First-Time Home Buyer in Palos Verdes: 6 Things to Know

Perfectly set on a peninsula that juts out into the Pacific Ocean, Palos Verdes is one of Los Angeles’ best-kept secrets. Surrounded by pristine beaches, dramatic clifftops, and breathtaking natural beauty, Palos Verdes offers a quieter lifestyle away from the touristy hustle and bustle of the rest of L.A. The peninsula is made up of the distinct cities of Palos Verdes Estates, Rancho Palos Verdes, and Rolling Hills Estates. Each has its own charms and unique characteristics. Want to learn more about the neighborhoods in Palos Verdes? Click here.

Palos Verdes is the perfect seaside place for those who love the outdoors and want a serene, laidback lifestyle within a strong, tight-knit community. It offers low-density residential housing with plenty of space and privacy while being only 30 miles from Hollywood and Downtown Los Angeles.

As a highly sought-after location, there are several ways to prepare yourself if you consider this your next destination. Here is our guide for the first-time home buyer in Palos Verdes.

1. Get your finances in order

Getting your finances in order is an essential first step in your home search. Get a copy of your FICO score and credit report. There are three main credit bureaus that lenders will check: Experian, Equifax, and TransUnion. Review your credit history carefully and check for any errors and inaccuracies. You need to resolve any negative items or delinquencies because they will significantly impact your credit score, leading to higher interest rates.

Lenders will look at your credit score and history when deciding to give you a loan. Your score will determine how much they will lend you and the interest rates. You can improve your credit score by paying off outstanding debts, paying your bills on time, and reducing your credit card balances. Avoid opening any new debts or credit card accounts in the meantime.

2. Have a pre-approval letter ready to show sellers

Having a pre-approval letter in hand can help set you apart from other buyers and show the seller that you have the financial backing for your offer. Once you have your finances in order, contact a mortgage lender or financial institution to receive pre-approval. You must provide basic financial information, such as your income and employment history. If you meet the lender’s criteria based on the information you give, you’ll get an estimated loan amount of what you qualify can for. You will also need to provide a comprehensive financial history report and supporting documentation.

Once you fill out a formal loan application, the lender will run your credit report, verify the information you’ve given, and evaluate your creditworthiness. If the application is successful, they will provide you with a pre-approval letter with a specific loan amount. Home sellers and sellers’ agents often take offers from buyers with pre-approval letters more seriously.

3. Research the local market

Researching and understanding the Palos Verdes real estate market will better prepare you for the home-buying process and what you can expect. Knowing the current conditions of the market will help you make informed decisions and negotiate more effectively with sellers. You can start by gathering information online and consulting with a trusted local real estate agent. Contact an expert today to learn more about the Palos Verdes and South Bay market!

A knowledgeable real estate agent who specializes in the area will have up-to-date market data and insight on their side. They will evaluate the recent price trends, current inventory levels, and the average time homes are listed for sale on the market before being bought. They can compile a comprehensive price analysis and give you a list of comparable sales, or “CMA’s,” so you’ll know if the price range is within your budget. A local agent can also offer valuable insights into particular neighborhoods and lifestyles.

4. Why you don’t have to put a 20% down payment

While putting down a 20% down payment is often traditional and recommended to avoid primary mortgage insurance, it is not always necessary. First-time homebuyers may be able to put down as little as 3% for a down payment on a new home, depending on the loan they qualify for. This is definitely advantageous if you don’t have the savings to meet the 20% down payment. Even if you do, you may want to keep some of your savings for emergencies or unexpected expenses. Keeping some of the money liquid in your savings give you financial flexibility. If you have high-interest debts, such as student loans or credit card debt, you may want to pay those off rather than putting down a larger down payment for a home.

5. Know the property taxes you have to pay

Property taxes are imposed by local governments to pay for public schools, roads, and other critical infrastructure. When buying a home, you need to be prepared to have additional funds to pay for property taxes. The amount is typically calculated based on the property's value multiplied by the local tax rate. The value of your property is determined by local tax assessors and will not be the same as the price you paid for the home or the price on your private home appraisal done by your lender. Property tax rates vary depending on the location.

Depending on the location and local jurisdiction, certain property tax exemptions or deductions may be available to you as a homeowner. These could include deductions if you installed energy-efficient improvements in your home or exemptions for senior citizens, which could help reduce your overall property tax liability.

6. Work with an experienced real estate agent

As a first-time home buyer, it’s essential to have an experienced real estate agent on your side. Accardo Real Estate can help you navigate the entire home-buying process with confidence. Their knowledge, expertise, and professional network can provide you with the resources and information you need.

Specializing in the luxury and boutique market in Palos Verdes real estate and all across the South Bay, the team of licensed professionals at Accardo Real Estate Associates is highly rated for their integrity and impeccable customer service. Contact them today to get started on the path to your new home.

*Header photo courtesy of Accardo Real Estate


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