Buying first home

[johnapril]

I always find it best to know the technical matters of what I am getting myself into. For technical questions regarding structure, maintainence, potential trouble spots, you might spend some time on Terry Love's plumbing forum. A good group, about twice the size of this forum, with plenty of technical experts.

 

[alflauren]

Originally Posted by Renault78law

The market appears to be cooling slightly, and I've been advised to wait. However, I'm apprehensive, I don't really think market timing is possible to judge. People have been saying wait for years, but the market has only gotten crazier. I'm thinking I'm just going to jump into it.

Well, as compared to two years ago, the market is cooling. It used to be that people were jumping all over properties and sales routinely occurred above an asking price. That isn't happening anymore. In my sister's neighborhood on the west side of the LA country club, prices soared up until about mid-2005, but have remained fairly stable since with home sales taking much longer than they used to. My guess is that prices will remain stable for while yet, especially as interest rates creep up and people get nailed on their ARMs. Appreciation will be tempered by some foreclosures.

I'm sure you've already found it, but this site is great: http://guests.themls.com/

 

[Full Canvas]

Originally Posted by Renault78law

I'm planning on buying my first home in the near future. More accurately, a condo.

As a buyer, are there any downsides . . .

General tips?

Of note for any and all buyers: http://www.signonsandiego.com/uniont...h16bubble.html
____________________________________________

 

[Mute]

Some tips on finding an agent. First narrow down your choices in neighborhoods. After you've done so, find real estate firms that work in that area and ask to speak to the broker of the firm. Tell him what you're looking for and that you'd like to find an agent who prefers working with buyers.

There's no need to sign any kind of paperwork as a buyer. The agent collects his commission from the seller, so you have a little more leeway than a seller does. If at anytime you are not satisfied with the agent, you can change agents. As a common courtesy, you should inform the agent if you choose to do so.

Regarding your question on how much you should spend. This is your first home. Although you want a home you'll be happy with, you don't need to find your "dream" home. There will be time for that in the future. Find a nice comfortable place you can afford. If you're not able to save a little money every month and instead have to put all your money towards a mortgage, than you taking a risk with your finances. That's how people get into foreclosure and other financial troubles. A good agent should be able to help you make some calculations on what price home you can afford if you can tell him, ideally, how much you'd be willing to pay every month into a mortgage. Good luck.

 

[Dakota rube]

Originally Posted by Mute

There's no need to sign any kind of paperwork as a buyer. The agent collects his commission from the seller, so you have a little more leeway than a seller does. If at anytime you are not satisfied with the agent, you can change agents. As a common courtesy, you should inform the agent if you choose to do so.
With all due respect Mute, this is simply wrong. In all the states in which I am licensed to sell real estate, establishing an agency relationship requires a completed contract between a buyer and his/her agent. It is a binding agreement between the parties, establishing the duties and responsibilities of each, and in effect, tying the parties together.

This is the only means through which a buyer can retain an agent who truly "” and legally "” works for the buyer. Any buyer who has not executed such a contract is not represented by the agent to whom he/she is working. Once said agreement is completed, the buyer is bound to work with this agent until the expiration of the contract.

 

[Mute]

Are you a licensed broker here in California? I am. In California all agency creation applies to seller/agent relationships but none for buyer/agent. Now there can be an implied contract based ont he actions of the buyer, but that isn't what we're talking about. Again, in California, that is not a requirement.

 

[Mute]

Let's expand on the points above. In California there are more than enough agents who are willing to work with buyers without any kind of buyer/broker agreement. I neither condone nor encourage this method of doing business. However, due to the stiff competition and glut of agents, too many are willing to indulge clients who erroneously believe it is to their advantage to not have any kind of agreement. However, the lack of an agreement does not completely absolve agents from carrying out their fiduciary duties to their pricinpals.

I advise anyone who is looking for an agent to work only with one that will give them a buyer/broker agreement, but that is a personal decision. Even so, most have agency cancellation terms that are fairly flexible.

 

[Dakota rube]

In the states in which I practice, there is no agency relationship without representation contract, and thus no fiduciary duties allowed. We have three choices in the markets in which I regularly work: Seller's agent, buyer's agent and facilitator. The facilitator owes no one fiduciary duties, although it does not absolve a practicioner from full and complete disclosure of material facts regarding the properties under consideration.

As to cancellation of agency representation agreements, I am seldom willing to give a buyer a quick and/or easy "out". If I've invested a lot of time, energy and money (expense) in someone and they want out to buy a fsbo or something from their friend's co-worker's brother, or some damn deal like that, I demand a fee. If I can't stand spending time with them, I'll sign the cancellation without another thought.

 

[Mute]

Originally Posted by Dakota rube

In the states in which I practice, there is no agency relationship without representation contract, and thus no fiduciary duties allowed. We have three choices in the markets in which I regularly work: Seller's agent, buyer's agent and facilitator. The facilitator owes no one fiduciary duties, although it does not absolve a practicioner from full and complete disclosure of material facts regarding the properties under consideration. As to cancellation of agency representation agreements, I am seldom willing to give a buyer a quick and/or easy "out". If I've invested a lot of time, energy and money (expense) in someone and they want out to buy a fsbo or something from their friend's co-worker's brother, or some damn deal like that, I demand a fee. If I can't stand spending time with them, I'll sign the cancellation without another thought.
I wish this were so in California, but I've seen more than a few agents get burned by this. California seems much more apt to protect clients than brokers and agents. If you act in anyway that an agent would act, there is some degree of implied agency to which you can be held accountable by law. When I had an active business, I never allowed any of my salespeople to represent a buyer without a buyer/broker agreement and I lost more than my share of potential clients. That was fine by me. I agree with you that I don't like having my time wasted by unscrupulous clients, but competition sets the rules in this state and here in So Cal they favor clients, at least in appearance. This is just one of many reasons why I no longer run an active brokerage and just invest in properties. Too many dishonest people in and out of this business. But enough with my rant. Let's see if we can help Renault78law make some sound decisions in this process.

 

[Rye GB]

Reviving this thread.

So I live in Silverlake..still renting due to the crazy real estate prices of the past couple of years.

I'm ready to buy this year and have seen 10% price reductions in my neighborhood for properties that have been on the market for 3 to 4 months.

Is it time to jump in yet or wait through to Fall for further reductions.

A typical 3 bedroom is $680-$999, I'm not interested in condo's or apartments. I'm looking at Silverlake, Los Feliz, Atwater, Mount Washington and possibly Highland Park and Eagle Rock.

Opinions welcome from LA area residents.

 

[Mute]

Any suggestions on how real estate prices will move will at best be an educated guest. I believe that it's possible there will some moderate price drop. Even if that weren't the case I don't see prices going back up in the immediate future.

As to whether you should wait, you need to look at the costs vs. the benefits. I don't see any major price reduction, so while you may save some money waiting, you'll also continue to pay rent for your current living situation. This is money that will never come back to you, where as with home ownership, at least a small fragment of your mortgage goes to principal and will therefore be your money. You're also taking a chance that interest rates won't go up. Just weigh the pros and cons and decide which will be better for your situation.

 

[dkzzzz]

I take an issue with a statements like you renting you throwing money away.
I sold my rentals in 2004 and now renting myself.
Most analyst from investment banking industry leaning towards real estate bear market throughout 2007.
Although buying home might prove beneficial in terms of interest rebate at the end of the year from IRS. I don't see it as sound investment. Unless you are really shrewd and know the market well.
By the time your primary residence fantastically appreciates 250% in 12 months every other house around you will do the same. Where is your fantastic equity? The only win win situation that I could foresee is if you bought property in a hot market LA SF NYC and then moved to the cold market where your condo-profits would bye you a mansion.

I laugh every time I hear the stories: We bought our condo 7 years ago for 250K and now it is worth 900K appreciation of gazillion %. We are so happy. Guess what, every ones condo in your area is worth 900K now. Say thanks to Fannie May and Freddie Mac.“

 

[Mute]

We're talking about someone only renting one room or home and not using it as a source of income. And what happens to that money that you're putting into rent? Owning property isn't just about the equity. There are also tax deductions and the fact that you're leveraging your an investment with a smaller amount of money. Unless your rent is significantly less than your mortgage you're not saving any money. The problem with people who think that real estate is not a sound investment is that they are thinking only in the short term and thinking that real estate will be the only investment you're going to make. I've said this before and I'll say it again. Real estate is a get rich slow scheme. If you don't have the discipline to hold for a longer duration, than yes, there are many other types of investments that are a better choice.

You also need to separate the difference between real estate as a home and real estate as an investment. It is best to treat the two as separate entities.

 

[lawyerdad]

I strongly agree with Mute's point about separating home ownership from pure investment in real estate. Obviously, you want to get a good deal on your house and have it appreciate. But if you're buying a home to live in, you don't want to worry too much about trying to guess which may the market's going to move. It's guesswork at best, and if you let it anxiety about whether your "timing" is exactly right can leave you frozen on the sidelines for years. Buy something you can afford and that you like, and build from there.
As far as an agent, you want someone who knows the area you're looking in and who you're comfortable with. Sit down with them over coffee and interview them as you would any other professional. Buying a home is both a major financial investment, and also often a very emotional process. You want someone you trust and feel comfortable with.
Renault's posts are fairly old, so he may have moved forward with his process. But if he or anyone needs recommendations for an agent on the west side of LA, I know a couple of good, trustworthy people. I have no connection to them except that they are friends I think highly of (and one was my agent when I bought my current house).
Also, someone suggested looking in the West Adams district. That's a fascinating neighborhood with beautiful historical homes, but has its pro's and con's. If anyone is interested in the neighborhood, a colleague and good friend of mine would be a good resource. He has lived in the area for 5-10 years, and during that time has bought, renovated, and resold several historic homes in the area over that period (once or twice simply to save them from people who wanted to gut them and turn them into multiple-occupancy buildings or churches). He would give you frank insight into the pro's and cons of the neighborhood, and probably would be willing to give you a tour if you were seriously interested. I also know slightly, through this friend, a real estate agent who specializes in that area.
Finally, in response to a question posed and then halfway retracted by Renault - I would be leery of buying a home downtown or anywhere else because you're speculating on appreciation. Downtown is especially dicey for a variety of reasons. But if you're buying a place to live in rather than as pure investment/speculation, the most important thing is to buy a place you'd want to live in. You never know which way the market is going to go, and you could end up living in the place far longer than you initially envision.