Avoid Disappointment When Looking for a Home in Los Angeles

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

You have decided you are going to buy a home and are wondering how you should start your search for homes in Los Angeles and set your expectations at a level that will not result in frustration and disappointment.

Disappointment

Included in this site is a page which describes the buying process with hopefully some useful information to help guide first-time homebuyers or those of you who haven't bought in a while. However, there is one strategic point I would like to bring up here which may save a lot of heartache - Price.

You probably have a picture in your mind of your dream home and if money is no object then by all means take your time to find exactly what you want. Your real estate agent will help you determine what it will take in a particular area to satisfy your requirements, which will give you a better idea how to set your top price limit. You will have one of those, because no one wants to overpay. Your agent will plug that price limit into their search criteria in the Multiple Listing Service (MLS), and you are for sure going to be scouring the internet on your own at the same time. I don't think I have ever had a buyer who didn't send me listings of homes they came across either before I had a chance to send them over myself or because they had searched a community not on my list.

If you are getting a loan you will have spoken to a lender who will advise you of your qualifications to buy, i.e. the amount of the loan you will be able to obtain. This will be based on several criteria including the amount of your downpayment. The more you put down, the more you will be able to borrow. However, just because you qualify for a certain amount doesn't mean you will want to make the monthly payments involved. The lender will help you determine the sweet spot and that will let you know where to set your top price point.

So here is where you can avoid disappointment:  Although Los Angeles real estate activity has slowed a little and prices are stabilizing, it is still a sellers' market in many communities. This means that multiple offers are still existent and homes are selling at, or in many cases, above asking price. Therefore, if your lender advises you that you qualify to purchase a $850,000 home, that should be the top price of homes plugged into your search criteria. Chances are that the home will sell above that price anyway. Remember Los Angeles is a sellers' market, and if you like the home you know others will too. But at least you have a chance. Although if you know others are going to be making offers, offering less than asking is not wise, so going in at the top of your comfort level is risky.

Let's say you set your top price at $900,000, you have little or no chance of being the successful buyer unless the home is overpriced or has something wrong with it. Either way it is not likely to come down $50,000 or you are going to have to put money back into it.

The best tactic is to always have some wiggle room. If you make an offer on a home priced at $800,000 you will be able to get involved in a multiple offer situation and maybe come out ahead. Having an appraisal contingency will protect you against overpaying.

Also, this will help you compete with cash buyers. You may have the luxury of beating them on price and submitting a clean offer.

So stay well within your comfort level. Don't stretch yourself to the limit. It rarely pays off.

Homes for sale in Los Angeles

 

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Ambassador
2,347,543
Debe Maxwell, CRS
www.AtHomesCharlotte.com | The Maxwell House Group | RE/MAX Executive | (704) 491-3310 - Charlotte, NC
Charlotte Homes for Sale - Charlotte Neighborhoods

Oh, this is SO true, Janie!  I have clients all the time who want to search higher than their max and think they'll be able to submit an Offer below list price (their true max)!  It doesn't work that way in today's market, does it?!

Dec 24, 2016 09:08 PM #5
Rainer
207,294
Chris Lima
Atlantic Shores Realty Expertise - Port St Lucie, FL
Local or Global-Allow me to open doors for you.

This is great advice and if only we could get them to listen.  As I type this, I am sorting through an email with properties from a buyer. The properties are 10-40 k over her budget and although our market is "neutralizing" a bit, she will never be able to purchase one of these properties and expect help with closing costs. She simply said, "I know that you can negotiate this for me."

Dec 25, 2016 05:41 AM #7
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Richard Iarossi
Coldwell Banker Residential Brokerage - Crofton, MD
Crofton MD Real Estate, Annapolis MD Real Estate

Just like some sellers think they should overprice by a percentage to leave negotiating room, so do some buyers. Sometimes they just need to try it to prove to themselves that it doesn't work.

Dec 25, 2016 05:50 AM #8
Rainmaker
812,223
Sam Shueh
(408) 425-1601 - San Jose, CA
mba, cdpe, reopro, pe

Expect the market to be slower than before as many inexperienced first time buyer will freak out at the interest increase.

Dec 25, 2016 08:28 AM #9
Rainmaker
3,821,877
Gita Bantwal
RE/MAX Centre Realtors - Warwick, PA
REALTOR,ABR,CRS,SRES,GRI - Bucks County & Philadel

I hope home buyers will read this post and learn from it. Thanks for sharing 

Dec 25, 2016 08:55 AM #10
Rainmaker
602,866
Nick & Trudy Vandekar, 610-203-4543
Long & Foster Real Estate Inc 610-225-7400 - Devon, PA
Tredyffrin Easttown Realtors, Philly Main Line

Some good advice for buyers who often do not understand the best way to search for a home based on price, or why as agents we will sometimes suggest an area they have not considered because we know prices are a little softer there.

Dec 26, 2016 07:23 AM #11
Rainmaker
1,117,662
Jane Peters
Home Jane Realty - Los Angeles, CA
Connecting you to the L.A. real estate market

Debe Maxwell it most certainly doesn't. And buyers just get frustrated and don't want to look at homes in their price range after seeing nicer ones.

Chris Lima Oh boy. All you can do is show here where homes are selling and wait until she sees the light.

 

Dec 26, 2016 12:28 PM #12
Rainmaker
1,117,662
Jane Peters
Home Jane Realty - Los Angeles, CA
Connecting you to the L.A. real estate market

Richard Iarossi Amazing isn't it. I guess it's just human nature. But it only leads to frustration in the end.

Sam Shueh Oh yes. That now gives them even less buying power.

Gita Bantwal Thank you.

Dec 26, 2016 12:31 PM #13
Rainmaker
1,117,662
Jane Peters
Home Jane Realty - Los Angeles, CA
Connecting you to the L.A. real estate market

Nick & Trudy Vandekar I think together with the price range they are often stuck on a particular area also. Something has to give.

Dec 26, 2016 12:32 PM #14
Rainmaker
1,928,814
Elizabeth Weintraub Sacramento Real Estate Agent, Top 1% of Lyon Agents
Lyon Real Estate - Sacramento, CA
Put 40 years of experience to work for you

We have a similar market in Sacramento, Jane. However, being a listing agent, when I spot an appraisal contingency in a home with over-list offers, I often advise my seller to remove it from the contract. It is not unusual for buyers to bridge the gap between appraisal and sales price when they bid over. It's not our fault they do it. LOL.

Dec 26, 2016 01:08 PM #15
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Jeff Dowler
Solutions Real Estate - Carlsbad, CA
The Southern California Relocation Dude - Carlsbad

Good advice, Jane. Budget and price are key, but so many do not think about it very thoroughly, and when dealing with multiple bids in a seller's market buyers really need to be prepared.

Jeff

Dec 26, 2016 04:43 PM #16
Rainmaker
642,184
Mike Bjork
American Pacific Mortgage - Redondo Beach, CA

I get amazed at how many buyers want to stretch out their budget to buy a home.  I understand that you want to buy a home that you will enjoy, but for the most part, most won't live in the home for more than 5-7 years (statistically speaking).  This is especially true for First Time Home Buyers.  Instead of buying a nice starter home, they want to buy the biggest on the Market.  I hope the buyers heed your advice, Jane!

Dec 27, 2016 10:54 AM #17
Rainmaker
1,117,662
Jane Peters
Home Jane Realty - Los Angeles, CA
Connecting you to the L.A. real estate market

Elizabeth Weintraub Sacramento Real Estate Agent, Top 1% of Lyon Agents the only reason I see to do that is if there are cash offers in there and there are a huge amount of offers. It helps narrow down the field.

Jeff Dowler It is still tough for your average buyer to compete and going in at the top of your price range is not the way to do it.

Dec 27, 2016 12:47 PM #18
Rainmaker
1,117,662
Jane Peters
Home Jane Realty - Los Angeles, CA
Connecting you to the L.A. real estate market

Mike Bjork Thank you. Yes, the idea is to build equity and that is going to be difficult if you stretch yourself.

Dec 27, 2016 12:48 PM #19
Rainmaker
1,322,750
Georgie Hunter R(S) 58089
Hawai'i Life Real Estate Brokers - Haiku, HI
Maui Real Estate sales and lifestyle info

It must be tough for buyers over there.  It's tough here too but not as crazy as your market.   Best of luck in the New Year!

Dec 29, 2016 01:44 AM #20
Rainmaker
1,122,234
Gene Mundt, IL/WI Mortgage Originator - FHA/VA/Conv/Jumbo/Portfolio/Refi
NMLS #216987, IL Lic. 031.0006220, WI Licensed. APMC NMLS #175656 - New Lenox, IL
708.921.6331 - 40+ yrs experience

As always, you provide very sound advice ... a roadmap to success, Jane Peters.  I so appreciate the fact that you always include a "bite" of advice regarding financing too.  In the majority of transactions, they go hand-in-hand ... 

A very Happy New Year to you, Jane!  Stay safe, be healthy, happy, and successful!

Gene

 

Dec 29, 2016 11:59 AM #21
Rainmaker
1,117,662
Jane Peters
Home Jane Realty - Los Angeles, CA
Connecting you to the L.A. real estate market

Georgie Hunter R(S) 58089 Thank you and the same to you.

Gene Mundt, IL/WI Mortgage Originator - FHA/VA/Conv/Jumbo/Portfolio/Refi Thank you. Happy New Year to you too.

Dec 30, 2016 12:35 PM #22
Rainmaker
1,629,588
Patricia Feager
DFW FINE PROPERTIES - Southlake, TX
Selling Homes Changing Lives

Jane Peters - Congratulations on the feature story! Your advice will save buyers a lot of time. Honesty is the best approach. You've said it all so perfectly!

Jan 22, 2017 05:53 PM #23
Rainmaker
1,117,662
Jane Peters
Home Jane Realty - Los Angeles, CA
Connecting you to the L.A. real estate market

Patricia Feager Thank you kindly.

Jan 23, 2017 12:40 PM #24
Rainmaker
602,866
Nick & Trudy Vandekar, 610-203-4543
Long & Foster Real Estate Inc 610-225-7400 - Devon, PA
Tredyffrin Easttown Realtors, Philly Main Line

Very good advice for Los Angeles buyers

Feb 23, 2017 01:10 PM #25
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