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Alexander Spatari/Getty Images November 09, 2022 Troy Segal is Bankrate's Senior Homeownership Editor, focusing on everything from upkeep and maintenance to building equity and enhancing value. Bankrate logo The Bankrate promise
At Bankrate we strive to help you make smarter financial decisions. While we adhere to strict editorial integrity, this post may contain references to products from our partners. Here's an explanation for how we make money. Bankrate logo The Bankrate promise
Founded in 1976, Bankrate has a long track record of helping people make smart financial choices. We’ve maintained this reputation for over four decades by demystifying the financial decision-making process and giving people confidence in which actions to take next. Bankrate follows a strict , so you can trust that we’re putting your interests first. All of our content is authored by and edited by , who ensure everything we publish is objective, accurate and trustworthy. Buying or selling a home is one of the biggest financial decisions an individual will ever make. Our real estate reporters and editors focus on educating consumers about this life-changing transaction and how to navigate the complex and ever-changing housing market. From finding an agent to closing and beyond, our goal is to help you feel confident that you're making the best, and smartest, real estate deal possible. Bankrate logo Editorial integrity
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You have money questions. Bankrate has answers. Our experts have been helping you master your money for over four decades. We continually strive to provide consumers with the expert advice and tools needed to succeed throughout life’s financial journey. Bankrate follows a strict , so you can trust that our content is honest and accurate. Our award-winning editors and reporters create honest and accurate content to help you make the right financial decisions. The content created by our editorial staff is objective, factual, and not influenced by our advertisers. We’re transparent about how we are able to bring quality content, competitive rates, and useful tools to you by explaining how we make money. Bankrate.com is an independent, advertising-supported publisher and comparison service. We are compensated in exchange for placement of sponsored products and, services, or by you clicking on certain links posted on our site. Therefore, this compensation may impact how, where and in what order products appear within listing categories. Other factors, such as our own proprietary website rules and whether a product is offered in your area or at your self-selected credit score range can also impact how and where products appear on this site. While we strive to provide a wide range offers, Bankrate does not include information about every financial or credit product or service. If you’re trying to figure out in Los Angeles, be ready to deal with some challenges in the next year. The housing market is cooling off around the country, and the Golden State is no exception: The California Association of Realtors projects that median sales prices in the state will decrease by nearly in 2023. That doesn’t necessarily mean home-selling is no longer a good idea in the City of Angels — just that it’s not quite the slice of angel’s food cake it used to be. As you prepare to list your property, read on for some key considerations to pave the path to a smooth and successful sale. Sell a house fast in Los Angeles
While buyers were moving fast when mortgage rates were low, that’s no longer the case. The California Realtors Association reports that the median number of days a property spent on the market in September of 2022 was 23 — compared to just 10 days one year earlier. While it’s hard to pinpoint the best time to sell a house right now due to changing market conditions, it’s easy to spot the worst time to sell a house here. Redfin data shows that properties have sat on the market for much longer during winter months over the past two years. As individual buyers worry about , it’s likely that properties will continue to take longer to sell in Los Angeles. If you’re on a tight timeline, consider looking at , which include companies like Opendoor and Offerpad. Be aware that the offer you’ll receive from one of these flip-oriented firms, while in cash, may be significantly lower than you would from someone who wants to actually live in the house. Plus, some of the iBuying activity is even in southern California, one of its longtime bastions. As of Nov. 9, RedfinNow – one of the biggest names in iBuying – was in the Los Angeles metro area, or in fact anywhere: this iBuying arm of the real estate brokerage Redfin was shuttered permanently. Things to consider when selling your house in Los Angeles
As you’re preparing to list your home, you’ll need to think about some important questions to develop your sales strategy. What kind of shape is your home in
Is your home in need of a ton of repairs? Rather than paying to , you can consider — meaning, you won’t make repairs or improvements, but have priced the house to take its condition into account. Or is it in fairly great shape but could use just a touch of love? It might be worth investing a small amount of cash in a . How quickly do you need to sell
Are you trying to ? If you’re relocating from Los Angeles to a housing market where properties are going fast, you might find yourself in a tough spot if you can’t afford to pay two mortgages at once. As properties sit on the market for longer, you might want to think about ways to accelerate your sale. The biggest holdup tends to be waiting for a buyer to receive formal approval of their financing, and that holdup is getting even more challenging due to steadily-rising mortgage rates. With that in mind, it’s wise to try toeither to a deep-pocketed individual/investor, an aforementioned iBuyer or a local “cash for homes” real estate firm. You will probably make a bit less than you would from an individual buyer who’s using financing, but time is money. Sell it faster, and you can move on with your life. What s the market like in your specific area
You’ve lived in Los Angeles long enough to know that different neighborhoods have different levels of desirability. Buyer activity in Fairfax might look much different than it does in Culver City. For example, Redfin’s data shows that properties were spending 35 days on the market in West Hollywood in August while properties just nine miles away in downtown LA were taking 77 days to sell at the same time. How much will all this cost
When you’re selling your home, you’re likely focused on all your profit potential. However, you need to consider another big question: The answer varies based on a number of factors including your sales price and your contract negotiations. As you think about your bottom line, be sure to consider these costs: Realtor fees: This represents the biggest chunk of cash that eats into your profit potential. You’ll be responsible for paying your agent’s 3 percent commission (unless you can ) and the buyer’s agent’s 3 percent. Both will come off the top of the purchase price. Transfer taxes: There are hefty imposed at both the city and the county level in Los Angeles. Los Angeles County charges $1.10 for every $1,000 of house value, and the charges an additional $4.50 for every $1,000 of value. On a $750,000 sale, that comes out to $4,200 in transfer taxes. No law mandates who has to pay the tax, however, so you may be able to negotiate with the buyer. Title insurance: Again, there’s no legal mandate, but it’s standard practice for the seller to pay for the buyer’s new in southern California. While rates vary, a policy for a $1 million property would typically be . Unpaid property taxes: If you have any outstanding property taxes, you’ll need to pay your portion of that bill at closing. Attorney fees: If you hire a (which is always a wise decision), you’ll need to pay them based on their rate and the number of hours they put into your deal. Concessions: Don’t be surprised if the buyer requests that you cover a portion of their closing costs — or knock some money off the purchase price — if they uncover any necessary repairs during their home inspection. Preparing your home for sale in Los Angeles
Since buying a home in Los Angeles costs so much cash, most buyers are going to need to feel wowed as soon as they see a property. Who wants to pay $750,000 for a place that looks cluttered or ? To stir up a love-at-first-sight feeling in prospective buyers’ hearts, you might want to hire a professional home staging service. varies based on whether you need just a little assistance – editing and organizing, for example – or major help such as renting furniture to outfit a few rooms. It can make a huge difference in how quickly you sell and how much money you make. A 2021 “Profile of Home Staging” report from the found that 23 percent of agents believe that staging helped increase offers by 5 percent. In addition to considering staging services, you should think about what’s underneath the floors and in the walls. A can help you spot potential red flags before the buyer’s home inspection uncovers them. If your agent thinks they’ll lead to concession requests or even be deal-breakers, you might want to just pay for them to avoid any snafus. Gearing up for your listing also involves some paperwork. You’ll need to complete the and share all your knowledge of any defects and issues on the property. You’ll have to complete, too, such as a natural hazard disclosure and Meghan’s Law disclosure. Selling your house with or without a Realtor
If you’re thinking about selling your house in Los Angeles, you’re probably thinking about trying to do it on your own. After all, a 3 percent commission on a $750,000 property means you’ll pay your agent $22,500. However, that is money well spent if you don’t have the ability to take on the responsibilities of a . Opting for an FSBO – – listing means that you will need to craft a compelling listing, , schedule open houses and negotiate with a buyer’s agent. Plus, you’ll still need to pay the buyer’s agent’s commission. Does all that work sound a bit too much? It’s time to find Pricing your home to sell
Once you have a solid understanding of how much you will need to pay to sell your house, it’s time to figure out how to get a buyer to want to pay whatever it takes to get the keys. There are simple and free, but online algorithms aren’t that smart. They don’t know if you updated your kitchen or you installed a new outdoor fire pit. So, instead of relying on technology, ask your agent to talk you through of similar properties that have sold in the last couple of months. What happened a year ago doesn’t matter: The market looks very different now, so it’s important to understand what buyers have been willing to pay – and how quickly they have made their offers – as they stare down 7 percent mortgage rates. Getting to closing day
After you accept an offer and sign the , you still have a bit of work to do to make sure the deal goes through. Make sure you’re answering emails, texts and phone calls from your attorney and your agent to respond to contract revisions and concession requests as quickly as possible. Buyers have been backing out of contracts to a higher degree lately, especially with the rapid rise in mortgage interest rates, so . After you’ve cleared the initial hurdle of a home inspection, things are likely looking good. It’s time to schedule movers, and as your move-out approaches, make sure the home is in good shape for : It should be in what’s called . Be sure to review the — a list of all the closing costs and expenses — that you’ll receive about three days prior to the closing. You can attend the event yourself on the actual closing day, but often you don’t need to show up; your attorney can handle all the final details and make sure you pay all the necessary closing costs. The rest of the are yours. Congratulations, and happy days in your next home — whether it’s across the street or across the country. SHARE: Troy Segal is Bankrate's Senior Homeownership Editor, focusing on everything from upkeep and maintenance to building equity and enhancing value. Related Articles