September 2016. The market is plugging along with inventory levels remaining low. However, there are homes on the market that have been sitting for a bit. Some of this is expected during the quieter summer months and some of it probably stems from Sellers overpricing their homes. Supply of homes for sale and demand for those homes varies from neighborhood to neighborhood and you’ll want to get familiar with the market in the neighborhood you are targeting so you can employ an effective strategy. No matter what neighborhood you’re buying in, it’s vital to be pre-approved for a loan before you start writing offers. Pre-approval means they have already checked your credit and verified your income. Sellers will also require verification that you have the funds liquid and ready to go for your down payment and closing costs.
Buyers can get frustrated very quickly when they find themselves having to compete in multiple offer situations so patience and determination are key. When we expect to be in a multiple offer situation (especially with newer listings), it’s important to come in with a strong offer from the get go. Price is always a big factor but offering shorter inspection contingencies can also do a lot to help your offer stand out. Very often you only get the one chance or as in many cases, only the top several offers will receive a counter offer from the Seller.
As I mentioned, multiple offers are common on homes that are well-priced so you need to move fast on those properties. Appropriately priced homes that stand out from most listings still tend to sell relatively quickly (within the days or a week or 2 of hitting the market). Don’t let multiple offers scare you off – it doesn’t always mean the price will drive up significantly unless the property has been intentionally priced low to create a bidding war. Also, don’t split hairs over five or ten thousand dollars if you really want the property. Comparable sales are only a snap shot of the market at any given time so don’t get too focused on that and miss the big picture. You should be familiar with recent comparable sales in the area you are buying – recent means in the last 3 to 6 months. This will give you a sense of where things are selling and what you can expect to pay for a similar property. Keep in mind that you also have an inspection contingency and you will have the opportunity to negotiate further with the Seller if your inspections reveal problems. If you’re getting a loan, the house will also need to appraise.
Give careful consideration to your job stability, if you expect to stay in Los Angeles for awhile, if you are planning a family soon etc. These factors all influence your decision. You’ll want to find a property that can work for you for the next 5 years at a minimum (unless you’re sophisticated enough to flip the property for a profit). If you’re serious about buying, get out and start looking at property – you’ll develop a sense of market value pretty quickly and you’ll have the confidence to write an offer when you find the right home. The process can take months for many people so be patient – the right house will come along. Buying real estate can be frustrating and stressful, especially in neighborhoods where demand is high and supply is low.
If you’re ready to make a purchase, be smart about it and give me a call. I’m ready to help you find a great place!
Kevin Bacher (310) 200-4916 or email firstname.lastname@example.org