Your long-held home-owning dream finally seems within your reach. You’ve found a house that almost perfectly matches up with the image in your mind, you’ve been pre-approved for the financing, and you’re ready to close the deal.
But before taking the major life step of buying a home in Los Angeles, you need to ask yourself and your spouse/partner these three things.
3 Things You Need To Discuss When Buying a Home in Los Angeles
1. Is this home really a good investment?
Although choosing and buying a home are very often mostly emotion-driven decisions, you still need to make some rational decisions before taking the plunge. And the first of these involves determining whether the home – the one with the big wrap around porch just like you’ve always wanted – is, in fact, a good investment.
Even if you’re not buying the property purely for investment purposes, with the intention of “flipping” it after a short while, it still should increase in value over the long haul. And that means two things primarily: 1) there won’t be any major repair or renovation costs, and 2) the location is one where home values increase over time.
Still, the emotional aspect does have its place. You shouldn’t view your home as nothing more than a financial investment but as an investment in your dream and quality of life. If you can acquire the property at a fair price and if it meets the two conditions above, then it will likely contribute to your quality of life and be a good investment.
2. How long do we intend to stay in this area?
This second question is related to the first. Buying a home is a major commitment both financially and to the neighborhood/area. And a house is not a very liquid asset, so if you don’t intend to stay in the area very long, maybe you should reconsider.
The process of selling a house is costly, complex, and usually protracted. The consensus among experts, then, is that you should avoid buying unless you intend to stay in the home for a minimum of five years. The idea is that these five years will allow enough time for the property to increase in value so that, if you do decide to sell, you can recoup the costs of the transaction or, at least, avoid losing much money on the sale.
Also, before buying a home, you should check out the schools and career opportunities. These considerations can also impact how long you will (or can) stay in your new home.
3. Can we actually afford the costs of home ownership?
Many times, we forget to take into account that the cost of owning a home reaches far beyond the cost of the initial transaction. Besides having to pay the mortgage, property taxes, and insurance, there may also be homeowner’s association fees. And usually – almost inevitably – you’ll have the costs of routine maintenance, as well as having to pay for some necessary repairs and improvements.
Again, the experts recommend that you should put back each year at least one percent of your home’s cost for repairs and maintenance. So if, say, your new home sold for $200,000, you’d need to set aside a yearly amount of at least $2,000. You may not need the entire amount each year for maintenance costs, but there will come a point when you will, for example, when the AC unit goes out.
Are you interested in buying a home – and have you asked yourself the three crucial questions? If you are, we have the experience and expertise to help you achieve your dreams.