THINGS THAT MILLENNIALS NEED TO KNOW ABOUT BUYING A HOME IN LOS ANGELES

Disclaimer: I am NOT a real estate agent and all beliefs below are solely my own.
  1. 1.
    Properties are still going way over asking price with multiple offers
  2. 2.
    Inventory still sucks, but you can find something if you have the right agent
  3. 3.
    You need an agent who has great relationships with other agents in the community in which you want to buy. Most deals are being steered by these relationships whether you like it or not. Choose someone who is in a position to do, or to ask for, a favor.
  4. 4.
    Get to know your loan options. There are several different loans available through your bank and via individual brokers. They all have access to different deals. You'll have the most leverage with your own bank, however you might find a better deal (loan to value ration or rate) via a smaller co.
  5. 5.
    Have a pre-qual letter from your loan officer ready at all times, you'll need to submit with your offer
  6. 6.
    If you find a house you like, go after it 100%, you cannot afford to mull it over in this market. You will lose the house.
  7. 7.
    Start actively looking at properties (in person, not just online) 4-6 months before you are ready to purchase so you can get to know the market. That way, when you see it, you'll know it's the one.
  8. 8.
    A house is only overpriced if you don't love it. If you're obsessed, it's worth whatever you have to pay to get it.
  9. 9.
    If you're putting an offer on a house with an owner/user (not an investor or flipper), write a heartfelt letter explaining why you have to have the house. Let them know you'll cherish every detail and maintain its original charm
  10. 10.
    If you are sweet and docile, get an agent that is aggressive. If you're aggressive, get an agent that is sweet and docile.
  11. 11.
    Be realistic about your expectations. If you become too picky, you'll miss the market. Prices will rise around you and you'll loose your purchasing power. Your budget may not allow for your dream home, but as long as it's a good investment, you can trade up in two years.
  12. 12.
    A good investment is: in one of the most desirable areas in LA, not directly on a busy street or canyon, something that needs a little cosmetic work, equipt with ample parking, in a good school zone (unless you're in an area where everyone goes private anyway), a yard of some kind, curb appeal.
  13. 13.
    In two years you can sell your house and avoid paying taxes on a profit of up to $250k per person. So if you're a couple, and you make a $500k profit on your sale, you won't be taxed. If you sell before two years, you will pay standard tax rates.
  14. 14.
    Pocket listings are still the way to go if you can get to them. This goes back to having a highly-connected agent.
  15. 15.
    Expect to pay a premium for pocket listings, as high as +20%, sometimes more.
  16. 16.
    No matter what your parents tell you, you do not need a 30-year fixed mortgage right now. Take advantage of the lower rates available with a 10-year arm, and if you sense the rates creeping up before you're ready to move, re-fi to a fixed product at that time. This requires you to pay attention!
  17. 17.
    When negotiating for a house you really want gets competitive, stretch as far as you can financially. Then stretch a little more. And when you think you've gone as far as you can, stretch one last time. You'll grow into it before you know it and will not regret it.
  18. 18.
    Most loans require you to have post-close reserves in your bank account which is an amount of cash in addition to your down payment, equivalent to a certain amount of mortgage payments (usually 3-12 months depending on price).
  19. 19.
    It is possible to borrow money from a friend or family member to cover your reserves, however it must be "seasoned," which means you need to have it in your account for at least 3 months prior to loan application, so plan ahead! You can give it back to them after you close.
  20. 20.
    Redfin is the best real estate app, with the most up-to-the minute alerts for listings. Zillow mortgage app is good for figuring out your purchasing power.