price, presentation, condition.
I'll give that to you again. Location, price, presentation, condition.
Location. Where does the home physically sit? Amazing, middle of the road, or subpar? Nothing anybody can do about it. The home sits where it sits. We can't move it.
Price. How did the seller elect to price it? As a marketing tactic, or are they overpricing and planning to negotiate down? That second one is a terrible strategy right now. I would never do it, just between you and me.
Presentation. How is it marketed? Is it all over social media? Highlighted on Zillow? Direct mail? Facebook, Instagram, Google, YouTube ads? Does the market actually know this listing exists?
Condition. Is it move in ready?
Great location, priced correctly, amazing presentation, phenomenal turnkey condition? I can guarantee you with 100% certainty it gets multiple offers in the first week.
If a home has been sitting 7, 14, 21, 30, 60 days, and our average days on market right now is around 56, then it missed on one of those four. Or a combination.
And sitting on the market past a couple of weeks is not a bad thing, by the way. I would not freak out at 21 days with no offers. That's normal right now. But if you want to break a record, you have to hit all four.
So as a buyer, you can run the same checklist. Is it priced right? Does it look amazing? Am I seeing it everywhere? Is the location great?
Four yeses means you're competing. And at that point there's agent relationships, there's terms, there's a lot of moving pieces. But the most qualified buyer usually wins.
Not always the highest one, by the way. Sometimes an offer comes in so far above that the seller isn't convinced it will actually close. But mostly it becomes a race to the top.
If that happens and we're working together, it's simple. I ask you one question. What is the number you are not willing to go past? Then I go see what I can do to get the seller at or below it.
Sometimes it's just not possible. Somebody wants the home more than you do, and it is what it is. We move on and find the next one.
Here's the honest scale of it. Look at the next 20 homes that go under contract in Carlsbad this week. Maybe one or two of them had multiple offers.
That's nothing like the COVID years, where everything had 40 offers and people were paying way over and freaking out. We are not in that market.
But in the top 25% of the market, the most desirable homes in the dominant communities, multiple offers still happen. Even if it's just two. It's not uncommon. It's not something to freak out about, and I definitely would not wait because of it. If you write enough offers, you'll run into it. No doubt.
Question 5: I'm ready now, but I'm worried pricing will come down. Should I wait?
I get this one constantly. Because the media tells us a housing crash is right around the corner, and if you follow the hedge fund guys, they're forecasting the same thing.
They're not wrong. They're not right. It just is what it is.
So let me show you what's actually happening in Carlsbad.
New listings by month
Going back to 2021, right after COVID started, one thing jumps out immediately. Carlsbad's market is very cyclical. The middle of the year explodes. The winter comes to a grinding halt.
So there isn't a lot of inventory in the winter. That's also a very good opportunity for a deal if that matters to you. And even with low inventory, we still have tactics for finding people who want to sell but aren't on the market.
Nobody wants open houses during Thanksgiving. That's pretty much the whole explanation.
This year followed the pattern. April was strong, May dropped, which is not normal. June went up. I'm expecting July to drop again.
Total listings
This is the weird stat.
July of last year we had about 470 total listings, the most we'd seen in a long time. That number is actually pretty normal pre-COVID, so it looked like we were getting back to a normal market.
A year later, June came in at 265. June of last year was 447.
That's a significant drop. That's the interest rate hangover. We're still in an inventory situation. I wouldn't call it a crunch, but it's much lower than you're used to.
Pending and closed sales
Pendings are cyclical too, and they're going up. June was 139. June of last year was 105. That's 25 more pendings year over year, which is good.
Closed sales are very stable. 124 last month. I think next month runs a little higher, we'll see. Don't read too much into closed sales though. That's a loaded number.
Average sales price
In 2021 we were at about a million bucks. Here in 2026 we're at a million seven.
Almost double in five years. Call it up about 75%. Great for equity growth, but it's a lot more expensive to live here than it was in 2021.
So are we going from $1,744,000 down to $1.4 million? No. That's not happening.
Just know that the number moves a lot depending on the time of year and the type of home. Bigger homes, 4,500 square feet and up, have way more variance. We've had some record sales lately in Carlsbad that skew the average.
The lower end of the market is pretty stable. Condos in the $800,000 to $1.2 million range are strong and steady. Single family was around $1.3 million in January of 2021 and now hovers around $2 million. That's a $700,000 increase.
Do I think that comes down? Probably not.
Months of supply
We're still hovering at about two months.
That's why I said if your home has been on the market 45 days without an offer right now, don't freak out. That's totally normal.
It's weird to say that two months on the market feels like a long time. I remember 18 years ago when we sold homes in four months and we were ecstatic about it. Last summer we got up to five months of supply, which was crazy, and that's just because there were 480 listings on the market.
So here's my actual answer
Short version.
If you need to buy in Carlsbad and you know you'll want to sell within two years, could the value be lower than it is now?
The answer is not no.
Statistically, going back at least 25 years, I can't find a two year window where you bought and lost, other than maybe the downturn. And even then it's shaky.
But with rates this high and pricing this high, it's possible that in two years you don't make money. It would still probably beat renting. But if you're honestly on a one and a half to three year turn cycle, I would probably rent.
Now flip it.
Almost any price point in Carlsbad, if you have a seven year hold in front of you, I don't think there's a way you get hurt. Unless you're buying a really old condo at the end of its life, and there aren't many of those here.
Single family home, six or seven year hold? There's no way you look back and say I wish I'd bought a year earlier or a year later. You're not going to feel it.
Here's why. Carlsbad is landlocked from a border perspective. There's some infill happening. There are a couple of new developments coming and an amazing park getting built right now. There will always be infill opportunities.
But to my knowledge there is no room left for another mega master plan community.
When that happens, one of two things follows. Equity shoots up, or we start building condos. And I don't see Carlsbad ever turning into a dominant condo market, even in the Village. I know a couple of projects friends of mine are running down there that are definitely dense housing. But nothing at the scale that would change the character of this market.
Most of the communities that exploded in 2005 are just now hitting the point where they're getting significantly remodeled. That's what's driving a lot of this equity gain. Modernization.
Mark the date on this one. Call me in eight years and tell me if I was right. If you're holding six, seven, eight years, I don't think you have anything to worry about.
So focus on the thing that actually matters. Buy a home in a great location at a price you're excited about. Because when people love their community, the values go up.
Coastal communities like Terramar or the Village. Hanover Beach Colony. Poinsettia Cove. San Pacifico. Waters End. Even a little inland, Bressi Ranch or anywhere in Aviara like the Bay Collection.
Those are very high demand areas. I have a hard time believing any of those drop year over year over the next five to eight years. I think you're going to be okay.
Got a specific question?
If you have a question about a specific neighborhood, drop it below and I'll answer it.
And if you're thinking about buying in the next 60 days or six months and you want the actual roadmap for identifying your next home, including homes that aren't listed on the MLS, go to buyin2026.com. Believe it or not, a lot of our transactions start with homes that were never actively listed.
Give us your first name and email and we'll send you the contract, how to read the contract, what money is due when, and our search criteria. We'll build the whole thing for you.
It'll answer about 98% of your questions. Then we hop on a call and figure out what you're actually looking for, and whether now is the right time for you to buy.
I'm here for you. See you on the next one.