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What Should You Offer When Buying a Home in Los Angeles

By
Real Estate Broker/Owner with Home Jane Realty BRE# 01439865

If you are buying a home in Los Angeles and have been in the market for a while, you may not have this question on your mind. You may be giving it everything you've got to finally be able to call somewhere home. However it is human nature to try and get a "deal". No one wants to overpay. It is important to keep one thing in mind. If you love the home, and you want it, if you end up with the home you did not What should you offer when buying a home in L.A.?overpay. Setting aside appraisals, comps, etc. a home is only worth what someone is willing to pay for it.

At the bottom of the market when buyers were not falling over each other competing for each home that came on the market, making a low offer could be the start of a conversation. Now with the low inventory and anxious pool of buyers that is no longer a luxury. When a home is first listed there is going to be a great deal of activity and it is not unusual for the seller to receive offers within the first few days. If you are one of the buyers in the fray then you need to pull out all the stops. Your Realtor® will generally be able to find out if there are any offers, how many, what type (cash or financing), and they may have a rough idea of how close to the asking price those offers are. Is the home well-priced or over-priced? Sellers will be tempted to overprice their homes knowing that there will be a high demand.

Your Realtor® will have run a comparison of similar properties which sold recently and will know if that is the case, so you will have a different strategy of making an offer if the home is indeed overpriced. It is likely that others will be making lower offers more in line with the correct price. However, in the event that you do still offer at asking or over, if you are getting a loan the home will still have to appraise, and unless you are willing to pay the difference between the appraised price and offered price, you will be free to walk away with no penalty.

If the home is priced well then you will be advised to offer at or as close to asking as possible. If it is established that there are offers already in over asking then anything less than asking price will probably not be considered by the sellers. The idea is to encourage the seller to include you in any counter offers they may write.

This is where knowing how much you are able and/or willing to go into debt for comes in. What you can afford and what you are willing to pay are two different things. After you have talked with your lender you will need to stay within a range that allows you to be involved in a counter offer situation. It is not much use looking in the top of your range where your first offer will be the last one you can make. There will be other buyers who will be able to go up to the next level.

Don't be scared by cash buyers in the mix.They may be offering less and have terms the seller can't live with. Make your best offer, make it clean (the less terms the better) and listen to your Realtor®, he or she is going to have the best feel of where you should come in with your offer to have a good chance of being the successful buyer.

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Comments (12)

Norma Toering Broker for Palos Verdes and Beach Cities
Charlemagne International Properties - Rancho Palos Verdes, CA
Palos Verdes Luxury Homes in L.A.

Jane - In an ever-changing market, the dilemma of how much to offer is a constant question.  Good suggestions, and time to call a real estate pro!

Jun 13, 2014 11:26 AM
Laura Allen, Lake Tahoe - Truckee Real Estate for Sale TahoeLauraRealEstate.com
Coldwell Banker Realty, Tahoe City, CA (530) 414-1260 - Tahoe City, CA
Tahoe Real Estate Agent Helping Buyers and Sellers

Jane - Great advice and counsel from a seasoned real estate professional is worth its weight in gold.  I hope Los Angele home buyer call you to help them buy!

Jun 13, 2014 02:50 PM
William Johnson
Retired - La Jolla, CA
Retired

Hi Jane, This is of course sage advise that should be taken seriously by any buyer in todays market. The better listing strategy is to price a property for the hopeful multiple offers, keeping price very close to market. The Seller will be delighted with choices and the serious Buyer will show up and make the deal. 

Jun 13, 2014 03:54 PM
Michelle Gibson
Hansen Real Estate Group Inc. - Wellington, FL
REALTOR

Jane - This is an excellent post! I'm always surprised when buyers are willing to lose a home over a few thousand dollars because they want what they feel is a "deal." Every time I've worked with a buyer who has done this they ended up paying more for the next home.

Jun 13, 2014 11:32 PM
Kristin Hamilton CA REALTOR
Berkshire Hathaway California Realty - Beaumont, CA
(909) 557-6966- Specialize 55+ Communties Banning

Great post Jane and I am sure your area sees you as the experienced go-to agent for rentals and purchases.

Jun 14, 2014 03:16 AM
Broker Patty Da Silva Da Silva
Green Realty Properties® - 954-667-7253 - Cooper City, FL
Top Listing Broker

Excellent blog Jane. This will help a lot of buyers in Los Angeles. Enjoy your weekend!

Jun 14, 2014 04:00 AM
Jane Peters
Home Jane Realty - Los Angeles, CA
Los Angeles real estate concierge services

Norma, thank you.

Laura, thank you too.

William, if a property is well-priced multiple offers are assured.

Michelle, you are right. Same as when a home is overpriced it will end up selling for less than if they had picked the correct price.

Kristin, thank you.

Jun 14, 2014 05:10 AM
Jane Peters
Home Jane Realty - Los Angeles, CA
Los Angeles real estate concierge services

Patty, thank you.  You too.

Jun 14, 2014 05:42 AM
Carla Muss-Jacobs, RETIRED
RETIRED / State License is Inactive - Portland, OR

This is a great read and buyers who want to buy a home in Los Angeles should give you a call and have you represent them!  

Jun 14, 2014 07:38 AM
Jane Peters
Home Jane Realty - Los Angeles, CA
Los Angeles real estate concierge services

Carla, thank you kindly.

Jun 14, 2014 07:43 AM
Sharon Paxson
Sharon Paxson, Realtor® EQTY Forbes Global Properties - Newport Beach, CA
Newport Beach Real Estate

Hi Jane - this is an excellent post and it is a dilemma on what someone should offer!! It is amazing that someone will risk losing a property over a small amount!!

Aug 18, 2014 01:48 AM
Jane Peters
Home Jane Realty - Los Angeles, CA
Los Angeles real estate concierge services

Sharon, thank you. And yes, knowing the right offer is not easy.

Aug 18, 2014 10:24 AM