How to Win at Buying LA Real Estate
Follow the process below
Buying a home in Los Angeles can be a complicated, time consuming, and possibly a disheartening process. If you want to succeed in buying your LA home in today's market, with the best possible terms, and in the shortest amount of time you should absolutely follow the process below.
If you Google search this topic you’ll likely find endless info and blogs with possibly non-relevant information, which usually leaves most potential buyers confused. The outline below was written by me for you and is updated periodically to reflect the current market conditions.
Determine your motivation, timeframe, and investment or financial strategy. I suggest you start thinking about ideal areas, property specs, and ideal features while also discussing this decision with your loved ones and key advisors (CPA, Financial Advisor, etc.).
It’s All About the Money:
1) No one wants to be house poor or worse unprepared when you find “the one”. Start thinking about your monthly house budget and how much you have for a down payment and closing costs.
2) My favorite online mortgage calculator is:
3) Once you’ve nailed down your budget, call a lender or an agent to have an educated conversation about closing costs, inspections costs, financing fees, and approximate monthly payments.
4. If you know your budget and know what you approximately qualify for, I suggest you start searching online and maybe begin driving neighborhoods that interest you. If you need specific information before driving all over town and prefer to start a narrow search vs. a casting a larger one and funneling down, I highly recommend you call an agent for a breakdown of detailed demographics, crime statistics, industry perception, trends and a market analysis of recent price appreciation.
5. Are you a do it yourself type? Below is a link of 21 factors every buyer must consider before buying into a neighborhood and those same factors apply to price when it comes to a seller considering how they should price their home.
Next, you have to engage:
1) Schedule a buyer consultation with an agent by phone, video or in person, if you feel you need one This may be a smart move even if your intention to buy is in 6, 9 or 12 months. You want to be prepared.
You’ll go over area information, familiarize yourself with the best technology suited for your needs, set up new home alerts so you can track the market, set up your home search app on your phone, discuss area conditions, review typical closing costs, review a purchase agreement, go over any questions and possibly get pre-approved if you’re ready to get started.
2) If you’re ready to start touring homes to potentially make an offer, make sure you get pre-approved. This can happen before or after you meet with an agent. **PRO TIP** Make sure you obtain a conditional approval from your bank, loan officer, or mortgage broker vs. a pre-approval which sometimes means your entire financial profile has not been fully reviewed. Having only a pre-approval or pre-qualification form from a lender could prevent you from purchasing a home with competing buyers who do have a full approval.
3) **PRO TIP** The lender that pre-approves you at the beginning of your home search may not be the lender that actually finances your property. It’s important to possibly talk to a few lenders before you start to officially search for a home, but only one should run your credit and issue a conditional approval.
The time to shop and negotiate with banks is the DAY AFTER your offer has been accepted. But you have to move fast because your escrow clock is ticking. Ideally, you take half a day off and call to get a few quotes (if you hire us to represent you, we can help). In a perfect world, for example, your offer is accepted on Monday, and you shop and choose a lender Tuesday.
4) Remember, The best agents educate, ask questions and listen. They usually discuss average days on market, low range vs. high range, average sales price to list price ratio, trending city pockets, and a plethora of data that is relevant today. Great agents will never rush you or pressure and solely advise you to buy or not buy in an area or a property that they don’t believe is a solid choice based on your parameters and financial situation. Moving at your speed and being mindful of your comfort levels is important.
5) **PRO TIP**
Technology matters. A well-equipped agent will have the the right platform so the search, escrow and closing process run seamlessly. This means having an app where you can share saved properties, take notes during home tours, communicate about potential offers, outline and measure your progress in a sale, instant relevant market date by neighborhood, zip code, bed or bath count or month, and of course access and download all of your transactions documents in one location.
When You Tour Homes, Tour Them Like a Pro:
1) Look at the roof, electrical panel, water heater, condition, look for potential moisture stains or cracking in the walls, windows, flooring, chimney, and even poke your head under the crawl space and take a look at the foundation. Ask the condition and age of the above-listed systems if the other agent or seller is present on your tour.
—Use your real estate app and take notes of each system after you see each property.
Click Here to Learn About Touring Homes Like a Pro. This link is my personal list of items I asses when touring single family residences and condos: www.westlaliving.com/blog/list-of-items-to-check-when-touring-properties-and-before-buying-a-house-in-los-angeles
2) **PRO TIP**
Download the LADBS app for your mobile device. Quickly search a properties permit and violation history. You can do so by clicking here: http://ladbs.org/ladbsgo/
3)The best agents see hundreds of homes a month and know what to watch out for and can sometimes gauge the condition of many items, but it’s always best to get the final say from an inspector or contractor during your due diligence portion of the transaction.
4) If you find a home you love and need quick measurements or a floor plan to gauge how furniture will fit, download my favorite award-winning app: https://www.magic-plan.com/
Writing Your Offer & What To Expect:
Once you prepare to write your offer, your agent should educate on what the best strategy and terms will be to have it accepted if there is competition or how to negotiate the best price if there is potential wiggle room.
You’ll need to provide the seller a full offer package, which includes a copy of your conditional loan approval, proof of funds, a copy of your credit score (with sensitive information whited out), purchase offer and a letter to the seller from you the buyer. Some sellers give lots of weight to the buyer to seller letter while others don’t. But in a low inventory, competitive market it doesn’t hurt to write a heartfelt letter to the seller. Need a copy of a few that stood out to me over the years? Let me know, and I’ll send them over. I always archive the best ones.
The seller and the listing agent usually vet an offer by reviewing over 20 contractual terms and the buyer’s motivation, purchasing ability, and financial standing.
You can read my outline, which discusses how an offer can potentially be vetted by
following the link below:
If your offer is accepted, then you’ve won at buying! In California, the seller has a contractual duty to sell you the property to you as long as you perform according to the agreement.
If you’re working with me, then the loan should not be a problem as I make sure my client’s finances are fully underwritten with a conditional approval and have a proven process, assistant, transaction coordinator, and proven software that ensure you’re always informed and nothing falls through the cracks.
If all goes well, then you’re on your way to becoming a California Homeowner. However, there are a few reasons, which I listed below as to why a transaction or home purchase escrow may fall apart.
During your repair inspection process, there may be large safety hazards or items you deem as deal breakers that the seller may not be willing to repair or credit money for.
The property may not appraise for the purchase price you and the seller agree to, and the seller and buyer may not agree to negotiate a reduction or meet on common ground.
Here are two more helpful links to help you navigate the home buyer and seller escrow process:
Inspections, The 4 Repair Categories, & What’s Negotiable in a Home Purchase. www.westlaliving.com/blog/what-can-and-cannot-be-negotiated-in-a-home-purchase-sale-in-los-angeles-california
I’m in escrow to buy a property. It did not appraise for the purchase price. What are my options?
Click here: www.westlaliving.com/blog/the-property-im-buying-did-not-appraise-what-are-my-options-los-angeles
Do you need solutions to specific problems?
Do you have answers to specific questions?
Reach out to us first. We’re a karma first strategy team. No sales pitch, no scripts, no pressure,
just an intelligent conversation. Hope to hear from you soon.