It is human nature to want a deal, and there are times in the housing market you can find one, especially in a down market. But this is a case of be careful what you wish for.
From around mid-2008 to late 2012 during the recession the housing market collapsed, but L.A. was not hit quite as hard as most markets in terms of foreclosures and short sales. We had our share but again nothing like really depressed communities.
Foreclosures and short sales still seem to be on the radar for many Los Angeles home buyers who think that is the way to get a deal. Repeat after me: “There are no housing deals in Los Angeles“, not for the regular home buyer. And in a market with such low inventory, just finding the right home and competing with multiple buyers is challenge enough.
Are there foreclosures? Yes, but they are few and far between and there are experts in that market who will swoop down and buy up anything that remotely smells of deal. Investors who are cash rich and know how to pick the good ones.
Are there short sales? Yes, also few and far between, but those are rarely if ever deals. The lender is already losing money and is not likely to let the property go for less than market value, which pretty much applies to the foreclosures also. And if you have ever been involved in a short sale it is not for the faint of heart. The process can drag on for several months and you may never close. There are so many things that can go wrong: the seller may change their mind or somehow come up with the money; after your inspection you may find major problems which the lender is not willing to fix; the process may take so long that the home just goes into foreclosure either through the fault of the seller or lender. Imagine setting your heart on a home only to find after months you have to start looking again. No short sale is guaranteed even when you see “approved short sale”.
And those foreclosures. Again, they are generally going to be at market value, and what y0u might end up saving on the purchase price you are most certainly going to have to put back in to making it livable. Often the previous owners did not take care of the property and might even have been destructive in anger. Pardon the pun, but foreclosures are not always what they are “cracked” up to be. The new owner, the lender, does not know about the property so cannot disclose any defects, and is not usually amenable to fixing them should you find them during the inspection period. Negotiating simple things like a termite inspection or home warranty which is pretty common during a standard sale is often off the table with a foreclosure.
Still looking for that “deal”? Does ‘dealing’ with a faceless lending institution whose bottom line is money give you the warm and fuzzies? Do you really think you are going to come out the winner?
Imagine buying a home at market price, which is move-in ready, where you close in your time-frame, get some perks like home warranty, the odd item fixed to your satisfaction, and you have an actual identifiable human on the other side of the transaction with whom you can hopefully reason. Do you still think the foreclosure is the deal?
Homes for Sale in Los Angeles
Maybe you have been looking to buy a Los Angeles home for a long time, or just started, but you finally find one you like. You are ready to make an offer.