If you are buying a house in Los Angeles, it is a very tough market right now. There is very little new inventory and sellers are pulling all the strings.
The latest home a buyer of mine is considering is being held open twice with private showings in between, to build up the momentum for buyers to make offers after a week on the market, and the number of buyers coming through has been huge. It is a beautiful house with a pool and great view and it is reasonably priced for the area. Is it perfect? No. Is it move-in quality? Absolutely. Are there going to be multiple offers? No question. It is going to go over asking? Possibly.
The successful buyer for a property like this is going to have to pull out all the stops. Such as:
- Pay all cash or put more down.
- Remove the appraisal contingency. With a large downpayment or full cash offer this will not be an issue. However it is not for the faint of heart. You could be overpaying for the house. But if you really love it…..
- Remove contingencies such as the termite inspection and clearance, retrofitting requirements, home warranty, normally paid by the seller.
- Shorten the inspection contingency period to 5 days, the contract standard is 17.
- Be somehow creative in their offer.
- Make the offer as clean as possible.
However, bottom line, the seller is going to look at two things: how much money he or she is going to net and whether the buyer is going to be able to successfully close the deal. The more money down, the less problems that will surface.
The pre-approval letter which a buyer receives from the lender is really nothing more than a pre-qualification letter. Until the paperwork actually goes through the underwriting process the buyer is not approved for the loan. And that is what sellers are afraid of. Many a deal has faltered or fallen through because the buyer ended up with a delay in, or not getting the loan.
I wish that buying a house in Los Angeles were not such a competitive process these days, but Los Angeles home buyers, don’t give up. If you keep looking the right place is going to come along and it will be yours alone.
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