If you are a seller looking to move on to another property you already own, the world is your oyster. You can sit back and watch the multiple offers roll in as long as you don’t overprice your property by more than 10% above market value.
Since there is such a lack of inventory, especially in Beverly Hills, Trousdale Estates, Bel-Air, Hollywood Hills, West Hollywood, Los Feliz and Hancock Park, the smartest way to price a house is just a few percent under market to create an auction-like bidding war. Under these competitive circumstances buyers are likely to over bid to a price high above a seller’s expectations and less likely to request deductions for repairs during the inspection process knowing there are several buyers in back offer position ready to take their place and sometimes for even more money.
Although, if you are a seller looking for a replacement property and need to sell your current house first to purchase your new house the thought of selling too quickly, having to rent first and move twice and worst of all, not knowing where you will take shelter is a bit daunting. If you are a seller in the latter position negotiating an optional long-term lease back in your counter offer can greatly relieve your moving fears. For a buyer, offering a long-term lease back option to a seller can make an offer more attractive, even over a higher offer and/or financially stronger offer.
The general consensus among Los Angeles homebuyers is the feeling that they are being priced out of the market. There is mass frustration with fierce competition due to increased prices, low inventory and all-cash investors making up about 35% of all offers nationwide who out bidding owner-user purchasers.
A recent CNN Money article reported real estate values in Los Angeles increased by 18.9% during the last 12 months, well above the national average of 13%. In the red hot areas such as Trousdale Estates in Beverly Hills and the Hollywood Hills Bird Streets property values increased well over 25% over the last year.
If you are a buyer obtaining a loan you will be paying 25% more for the money you are borrowing with mortgage rates up by nearly 1 point to 4.3% than compared to 1 year ago. Between increased prices and interest rates getting creative with your offer and being innovative in your identification of property such as pursuing off market listings is the best fighting chance you have.
For more information about how to structure your offer in this competitive Los Angeles real estate market and/or if you are a selling your property and would like to find out the strategies to achieve maximum profit please contact Susan Andrews at 323-829-8811 or email Susan@LuxuryLAHomes.com.
Photo courtesy of CNN money.