Choosing a Real Estate Agent to Sell Your Home in NELA

Northeast Los Angeles is a destination for thousands of homebuyers. If you plan to sell, be sure to pick an agent with the right experience and credentials.

In a strong real estate market, as currently exists in Northeast Los Angeles (NELA), it’s easy to imagine one simply needs to throw up a sign and the offers will come in. But it rarely (if ever) works that way. Real estate in Eagle Rock and homes in Highland Park are in demand, but that sure doesn’t mean a seller doesn’t have to perform due diligence to find the right agent. A selling agent will make sure the home is made to be maximally attractive and sell at the best price, working on behalf of the current owners and their best interests.

So what makes the best choice in Realtors? Your ideal selling agent offers the following:

Experience in the area and the types of homes – A good real estate agent in Northeast Los Angeles absolutely will have experience in single family residences because the inventory of homes for sale in Pasadena, Glassell Park, Hermon, Eagle Rock and Highland Park is rich with bungalows, mid-century moderns (MCMs) and Victorian homes. But the condo market in each of these towns is strong as well. Some agents consult with colleagues who specialize in one or the other.

Will share references of past clients – The relative success of a Realtor is defined by what they have sold in the past. Of course, both sellers and buyers need to complete their transactions with some degree of satisfaction. So ask to speak with at least five past clients to learn how well things went: ask about the hunting phase, negotiating, the guidance they offered to find a lender, in the closing process and after the closing.

Will market it using appropriate tactics – The Internet has upended the world of selling homes in that so many first “showings” are done online. So your agent should be adept with photography, videography and placement of that imagery on Facebook, Twitter, Pinterest and YouTube, as well as real estate online portals Zillow, Trulia and Realtor.com. But note that not all tools work for all types of properties in all locales. Ask your agent questions as to what is selected and why. Once the property is posted online, you will be able to see the traffic it gets and perhaps get feedback as well.

Is communicative – How do you prefer to communicate (particularly when at work)? If you want to text, or email, or speak by voice, your Realtor should be able to do the same. You are the customer, after all. If you are at work in Pasadena but your home in Mt. Washington or Garvanza might have a last-minute buyer, minute-by-minute communication can be critical.

Provides gently blunt advice –This is sometimes referred to as the “your children are ugly” conversation. Almost every home seller will need to make physical changes to the property and sometimes accept price compromises in order to get a sales contract. Do not take constructive criticism personally – listen to what your agent knows from his or her work in the field to get rid of a sofa, change a rug, clean out closets or lower your price expectations. They share your ultimate interests – to sell the property – so the advice is always genuine. Your “child” just needed a new haircut and braces, in most cases.

Realtors are like any professional in that no two are alike. Buying and selling real estate demands patience and dedication and, above all, buyers and sellers performing their due diligence to learn more about the background, resources and track record of whichever agent they hire.

NELA Real Estate: Does it Pay to Buy a Fixer-Upper?

Northeast Los Angeles is increasingly popular because of the vintage housing stock. Much is already modernized, but some can still be renovated for profit.

There are two ways to look at buying a fixer-upper in Northeast Los Angeles – NELA, as the locals call it. One is as a flipper, another is as a long-term homeowner. The physical outcome might be the same, where a down-at-the-heels existing home is turned into something brighter, more modern, and of higher value. But the path to getting there might be very different, depending on who is doing the work.

Flippers are, as most people know, professionals (or dabblers who watch a lot of real estate shows on television) who buy fixer-uppers with the sole intent of increasing the home’s value as quickly as possible and therefore to sell it at a profit. They can be very successful with the housing stock in NELA: In 2016, brisk sales of homes in Mt. Washington made it the hottest neighborhood in all of Los Angeles, according to the real estate website Redfin, returning an average gain on value of $312,000 to whomever did the buy-fix-resell on the property. Silver Lake and Los Feliz joined Mt. Washington on Redfin’s national list of the top ten neighborhoods for flips.

Flipping homes in hot neighborhoods isn’t new. Homes in Glassell Park, Highland Park, Garvanza, Hermon and, of course, Eagle Rock, has been a high-profit business for investors for the last ten years with relatively low risk. Why? One thing everyone knows is, homebuyers want into these neighborhoods.

What professionals also know is which renovations will be most attractive to buyers. They also recognize where problems might slow the renovation or prevent it from happening altogether.

The long-term owner might still do well with a fixer-upper, but the economics can be quite different:

Long-term ownership, slower renovation: In some cases, the buyer might not have the budget to complete a renovation before moving in, opting in stead to do it gradually.

Beds and baths might matter more than the kitchen: If the buyer has three children with a fourth on the way – the attractiveness of schools in places like Eagle Rock, Glassell Park, Highland Park, Garvanza and Hermon generally draws families – they are thinking more about where everyone sleeps and will do their homework than if the kitchen is brand new. So where a flipper might factor in for a $30,000 or more renovation of a 1980s kitchen, the buyer-occupant might be less concerned about white appliances and an aging Formica countertop.

D-I-Y: Does the homebuyer have carpentry skills? Does he or she at least know how to paint, how to choose finishes, and perhaps even the architectural acumen to reconfigure walls and stairwells that can turn a tired home into something terrific? The homebuyer-occupant can save a bundle on doing some things by themselves.

Some tips from “This Old House,” the long-running television and magazine advisors on renovations, include:

• Build in a 20 percent cushion on your budget to cover “nasty surprises.”

• Strategic thinking about design, materials and timing “can cut costs without cutting corners.”

• A smaller kitchen can be “expanded” with more efficient space use in lieu of moving walls.

• Light tubes can bring in daylight to dark spaces more cheaply than installing windows.

• Recycling center (e.g., Habitat for Humanity’s Re-Stores) offer salvaged building materials such as doors and skylights at half price.

• Do your own demolition, even it it’s just lifting up old carpet. Books provide advice on how to do it without causing a disaster.

• Renovate in the winter: Contractors are simply busier, and more expensive, in the summer.

Is renovating right for you – or do you prefer for the work to be done before you buy? Consult Tracy King at 626-827-9795, a longtime NELA-based Realtor who has been a vital part of the area’s ascendancy to one of the most desired places to live in Los Angeles.

The Rules of Attending Open Houses in Northeast LA

Shopping for a home is fun for many people. And while signs for open houses suggest come-one-come-all, you should be both polite and strategic.

The real estate sales technique of open houses has taken a hit in recent years. With online listings – complete with photos and videos – much of the preliminary shopping individuals do is from their personal computer.

But one can get much more out of the experience of actually being in the home, getting a sense of the quality of materials, the views out of windows, and the vibe of a neighborhood. You want to know about Glassell Park, Highland Park or Eagle Rock if you’ve never been there before.

For instance, throughout Northeast Los Angeles, homes in Echo Park and Highland Park, as well as real estate in Atwater Village and Eagle Rock, are unlike homes anywhere else. They have to be seen to be understood.

Open houses are sometimes the route for people just beginning their search, such as someone who has yet to sign on with a representing broker.

Just be advised on some rules and strategies for attending open houses:

Visit on your own time (without your broker)? If you have a signed exclusive buyer-broker agreement, it’s conceivable that your agent would provide you with a list of open houses to visit on your own. It’s OK to go solo to open houses just because you happen to be driving through Garvanza or Hermon one day, but it would immensely complicate the process if you decided to write an offer without your Realtor involved. Just be upfront with your agent and the brokers representing the homes you visit about your standing buyer-broker agreement; your agent might even give you a handful of his or her business cards that, should you find a home interesting, you can connect your representative with the open house host agent.

Reveal minimal information about yourself. This is less about etiquette and more about preserving your negotiation leverage. If you say too much about your financial situation, if your offer to buy would be contingent on selling an existing home – or stating how much you love a place – each of those things provide information that is useful to the seller’s agent. Better to let your own agent handle that communication later. Rule of thumb: the less said the better.

Be conversational but not overly enthusiastic or interruptive. It’s certainly ok to ask questions (e.g., “Will the dining room chandelier stay?,” or “When was the electrical updated?”), as well as to make mild compliments (“That’s a lovely fireplace”). But don’t gush (“Oh, I just LOVE this kitchen!” or “I’ve had my eyes on Mt. Washington for a long time!”), as it might reveal a willingness to pay more. Also, if the seller’s broker is engaged in conversation with someone else it’s perfectly ok to walk through the home unattended.

Respect private places. Sometimes a door will be closed; unless the seller’s broker opens it assume it’s a room that is not for viewing in the open house stage. You will be able to see it later if you are a serious buyer.

Look in your ballpark. If you want to see something outside of what you can afford, that may become apparent within a short conversation with the seller’s broker. It wastes their time and distracts them from doing their job, which is to find an interested and qualified seller. It helps to know what a lender has pre-qualified you for in terms of a mortgage before you even look at something. Besides, why disappoint yourself with something that’s inaccessible?

You should understand also that if you step inside an open house you are technically a sales prospect if you are unaccompanied by a broker. So if you are seriously considering buying a home, you should be game for that conversation.

If you have more questions, contact an experienced realtor that has hosted and attended countless open houses while diligently working in real estate in the NELA area.

The Benefit of an Army of Agents Selling Your Home

There’s an art to selling real estate, but the science of numbers comes into play for any great real estate agent.

It’s no secret that the communities that comprise Northeast Los Angeles – Eagle Rock, Highland Park, Mt. Washington and Garvanza, to name a few – represent a hot real estate market. Homes for sale in Glassell Park can draw several dozens of prospective buyers to an open house. Homes in Pasadena almost always sell quickly and with multiple offers. How does that work exactly?

Selling real estate is a numbers game. The more potential buyers that see your listing, the more inquires we receive. The more inquiries we receive, the more likely we are to have a lot of prospects show up to an open house or request a showing. The more showings, the more offers. The more offers, the chance of achieving an over-the-asking-price offer for your home.

While it is vital to have a great website with superior marketing and visibility, that isn’t the only way experienced and skilled realtors create buzz about your home. There’s always the time-tested method of “word of mouth”. That’s right. Even in the age of the Internet, networking and making personal connections is still important. Why? Good question.

As one would expect, real estate agents have a good amount of influence over the homebuyers they represent. And why shouldn’t they? If a homebuyer has performed their due diligence, they know and trust that the realtor is an expert who is looking out for the buyer’s best interest, not their own. That includes having an effective marketing plan to make your home sell quickly and for the right price.

Real estate agents can guide their buyers one way or another, depending on whether they believe a home or neighborhood is going to meet their client’s needs.

This is why it’s important for home sellers and their agents to not only market to consumers, but also to make sure the local community of real estate agents also know about the home. The larger the network of agents you have spreading the word, the more potential buyers those agents can share your home with. This, after all, is the true meaning of “word of mouth”.

For this reason and more, an experienced agent should be part of a large network of real estate professionals who operate throughout the Los Angeles area, not just the Northeast. This is substantial benefit for you as a seller because it means the agent is not limited to marketing your home to only local buyers. Through these important “viral” networks, out-of-the-area buyers who are looking to relocate into our region can also be reached.

An experience real estate agent should actively market your home directly to interested homebuyers, as well as to their own network of agents, working on your behalf to spread the good word about your home. The more interest they can generate through promotion, the more buyers and potential offers they can attract. That, after all, is the name of the game. At least in realm of home selling, more is more!

Understanding the Real Estate Agent’s Commission for NELA Homebuyers

The agent compensation system in Northeast Los Angeles is designed to ensure smart, smooth transactions that are fair to both buyers and sellers.

The process of purchasing a home, particularly for first-time homebuyers, is somewhat opaque. You sign a contract with a broker, who you might view as your shopping friend, and yet you are not obligated to pay them for anything. At no point in the process do you cut a check to your real estate agent, even if they spend dozens of hours with you in the home purchasing process.

Let’s face it, it isn’t difficult for an agent to spend a dozen hours with a client. It can take a half a day to look at various homes for sale in Glendale, for instance. Logging another several hours looking at nearby homes in Glassell Park or Burbank makes sense.

This is no different in Northeast Los Angeles (NELA) as it is in Bel Air or San Francisco or Chicago or New York. In the American system of house buying, the actual compensation to both agents, those representing buyers and sellers, is somewhere between 5% and 8% of the sale price of the home. It is paid for by the seller and split 50-50 between the agents, typically (although that occasionally gets negotiated differently between them).

So, for example, if you buy a home in Eagle Rock for $650,000 the commission might be 6%. The seller then pays out $39,000 to the brokers, who then each get (give or take) $19,500 for their work. Nice, right? Keep in mind they might spend many hours in showing the home to a variety of buyers (weekdays, evenings and weekends), all while directing preparation of the home for sale, or showing a buyer 20 or 30 other properties after spending hours on research (in towns adjoining this one, such as Mt. Washington, Hermon, Glassell Park, Highland Park, Garvanza and others), negotiating prices, drawing up contracts and guiding buyers and sellers through the closing. Also, Realtors rent offices, employ administrative and marketing staff, and absorb the marketing expenses (photography, videography, signs, listings, even staging costs in some situations). Those brokers’ fees also may be split between agents who work for brokers. Brokers are well compensated, but not as much as is often mistakenly assumed.

The more successful agents know from their education and experience how to price a home fairly and effectively, how to work out issues in negotiations, and how to guide a buyer or seller through the paperwork, legal and financial/lender processes.

Also, sometimes a home doesn’t sell, a buyer doesn’t buy, and no one earns a commission. That’s the way it can work in real estate.

From time to time real estate agents try different methods of compensation. Alternatives to this system – each of which have clear disadvantages – could be:

Pay a flat fee – Say you determine it’s worth paying an agent $5,000 to help you find or sell a $750,000 house. But the other party has to agree to something similar and it’s highly unlikely they would do that. In cases where someone is purchasing a home from a family member or friend this might be a workable plan. Or not.

Pay a [lower] fee that offers no incentive to move quickly – This falls under the rule that “you get what you pay for.” If an agent is working to earn 1% on the sale price, will they be sufficiently incentivized to give a buyer or seller expeditious service? When the fee is at a market rate, the agents are collectively interested in making the sale happen as quickly as possible.

Pay by the hour – If a buyer’s agent agrees to this, presumably the difference between the hourly fee and what would be the 3% (more or less) of the buyer’s agent would be value returned to the buyer. But that would incentivize an inefficient process, such as seeing too many homes that are inappropriate or, for the seller, bringing in too many prospects who aren’t really qualified buyers.

For more on homes available in NELA, speak with a realtor. Experienced NELA realtors are able to outline the terms of working with them under traditional fee structures.

Why be Pre-Approved for a Home Loan When Still Shopping for a House

It’s almost a requirement for Realtors and sellers to recognize you as a serious buyer by being pre-approved. But in fact, you really are just “pre-qualified.”

For most people the fun part of looking for your next home is seeing what different houses and neighborhoods look like. Homes for sale in Mt. Washington, for instance, look nothing like Echo Park homes. Streets in Highland Park don’t even remotely resemble neighborhoods in Atwater Village. Enjoyable as it is, however, it still take some effort.

But the real work – and what’s most financially impactful towards your goal of buying a home in Northeast Los Angeles – is getting the right financing. It helps to at least get pre-qualified for a loan before you make an offer, and better yet, before you even look.

Reasons for preapproval – If you are shopping for a home in Mt. Washington, Garvanza or Eagle Rock and you find something that is well priced, you know the competition can be high to get your offer accepted over other bidders. So it’s to your advantage for your agent to be able to say, “the buyer is preapproved.” If the seller is motivated (i.e., they are wary of waiting a few weeks to learn the highest bidder cannot qualify for a loan) they might actually go with a lower offer from a buyer who appears to be more solid.

What the doubters say – A pre-approval isn’t a certainty that you will get the mortgage, much less at a particular rate and favorable set of terms. The process of getting a pre-approval involves minimal documentation just to get you started, to know you are “in the ballpark.” It identifies a price range that is appropriate for your level of income and probably a credit check that would identify “red flag” issues. But because the documentation requirements for homes have gotten much more stringent in the past decade (post-2008 financial crisis), it will be necessary to provide previous years’ tax returns, and as to answer questions on sources of income (e.g., “What was the source of this $30,000 deposit last month?”).

How to do it – Long gone are the “no documentation” loans that existed prior to 2008. That’s probably a good thing, given how most homebuyers want to be able keep their homes, enjoy their time there, and accumulate value in the asset over the years to come. The documentation you will need are the following: Proof of income (W-2 statements, most-recent pay stubs, and proof of any other sources of income such as alimony, pay bonuses, royalties or residuals); verification of employment (with a phone call to your employer and possibly a most-recent past employer); proof of assets (investment account statements, savings of any kind, appraisals of property you might already own and, if you are receiving assistance on the down payment from a relative or friend, a letter stating it is a gift and not a loan).

Lenders will usually give the best interest rates to people with a credit score above 740 – that holds true whether you’re shopping in Hermon, Glassell Park or Highland Park as well as anywhere else in Northeast Los Angeles. But if you fall below that, it doesn’t mean you can’t get a loan. It just means you might have to settle for less-favorable terms.

Note that with self-employed individuals, the requirements for documentation of income are significantly higher. People who consider going out there on their own are highly advised to get a mortgage and buy a new home they think they’ll be able to afford before taking that step.

A NELA Realtor with experience in home transactions and the lending process can provide referrals on lenders and mortgage brokers – and show you homes you might find interesting.

Understanding Home Closing Costs in Southern California

Real estate closings involve multiple parties performing several tasks to ensure legal transfer of the property, plus a solid loan contract with your lender.

Looking to buy a house in Northeast Los Angeles – NELA, as it is known – but unclear of the process and amount of money needed? A licensed Realtor can help you figure it out. But for ballpark purposes, it might help to do some preliminary study on your own.

NELA is, after all, one of the hottest markets in all of Los Angeles. Not just the obvious neighborhoods like Glendale and Pasadena, but in smaller, lesser-known neighborhoods. Homes for sale in Garvanza are being bought fast. Real estate in Hermon is always in demand.

You might be in love with the schools in Mt. Washington, the housing inventory in Highland Park or the neighborhoods of Eagle Rock, but you have to work through some of these details before you can call any of those places home.

Much is made about closing costs in real estate transactions, and yet these vary for several reasons. The single largest expense, the real estate commission, is covered by the seller (who pays the commission in a split between the buyer’s and the seller’s agents).

Fees the buyer will need to pay at the closing come with some variation; the following are the largest of such costs at closing:

Homeowner association fees – If the property is a condominium the seller might be in arrears with the homeowners association, in which case you will find this out before entering the sales contract. In distressed circumstances (foreclosures, near-foreclosures and short sales), these fees might amount to thousands of dollars.

Private Mortgage Insurance (PMI) – If your down payment is less than 20% of the price of the property, you will be required to insure the mortgage at between 0.3% and 1.15% of the loan amount.

Origination fee to the lender – Even while you fix your dreams on a Victorian in Glassell Park, a two-unit duplex in Garvanza or fixer-upper in Hermon, you have to go through a large amount of paperwork with a would-be lender to prove your creditworthiness. And yes, they do charge fees at closing for all that fun.

Points – These enable you to change the terms of the loan to your favor if you pay one or more percentage points toward the mortgage amount. If you have the cash and plan to own the property for a decade or longer, paying a point or two upfront can save you much more over time.

Prorated property tax – As the LA tax year begins on July 1, you will need to cover whatever remains in the year in advance from the day of the closing.

Insurance premiums – Protecting the property (as required by all lenders) from damages and liability is required at closing also.

Escrow fees – Third parties performing escrow services need to be compensated for that work. Note that fee structures are not fixed or regulated by the state of California, but are generally set according to the size of the transaction.

Technically speaking there are multiple fees that will be part of the buyer’s closing costs but which the seller automatically pays for in a reimbursement. These include the city transfer tax, documentary transfer tax to title and the owners title policy. Multiple other fees under $500 (average) costs include the lender appraisal fee, credit report fee, prorated HOA fees, courier services related to the transaction, notary services, archiving fees, recording trust deed (to title), and loan tie-in fees.

Note that the process of looking at houses and negotiating a price, and perhaps that of qualifying for a loan, are typically more time consuming than the closing itself. An experienced realtor will be able to advise you on all these details, invariably to the point where you are told how much money to bring to the closing and in what form.

Understanding the Real Estate Agent’s Commission for NELA Homebuyers

The agent compensation system in Northeast Los Angeles is designed to ensure smart, smooth transactions that are fair to both buyers and sellers.

The process of purchasing a home, particularly for first-time homebuyers, is somewhat opaque. You sign a contract with a broker, who you might view as your shopping friend, and yet you are not obligated to pay them for anything. At no point in the process do you cut a check to your real estate agent, even if they spend dozens of hours with you in the home purchasing process.

Let’s face it, it isn’t difficult for an agent to spend a dozen hours with a client. It can take a half a day to look at various homes for sale in Glendale, for instance. Logging another several hours looking at nearby homes in Glassell Park or Burbank makes sense.

This is no different in Northeast Los Angeles (NELA) as it is in Bel Air or San Francisco or Chicago or New York. In the American system of house buying, the actual compensation to both agents, those representing buyers and sellers, is somewhere between 5% and 8% of the sale price of the home. It is paid for by the seller and split 50-50 between the agents, typically (although that occasionally gets negotiated differently between them).

So, for example, if you buy a home in Eagle Rock for $650,000 the commission might be 6%. The seller then pays out $39,000 to the brokers, who then each get (give or take) $19,500 for their work. Nice, right? Keep in mind they might spend many hours in showing the home to a variety of buyers (weekdays, evenings and weekends), all while directing preparation of the home for sale, or showing a buyer 20 or 30 other properties after spending hours on research (in towns adjoining this one, such as Mt. Washington, Hermon, Glassell Park, Highland Park, Garvanza and others), negotiating prices, drawing up contracts and guiding buyers and sellers through the closing. Also, Realtors rent offices, employ administrative and marketing staff, and absorb the marketing expenses (photography, videography, signs, listings, even staging costs in some situations). Those brokers’ fees also may be split between agents who work for brokers. Brokers are well compensated, but not as much as is often mistakenly assumed.

The more successful agents know from their education and experience how to price a home fairly and effectively, how to work out issues in negotiations, and how to guide a buyer or seller through the paperwork, legal and financial/lender processes.

Also, sometimes a home doesn’t sell, a buyer doesn’t buy, and no one earns a commission. That’s the way it can work in real estate.

From time to time real estate agents try different methods of compensation. Alternatives to this system – each of which have clear disadvantages – could be:

• Pay a flat fee – Say you determine it’s worth paying an agent $5,000 to help you find or sell a $750,000 house. But the other party has to agree to something similar and it’s highly unlikely they would do that. In cases where someone is purchasing a home from a family member or friend this might be a workable plan. Or not.
• Pay a [lower] fee that offers no incentive to move quickly – This falls under the rule that “you get what you pay for.” If an agent is working to earn 1% on the sale price, will they be sufficiently incentivized to give a buyer or seller expeditious service? When the fee is at a market rate, the agents are collectively interested in making the sale happen as quickly as possible.
• Pay by the hour – If a buyer’s agent agrees to this, presumably the difference between the hourly fee and what would be the 3% (more or less) of the buyer’s agent would be value returned to the buyer. But that would incentivize an inefficient process, such as seeing too many homes that are inappropriate or, for the seller, bringing in too many prospects who aren’t really qualified buyers.

For more on homes available in NELA, speak with a realtor. Experienced NELA realtors are able to outline the terms of working with them under traditional fee structures.

Why be Pre-Approved for a Home Loan When Still Shopping for a House

It’s almost a requirement for Realtors and sellers to recognize you as a serious buyer by being pre-approved. But in fact, you really are just “pre-qualified.”

For most people the fun part of looking for your next home is seeing what different houses and neighborhoods look like. Homes for sale in Mt. Washington, for instance, look nothing like Echo Park homes. Streets in Highland Park don’t even remotely resemble neighborhoods in Atwater Village. Enjoyable as it is, however, it still take some effort.

But the real work – and what’s most financially impactful towards your goal of buying a home in Northeast Los Angeles – is getting the right financing. It helps to at least get pre-qualified for a loan before you make an offer, and better yet, before you even look.

• • Reasons for preapproval – If you are shopping for a home in Mt. Washington, Garvanza or Eagle Rock and you find something that is well priced, you know the competition can be high to get your offer accepted over other bidders. So it’s to your advantage for your agent to be able to say, “the buyer is preapproved.” If the seller is motivated (i.e., they are wary of waiting a few weeks to learn the highest bidder cannot qualify for a loan) they might actually go with a lower offer from a buyer who appears to be more solid.

• • What the doubters say – A pre-approval isn’t a certainty that you will get the mortgage, much less at a particular rate and favorable set of terms. The process of getting a pre-approval involves minimal documentation just to get you started, to know you are “in the ballpark.” It identifies a price range that is appropriate for your level of income and probably a credit check that would identify “red flag” issues. But because the documentation requirements for homes have gotten much more stringent in the past decade (post-2008 financial crisis), it will be necessary to provide previous years’ tax returns, and as to answer questions on sources of income (e.g., “What was the source of this $30,000 deposit last month?”).

• • How to do it – Long gone are the “no documentation” loans that existed prior to 2008. That’s probably a good thing, given how most homebuyers want to be able keep their homes, enjoy their time there, and accumulate value in the asset over the years to come. The documentation you will need are the following: Proof of income (W-2 statements, most-recent pay stubs, and proof of any other sources of income such as alimony, pay bonuses, royalties or residuals); verification of employment (with a phone call to your employer and possibly a most-recent past employer); proof of assets (investment account statements, savings of any kind, appraisals of property you might already own and, if you are receiving assistance on the down payment from a relative or friend, a letter stating it is a gift and not a loan).

Lenders will usually give the best interest rates to people with a credit score above 740 – that holds true whether you’re shopping in Hermon, Glassell Park or Highland Park as well as anywhere else in Northeast Los Angeles. But if you fall below that, it doesn’t mean you can’t get a loan. It just means you might have to settle for less-favorable terms.

Note that with self-employed individuals, the requirements for documentation of income are significantly higher. People who consider going out there on their own are highly advised to get a mortgage and buy a new home they think they’ll be able to afford before taking that step.

A NELA Realtor with experience in home transactions and the lending process can provide referrals on lenders and mortgage brokers – and show you homes you might find interesting.

Understanding Home Closing Costs in Southern California

Real estate closings involve multiple parties performing several tasks to ensure legal transfer of the property, plus a solid loan contract with your lender.

Looking to buy a house in Northeast Los Angeles – NELA, as it is known – but unclear of the process and amount of money needed? A licensed Realtor can help you figure it out. But for ballpark purposes, it might help to do some preliminary study on your own.

NELA is, after all, one of the hottest markets in all of Los Angeles. Not just the obvious neighborhoods like Glendale and Pasadena, but in smaller, lesser-known neighborhoods. Homes for sale in Garvanza are being bought fast. Real estate in Hermon is always in demand.

You might be in love with the schools in Mt. Washington, the housing inventory in Highland Park or the neighborhoods of Eagle Rock, but you have to work through some of these details before you can call any of those places home.

Much is made about closing costs in real estate transactions, and yet these vary for several reasons. The single largest expense, the real estate commission, is covered by the seller (who pays the commission in a split between the buyer’s and the seller’s agents).

Fees the buyer will need to pay at the closing come with some variation; the following are the largest of such costs at closing:

• • Homeowner association fees – If the property is a condominium the seller might be in arrears with the homeowners association, in which case you will find this out before entering the sales contract. In distressed circumstances (foreclosures, near-foreclosures and short sales), these fees might amount to thousands of dollars.

• • Private Mortgage Insurance (PMI) – If your down payment is less than 20% of the price of the property, you will be required to insure the mortgage at between 0.3% and 1.15% of the loan amount.

• • Origination fee to the lender – Even while you fix your dreams on a Victorian in Glassell Park, a two-unit duplex in Garvanza or fixer-upper in Hermon, you have to go through a large amount of paperwork with a would-be lender to prove your creditworthiness. And yes, they do charge fees at closing for all that fun.

• • Points – These enable you to change the terms of the loan to your favor if you pay one or more percentage points toward the mortgage amount. If you have the cash and plan to own the property for a decade or longer, paying a point or two upfront can save you much more over time.

• • Prorated property tax – As the LA tax year begins on July 1, you will need to cover whatever remains in the year in advance from the day of the closing.

• • Insurance premiums – Protecting the property (as required by all lenders) from damages and liability is required at closing also.

• • Escrow fees – Third parties performing escrow services need to be compensated for that work. Note that fee structures are not fixed or regulated by the state of California, but are generally set according to the size of the transaction.

Technically speaking there are multiple fees that will be part of the buyer’s closing costs but which the seller automatically pays for in a reimbursement. These include the city transfer tax, documentary transfer tax to title and the owners title policy. Multiple other fees under $500 (average) costs include the lender appraisal fee, credit report fee, prorated HOA fees, courier services related to the transaction, notary services, archiving fees, recording trust deed (to title), and loan tie-in fees.

Note that the process of looking at houses and negotiating a price, and perhaps that of qualifying for a loan, are typically more time consuming than the closing itself. An experienced realtor will be able to advise you on all these details, invariably to the point where you are told how much money to bring to the closing and in what form.