You are buying a home in Los Angeles and don’t want to overpay? Oh boy, where do I start.
No one wants to feel like they are overpaying for anything let alone for as large an investment as a home. But here is the reality of today’s market. If you love the home and you want it, you are going to have to go all out to get it.
So, when we are representing Los Angeles home buyers how do we make sure that they are not “overpaying”. We do the same thing as the listing agents try to do when pricing the home, we look at the comps (similar homes in the vicinity that sold recently). And then we let that fly out of the w
indow. Why? Because sometimes those prices are all over the place.
Los Angeles real estate is in an extreme sellers’ market which means that for every good property that comes on the market there are several interested buyers and multiple offers are the norm. If a home is priced well to start with, offering less than asking, with other buyers also making offers, is probably not going to encourage a counter offer. The least you, the buyer, should be offering is full price, and in some cases, a little over. Of course this assumes that this is all within the your budget, and that you really want the home.
Next will come an acceptance of your offer or, more likely, a counter offer, probably asking for a highest and best purchase price, or it may contain a specific number. Now you don’t have to continue and can let someone else get the home. But if you still want it then you are going to have to make your “highest and best” offer.
Assuming that you really, really love the home and do not get it, and in this market with so little inventory it is unlikely that a similar home is going to come up quickly, and if it does that you are going to get it, how are you going to feel? Are you going to wish you had gone a little higher? And what if your offer is the successful one, are you going to feel that you overpaid or be happy that you finally got the home you love?
A home is only worth what someone is willing to pay for it. So if you found the home you love and intend to live in it for several years, be happy. You made a great investment.
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