Confessions of a Malibu Real Estate Professional

Malibu Coast Line

If you’re planning on buying a dream home in Malibu, CA, here’s what you can expect.

Your business agent will call me while you are on set in Romania. We tour a few $10-$15 million homes in Latigo & Corral Canyons. You will find these too small for your entourage and insist on having four more bedrooms and two screening rooms. A call to my Guaranteed Rate Affinity Mortgage Broker pre-qualifies you for a super-jumbo jumbo loan of $35,000,000. Your Business Manager and I tour $50,000,000 properties and email you videos.

You hate three, but the fourth you love and quickly post to Instagram. Your publicist calls it a nice starter home in Malibu. The post goes viral just as your business manager and I present an offer. The Seller looks at her offers and responds with a slightly higher counter-offer contingent on her getting to remain living on property while she remodels the Beverly Hills zip code property she is downsizing into. After Romania you are playing Broadway for eight weeks. You accept her counteroffer. She will pay $35,000 per month for 45 prorated days after close of Escrow. The purchase is contingent on your super-jumbo loan getting funded, home inspection and the approval of an independent appraiser.

The seller opens escrow, and you make an earnest money deposit of 3%. You get your first lesson in closing costs as we will hire a small army of home inspectors. They verify that the home is not about to slide into the ocean. In addition to geology, they check for Radon, Mold, Wood-destroying organisms (termites, ants, etc.), and more. Less than a day later, they emailed the reports and bills to your business manager for review and payment: Wine cellar has a crack in the retaining wall, you call in a Foundation Inspector for a deeper look; Geology finds a crack in one of the caissons;  The leaky sink in the third guest room toilet gets a pass. We submit a “Request for Repairs.” The seller’s agent tells us the owner is furious and there’s nothing wrong with her home. Instead of making repairs, seller agrees to buy down your loan interest rate, lowering the interest rate you will pay.

Home insurance is purchased to be effective on the day escrow closes. Home warranty is purchased to cover any mechanical problems with the home. A home warranty is purchased to cover repairs of properly maintained household appliances and mechanical systems that fail due to normal wear and tear.

Your publicist sees you posting on Instagram. While on break from filming, you buy a Patek Philippe watch, diamonds all over it. She DMs you. Your assistant flies back to Switzerland to return it. The loan gets underwritten.

The appraiser ticks all the boxes and says the house is worth the loan. You remove contingencies. Loan is funded. Your funds are transmitted to Escrow. Your Business Manager and I do the final walk-through. Escrow closes, the seller pays lease-back costs. Your business manager hires a decorator. You kill on Broadway.

This is a fictionalized account of a first-time home buying process of a high-value property in Malibu. Names or similarity to people is coincidental. We have tried to keep the numbers and process similar to actual processes. Actual results will vary.

Smaller Malibu House with a pool
Photo courtesy of Unsplash

Everyone wants to live in Malibu, and how can you blame them? The fantastic year-round weather, recreational outlets, upscale shopping spots, world-class dining, and fabulous California lifestyle are hard to replicate anywhere else in the world.

Malibu, CA, is a beachgoer’s paradise, with incredible sunny weather, 21 miles of gorgeous coastline, mountain vistas, and a relaxed vibe centered around the great outdoors. Along with this beachy atmosphere is a coveted real estate scene with stunning modern estates tucked into the hills and beachfront cottages along the coast with incredible views of the waves. Plus, Malibu is only about 30 miles from downtown Los Angeles’ endless amenities. About 13,000 residents live in this oceanfront oasis, including notable celebrities, singers, artists, and entrepreneurs.

Malibu is jam-packed with year-round pastimes and activities. Unique boutiques entice those in need of retail therapy. Food enthusiasts will follow their noses to artisanal bakeries and gourmet food shops and indie cafes. Outdoor adventurers who walk, bike, hike, sunbathe, swim, bodyboard, and surf can all find what they need in Malibu’s hills, mountains, and beaches.

Malibu real estate is always a hot commodity thanks to its promise of seclusion and seaside living. Typically, homes for sale in Malibu see a strong seller’s market because of its highly sought-after location and gorgeous properties. A seller’s market means that more buyers are looking for homes than there are homes available for sale. However, as this summer is winding down, we are seeing the real estate market softening. The average sales prices are dropping and there are less offers per property. This is an excellent time to buy in Malibu.

You can choose from single family homes, condos, townhouses and even manufactured homes with views of the ocean. There are also parcels of land that you can buy. Because of the desirability of Malibu, it’s an excellent investment and can be a lucrative rental property investment.
The average sales price of a single family home hovers around $5.5M, and condos/townhomes are $1.4M.

If you’re enticed by this exciting location, this is a start to buying your first home in gorgeous Malibu.

Prepare for your home buying in Malibu

Illustration of what not to do just before buying a house

Before you start looking for your first home in Malibu, it’s essential to analyze and redirect your spending habits. If you look at your spending behaviors, such as travel, vehicle, and entertainment expenses, you could easily put away enough to save for your first home. It’s all about what you can prioritize.

It’s also important to remember that you must budget for required closing costs, which usually range from 2% to 5% of the loan amount. This is a significant amount that your financial advisor can help you plan for.

Calculate your budget

Money fanned hiding a face

Not everyone can be amongst the home owning residents that enjoy this lifestyle. Before diving into such an enormous, costly decision, determine how much of a house you can realistically afford. The Dahls can help you get pre-approved for a loan, before you focus on the house you want in Malibu. Working with a professional financial advisor can also help you plan out your finances and understand exactly how much home you can afford to invest in.

Ready to get started?

Pick out some currently available properties you like on the Dahl Realty Home locator and reach out to the Dahl Realtors for expert guidance. Specializing in the stunning properties of Topanga, Pacific Palisades, and Malibu real estate, Greg and Jo Dee Dahl are an incredible duo on the luxury real estate scene. Let them be your guides to paradise.

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How to Get Started in Buying Your First Home in Malibu

Malibu home

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.