A step-by-step guide to finding your dream home in today’s market
First time homebuyers in LA often overlook this major step in the process: understanding everything you need to know about buying a property. This goes for apartments, condos, duplexes or even vacant land, too. You’ve got many things to consider: tax savings, where to buy the best properties, what to look for, market trends, and monetary planning. Not to mention all the steps involved in purchasing a home – from the search to figuring out the best deal to closing. From a real estate agent with almost 20 years of industry experience, this guide will help you start the process with confidence.
What to know about the LA market
Los Angeles is known to attract fresh faces from around the country. The city has a 75-mile coast, mild winters, a thriving arts scene, and countless exciting things to do. On average, LA has 264 sunny days per year. So, it’s not really a surprise that homes along the city’s coast are among the highest in demand, as they provide access to some of the most beautiful beaches in the country.
The catch: LA’s popularity is reflected in the cost of its homes. Right now, LA is one of the country’s most expensive and exclusive property markets, with an average house price at well above $900,000. The housing market is booming, and costs are rising because demand is increasingly outweighing supply.
One way to help navigate the rising costs is to hire a real estate agent who is familiar with the neighborhoods where you want to live to get the most out of your home-buying experience. I’ve lived in Los Angeles my whole life, and I always use my knowledge of the city to help my clients get the best properties AND the best deals. Feel free to reach out here for personal advice!
Get a sense of where you’re going
The sprawling Los Angeles metropolitan area includes many communities and cities. Before setting down roots, it’s essential to understand the sprawl… especially when it comes to your commute. You might want to consider how your home & location can fulfill your needs. Think about the following questions:
What are you looking for within your community?
What would your commute look like? Could you take public transportation?
What kind of schools are in the area?
Can you conveniently get what you need on a day-to-day basis (groceries, shops, etc)?
How do you want to spend your free time? Would you rather hang out at the beach or go on a hike?
Once you’ve narrowed your home search down to a few, make sure to visit each one at different times of the day AND on the weekend. You can get a sense of traffic patterns and what it would be like to live in the house by visiting it in the morning, afternoon, and at night.
5 Steps to Prepare for Buying a Home in Los Angeles
If you want to buy a house, there are five simple steps to ensure that you are ready to make the bid. Each of these steps has more nuanced considerations, which you will be able to discuss with your mortgage broker or real estate agent, but following them will help ensure the process goes smoothly.
First and foremost, consult a mortgage broker.
If needed, contact your bank for a house loan. Entering bidding wars against all-cash buyers is not uncommon in the Los Angeles area. Buyers are responsible for making sure they have solid, pre-approved financing in place before they can close on their new home. Talk to a lender about your financial situation before you begin looking for a house.
Take an inventory of your financial resources.
Additionally, ensure you’ve got enough cash at least for a 20% down payment. Many think putting 20% down is the best way to avoid paying mortgage insurance (PMI). However, even with a 20% down payment, most conventional loans require a PMI to cover the lender if the borrower cannot make payments on their loan. The premium is often added to the monthly mortgage payment, and it is hard to stop paying it. One rule of thumb to remember is that a seller will take your offer more seriously if you have a larger down payment.
Get a pre-approval for your mortgage.
Most sellers won’t take even the best offer if it doesn’t come with a pre-approval letter from a reputable bank. With a pre-approval letter, all parties involved in the transaction are on the same page financially, and you demonstrate to the seller and the mortgage lender that you are a serious buyer who can be trusted with the borrowed money.
Find a real estate agent, a lawyer, and a home inspector.
A good agent is always available for questions and has experience with the neighborhoods you’re looking in. Ask around the neighborhood and make sure to do your research. With the help of a knowledgeable agent, your schedule will be tailored to fit your needs and your budget. For example, I once had a buyer from Europe who had no experience buying a home in LA. Through effective communication, I was able to oversee the sale of his dream home while he was overseas.
Breathe.
Purchasing a property in LA can be a difficult and time-consuming process, and you should keep this in mind as you begin your search. Rarely do people take the first offer they are presented with. Even so, if you put in the time and effort, you may be able to find the house of your dreams very soon.
The Final Checklist for Buying a House in Los Angeles
End-to-end real estate purchases in Los Angeles more or less involve these stages, so it could be helpful to have this checklist ready as you start the process:
Put money away for a down payment (think at least 20%)
Consult with a mortgage broker.
Get pre-approved for a mortgage, with a trusted bank.
Ask yourself what your needs are in terms of your home and location.
Get a real estate agent, lawyer and home inspector on your team.
Narrow down your search and check out the properties during the week, on the weekends, and at varying times of day.
Make an offer.
Know how to close (this can be a WHOLE other blog post if you want my tips on this).
Whether you’re a first-time buyer or an experienced home buyer, I hope these tips help you find your dream home. Let me know how else I can help, I am always here.
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