Are you a property deal hunter looking to land the juiciest deal in homes in LA? You’ve got to critically look at the numbers at every stage of your purchase process to avoid the many pitfalls that exist in the Los Angeles real estate market.
Speaking of numbers, they are about as competitive and expensive as they can get in Los Angeles. For starters, the median condo prices in LA are well above $500,000, while single-family homes reach up to $750,000. These prices are well above the national average and mean that buying a house in Los Angeles can be borderline exorbitant.
The story doesn’t stop there: sales data project that the prices would keep rising in the coming years and suggest that the area’s desirability among the rich and famous is to blame for it.
These realities then beg the question: what does a home buyer need to ensure good value as he buys houses in Los Angeles? We’ll show you some valuable tips on how you can pull a successful purchase deal either as a newbie or an experienced property deal hunter.
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Safeguard your Employment Status
You have to be in employment for two years at the minimum before you can initiate a purchase process on the house in LA. This requirement applies to first-time buyers, and the financial institution would need to see proof of your employment status for two years or more for them to close the purchase. Financial institutions are quite thorough with this requirement, so don’t get surprised if they ask to check your employment status mere hours before closing the deal.
Avoid Massive Credit Charges
Once you begin purchasing a home in LA, you must avoid taking out extensive credits on your account or falling behind on another loan payment. Taking out such things as an auto loan would immediately affect your credit score and drive up your debt ratio.
The new change would affect your chances of completing the purchase deal, as the lenders would check your credit profile just before closing the process. The recommendation is to hold off on a new car or a luxury vacation until you complete the purchase deal.
Avoid Leaving Out Debt and Liability Details in your Loan Application
Generally, you’d approach a lender or financial institution for a loan to buy a home in Los Angeles. You must outline your debts and liabilities in your application. Failure to do so would come around to hurt your chances of closing the purchase deal.
The lenders have a two-point debt check which starts with the pre-qualification stage. The debt officer would inquire about your debt profile and other relevant details. They would then check-in at the closing period to verify the collected information.
If the debt details you give at the pre-qualification stage are wrong or incomplete, the lender may decline your loan application. The financial institutions may – in good faith – approve you for a different loan level, which could have a higher down payment.
Any of the cases may come as a rude shock to you, and the only way to avoid it is by filling your loan application with all the necessary details. Ensure to document every debt history that you have. There are guides you can follow if you need to sell your current home to clear some of the debt you have.
Avoid Co-Signing a Loan for Someone Else
As anyone who buys houses in Los Angeles would tell you, buying a new LA home is not the right time to co-sign another person’s loan application. Your co-signature counts against your credit score and would show up in your application for a house loan.
Typically, this situation raises your debt ratio and the lender – at least in LA county – would either reject it or slap a higher down payment on it.
Apartment Types you should Know
If you’re in the market for a house in Los Angeles for the first time, it will help if you know what apartment types are available to buy. This information would enable you to plan and determine the steps to take in the long term. Below are some of the apartments you can find listed on the Los Angeles housing market:
- Single-Family Houses: Single-family apartments are one of the most common types you’d find in LA. Most of them have a Spanish-style design, but you get to mid-century modern architecture as well.
However, you can have a single-family house with a more American style. It will sit on a separate plot of land, complete with the picket fences and swimming pool if you want. Overall, single-family houses contribute to the cheap houses for sale in Los Angeles that you can find.
- Duplex and Triplex Apartments: These apartment types have multiple self-contained units within them and are perfect if you’ve got an extended family. Bear in mind that duplexes and triplexes are in high demand from investors and corporate buyers.
Don’t be surprised if you get edged out by a large-scale property company that buys houses in Los Angeles. If you can grab hold of a duplex for sale, You’d want to close a purchase deal on one of them as quickly as you can manage.
- Condos: Condos are an apartment option for home buyers in Los Angeles seeking a more communal, “neighbourly” living. You get to buy a unit in the apartment and share the land ownership with the people who purchased the respective condo apartments.
One standout feature for condos in LA is that maintenance and security costs get fixed by the homeowners’ association, to which the condo residents contribute monthly.
Buying a home in Los Angeles isn’t cheap and wouldn’t be in a long time to come. It would be best if you had an added level of insight, focus and dedication to close a purchase deal on the house in the area, as lenders and financial institutions have a thorough standard for the homebuyer’s creditworthiness.
At Property Escape, we would know about the Los Angeles property market, as we buy houses for cash very often. Property Escape buys houses in Los Angeles and many areas in California and other states.
The tips mentioned above could help you see a purchase process you initiated and ensure that your financing application doesn’t get turned down. Also, you’ll find information on the apartment types you should check out and which to buy depending on your living needs and other requirements.