Buying on the Wilshire Corridor

Buying a Wilshire Corridor Condo? Check Out Your Comps

If you are thinking of  buying a Wilshire Corridor condo you should check out comparable sales in the same or similar building. This goes for purchasing any condominium unit, or home for that matter, although it is easier to understand pricing when you are comparing like for like, i.e. units in the same building.

Buying on the Wilshire Corridor

Often, a seller may not use this approach when pricing their home to put it on the market. They may see their unit through rose-colored glasses and place a higher value on it. How do they justify this? They are on a higher floor; they have a better view; they have made “significant” improvements to the unit; they have a “better” layout. These are the main example of a seller’s thought process.

There is no hard fast rule of how much to add per floor; a typical adjustment would be approximately between 1%, to 2% but above a certain floor level it would start to decrease.  And if the view does not change significantly between two floors, what value, if any, can be added?  Of course if the difference between floors makes a significant difference to the view, then that is a different matter, and the per floor adjustment would probably apply. The direction of the view shouldn’t make a big difference.

If the seller has made improvements then they may be able to add 60 to 70% of the cost of those improvements: mainly a kitchen and bathroom upgrade, wood floors, new appliances and added storage. Also the upgrades made may not be to the buyer’s taste.*

The layout of the unit may differ from others in the building, but this is subjective. Maybe they made a bedroom into a den, or added a wall to provide another bedroom. This does not necessarily increase the value. It is, after all, the same square footage.

*Your real estate agent can help you establish the right price to offer for the unit. There is a baseline to work with. Other units will have sold in the same building, and there is a price per square foot average your agent will be looking at. They will also know what the seller paid when they bought the condo and check out the average price increase over the years in that building. They will also ask, if improvements were made and when they were made, because these will not factor into the price if they were in place when the seller originally bought the unit as those improvements did not increase the price over the annual increase.

If you are getting a loan, then an appraiser will determine the correct price for the unit, and if they find that the unit is overpriced you can decide whether you want to ask the seller to pay the difference, or if you are willing to increase your downpayment or walk away from the property. If you are a cash buyer and you love the property then you can decide to overpay. Either way, you have the tools to make an informed decision when buying a Wilshire Corridor condo, or one in any other building.

 

 

 

 

 

 

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