Los Angeles has an undeniable allure. From the iconic post-modern mansions of the Hollywood Hills to the serene beachfront properties of Santa Monica, LA boasts a real estate landscape as diverse as its residents.
The housing market in the Los Angeles area is quite varied. Buyers can get a single-family home, while real estate investors can find chances to own multi-family properties. Deciding to own a piece of this vibrant metropolis is an exciting adventure, but the transaction process brings plenty of challenges.
When a home hits the market in one of the neighborhoods in Los Angeles, folks on the house hunt jump in for a chance to own a piece of Tinsel Town.
So whether you're looking for a hip enclave in Silver Lake or a storied home in Beverly Hills, homebuyers must ensure their priorities are set before starting their search. That is why the team at Prevu Real Estate compiled a quick guide for buying a home in LA.
How to buy a house in Los Angeles
- Find your favorite neighborhood
- Set your budget
- Get pre-approved for a loan
- Work with an expert agent
- Secure a commission rebate
- Learn about local laws and regulations
- Make an offer
- Inspections and appraisal
- Final steps to closing
Find your favorite neighborhood
Los Angeles is a sprawling city with an array of neighborhoods, ranging from suburban enclaves and beachfront cities to urban hubs filled with culture and nightlife. Finding the right one will depend on your homebuying goals and lifestyle.
If you want beachside bliss, you'll want to embrace the coastal glamor of Santa Monica. With its iconic pier and bustling Downtown, this is one of the most popular places to buy a waterfront home in Los Angeles. Venice is a close second, with its iconic boardwalk and bungalow-style homes on Venetian canals defining this historic section of LA.
If you prefer brunches and retail therapy, you'll want to check out Downtown LA. Skyscrapers, cultural venues, and a thriving food scene define this bustling urban hub. Meanwhile, folks looking for a suburban feel should check out Burbank, Glendale, or Pasadena. Each locale offers a small-town feel in the big city, with tree-lined streets and cozy downtowns.
But if luxurious living is paramount, you may want to check out enclaves like Beverly Hills, Pacific Palisades, or Bel Air. These are where you can find the star-studded mansions of Los Angeles, so expect to pay a pretty penny if you're looking for homes in these neighborhoods.
Set your budget
As you think about what LA neighborhood you want to buy a home in, you must consider your budget. Navigating the homebuying process is challenging, and understanding your limits will help limit surprises.
First, you want to take stock of your yearly income, debts, and other assets. This way, you can visualize how much you can dedicate towards a down payment and then figure out how much you can afford in monthly mortgage payments. Housing costs are expensive in Los Angeles, and the median home price can significantly vary depending on the neighborhood you're searching.
You also have to consider utilities. The mild climate can mean lower heating and cooling costs but also a higher water bill if you want to maintain a lush, green lawn.
Get pre-approved for a loan
If you are making an all-cash purchase, then you likely know your financial standing, but if you are using mortgage financing, you’ll want to get your information in order. Then, once you figure out your finances, you will want to get pre-approved for a mortgage before setting up property tours.
Pre-approved buyers in LA can quickly move through a transaction, which is a boon for sellers who need to move out of their homes fast. Mortgage lenders look at your income, credit score, and other financial factors to evaluate your qualifications for a loan.
By looking at these factors, lenders determine the maximum amount you can qualify for and what you can handle in monthly mortgage payments.
This is why you want to get your financial information in order early. Having a pre-approval in tow when making an offer on an LA home can help you stand out from other buyers.
Work with an expert agent
Buying a home in Los Angeles is a complicated process without expert representation.
A local buyer’s Agent has an in-depth understanding of property values and community amenities in each LA neighborhood. As such, they can help you pinpoint the perfect area that aligns with your lifestyle and preferences. The agent can provide valuable insights into current market conditions, pricing trends, and upcoming developments.
Plus, once you find your Los Angeles dream home, your agent is your advocate in negotiations. Whether bidding on a hot property or navigating counteroffers, their expertise ensures your interests are well-represented.
Make sure you meet with multiple agents, as you want to get a well-rounded sense of experience from a few different agents. Ask about their deal experience in your favorite neighborhoods, their negotiation strategy, and if they can offer you a commission rebate.
Secure a commission rebate
It shouldn't be a surprise that buying a home in Los Angeles is an expensive endeavor. Home prices are high, and when you factor in closing costs, buyers can expect to spend what feels like a fortune for a home in the City of Angels.
Yet, there are ways buyers can save money when purchasing a house in LA. By working with a buyer's broker offering a commission rebate, homebuyers in Los Angeles can put a sizable amount of money back in their pocket. The practice of commission rebates enables your buyer's broker to return a portion of their broker fee to you at closing.
Traditionally, your buyer's broker receives a portion of the broker fee from the listing agent after a transaction closes. But if you work with a buyer's broker from a tech-forward brokerage like Prevu Real Estate, your agent will provide you with up to 2% of the broker fee at closing, depending on the home's purchase price.
With commission rebates, you can use the saved funds to cover closing costs, make home improvements, or rebuild your nest egg.
Learn about local laws and regulations
Beyond getting a commission rebate, you want a local agent as they can help you navigate the complex web of zoning laws and building codes regulating property use, construction, and development in the city.
For instance, zoning laws dictate building height, setbacks, and lot coverage. So if you have plans to buy a property and build a multi-family unit in a place like Pasadena, you need to know the regulations. Otherwise, your dreams of being a landlord can get dashed.
Equally, if you want to buy a home and add an addition, you want to ensure the home can get the necessary permits. If the house is in a historical or preservation zone like Venice, you may be unable to alter a historic bungalow.
Lastly, consider natural hazards when looking at a home. Los Angeles has regulations related to environmental concerns such as hillside development, coastal areas, and earthquake safety. Buyers should ensure that their property complies with these regulations and may need to undertake specialized inspections.
Make an offer
Once you've found your dream dwelling in LA and there are no hiccups with the property location or zoning, it is time to make an offer.
The Los Angeles real estate market is notoriously competitive, so understanding how to thrive in this environment is essential whether you're a first-time buyer or a seasoned investor. Your agent is your quarterback in this process, who will help you navigate negotiations to help you secure the deal.
You want your offer to stand out by offering competitive prices, flexible terms, or demonstrating strong financial readiness. Your agent can advise on the best strategies for each specific situation.
Inspections and appraisal
If a seller accepts your offer, it is time for the final critical miles of your homebuying journey.
First, you want to order a home inspection to get an in-depth evaluation of the property's condition, covering structural elements, electrical systems, plumbing, roofing, and more. In Los Angeles, inspectors also look out for earthquake safety and erosion mitigation. If the inspection has issues, your agent can help negotiate repairs or obtain credits with the seller.
As the loan underwriting process is happening, you must get the home appraised. Lenders require this step to ensure the home is worth the amount they lend you. This valuation is based on recent comparable sales in the area to arrive at an objective valuation.
Once these two important tasks are done, it’s time to get ready for closing.
Final steps to closing
After searching for homes, bidding against other buyers, coordinating home inspections, and securing your mortgage, it is time for closing day.
This is when you'll meet with your agent, the seller, and your lender and title company representatives to finalize the transaction. You will sign all of the necessary paperwork to transfer ownership.
From there, you pay the seller and disburse the closing costs, when the lender or escrow agent releases funds. Following this, it's time to set up utilities in your name.
Now, with keys in hand, you can start settling into your new Los Angeles home and enjoy all California has to offer.
Interested in buying a house in Los Angeles? Browse listings and see how much you can save with Prevu’s Smart Buyer Rebate.
