Shopping for a home is exciting. You spend time looking at amazing photos of homes, dreaming about your future life there. You can see the kids swinging under the tree and the many cups of coffee shared among friends in the kitchen. Once you get into the thick of home shopping, you might be surprised with a lot of things you were unaware of. Here are 10 things you never knew about home shopping in Los Angeles.
Getting Pre-Approved Makes You A Better Buyer
Sellers often consider offers from buyers who they confidently feel will be able to execute the transaction. This means they can get the loan funded. When a seller sees a pre-approval letter, they know the lender has reviewed the credit, debt and income and verified everything to approve the loan. Pre-qualified is merely a high-altitude overview.
People Pay More Than The Listing Price
If you are new to real estate and still under the belief that everyone is underwater on mortgages, you’ll be surprised to learn that many properties sell with buyer-frenzied offers. Properties are often strategically priced to get more eyes on the home and thus more offers, many of which can be for thousands over asking.
Inspections are Negotiation Points
Buyers often become sad when inspection reports show them everything wrong with the home they are buying. Inspections should be viewed as a negotiation point for realtors to go to the sellers and ask for price reductions or credits. It is possible the seller will fix items but the reality is most things are minor and buyers should happily take the credits, especially if they are handy and can change a toilet flush handle on their own.
Loan Approval Can Be Taken Away
Sellers can get over-confident as escrow progresses and prematurely start to plan the move in. This might include financing furniture or getting a home improvement store credit card. Many loan funding is pulled the day before escrow closes because when the lender re-runs credit to finalize everything, he will see a ding on credit and possible new debt that throws the debt-to-income numbers out of whack. Just wait an extra week – really… life will be okay if you wait.
Buyers Don’t Pay Agents
Don’t shy away from finding a great buyers agent who will work for you from the start of looking for a home to closing escrow. Don’t worry; you don’t need to pay them. Agent commissions are paid from the sale proceeds given to the seller.
New Construction Still Needs Inspections
Buying a brand new home where the paint hasn’t even dried. Don’t waive those inspections. There are still things that inspectors will find, usually minor items that need to be fixed. And if the inspector finds a major issue because something wasn’t built to code, you’ll need to know that before you commit.
There are Tea Leaves in Listing Dates
Okay, so we are getting a little Zen-hoaky here. But hear us out. New listings get the most attention, especially in the first open house. After two to three weeks, a listing may become what realtors call “stale.” This means interest drops. You can start to read patterns of when home prices will drop or make an offer on a stale listing below list price. You might be able to Zen your way to a deal.
Real Estate Has Seasons
Eager to find a home but can’t find one to buy? Got that pre-approval letter with no place to make an offer? Believe it or not, these aren’t uncommon problems in the real estate market. Summers tend to be busier seasons with the good weather making shopping better and summer vacations making relocation more manageable. Seasons slow for holidays when people don’t want prospects walking around the Christmas tree. That being said, buyers and sellers during the holidays tend to be more legitimate, eager to make a deal.
Trading Off Redone for Bigger
New buyers often can’t see beyond pretty paint and green grass. But if you can wield a paintbrush and water the lawn, why not buy the bigger house with the extra bathroom instead? If the two are the same price and you are willing to put a little elbow grease into it, you can have a better home for the same price. Don’t literally buy into the cosmetics.
Location Has Micro-Locations
Everyone is always looking for a perfect location that is safe and in a good school district or near things they do. Great! But just because you hear something about Los Angeles doesn’t mean every part of that city is bad or good. There are good and bad pockets in all major cities. Consider the neighborhood, not just the zip code.