The Biggest Downtown Loft Disasters, and How to Avoid Them
The #1 disaster in Downtown real estate is caused by using an out of area agent instead of a Downtown specialist Realtor who is well informed about the unique buildings and issues in Downtown.
The most common disaster that we see for buyer and sellers using out-of-area agents is that the agent does not know what properties just sold in the past few weeks, so the buyer either pays too much or the buyer does not offer enough and loses their dream loft to a more experience Downtown buyer/agent. The out-of-area agent has a very clumsy time just trying to get into the different buildings in Downtown. After a very clumsy and exhausting process, the buyer finally gets into an escrow on an acceptable loft, makes it all the way to the end of the escrow period, and then the home loan company finally checks the building and promptly notifies the buyer with a phone call, “of course we cannot lend on this building. This is an industrial or commercial building. We only do residential loans.” The buyer is devastated by this final straw. The buyer must either pay $100 per day while a loft lender tries to re-do the loan, or the transaction fails and the buyer loses another desirable property. This is the #1 most common preventable disaster in Downtown.
Our office receives phone calls from remorseful buyers all the the time who used an out-of-area agent who did not really know the investment value of the loft and did not understand the lawsuits and other problems with Downtown lofts. The last buyer that I spoke to who purchased a new development directly from the sales office did not know anything about the two lawsuits against the developer, lost parking, future parking problems and health hazards in the neighborhood. The buyer also had no idea that there were cheaper alternatives in the same complex. Meanwhile, another buyer who used the #1 Downtown loft specialist team was in escrow with an amazing resale loft in the same complex, an unadvertised pocket listing for $50,000 less than the loft purchased from the sales office.
There are numerous other unique issues affecting the Purchase or Leasing of Lofts, Condos, and Apartments in the Downtown Los Angeles area. The following are some unique issues for Downtown:
1. Noise and Traffic Issues: Some lofts and condos may be affected by Noise and the inconvenience of Traffic as a result ofthe congestion in the Downtown Los Angeles area. NumerousFreeways also impact living in the Downtown Los Angeles area
2. Air Quality: The air quality in the Downtown LosAngeles area is generally of less quality and more harmful than areas outside of the Downtown Los Angeles area as a result of Automobile Exhaust, Factory Pollution, etc.
3. Mills Act Properties: Certain properties in the Downtown Los Angeles area are affected by the Mills Act Historical Property Program which affects Property Taxes and also involves many Historic Preservation Restrictions. Many buyers do not understand how the Mills Act may or may not save them money on county property taxes.
4. Views: New building projects may block or alter theviews of existing property in the Downtown Los Angeles area. Buyer/Renter cannot rely on the continuation of any particularview after the Purchase/Lease of any real property.
5. Public Transportation: Current and future public transportation projects, such as new Metro stations etc, may interfere with the quality of life in the Downtown Los Angeles area as a result of added Noise, Pollution, and Congestion.
6. Mixed Use Buildings: Many residential units such as“Lofts” and “Condominiums” are located in buildings that were originally built for Other Purposes such as Manufacturing, Warehouse, Retail, Office Space, and Other Uses. As such, there may be an Added Risk of Toxic Contamination in such residential units. Also, new businesses move into such buildings from time to time which may adversely affect the property value of the residential units.
7. Older Buildings: Many older buildings were converted into residential towers, and many of the Original Construction Defects remain if the developer did not correct such Original Defects. For example, Facades of some older buildings have fallen off, Foundations may be defective, Sound-Proofing isoften inadequate, Roof Leakage, Asbestos found in original building areas, Elevators whose manufacturers do not honor the warranties, Floors shifting after construction completion, Bugsfound in wood flooring, etc.
8. Developer Bankruptcy: There are cases in which developers have filed for Bankruptcy after the sale of a buildingis completed and certain amenities were discontinued after aBuyer or Tenant has moved in. Keller Williams, its Broker andAgents, make no claims regarding a Developer’s reputation. Also,reputations of Developers can change over time and may affect thevalue of a building.
Other issues plague buyers who purchase a Downtown loft without using a Downtown specialist Realtor, including Inadequate Parking, Missed Tax Savings, Reduced Quality of Life, City Code and Permit Issues, Misreporting of Square Footage, Upside-Down Owners, High Renter Ratios, Proximity to Homeless and Mentally Ill.
For sellers, many loft sales often fail because the seller uses an out-of-area agent who is not familiar with loft loan and lawsuit issues, and the agent does not know how to properly explain and help with some of the issues and prevent problems with Downtown loft transactions.
For buyers, it is free to get assistance from a Downtown Specialist team with the most experience in helping to prevent these all-too-common disasters. Call Corey Chambers (213) 478-0499 to get started on the right path to a Downtown home purchase.
L.A. Loft Blog, 200 N. San Fernando Rd., #119, Los Angeles, CA 90031
The #1 Downtown buyer’s agent with 19 successful buyer transactions closed in 2013, Corey Chambers is a Realtor®, and member of the Top 6 award-winning, 5-Star Yelp rated team. J.D. Power Award 2012 – Keller Williams Realty ranked Highest in Overall Satisfaction for Home Buyers and Sellers Among National Full Service Real Estate Firms. DRE#01889449