As Los Angeles Real Estate Attorneys we tend to represent a fair number of first time home buyers in litigation that arises out of their first home purchase. We offer the following tips:
1. Expect Delays so do not try to close escrow too quickly. Years ago, before the problems with the housing bubble, buyers were able to close escrow in shorter period of times – like 30 to 45 day escrows. These days it is extremely hard to close escrow in even 30 days. Therefore, it is important to give yourself enough time to complete the deal. We recommend trying to get at least a 45 day escrow. And, know that no matter how long your escrow is set to last there is no way to control how quickly your lender will approve your loan and commit to funding it. Try asking your lender ahead of time how long they think they will need to close escrow. Of course, once you are in escrow you can always ask for an extension but there are no guarantees the seller will give one.
2. Understand the importance of your purchase contingencies. A typical purchase and sale agreement sets forth a number of buyer contingencies that allow the buyer to back out the purchase and sale agreement without penalty – without losing the initial deposit. These buyer contingencies are very important to understand. For example, an inspection contingency allows the buyer to inspect the property during specified period at the outset of the escrow period and to cancel their purchase if they find a condition that does not meet their needs. This allows a buyer to make an informed decision and not be locked into a deal before knowing that they are really purchasing. As a result, if a buyer likes a property they can be more free to submit and offer and finish their due diligence during the escrow period.
3. Find a good real estate agent. A good experienced real estate agent can save you a great deal of headache. A buyer’s agent should be responsive to the buyer. As the buyer, you have to know that you trust not only the agent’s expertise but also the agent’s responsiveness. There is nothing worse than a non-responsive agent who you are entrusting to handle your negotiations. We recommend always talking strategy with your agent and getting a realistic expectation from your agent on how they will handle any problems that may arise during the escrow period.
4. Look for good bones not good cosmetics. An investment in real estate is always a large investment of money. First time buyers should not get overly bogged down in the property’s cosmetic appeal. A savvy buyer will look at the physical structure, the layout, the flow, the future potential and not just whether it has the latest trendy countertops. The cosmetic aspect of the property is easy to change but a property with a bad layout is tougher to change and may not go up in value as quickly as a property with a more functional layout.