The often-used idiom “you get what you pay for” definitely applies to buying a home in Los Angeles, and it should be extended to “you get what you overpay for”.
The majority of the L.A. real estate market is still very much a sellers’ market and consequently affordability here is going through the roof. I still have buyers asking me to let them know when there is a deal, and I continue to advise them that there are no deals. Even if in a long shot one were to come on the market it would be buried in a mass of multiple offers and the “deal” would disappear. In fact it will probably end up selling for way over the asking price.
Homes that come on the market at what would seem is a reasonable price are most certainly going to require work, if not complete renovation. And, believe it or not, homes that seem overpriced are not necessarily trouble free. You need to make sure that you are not overpaying for a home by working with your agent to make sure it compares to recent sales in the area. You may fall in love with a property, especially if you have been looking for a long time, and you may just feel like doing whatever it takes to get the home. That can come back to bite you.
You are going to get what you (over)pay for when you find out that your lender is not going to cover the increased mortgage amount and you are going to have to come up with the difference out-of-pocket. What is going to happen to your liquidity? Are your monthly payments going to change? What about the money you were going to put aside to buy furniture, make changes, or fix things the seller is not willing to after you find problems during an inspection.
When multiple offers are involved in the purchase of a home buyers tend to go a little crazy. It is only natural that in this tight market they go all out to finally get a home. But keep two things in mind: do you really, really love the home enough to stretch your budget, and are you sure that you are not offering more than you should to get the home. You will never really know what other buyers are offering so try and stay within your comfort zone when making your final offer.
You should enjoy your new home without any regrets.