Buying a home in Los Angeles can be a complex and competitive process due to the high demand of housing in the city. Here are some tips to help you as a first-time homebuyer in Los Angeles.
The contents of this article are for educational purposes only. They are not intended to be a source of professional real estate advice. You will find experts on real estate investing here.
With many real estate agents to consider in LA, working with the best Realtor will enable you to find your perfect home. Ila Corcoran is a licensed Realtor and the SVP of Real Estate Operations and Advisory services at Bay Street Capital Holdings.
Her career started off in apartment management and leasing, then briefly in commercial real estate, after which she transitioned to residential real estate where she found her passion. Ila is very passionate about helping both younger and older Americans create security through housing and homeownership.
Ila has an active Real Estate License and she has handled many residential sales in Los Angeles and the greater Southern California region. So far, she has managed to close $10.4M in real estate transactions. She is also a holder of a Bachelor's degree and 2 minors from California State University Long Beach.
As a licensed investment advisor at Bay Street Capital Holdings, Ila also supported Resthaven in securing $25M in funding from investors who are keen to provide safe and accessible accommodation options for people in diverse communities.
Being a Los Angeles native, Ila is keen to give back to her community. During her free time, she enjoys serving in apartment communities across Los Angeles and the non-profit housing space dedicated to serving those experiencing homelessness.
If you're looking for the right real estate agent to work with in Los Angeles and the greater Southern California area, get in touch with Ila today and she will help you find the perfect home in Los Angeles.
In the US, Los Angeles is one of the most expensive cities to live in, with a median income of $98,200. Before you start thinking of buying a house, figure out how much you can afford by coming up with a realistic budget.
Remember, buying a home goes beyond the purchase price. Expenses and recurring bills that you have to factor in include down payment for the house, monthly mortgage payments, closing costs, homeowner's insurance and maintenance costs.
Saving for a down payment is one of the biggest challenges for first-time buyers in Los Angeles. According to the U.S. Department of Housing and Urban Development (HUD), a first time home buyer is classified as an individual who has not owned a principal residence during the 3-year period ending on the date of purchase of the property.
Depending on the house you want to buy, aim to raise at least a 20% down payment, to avoid paying private mortgage insurance (PMI), which adds to your monthly costs. The amount you will be required to pay as down payment will depend on the type of mortgage you choose as well as the mortgage lender you decide to work with. Although it is advisable that you save up at least a 20% down payment, you can still get loans with lower down payment options like a conventional loan at 3% and FHA (Federal Housing Administration) loan at 3.5%.
When looking to secure a mortgage, your credit score will determine whether you're eligible for the home loan and the interest rate that you'll get on that loan. Having a high credit score can increase the chances of you getting a lower interest rate. Some steps that you can take to ensure a good credit score are:
Los Angeles is a big city with diverse neighborhoods. As you prepare to buy a house, research the different neighborhoods and find one that fits your needs, taking into account factors like commute time and safety.
To get a better feel of the area you'd like to settle in, take time to visit the neighborhood during the day and at night. This will help you figure out what you like and don't like about the area.
As for the type of house you're looking to buy in Los Angeles, have a well-defined list of needs vs wants. Needs are the non-negotiable aspects of a property, such as the number of bedrooms, proximity to work or school and safety of the neighborhood. Wants are desirable features that you can live without such as a swimming pool and specific architectural style.
Having a clear understanding of what you need and what you can compromise on will not only save you time, but also prevent you from overspending on features that may not be essential.
Before you settle on a specific mortgage, first compare different options offered by multiple lenders. Be sure to compare the rates of at least three lenders so that you find an option with favorable interest rates. Also opt for a mortgage with a monthly payment plan that you can afford.
Things you should pay attention to as you shop for a mortgage loan are:
Besides the interest rate charged on the loan, it is also important that you find out if there are extra costs like late fees, closing costs and prepayment penalty.
After looking at what different lenders offer and settling on one, the next step is to get pre-approved for a mortgage. A pre-approval letter is basically a document from a mortgage lender that indicates the maximum loan amount that they are willing to give you.
With a pre-approval letter in hand, you can confidently search for homes within your price range, knowing that you have access to financing. Getting a mortgage pre-approval demonstrates your financial capability and seriousness as a buyer during the homebuying process. It can give you an upper hand when making an offer and can expedite the homebuying process.
A useful tip after getting pre-approved is; keep saving and paying all your debt on time. As much as possible, try not to take on any additional debt during this time.
As a first time home buyer in Los Angeles, you have the option of exploring different payment assistance programs available to you. Los Angeles has several home buyer assistance programs that are designed to make homeownership more accessible, especially for those with limited financial resources.
These programs include the Los Angeles County Development Authority (LACDA) and Los Angeles Housing Department (LAHD). For people eligible for these programs, they can get assistance to cover costs such as down payment and closing costs.
To fully utilize the benefits offered by these programs, consult with your mortgage lender and a real estate agent who has experience working with first-time buyers in Los Angeles. By tapping into these assistance programs, you can potentially reduce the financial burden of buying your first home and make the process more achievable.
As a first time home buyer in Los Angeles, the real estate agent you choose to work with will greatly determine the success of your home search. A good real estate agent will guide you through the entire home buying process, from scheduling viewings to negotiating with the seller to closing on the house.
To get a good agent to work with, you can get referrals from friends and family or from other first time home buyers. Be sure to interview at least three agents before settling on one. It is also important that you prioritize working with someone who has experience in dealing with first time home buyers in Los Angeles.
A skilled local agent can help you:
Finding the right home can get you excited and ready to buy immediately. However, it is important that you still negotiate even if you've gotten a good deal from the seller. Having an idea of the value of the property and addressing any necessary repairs that you're willing to cover in the house can help land you a better deal from the seller.
Working with a skilled real estate agent can also be beneficial as they can negotiate on your behalf to get you the best deal in the market. So don't be afraid to negotiate, especially if you're a solid candidate or if the house has been on the market for a while.
Once you've settled on the house that you want to buy, work with your real estate agent to submit a competitive offer that is within your budget. In a hot real estate market like Los Angeles, a compelling offer can make all the difference in securing your dream home.
Buying your first home in Los Angeles might seem like an uphill task, but by implementing these tips, you can enjoy a smooth home buying experience. As you look for a house in LA, take your time and don't be in a rush to make a decision. Buying a home is a significant financial commitment, and therefore, it is important that you settle on a property that meets your needs and budget.
Remember, navigating the Los Angeles real estate market can be challenging, but with careful planning and the right guidance from a qualified real estate agent, you can find your Los Angeles dream home!
Based in Palo Alto, California, Bay Street Capital Holdings is a well-known wealth management firm founded by William Huston, a distinguished financial advisor listed among Investopedia's Top 100 Financial Advisors from 2021 to 2023. The firm specializes in financial planning, investment advisory services, and risk management.
In 2023, Bay Street received a nomination at the WealthManagement.com Industry Awards in the Asset Managers: Diversity, Equity, and Inclusion category. This recognition was a result of their collaboration with Resthaven Properties in the real estate sector.
Furthermore, Bay Street achieved finalist status in the Asset Manager for Corporate Social Responsibility (CSR) category in 2021, an impressive feat considering there were more than 900 competing firms throughout the United States.
https://www.bankrate.com/mortgages/tips-for-first-time-home-buyers/#finding-a-mortgage
https://www.nerdwallet.com/article/mortgages/tips-for-first-time-home-buyers
https://www.rocketmortgage.com/learn/first-time-home-buyer-tips
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