Things to Look for When Buying a House in Los Angeles

Key Takeaways

• Buying a house in Los Angeles can be a great investment as it's a great way to build wealth.
• Some of the things that you need to consider as you look for a house in Los Angeles are: Your finances to see how much you can afford, the overall condition of the house, safety of the neighborhood and mortgage options available to you.
• As you look through different houses, some red flags to look out for are: Signs of poor maintenance, issues with the foundation of the house, water damage and mold and mildew.
• As a potential home buyer in Los Angeles, working with a Los Angeles based real estate agent can be very beneficial as they are very conversant with the Los Angeles real estate landscape and can get you the best deals in the market.

Disclaimer

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 real estate agent

Regardless of whether a house is brand new or was built years ago, it is still bound to have some flaws. Without the help of a qualified real estate agent, you might not be able to identify these problems by yourself.

Working with a Los Angeles based real estate agent can be very beneficial as they have comprehensive knowledge of the Los Angeles real estate market.

Ila Corcoran is a licensed Realtor and also serves as the SVP of Real Estate Operations and Advisory services at Bay Street Capital Holdings. She has experience working in both commercial and residential real estate, but her passion majorly lies in residential real estate.

Ila earned a Bachelor's degree and two minors from California State University Long Beach and has an active Real Estate License. For a majority of her life, she has lived in Los Angeles and is therefore the best real estate agent to work with, if you're looking to buy a house in LA. Regardless of whether you're looking for a house in Santa Monica or in Downtown Los Angeles, Ila will help you find a house that fits your budget and needs, as she is very conversant with the LA housing market.

As a potential home buyer in Los Angeles, Ila will help you:

• Curate a list of options of houses for you to view and consider.
• Negotiate with the seller to secure the best possible terms and purchase price for you.
• Prepare purchase offers, ensuring that all necessary terms and conditions are included.
• Schedule and facilitate property showings, allowing you to view different homes in person.
• With the closing process, ensuring that all necessary documents are signed, and that the transaction is completed smoothly.

So far, Ila has managed to close $10.4+ million in real estate transactions. She has helped many clients in Los Angeles and the greater Southern California purchase homes that suit their needs and align with their financial goals.

If you're looking to get started on the home buying process in Los Angeles, schedule a meeting with Ila today and she will help you find the perfect Los Angeles home!

Things to look for when buying a house in Los Angeles

If you're looking to buy a house in Los Angeles, here are some important things to have in mind as you get started on your home search.

Look at your finances to see how much you can you afford

Before you decide that you want to buy a house in Los Angeles, first determine how much you can afford. Start by coming up with a comprehensive budget that accounts for not just the purchase price of the house but also closing costs, property taxes, insurance and potential renovations.

In addition to that, it is important to plan how you'll raise the down payment of the home, which is usually 20% of the total purchase price. Paying the 20% down payment is important as it saves you from paying for private mortgage insurance.

Be sure to also account for closing costs which normally range from 2-5% of the total purchase price. Closing costs are the various fees and expenses that buyers incur when completing a real estate transaction. These costs are in addition to the purchase price of the property and are typically paid at the closing, which is the final step in the home buying process.

Check the condition of the house that you want to buy

Once you narrow down on a house that you're interested in buying, check to see the condition that it is in. To get a thorough analysis, hire a professional home inspector to assess the condition of the property to look for any structural issues, water damage, electrical or plumbing problems. Consider things like how old the roof is, if the HVAC system is working and if the different appliances in the house are functional.

Depending on whether the issues are major or minor, you can decide if you're willing to do renovations or not. Bear in mind that these improvements will be an added cost for you.

Consider the safety of the location that you want to live in

As you check through which neighborhoods you'd like to live in, be in the suburbs or in downtown Los Angeles, check the crime rates in the area and inquire about local safety measures. According to data released in 2023 by the Los Angeles Police Department, the crime rate in Los Angeles has gone down, as compared to the year 2022.

That however doesn't mean that all neighborhoods within the city are safe, you still have to stay vigilant. Do your own research and see what are some of the safe areas that you can live in without the fear of being robbed or your house broken into.

Find out the mortgage options are available to you

Credit score: Check your credit score and review your credit report. You can get a free copy of your credit report once a year from Equifax, Experian and TransUnion. Having a good credit score can help you get favorable mortgage rates.

Mortgage options: Before you settle on a mortgage option, first research the different types of mortgages that are accessible to you. Some loan options that you can consider include: A conventional loan, fixed-rate, adjustable-rate, FHA, VA loans and USDA loans. Each type of loan has specific eligibility criteria, interest rates and down payment requirements. Ensure that you select the option that best suits your financial situation.

Interest rates: The amount of interest that you pay can significantly impact your monthly mortgage payments, and the overall cost of your loan. As you look at different mortgage options, look for one that offers a good monthly payment plan that you can keep up with.

Debt-to-income ratio (DTI): A DTI ratio is a metric that lenders use to evaluate your ability to manage your monthly mortgage payment alongside your existing debts. A lower DTI ratio is generally more favorable to lenders.

Mortgage pre-approval: Consider getting pre-approved for a mortgage before house hunting. A pre-approval letter helps you know the maximum loan amount that you can get and it also shows sellers that you are a serious and qualified buyer. This can work to your advantage during negotiations.

Property taxes

Something else that you need to consider as you look for a house to buy in Los Angeles is property taxes. Property taxes are a form of taxes paid by property owners to the local government, based on the value of property.

In Los Angeles, the average property tax rate is 1% of the assessed value of the property. So as you look for a house to buy, keep in mind that this is a cost that you will have to incur. To get an estimate of how much you'll be required to pay in property taxes, ask your seller to share with you a record of their previous property tax bills.

Homeowners Association (HOA)

Another thing to consider as you look for a house in Los Angeles is the presence and influence of Homeowners Associations (HOAs). A homeowner's association is an organization that is typically formed by the residents of a specific housing community. The role of a HOA is to manage and maintain the common areas and shared facilities within the community while enforcing certain rules and regulations designed to maintain property values and the quality of life for the residents in that community.

So if you want to live in Los Angeles, think about whether you want to live in an area that is run by a HOA or not. If you are comfortable living in an area that is run by a HOA, assess whether the rules and restrictions align with your lifestyle or not.

Something to note is that, if you're living in an area that is run by a HOA, you might have to pay a fee that helps to maintain the amenities and specific services offered within that community. If you prefer living in a community that is under a HOA, ensure that you factor in the monthly fees into the overall cost of the house to ensure that you can afford to make regular payments.

Home features

The city of Los Angeles offers a wide variety of properties and so as you look for a home to buy, look for one that has features that align with your lifestyle and preferences, and prioritize those.

As you figure out the features that you want in your house, also pay attention to these crucial things:

• The age and condition of the roof
• If the HVAC system is functional
• If there are any plumbing issues in the house
• Check for any water damage that could lead to the growth of mold
• If the house has a steady foundation and the general condition of the exterior of the house

A home is a significant investment and so strive to find one with the amenities that you want. Depending on what matters to you, consider things like the layout of the house, number of bedrooms and bathrooms, size of the kitchen, outdoor space, energy efficiency and storage options.

Proximity to schools

The quality of schools in the area where you want to buy a house is another significant factor to consider, especially if you have children or plan to in the future. Los Angeles is a diverse city with a wide range of educational options, including public, private and charter schools.

Researching school districts, their rankings and educational programs is important to ensure that your children receive the education that meets your expectations. Proximity to good schools can also impact property values and resale potential, making it an essential consideration for families.

Before you enroll your children in a particular school, first visit several schools, talk to local parents and check the different school ratings so that you make an informed decision about where to buy your future home in Los Angeles.

Daily commute

Los Angeles is known for its traffic congestion and as you look for a house in the city, consider your daily commute to and from work or school. The distance between your home and workplace can significantly impact your daily life. A long commute can cause you added stress, increase your transportation costs and limit the amount of time that you spend with your family.

Ao as you house hunt, be sure to factor in commute times and available transportation options.

Noise levels

Los Angeles is a city that is known for its diverse neighborhoods, some of which can be noisy due to traffic, nightlife or proximity to busy streets. If living in a peaceful environment is a priority for you, make sure to highlight this with your agent as you search for a house.

Before you settle on where to buy a house in Los Angeles, ensure that you visit the neighborhood during the day and at night so that you can be able to properly gauge the neighborhood's noise levels.

Red flags to look out for when buying a house

When buying a house, it's important that you also be on the lookout for things that could indicate potential problems or issues with the property. Here are some common red flags to be aware of.

Signs of poor maintenance: If you notice signs of neglect within the property like a deteriorating roof, cracked foundation and broken fixtures, that could be an indication of a poorly maintained home.

Issues with the foundation of the house: Cracks in the foundation or walls, uneven floors or doors that don't close properly can be an indication of foundation problems. Foundation repairs can be expensive, so it's essential to have these issues inspected thoroughly.

Water damage: To detect water damage, look for water stains on ceilings or walls. Water damage can be a sign of leaks in the roof or a plumbing issue which may lead to mold or structural damage.

Mold and mildew: Mold or mildew in bathrooms and other areas in the house can be a health hazard and can be an indication of moisture issues. It's important to determine the extent of the problem and its cause.

Neighborhood issues: Pay attention to the neighborhood and its surroundings. If the crime rates are high, there is noise pollution and the value of surrounding property is declining, this may affect your quality of life and property value.

High utility bills: Excessively high utility bills may be a sign of poor insulation, outdated HVAC systems or other energy inefficiencies that can lead to unnecessary extra costs.

Before you buy a house, it is important that you have a professional do a home inspection as inspectors can identify many of these red flags and provide a comprehensive assessment of the home's condition. That way, you can be able to decide if you still want to go ahead and purchase the house or not.

Work with the best real estate agent in Los Angeles

Looking for a house in Los Angeles can be a complex task, but with the help of the right real estate agent, you can be able to find a home that suits your needs and is within budget.

In addition to working with a real agent, also ensure that you stay updated on the current real estate market conditions in Los Angeles, so that you're aware of current trends in home prices and inventory levels.

Bay Street Capital Holdings

Bay Street Capital Holdings is a leading financial planning firm that specializes in wealth management and investment advisory services. It is a Black-owned firm that was founded by William Huston, who has been recognized as one of Investopedia's Top 100 Financial Advisors from 2021-2023.

Bay Street's significant contribution to the real estate sector has led to the firm being recognized as a finalist in the Wealthmanagement.com 2023 Industry Awards under the category of Asset Managers: Diversity, Equity, and Inclusions, specifically for their work with Resthaven Properties.

What sets the firm apart is its unique approach on effective risk and volatility management, prioritizing that over solely maximizing returns.

Sources

https://www.houzeo.com/blog/how-to-buy-a-house-in-los-angeles/

https://www.forbes.com/advisor/mortgages/real-estate/what-to-look-for-when-buying-a-house/

https://la.curbed.com/2018/4/27/17245204/los-angeles-real-estate-buy-house-guide