When buying a home in Los Angeles, especially in this crazy sellers’ market, people tend to look for homes that have been listed for a while, the reasoning being that they are going to have more chance to be able to buy that home than one that is fresh on the market, and that they may be able to get it at a lower price than listed.
When I say “don’t discount a Los Angeles home for sale” I have two definitions of “discount” in mind, one being that a price discount may not be on the cards, and the other that you should not dismiss the home with the opinion that something is wrong with it.
There are a number of reasons that a home may show a larger than normal number of days on the market, among them:
- The home was actually in escrow at one or several times and escrow was canceled. The question your Realtor® will ask here is why? Some reasons could be:
- The buyer did not qualify for a loan.
- The buyer got cold feet and found a reason to cancel the contract.
- An investor who made an offer sight unseen decided it was not a good investment.
- A short sale that was not approved by the lender for one reason or another is going to add a significant number to the days on the market.*
- There was a problem discovered during the buyer’s investigation period.*
- The listing may have been put on hold for a period. Maybe there was an illness in the seller’s family or some other emergency.
- The property was not easily available to be shown, either because of seller instructions or the agent’s schedule.
- Adding to the previous point, an agent who does not market the home properly by taking good photos, providing an accurate description, and making showings easy, can be a detriment to the sale of the property, however nice it is.
**These are the two red flags that may justify you discounting the property in both respects:
- If a previous buyer had an inspection and backed out of the contract then the question would be, what did they discover. Maybe it was of minor concern and the negotiations at the Request for Repairs phase broke down. Or maybe there was major work that would add several thousands of dollars to the purchase and the seller was not willing to participate. If there is something that is discovered then this should be disclosed to the new buyer. The argument has been presented that this was not the seller’s own inspection so the information cannot be relied on and possibly may not be disclosed. However, in most cases any problems are disclosed when the property comes back on the market.
- In this instance a discount in the price listed may be in line.
- Just because a short sale is not approved for one buyer does not mean that the next one will have the same result. Also, in many cases, a short sale will just be ready for approval by the lender and the buyer backs out, often because they have been on hold for so long they lose interest or find another home.
Stand out from the crowd with those homes that have been sitting on the market. Do your homework with your Los Angeles Realtor® and find out which homes should be treated with the same respect as those new on the market and which ones should or may be discounted.
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