If you’re in the market for a home and you don’t have a lot of cash, you might be out of luck. For most people, housing in the Greater Los Angeles area is all but unaffordable. In Los Angeles, the median home price is about $570,000 and the bidding wars are alive and well.
If you do it right, it is still possible to win a bidding war, but be prepared to make some compromises.
Get pre-approved
Many Realtors won’t even show you homes without a pre-approval letter in your hand. It shows that a mortgage broker has checked your credit and made sure you will qualify for a home loan. If you are pre-approved for $500,000, though, don’t look at houses worth $600,000 unless you have a hefty downpayment. You might even avoid going above $400,000, in anticipation of a bidding war.
Be prepared to compromise
We, like pretty much everyone else who’s ever begun the house hunting journey, had a long list of “must haves.” We had to have three bedrooms, at least two baths, a yard for our dogs, a single story for our elderly dog, must be move in ready and in a great neighborhood. While all of that might exist, we were quickly brought down to earth when we learned that none of that was available in our price range. Instead we settled on a split-level foreclosure, with two bedrooms and a bonus room, 1.5 baths, a yard and in an up and coming neighborhood. While it was technically move in ready, the kitchen is in serious need of a remodel and there are other issues we need to address.
Look for “good bones” and a good location. You can change a kitchen and in many cases add a bathroom, but you can’t move a home.
Look outside your target area
Sure, you want that great school district, or perhaps you want to be close to hiking trails or you want to walk to all your favorite haunts. The problem is, so does everyone else, including people who have a lot more money than you. There is a new exodus to the suburbs, and not because people want to escape the city. It’s because that’s where housing is more affordable. You might even find yourself in good company.
“More than ever millennial buyers are willing to look in the suburbs in order to get a more updated home and more space,” says Gabriela Venegas, an LA-based Keller Williams realtor at the Carrasco Group. “I’ve had several clients start their search for condos on the Westside, only to eventually decide that a single family home in the Valley is a better fit for them and makes more financial sense. They are willing to make the sacrifice of having a longer commute in order to get into the fast moving real estate market before they are priced out.”
Source: LA Curbed
Leave a Reply