For New Buyers

So you’re considering to buy a house in Los Angeles.

In these notes, I’ll do my best to answer questions most frequently asked by new homebuyers, property sellers, and anyone else that gives a crap about real estate. Knowledge is power, and I want my buyers and sellers to be the most knowledgeable out there. If you have any questions not covered here, or a general question about real estate or the community, or anything else contact

-Glenn Shelhamer

• Obtain a loan
• Contact an awesome real estate agent like me!
• Determine what features you want in a house
• Be clear with your agent about what you like/don’t like
• Be realistic about what you want and can afford
• Fall in love – make an offer

Your house is not just “your home” it is a serious investment in a dwelling, the area, and your future. When buying a house in Los Angeles – you’re bound to have many questions. For example, “In what area can I find a home that suits my needs?” “How much money will I need to afford the monthly payments?” and “How long will the home buying process take?”

Below are some notes I put together that you might find useful in the home buying process. Please feel free to click on one of the links below to read more.

Should I consider a condo, multi-unit or single family home?

Again, this is only something you can determine. Things to consider:

• Condos Pros: Condos are usually cheaper and the price can sometimes afford you access to your 1st choice location. They’re relatively low maintenance with no yard and generally, no exterior upkeep costs.

• Condo Cons: Mandatory Homeowner’s Association (HOA) dues typically between $200-400 per month, HOA regulations may impose very strict rules that you have to abide by.

• Multi-units Pros: Since you have a rental unit, your share of the mortgage may be significantly less than what you paid in rent.

• Multi-unit Cons: You may need to put more money down to obtain a loan. Also, since you’ll be a landlord, you’ll have to deal with tenant issues.

• Single Family Home Pros: You’ll have your own private home.

• Single Family Home Cons: You’ll have to pay for a gardener and exterior upkeep.

• Pre-Qualification:

Meet with a loan officer or mortgage broker and find out how much you can afford to pay for a home. I work with loan officers and mortgage brokers. I’m happy to introduce you to good people that get the job done.

• Pre-Approval:

While knowing how much you can afford is the first step, sellers will be much more receptive to potential buyers who have been pre-approved. It doesn’t make sense to shop for a property without a pre-approval unless of course, you’re buying all cash.

With a pre-approval, you’ll also avoid being disappointed when going after homes that are out of your price range. With pre-approval, the buyer actually applies for a mortgage and receives a commitment in writing from a lender. This way, assuming the home you’re interested in is at or under the amount you are pre-qualified for, the seller knows immediately that you are a serious buyer for that property. Costs for pre-approval are generally nominal and lenders will usually permit you to pay them when you close your loan.

• List of Needs & Wants:

Make 2 lists. The first should include items you must have (i.e., the number of bedrooms you need for the size of your family, a one-story house if accessibility is a factor, etc.). The second list is your wishes, things you would like to have (pool, den, etc.) but that are not absolutely necessary. Realistically for first-time buyers, you probably will not get everything on your wish list, but it will keep you on track for what you are looking for.

• Representation by a Professional:

Consider hiring your own real estate agent, one who is working for you, the buyer, not the seller. I’m happy to discuss this in more detail.

• Focus & Organization:

In a convenient location, keep handy the items that will assist you in maximizing your home search efforts. Such items may include:

One or more detailed maps with your areas of interest highlighted. We will “map out” an active search criteria, and receive alerts the minute a property goes on the MLS in an area we have targeted. I’m also plugged into the off-market activities so this knowledge is more of an advantage for property considerations.

• A file of the properties that your agent has shown to you, along with ads you have cut out from the newspaper. Let me know if you see something outside of our search area so I can do my homework for you.

• Paper and pen, for taking notes as you search.

• Instant or video camera to help refresh your memory on individual properties, especially if you are attending series of showings. When working with me, we will schedule property tours and a detailed CMA for each prospect property will be considered.

Look at a potential property as if you are the seller. Would a prospective buyer find it attractive based on school district, crime rate, proximity to positive (shopping, parks, freeway access) and negative (abandoned properties, garbage dump, the source of noise) features of the area?

• Visualize the house empty & with your decor:

Are the rooms laid out to fit your needs? Is there enough light?

• Be Objective:

Instead of thinking with your heart when you find a home, think with your head. Does this home really meet your needs? There are many houses on the market, so don’t make a hurried decision that you may regret later.

• Be Thorough:

A few extra dollars well spent now may save you big expenses in the long run. Don’t forget such essentials as:

• Include inspection & mortgage contingencies in your written offer.
• Include inspection & mortgage contingencies in your written offer.
• Have the property inspected by a professional inspector?
• Request a second walk-through to take place within 24 hours of closing.
• You want to check to see that no changes have been made that were not agreed on (i.e., a nice chandelier that you assumed came with the sale having been replaced by a cheap ceiling light).

All the above may seem rather overwhelming. That is why you’ll have a professional like me represent you, and keep track of all the details for you. Please email me or call me directly to discuss any of these matters in further detail.

Buying a property isn’t just about a great kitchen or square footage. Though important, there are other factors to seriously consider. Like:

Can I Afford It?

It’s funny how many people don’t keep this in mind. While you might have a loan approval for five million that doesn’t mean you need to go that high and have a mortgage payment at the top of your budget.

The Neighborhood.

Do you really want to be the biggest, nicest home on the block? Appraisers don’t think so. Do you really want to be the prettiest home in a questionable neighborhood? Probably not. These factors will definitely affect your resale.

Square Footage.

I’ve seen 1000 sq. ft. homes that felt larger and had better floor plans than houses double that size. Don’t get fixated on a certain square footage. My tip: have a 200 sq. ft. buffer. If you want a 2000 sq. ft house, consider homes in the 1800 sq. ft. range and up and see them in person to determine whether it’s really too small for you. It may be turn out to be ‘just right.’

Blinded by Bling.

The average cost of a new, gorgeous kitchen is about $15k. Do you really want to buy that house that’s asking $50k more than every other house you’ve looked at simply because you’re blinded by the shine of granite and stainless steel? The same goes for most other “bells and whistles” like new flooring, an updated bath, etc. You can always do the upgrades yourself, choose what you really want and pay much less for it.

The Bones.

This goes hand-in-hand with getting blinded by bling. The most important thing to consider when buying a home is the quality of the home itself. Are the bones good? If it’s in older home, chances are that the materials used to make that home are far superior and stronger than anything you can find today.

Doing an Open House Right.

This goes along with tips on Bling & Bones. When walking through a house, don’t get blinded by professional staging and bling-y kitchens. Look at the big picture. Do you like the home’s presence from the curb? Do you like the natural light? Is the living room large enough to accommodate the 3 kids and the 2 dogs? While staging is nice, it’s unlikely you’ll ever replicate the great looks of professional staging if you were to buy the home. So think about how you really live–even while walking through a home designed to get you to buy.

For a great real estate agent who can help you find beautiful homes that truly meet your needs and wants, contact Glenn Shelhamer.

If you decide to not work with me, make sure your buyer’s agent has represented a fair amount of sellers, because its important your agent understands both sides of the fence when negotiating. Besides, buying a home is one of the most important purchases most people will make. In order to make the right decision the first time, potential buyers need to be prepared. Consider the following before starting negotiations:

• Be prepared

Research the housing market in the target area. Once you have information about the general area, focus on the particular property and seller.

Look for answers to questions such as:

• Why is the homeowner selling? (If they’re moving because they find the area undesirable, you might want to consider this issue.)
• How long has the home been on the market? (If it has been on the market for a long time, perhaps there are negative facts about the property that you need to know.)
• How much did the seller pay for the home compared to the current asking price? (If the seller paid more, find out why. Was it a general real estate trend, or did property values in that particular neighborhood go down?)
• What is the seller’s time frame for selling and moving? Does it fit your needs? Are there any defects in the home or problems with the surrounding neighborhood? (For example, is the roof so old that it will likely leak during the next storm? Is there a new construction project in the area that will lead to major traffic congestion?)
• As the potential buyer, you want the advantage. While you want answers to all your questions to the seller, reveal very little about your circumstances.

Do not give the seller personal information such as your income, the maximum you are able to pay for a down payment or the home, or when you want to move.

Make sure that your agent knows not to reveal any such information to the seller or his/her agent.

Also, do not let the seller see how much you want the property. If you appear desperate or overly enthusiastic, the seller then has the stronger bargaining position. When meeting with the seller or listing agent, keep your emotions in check.

Establish a Timeline

Find out if the seller needs to have the sale closed sooner rather than later. If the seller is feeling pressured to sell, use that to your advantage in negotiating. Even if you, the buyer, are the one with the deadline for purchasing a home, don’t let yourself be rushed into making concessions or a purchase you may regret later.

Congratulations on falling in love and making an offer! This is what to expect for the next 30 days until your escrow closes.

• Offer accepted by seller

• Escrow is opened with buyer’s good faith deposit (usually 3% of the cost)

• You or your awesome agent will notify your lender that you have an acceptance

• “Contingency period” starts–17 days to do all property inspections (unless the contract reads another timeframe).

• Your bank will order the property appraisal to determine the value

• You’ll sign lots of real estate paperwork, including a TDS (Transfer Disclosures) where the seller reveals everything known about the property

• You’ll start getting lots of paperwork to sign from your escrow & title companies

• After your inspections, but before your contingency period expires, determine if you need to request repairs or credits for repairs from the seller.
• Seller will either accept, counter or reject your request

• Assuming an agreement, you’ll get your loan documents in about 2 more weeks

• Sign your loan docs usually at the bank, at escrow or with a notary in your home

• Bring in your closing funds to escrow (remaining down payment + closing costs)

• Your loan will fund a few days later, record and you’ll get keys to your house

• Hire a moving company, turn on all utilities, forward all your mail

Questions? Click here.

Congratulations, you are on your way to owning your very own home! Follow these suggestions (and your realtor’s advice) so that escrow and settlement with go as smooth as possible.

You will be asked for a down payment on the home you are purchasing. You can choose to put down as much or as little as you want (depending on your mortgage), but remember, the more you put down toward the total price of your home, the less time it will take you to pay off and the less your mortgage payments will be every month.

During this period of purchasing your home, you are going to need an escrow or settlement company to act as an independent third party so that you know when and who to give your money to get the deed to your new home. The escrow or settlement company will hold your deposit and coordinate much of the activity that goes on during the escrow period. This deposit check may also be held by an attorney or in the broker’s trust account. Make sure that there are sufficient funds in your account to cover this check.

The deposit check will be cashed. Assuming the sale goes through, this money will be applied to the purchase price of the home. If for any reason the sale is not consummated, you may be entitled to receive all of your deposit back, less standard cancellation fees. In certain instances, the seller may be able to retain this money as liquidated damages. Prior to executing a purchase contract, it would be wise to speak with your counsel regarding whether or not it is your best interest to have a liquidated damages clause as part of the contract.

The period that you are “in escrow” is often 30 days, but may be longer or shorter. During this time, each item specified in the contract must be completed satisfactorily. By the time you have opened escrow, you have come to an agreement with the seller on the closing date and the contingencies. Each contract is different, but most include the following:

Inspection contingency:

This should be completed as soon as possible after the contract to purchase is signed as unsatisfactory results of the inspection may mean that you will want to cancel the contract.

Financing contingency:

Once the contract is signed, you have a period of time to secure funding. If, for any reason, you are unable to secure funding during the period of time granted to you by the contract (and the seller will not provide a written extension of time), you must decide whether you want to remove the contingency and take your chances on getting a loan. You may choose to cancel the purchase contract.

• A requirement that the seller must provide marketable title.

With an attorney or title officer, review the title report. The title must be “clear” to ensure that you do not have legal issues regarding your ownership.

Check into local and state ordinances regarding property transfer and make sure that you and/or the seller have complied with them.

Secure homeowner’s insurance.

This will probably be required before you can close the sale. Due to such requirements as special fire and earthquake insurance, obtaining this insurance may require a lengthy period of time. It would be in your best interest to apply for insurance as soon as possible after the contract is signed.

Contact local utility companies to schedule to have service turned on when you close escrow.

Schedule the final walk-through inspection. At this time, you should make sure that the property is exactly as the contract says it should be. What you thought to be a “permanently attached” chandelier that would come with the property might have been removed by the seller and replaced with a different fixture entirely.

You’ve made it! Once the sale has closed, you’re the proud owner of a new home. Congratulations!