You are buying your first home in Los Angeles and are complete overwhelmed. How does the process work? How will you be protected? What are the costs involved? These are some of the questions going through your mind.
Buying your first home can be a scary ordeal and it is certainly not an easy process. There are so many steps to navigate, and you want to make sure that you do everything right and nothing falls through the cracks.
So how do you do that? You hire your own agent.
How will that help? Compare it to when you are on vacation visiting a new country and don’t know your way around. You hire a guide. You put yourself into their hands and enjoy the tour. Well this is similar. If you find the right agent you can simply put yourself in their hands and “enjoy” the ride.
We are in the middle of a strong sellers’ market in most of Los Angeles which makes it all the more important for a buyer to have good guidance.
What does the buying process involve? What does your agent do?
Your agent will not start the home search until you have determined your eligibility with a lender. In order to make an offer you will need a pre-qualification letter from that lender. Also, be sure not to make any major purchases until your have closed on your home as this may affect you obtaining a mortgage. If you are a cash buyer proof of funds will be required.
Finding the home:
Your agent will work with you to understand your needs and qualifications to buy and conduct the relevant search for a home that meets them. All you have to do is be available to tour homes as they come up. In a sellers’ market homes do not stay on the market for long and you do not want to miss out on the opportunity of making an offer.
Making an offer:
In a sellers’ market, a just-listed good property is going to go quickly with several offers involved. Your agent will determine the right offer while allowing some wiggle room should a counter come in. This will include making the offer as “clean” as possible. Read more on making your offer.
The Counter offer:
Your agent will discuss your options with you. The terms will come in from the seller on either a single or multiple counter offer form. The latter means that other buyers are involved, and together you will decide how to respond. More on the multiple counter offer. A single counter is much easier to handle since there will be terms you either agree to and move forward or reject and walk away. Your agent should have a good idea of the right offer to make. You can only do your best based on your finances, but that “clean” offer may help and can sometimes beat out a cash offer.
Accepted offer – under contract: – now the real fun starts:
Both the buyer and seller have time-sensitive contingencies to meet during the escrow process. The seller has to provide multiple disclosures which the buyer has to approve and you the buyer have the following responsibilities which will be closely managed by your agent:
- Mortgage: if you are getting a loan then you will need to move quickly to get all the paperwork needed to the lender. Generally the loan contingency period is 21 days. Your agent will be working with your lender to ensure that things move forward in a timely manner.
- Conduct inspections on the property. This will start with a general inspection by a Certified Home Inspector. Your agent will generally make these arrangements. The general inspector may advise further inspections by specialists depending on his findings. Once you have the results of the inspection(s) you have three options: submit a Request for Repairs, ask for a reduction in purchase price or credit, or cancel the contract. More on the Request for Repairs. Of course, if nothing major has been found and the cost or repairs will be acceptable, you can move ahead without asking for anything.
- Seller disclosures: the seller must present multiple disclosures on the property. Some will be personal disclosures and others standard State-required disclosures. You will read these and, if satisfied, approve them. Your agent will be familiar with what to look out for and if there is something that needs attention, advise you accordingly.
- CC&Rs and HOA Docs: If you are buying a condo then the seller must present Covenants, Conditions and Restrictions (CC&Rs) and Homeowners Association documentation which includes the latest budget and minutes. It is your responsibility to read these to satisfy yourself that there is nothing that will prevent you from living in the complex. Pet restrictions may be a problem or there may be an upcoming assessment you are not willing to pay. Also it is a good idea to make sure that the building reserves are healthy or what plans the Board have to build them back up if they are not. While your agent is not involved in reading these documents they will make sure that you stay on top of them.
Contingencies must be removed within their contractual timeframe. Your agent will ensure that you meet this timeframe. They will make sure that you are completely satisfied and wish to move forward, because once you remove all your contingencies you have basically bought the home. If you have any concerns your agent can ask for an extension for you to do further research on those concerns or ask for a cancellation of the contract. Until you remove your contingencies and have a valid reason you may cancel the contract.
Bottom line. The home buying process is managed from start to finish by your agent. Whether you are a first time Los Angeles home buyer or a seasoned one, choose your agent wisely and put your trust in them.
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