HomeMy WebLinkAbout5/5/2026 Item 7g, Delmartini (2)
Colunga-Lopez, Andrea
Steve Delmartini <steve.delmartini@compass.com>
Sent:Monday, May 4,
To:E-mail Council Website; Francis, Emily; Stewart, Erica A; Marx, Jan; Boswell, Mike;
Shoresman, Michelle
Subject:Council meeting May 5, 2026. Item #7.g Sewer Lateral
Honorable Mayor and Council Members
I would also like to focus on the Buyer side of this proposed point of sale change to replacement.
I found it interesting that somehow during the conversation with staff and others that it was almost
assumed that the buyer of a property would be just fine substituting the actual replacement with a "seller
credit" if the replacement could not be completed within the escrow time period which is typically thirty
days and would just take this on and complete within 180 days from close.
Unfortunately, in my opinion, this is going to affect first time home buyers and buyers with 3% to 5%
down the most in a very negative way. These are the buyers we are trying to help the most with "seller
credits". These buyers might already be asking for a seller credit to buy down an interest rate so they can
get to the payment that qualifies them for the loan, or, in addition to that these buyers are asking for a
credit for their closing costs or maybe some repairs that are really necessary. These buyers are stretched
for cash and seller credits for these types of things are so much more important than a credit fixing the
sewer lateral. This is the foot in the door they need to actually have home ownership. Lenders have limits
on how much credit can be given to a buyer in "seller credits" and just for the ease of conversation, lets
just say that may be in the $14,000.00 to $16,000.00 range. It's generally a percentage of the loan
amount. If there are any cost overruns for the replacement if done after close, then the buyer will
generally have to eat those extra costs.
The numbers for a replacement that are generally thrown around now are maybe $12,000.00 to
$16,000.00. I think the days of $8,000.00 to $10,000.00 are disappearing. This was discussed with staff
and I really didn't see much if anything in the staff report that reflected this conversation.
As a Realtor, I'm just trying to get those that want to own and are struggling to do so a chance for that to
happen. It's an uphill battle. If a buyer is up against another offer and they have the ability to negotiate
the lateral replacement and they don't need other types of credits, then in most cases the seller goes
with path of least resistance.
Thank you for your time and consideration.
--
Steve Delmartini
Broker Associate
DRE#: 00601891
San Luis Obispo, CA 93401
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