Buyers Guide: How to Buy a Home in Los Angeles
The Buying Process
Welcome to your ultimate guide on buying a home in Los Angeles! Navigating the Los Angeles real estate market can be challenging, but with the right information and a trusted realtor by your side, you can find the perfect home. My name is Matias, and I’m here to help you through every step of the buying process. Let’s get started!
First Steps
Before beginning your search, it’s essential to understand why you’re buying a new home. Knowing your reasons will help you focus your search, set clear priorities, and make informed decisions. Identifying your motivations early on ensures that your new home aligns with your lifestyle, financial goals, and long-term plans, making the entire process more efficient and less stressful.
Understanding Motivation
Relocating to Los Angeles
Relocating to Los Angeles means finding the perfect neighborhood that fits your lifestyle, whether for a job, family, or a new adventure.
Tired of Renting
Buying a home offers stability, equity growth, and the freedom to personalize your space, making it a wise alternative to renting.
Upsizing or Downsizing
Whether you need more space for a growing family or want to simplify your life, finding the right-sized home is crucial for comfort and functionality.
Family Changes
Family changes, such as welcoming a new addition to the household, or taking a relationship to the next level, often require a home that better accommodates your evolving needs and priorities.
Investing
Investing in real estate can build wealth and provide income. Understanding market trends helps make informed decisions for long-term gains.
Seeking a Lifestyle Change
A new home can offer a fresh start and better align with your desired lifestyle, whether that means urban excitement, suburban calm, or natural surroundings.
Making a Clear Plan
Determine Who Will Live in the Home
Consider everyone who will be living in the new home:
- Individuals or Couples
- Families with Children
- Pets (Four-legged family members)
Understanding the occupants’ needs will help you find a home that fits everyone’s lifestyle.
Establish Your Timeline
Define your timeline for buying a home:
- Urgent: Need to buy quickly (e.g., relocating for a job).
- Flexible: No immediate rush (e.g., browsing for the perfect home).
Your timeline will dictate how aggressive your search should be and how you approach the buying process.
Financing Your Home Purchase
Next, determine how you will finance your new home:
- All-Cash Purchase: Simplifies the buying process and can give you an edge in negotiations but require considerable capital.
- Mortgage Financing: Offers flexibility but requires careful consideration of loan options and terms.
Tip: Ask for the difference between Pre-Qualification vs. Pre-Approval vs. Pre-Underwriting
Choosing Between Banks and Mortgage Brokers
- Banks: Often have better rates but limited options.
- Mortgage Brokers: More options but might be more expensive.
Tip: Focus on loan terms and points, not just interest rates. Use resources like Freddie Mac or Federal Reserve Economic Data to understand current rates.
Determining Search Criteria
Area Selection
Choose the right neighborhood based on your priorities:
- Proximity to Work
- Schools and Parks
- Lifestyle Preferences
Explore different neighborhoods to find the one that suits your needs.
Property Types and Preferences
Decide what type of home fits your lifestyle:
- Single-Family Homes
- Condos and Townhouses
- Tenancy in Common (TIC) or Co-ops
Consider specifics like the number of bedrooms, presence of stairs, yard size, and amenities like pool and workout room.
Starting The Search
Together, we will begin by setting you up on specialized online portals that provide access to the latest listings tailored to your preferences. These tools will help streamline your search and keep you informed of new properties as they become available.
There are four main options to view properties in Los Angeles.
Open Houses
Open houses are a convenient way to see multiple properties in a short amount of time, typically held on Saturdays and Sundays. This option allows you to casually browse homes, compare features, and get a feel for different neighborhoods. Open houses are great for initial viewings and can help you narrow down your choices.
Lock Boxes
Realtor lock boxes, accessible via a Bluetooth-enabled app called Supra, allow us to view properties at flexible times. This option provides convenience and security, enabling us to access homes even when the owners or listing agents are not present. It’s an efficient way to see properties that fit your schedule.
Private Showings
For a more personalized experience, I will arrange private showings that work around your schedule. This option allows for a detailed viewing of the property without the distractions of other potential buyers. Private showings give us the opportunity to take our time and thoroughly evaluate each home.
Tenant-Occupied Properties
With tenant-occupied multifamily properties, it’s common to submit an offer without seeing the interior to avoid disturbing tenants. However, this option is less relevant for single-family homes and personal residences. When faced with limited access, we will adjust our strategy accordingly.
Submitting an Offer
When you find the perfect home, it’s time to submit an offer:
- Offer Price: Based on list price, comparable sales, days on market, and competition.
- Terms and Contingencies: discuss the need and length of contingencies for inspections, appraisals, financing, and documents review.
Negotiating the Offer
Terms may be further negotiated during the counter-offer process when applicable:
- Contingency Periods: Time to address any issues found during inspections.
- Appraisal and Financing: Ensure the property appraises at the contract value and secure your loan.
Opening Escrow
Now that your offer has been accepted, it’s time to open escrow and navigate the next crucial steps in the home-buying process. This phase involves careful coordination and timely actions to ensure a smooth and successful transaction.
Acceptance & Deposit
Once the listing agent sends us the signed purchase agreement, we open escrow.
Initial Deposit: Typically 3% of the purchase price in Los Angeles, paid via bank wire or on rare occasions with a cashier check.
Tip: Always call the escrow company to verify account numbers to avoid wire fraud.
Homeowners Insurance and Disclosures
Insurance: Start shopping for homeowners insurance early due to the challenging market in California.
Statutory Disclosures: Review seller-provided disclosures and obtain a preliminary title report to ensure a marketable title.
Title Report: Carefully review the report to confirm there are no issues with property access or other exclusions.
Inspections and Contingencies
General Inspection: Hire an inspector to assess the property’s condition. Search for general and special inspectors or leverage my network of experts .
Inspection Report: Review the report together, keeping perspective on minor issues versus major concerns.
Other Inspections: May include termite, sewer line, foundation, mold, HVAC, lead, asbestos, roof, and chimney inspections.
Request for Repairs and Contingency Releases
Request for Repairs: Decide whether to ask the seller for repairs, a credit, or a price reduction based on inspection findings.
Contingency Releases: Release inspection and appraisal contingencies as appropriate to move forward with the transaction.
Financing and Loan Process
Lender Coordination: Connecting the lender with escrow as soon as possible is crucial.
Paperwork: Prepare for extensive documentation and additional requests during the loan underwriting process.
Appraisal: Ensure the property appraises at or above the contract value to avoid complications.
Preparing to Close
State and Local Requirements: Ensure compliance with requirements like CO2 and smoke detectors, low-flow toilets, and gas shut-off valves.
Home Warranty: Typically paid for by the seller, covering major systems for one year.
Down Payment and Funds Transfer: Wire the remaining down payment to escrow once the lender is ready to send their funds.
Final Steps and Closing
Once funds are in escrow, the file is released for recording. Upon confirmation from the title company, you officially become the new owner!
Key Takeaways
- Understand Your Motivation:
Identifying why you’re buying a new home—whether it’s relocating, upsizing, investing, or other reasons—will help tailor your search to your specific needs. - Financing Your Home Purchase:
Decide between an all-cash purchase or mortgage financing, and understand the differences between pre-qualification, pre-approval, and pre-underwriting to strengthen your buying position. - Begin Your Search:
Utilize both online and in-person methods to find your home, and be aware of lead-selling practices on popular real estate websites while using customized alerts and portals. - Escrow and Closing:
Once your offer is accepted, navigate the escrow process from making the initial deposit to conducting inspections, and reviewing the title. After completing loan paperwork to finalize the purchase get ready receive the keys to your new home!
Hi there, I’m Matias.
DRE # 02054763
Contact
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Office Location
Strategically located on Rodeo Drive in Beverly Hills, we serve all of Los Angeles County as well as parts of Ventura and Orange County. We are located at 131 S. Rodeo Dr. Ste. 100 Beverly Hills, CA 90212. Stop by anytime!
