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Key Takeaways
- Buying a home as a first time homebuyer can be exciting and challenging at the same time due to the high cost of houses in Los Angeles and the steps involved in buying a home.
- Some tips for finding the best home in LA as a first time homebuyer include: planning your finances to see how much you can afford, saving up for a downpayment, and getting pre-approved for a mortgage.
- More importantly, working with an experienced and qualified real estate agent who is very familiar with the Los Angeles real estate landscape will help simplify the homebuying process.
Disclaimers
The contents of this article are for educational purposes only. They are not intended to be a source of professional real estate advice. You will find experts on real estate investing here.
Work with the best Realtor in Los Angeles!
As a first time home buyer in LA, working with a qualified Los Angeles based real estate agent is of utmost importance as they will help you navigate this highly competitive market.
Ila Corcoran is a licensed Realtor and SVP of Real Estate Operations and Advisory services at Bay Street Capital Holdings. For a majority of her life, she has resided in Los Angeles, California and she's very knowledgeable of the Los Angeles housing market.
Ila has worked in both commercial and residential real estate but her passion lies majorly in residential real estate. She holds a Bachelor's degree, two minors from California State University Long Beach and a Real Estate License. As a first time home buyer, she can provide you with insights on:
- Affordable and safe neighborhoods to live in
- The current market trends and important things to look out for in a real estate deal
- How to meet lender requirements and get approved for a loan
- Best mortgage payment plans that are available to you
- Navigating the legal and paperwork aspects of buying a home
- Additional costs beyond the purchase price that you will incur in the home buying process
In her capacity as an investment advisor at Bay Street Capital Holdings, Ila has successfully closed real estate transactions exceeding $10.4 million and effectively managed an asset portfolio totaling over $2.2 million. Additionally, she facilitated the acquisition of investment capital amounting to $25 million for Resthaven, an initiative aimed at providing secure and inclusive accommodation options across diverse communities.
If you're a first time homebuyer and are looking for a qualified Realtor to work with in Los Angeles and the greater Southern California real estate market, get in touch with Ila today. She will help you find the perfect home that aligns with your vision and is within your budget.
Tips for buying your first home in Los Angeles
Buying a home, regardless of whether it's the first or third one, is a significant investment. For buyers looking to buy their first home in the Los Angeles area, here are some useful tips to help you land the home of your dreams.
Identify a neighborhood that you'd like to live in
Los Angeles is a city with many different neighborhoods and so before you start house hunting, first narrow down to a few places where you'd like to live. If you're looking to live close to the beach, you can consider living in cities like Santa Monica, Hermosa Beach, Malibu and Manhattan Beach. However, if you're looking for more affordable housing options, you can consider purchasing a home in downtown LA.
As you decide on an area that you'd like to live in, consider things such as:
- Commute time and how long it would take you to move from your home to different places in the city
- If the neighborhood is walkable
- Accessibility to amenities such as schools and shopping centers
- How safe the area is both during the day and at night
Los Angeles is known for its hectic traffic congestion. As you continue with the house hunting process, visit the areas that you're interested in settling in on different days and at different times to give you a clear picture of how traffic flows on normal days.
Plan your finances to see how much you can afford
In the US, Los Angeles is considered among the most expensive cities to live in. In 2023, it is reported that the median home price in LA is approximately $1 million. And so if you're planning to buy a home in Los Angeles, it is important that you plan your finances to know how much you can afford. Also, be clear on what type of property you're looking for as the cost of single family homes might be higher than that of apartments.
It is important to note that in addition to the price of the home, you will incur additional costs such as closing costs and property taxes. Closing costs are the various fees and expenses associated with finalizing a real estate transaction, typically occurring at the closing or settlement of the property purchase. Common examples include attorney's fees and homeowner's insurance and inspection fees. Closing costs can come to a total of 2-3% of the purchase price.
Property taxes on the other hand are taxes charged by local governments on real estate properties, including land and any structures built on the land. Property taxes are calculated based on the assessed value of the property and are typically paid annually or semi-annually by the property owner. In Los Angeles County, the property tax rate is approximately 1.25% of the purchase price.
Save up for a down payment
As a first time home buyer, aim to save at least 20% of the downpayment to avoid taking out private mortgage insurance (PMI). Private mortgage insurance usually protects the lender in case a borrower is not able to pay back the mortgage.
Another useful tip as a first time home buyer is to research available down payment assistance programs that can help you finance your purchase for a house. Examples include Los Angeles County Development Authority (LACDA).
Get a good real estate agent to work with
Buying a home is a big step and trying to navigate the entire process by yourself can get quite overwhelming. Working with a trusted and qualified real estate agent who specializes in the LA market can ease the process of searching for a home. They can help you with things like:
- Finding a home in your desired neighborhood that is within your price range
- Scheduling for showings
- Advising on whether to take a federal housing administration (FHA) mortgage or a conventional loan
- Negotiating for the best price with the seller
- Ensuring compliance with state and local laws governing property transactions
Partnering with an experienced real estate agent is essential for a successful property transaction in Los Angeles where demand and competition for good homes is at an all-time high.
Get pre-approved for a mortgage
After you've established how much you can afford to buy a house with the help of your real estate agent and have saved up enough downpayment, the next step is getting pre-approved for a loan by a mortgage lender. Getting pre-approval basically means that a lender has done an assessment of your financial situation and creditworthiness and they've determined the maximum amount of money that they are willing to lend you for a home purchase.
Getting a pre-approval letter shows sellers that you are serious about buying a home and also it will save you the trouble of going for homes that are beyond your budget. It will also make the process of getting a home loan much easier once you come across a property that you like.
Get started on the house hunting process
Once you've determined your needs and preferences for the house that you want, whether it's a single family home or an apartment, you can get started on serious property search.
Working with a skilled real estate agent during this phase can greatly enhance your experience. They will attend open houses of different Los Angeles homes and schedule viewings for you for properties that fall within your price range.
Once you've identified a home that meets your needs, your real estate agent will then guide you through the process of making an offer. Their negotiation skills come into play as they work on your behalf to present a competitive and attractive proposal to the seller. Your agent will also guide you through the process of reviewing and signing contracts as well as what the closing process entails.
Close the sale
After finding a home that you're ready to purchase, your agent will go ahead and submit an offer to the seller. The two parties will then negotiate the price and terms until an agreement is reached. Once your offer is accepted, your agent will help you schedule a home inspection to identify any potential issues with the property. Consider other inspections like pests and mold if necessary.
After closing the sale, proceed to finalize your mortgage application with your chosen lender. Complete any required documentation and provide additional information as requested. Review the closing documents carefully, including the closing disclosure, before the closing date. It is important that you do a final walkthrough of the property to ensure it's in the agreed-upon condition.
Once you're satisfied with the condition of the home, sign the necessary paperwork, including the mortgage documents and the deed. Pay the closing costs, which may include fees for services such as appraisal and title search among other services. Transfer utility services to your name before moving in and then plan your move with the help of professional movers if needed.
Once you're in your new home, take time to settle in and enjoy the process of making it your own!
Let us help you buy your first home!
If you're looking to buy your first home in Los Angeles and in the greater Southern California area, we can help you. Get in touch with Ila today and she will help you find the perfect home for you. Ila is a qualified and experienced Realtor based in Los Angeles, CA.
Bay Street Capital Holdings
Bay Street Capital Holdings is Black-owned financial planning, wealth management and independent investment advisory firm. With its headquarters located in Palo Alto, CA, the firm manages client portfolios with the aim of minimizing overall risk and maximizing returns.
In 2023, Bay Street received recognition for its outstanding work in the real estate sector as a Finalist in the Wealthmanagement.com 2023 Industry Awards, for its collaboration with Resthaven Properties.
Bay Street Capital Holdings was established with the mission of championing diverse and emerging fund managers and entrepreneurs.
Sources
https://www.lahomes.com/buyers/first-time-buyers/
https://www.firstrepublic.com/insights-education/a-beginners-guide-to-buying-a-home-in-los-angeles
https://la.curbed.com/2018/4/27/17245204/los-angeles-real-estate-buy-house-guide
https://www.bankrate.com/real-estate/buying-a-house-in-los-angeles/#tips
https://www.firstrepublic.com/insights-education/a-beginners-guide-to-buying-a-home-in-los-angeles
