Are you looking for your first home in Malibu, California? Here are some tips to help you through the process.

Malibu, CA, is a gorgeous beachfront city with 21 miles of stunning coastline along the waves of the Pacific Ocean. Malibu lies about 30 miles west of Los Angeles proper and is home to approximately 13,000 lucky residents. Malibu takes up approximately 20 square miles of beachfront and foothills alike and is home to many celebrities, entrepreneurs, and artists.

If you’re interested in purchasing your first home in this beautiful coastal oasis, read on for The Dahl Realtors’ guide to making sure the process goes smoothly.

The appeal of Malibu

Malibu real estate is always a hot commodity, but this prime real estate location has been especially popular in the last two years as the ability to work remotely has spread like wildfire, and people have discovered they can live almost anywhere they want.

The median home price for single-family properties, according to the California Association of Realtors monthly market report, is $4.3 million as of July 2022. Homes for sale in Malibu often experience an aggressive seller’s market because of its highly-sought after location and desirable properties. There is typically a greater number of buyers looking for their dream homes than there are houses available for sale. In seller’s markets like this one, bidding wars are common, and sellers often reap sales that are tens or even hundreds of thousands of dollars more than they originally asked for.

Along with its beautiful coast, Malibu is packed with things to do all year round. Retail therapy is available via curated boutiques, artisanal gourmet shops, indie cafes, and art galleries, to name a few. Hikers, runners, bikers, surfers, and sunlovers descend upon its hills, mountains, and pristine beaches to celebrate the great outdoors.

If this sounds like heaven to you, you’re not alone. Here are some tips to help you become a proud, first-time owner of a Malibu luxury home.

1. How to define a first-time home buyer

First, it’s essential to understand who qualifies as a first-time home buyer. You might be surprised! According to the U.S. Department of Housing and Urban Development (HUD), a first-time home buyer is:

  • Someone who has not owned a principal residence in the last three years. Additionally, if you are married and you have owned a house by yourself, but your spouse was not listed as an owner of that house, you and your spouse as a couple will qualify as first-time homebuyers.
  • A single parent who has only ever owned one residence with their former spouse during the time they were legally married.
  • An ousted stay-at-home spouse who has only owned a residence with his or her spouse.
  • A person who has only ever owned a principal residence that is not affixed in perpetuity to a fixed foundation (such as a mobile home).
  • A person who has only ever owned a property that currently lies out of compliance with building codes and that cannot currently be brought up to compliance for any amount that’s less than the cost of constructing a permanent establishment.

If you meet the above criteria, you may be eligible to receive access to tax breaks, specialized loans, and other benefits.

2. Refocus your spending and saving habits

It’s time to refocus your spending habits and direct them toward a home-buying fund. Even if you have perfect credit that qualifies you for a 3% down payment and low interest rates, you’ll need a significant amount of savings to make a down payment on one of the homes for sale in Malibu.

As a home buyer, you’ll also need to pay closing costs. Closing costs are required to finalize a mortgage, and they usually range from 2% to 5% of the total loan amount. If your credit rating is anything less than excellent—especially for luxury-level homes—you’ll more than likely be hit with a minimum down payment of 20%, which will be rather significant.

3. Calculate your budget

woman operating a calculator
Photo courtesy of Pexels

Photo courtesy of Pexels

Sure, Malibu is a much-desired locale, but not everyone can afford to live there, at least not in a home ownership scenario. Before you make such a life-changing decision, make sure to determine exactly how much of a house you can actually afford. There are many online home affordability calculators to determine a current budget based on your income, debt, down payment, and credit score. Work with a financial planner to determine how much home you can reasonably afford. Your Malibu real estate agent can also help you determine which features and amenities will fit into your desired home type and location according to your budget.

4. Obtain a pre-approval letter

A pre-approval letter is a mortgage lender’s offer to loan a home buyer a certain amount of money under particular terms. It shows a seller that you are a viable, prepared buyer, and it gives you an edge over competitors who haven’t yet taken this step. This can be a considerable advantage in a situation where the home of your dreams receives multiple competing offers.

5. Invest in a home inspection

Man with clip-board
Photo courtesy of Shutterstock

Don’t skimp on investing in a home inspection. A professional inspection involves a thorough examination and assessment of the home’s structure and mechanical systems, inside and out. Make sure you specify that the inspection covers chemical/gas assessments (such as radon) as well as signs of mold or pests (such as termite infestation). Ensure the inspector has access to every part of the house, including the roof and crawl spaces. Make sure you attend the inspection so you can ask questions about any findings that are unclear, and review the inspector’s report to make sure you understand all of it.

6. Purchase adequate home insurance

Home Insurance form

Photo courtesy of Pexels

Lenders require buyers to purchase homeowners insurance before a purchase can be finalized. Homeowners’ insurance covers costs to repair or replace the home and its contents if they’re damaged by an incident covered by the policy. These incidents include weather-related events like tornados, hurricanes, floods, tsunamis, and earthquakes. Homeowners insurance also provides coverage if you’re held responsible for an accident or injury. At the very least, you should purchase enough insurance to cover the cost of rebuilding your Malibu real estate if it is destroyed.

Ready to get started?

If you’re hoping to find paradise, The Dahl Realtors can help you find it. This professional team is eager to help seasoned home buyers and first-timers secure the properties of their dreams among the beautiful homes for sale in Malibu. Reach out today to get started!

*Header photo courtesy of Shutterstock


Title: How to Get Started in Buying Your First Home in Malibu

url: how-to-get-started-in-buying-your-first-home-in-malibu

meta: Are you looking for your first home in Malibu, California? Here are some tips to help you through the process.

Shares:

Leave a Reply