12 Things Buyers Should Know When Purchasing Home!
Westside Homes Real Estate: Finding a home is a challenge. Before viewing properties the buyer has a mental visual of what they are looking for in a new home. The buyers may be first time or seasoned home buyers. Reason vary: renter ready to purchase home, growing family want a larger home, kids are grown downsizing, want a better neighborhood and school district, changing from condominium to home, changing from home to condominium and etc. Purchasing a home is a large investment and should not be taken lightly. There are 12 things prospective buyers should consider when purchasing a property.
1. KNOW WHAT MORTGAGE AMOUNT YOU QUALIFY and What are additional mortgage FEES?
As a Realtor I met prospective buyers inquiring about a home. You will ask the prospective buyer if they have a Realtor-APPROVAL from a direct lender. Unfortunately the answer will be no BUT they know they can qualify for this home at this asking price. THE FIRST THING a buyer should do is get a Comparative-approval letter from a direct lender. Have lender give rates and terms on both conventional and FHA financing. The buyer will have a realistic view of their home price range and purchasing power. Once the buyers has been Pre-Approved they know their price range. Areas are dictated by price ranges. The home price ranges in vary per area. Culver City price ranges is different from Cheviot Hills home values. In addition to mortgage loan amount the lender charges additional fees: appraisal fee, points on loan amount, document fees and etc. Prospective buyers should shop lenders for Best rates and fees.
2. GOING TO SALE EXISTING HOME AND PURCHASE NEW HOME?
The housing market has improved and sellers are planning to purchase a new home after they have sold their existing property. Contact a local Realtor get a Comparative Market Analysis of your existing home. Is there realistically enough equity in the existing property to purchase a new home? Or will the new purchase require the equity from the sale in addition to saving for the purchase of the new home? Process when selling requires time. Current property has to be listed and receive accepted offer from qualified buyer. After offer has been accepted home enters escrow. The escrow period can be about 30 to 60 days. If your home is currently on the market the total selling process can take a few months. Prospective buyers allow time to sale current home and the process of finding a new home.
3. LOCATION, LOCATION, LOCATION
The 3 L’s may not be everything but close to it. Best locations are higher priced neighborhoods for good reasons.
- Established Neighborhoods
- Well Kept
- Notice updated, renovated and new construction in residential and commercial areas.
- Good School System
- Low Crime Rate
- Surrounding home in same neighborhood well kept. Condominium project well kept.
- Well maintained shopping centers and activities with low police presence.
- Block Location
Fixer-upper in a great neighborhood, on good block with great school system. This home will be coveted because of the location. Fixer-uppers in good communities will not command the same sales price as updated homes in the same area. But the neighborhood’s values will translate to increased values for the fixer. Keep in mind that not all neighborhoods are created equally. Los Angeles is a big city. Notice in some neighborhoods there is a great area and just two blocks away the area maybe marginal. Investigate the community you desire. Drive by at different times of the day. Walk to neighborhood parks, mini malls and bistros. Check the school and crime rates in desired and surrounding neighborhoods.
4. The School District
Great Schools (rating)
California School Rating
Neighborhoods with the best schools home values are higher. Parents want their children in the best and safe schools. Are values really higher if you run the annual tuition in private school for two to three kids. The actuality, is that you maybe able to afford higher mortgage payments in exchange for a good public school district. Interest payments on owner occupied homes are tax write-offs. Even if you do not have children school districts are good indicators of property values and stability. Checking school districts is just as important as professional home inspections on roofs and plumbing.
5. Crime
on line Realtor Times Crime Statistics
This is a big one. Check crime rating for a neighborhood. Get an idea of the crime rating and severity of crimes over time. Searching for a home check Realtor for community crime rating. Areas with high crime rate and heavy police presences have lower values than communities with low crime rates.
6. Homes Position
Verify if residential street is busy commuter street with heavy traffic. Does the home provide privacy? Does the master bedroom look into the neighborhoods bathroom? There maybe a location problem. Condominiums with the highest value tend to be top-floor and end units. End units have one common wall. Does condo view brick wall or greenbelt? Things to consider when searching home or condominium.
7. Walkability – Skateability - Bikeability – Driveability
Walk ability is a key factor in the home search process. Buyers of all ages are interested that amenities are within walking distance from their home. People want neighborhoods where they can walk or bike to stores, restaurants, coffee shops, gyms, public transportation and work. Pet friendly areas, you can stroll alone or take the dog for their daily walks. With the price of gas and pollution trends are leaning toward public transportation. Over coming decades there will be high value in being able to walk to public transportation. In West Los Angeles most people have to drive to work. Know the nearest freeways proximity to neighborhood. Know commuting distance and time from home to work. In West Los Angeles the main freeways are the Santa Monica and San Diego Freeways. Commuter time from the Westside to Downtown Los Angeles is approximately 30 minutes.
8. Neighborhood’s Character
May have found the perfect house that has everything you want. Pause just a moment and check out the surrounding area. Los Angeles, CA is funny may be a FAB area but just two blocks away an area of lesser value with higher crime rate. Just be aware of your surrounding area.
9. Best House on the Block
I have conflicting views about the best house on the block. Some may suggest buying the best house on the block does not leave any room for your investment growth. I do not agree because if the real estate market ever appreciates that home should appreciate based on average rate in the area. On the other hand, do not let emotions dictate paying to much for an over improved home. If home is over improved for area it will be tough recouping your money. Depend on direct lender’s appraised value. Do not over pay for property. Depend on the lender’s appraisal. If it is property of you dreams and not over priced, what the heck.
10. Fixer-Upper
If you buy a fixer-upper know the cost to get the home up to your standards. What are the repairs cosmetic or major repair/replacements? The home may be in the most desirable area, with great schools and a low crime rate. Have a professional inspection of roof, plumbing, electrical, chimney and etc. Shop contractors for estimated costs for replacement items including labor. Request referral from all contractors. What may appear to be a simple cosmetic job in the kitchen may end up being a renovation. What are the costs involved to get the home up to snuff. Cosmetic repairs/replacements maybe $10,000.00 to $20,000.00. On the other hand, major replacements like roof, plumbing or foundation can run in the tens of thousand dollars. Do your homework add home’s purchase price plus repair costs. Calculate the total purchase price with repair/replacement costs if value is current market or over market values? Cosmetics repairs and renovation takes money, time and energy. Compare fixer home price plus repairs to homes in original condition and renovated homes. The fixer maybe encouraging or the total price maybe discouraging. On the other hand, it maybe a great deal.
11. Will Home Values Hold?
The “Great Recession” saw a decrease in property values of approximately 20% to 40%. Mid 2012 some areas have seen a leveling and appreciation in values. These are areas with low short sales and foreclosed properties on the market. The market maybe depressed or strong, asks yourself, what will happen to the values if the market changes tomorrow? The real estate market is up and down. Have your Realtor give you a snap shot of property values in last seven to ten years. A good real estate agent familiar with your neighborhood can supply statistical information needed. As a homeowner find ways to add value to the property. As time goes by homeowners may have to replace non-functional items (roof, plumbing, electrical and etc). Remodeled kitchens and bathrooms translate to higher values.
12. Condominiums Dues, Fees, Special Assessment and Law Sues
Purchasing a Plan Unit Development (condos, townhouses, and homes) have monthly homeowner association dues. West L.A. newest PUD Playa Vista has mello roos fees in addition to homeowner dues. Generally, these fees are due monthly. Verify the homeowners associations month dues and reserves. Verify if there are any special assessments or law sues against association. Verify what are included in HOAs dues, gardening, landscaping, pool, spa and or tennis maintenance, insurance and etc. Have a clear understanding with written verifications.
There are things on your home dream lists:
- Price Range
- Housing Mortgage Rate
- Property Taxes and Insurance
- Good School District
- Neighborhoods
- Low Crime Rate
- Home Square Footage
- Home Lot Size
- Bedrooms, Baths and Kitchen
- House vs. Condominium
- Homes in original condition, updated condition or fixer upper
- Location, Location, Location
- School District Ratings
- Neighborhood Crime Rate
- Home location on block
- Condominium level and location in complex.
- Walk ability to shops, restaurants, shopping centers, recreation centers, public transportation, health centers and etc.
- Commuter time from home to work, freeways, schools, shopping centers and recreational centers and etc.
- Neighborhood and surrounding areas characteristics.
- Best House on the Block
- Fixer-upper pricing compared to home in original condition or renovated home.
- Will home maintained its value based on real estate housing market
- Homeowner’s estimated home maintenance.
- Condominiums and townhouses be aware of dues, fees and special assessments.
- Community involvement in maintenance of neighborhood.
CALL
Gail Mercedes Cole
Your Westside Homes
West L.A. Estates
gailmercedes@aol.com
310.853.9933
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