There have been cases where buyers, overwhelmed with joy that their offer was accepted, signed the contract without reading it again. This led to a situation where they had to renegotiate just before closing because they missed a condition. In a competitive market like Santa Monica, finding a balance between speed and caution can be challenging.

The median sale price in Santa Monica over the past month is $2.1 million, which is a 25.3% increase from the previous year, with an average of four offers per property, selling in 43 days (according to Redfin). While this is advantageous for sellers, it can create pressure for buyers who may not have enough time to carefully review the conditions.

On the contrary, a common mistake is completely removing inspection contingencies. While this can enhance the competitiveness of an offer, in Santa Monica, where many older buildings exist, it can lead to risks of dealing with plumbing or roofing issues later on. Instead of eliminating conditions entirely, a balanced approach would be to minimize the review period.

Underestimating closing costs is another point to consider. Calculating around 2-5% of the sale price means that for a home priced at $2.1 million, you would need at least $42,000 to nearly $105,000. If you only prepare a sufficient down payment and overlook this aspect, it could lead to a situation where funds are lacking at the end of the contract, resulting in a significant difference between closing smoothly and scrambling for funds.

When budgeting, it's important to include property taxes, insurance, and HOA fees, rather than just focusing on the mortgage principal and interest. With California's base tax rate of 1% plus local bonds, the effective tax rate can rise to between 1.1% and 1.3%, meaning annual property taxes for a $2.1 million home could range from $23,100 to $27,300. If it's a condo or townhouse, adding HOA fees means it's safer to calculate total ownership costs in advance.

There's a difference between looking at properties without mortgage pre-approval and waiting with pre-approval in hand for the right moment to make an offer. Just because homes sell in 43 days doesn't mean there's ample time; searching for a home you like without pre-approval can put you at a disadvantage in negotiations. Additionally, comparing at least three lenders can save you thousands in interest on a $2.1 million home, rather than just sticking with one lender.

There's also a contrast between using all your reserves for the down payment and leaving some aside. While it's understandable to want to maximize your down payment to win in a competitive offer, leaving some funds available for unexpected expenses right after moving in seems to be a more stable long-term choice.

Maintaining your credit score and debt-to-income ratio until just before the contract versus making large purchases that could affect your conditions is worth considering. If you buy furniture or a vehicle out of relief after your offer is accepted, your loan conditions may be re-evaluated at the last minute, so it's safer to keep your credit status intact until closing.

Planning for long-term residency and making decisions versus rushing due to emotions can lead to different outcomes. Considering commuting distance, school districts, and future resale potential before signing the contract may lead to greater satisfaction years down the line. The preferred school districts for Korean families can vary within Santa Monica, so it's advisable to check the assigned schools directly.

Ultimately, whether to prioritize speed or caution depends on the situation, but reviewing the contract, preparing for closing costs, and calculating property taxes should be addressed regardless of the choice. For families moving from out of state, this is especially important as they may overlook these aspects based on their previous location. When weighing the pros and cons, it seems that in the end, it's always advantageous for those who are prepared. This article is not investment or legal advice, and consulting a professional before finalizing any contract is recommended.