Buying a home is never to be taken lightly. With considerable financial and emotional stakes involved, it’s important to make the right decisions and weigh all the factors that can impact your investment. This is even more crucial when you’re buying a luxury home in a high end neighborhood like Studio City.
When it comes to luxury properties in California’s San Fernando Valley region, no other place comes close to Studio City. Formerly known as Laurelwood, Studio City is an affluent and historic city best known for its upscale properties, and excellent schools, as well as its proximity to major studios and production companies.
Because the process of buying a home can be overwhelming, however, it is relatively easy for buyers to take a few missteps, some of which can prove quite costly in the long run.
We prepared this guide on the common mistakes to avoid when buying a luxury home, as well as a few tips on how to find the perfect property in Studio City.
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The basic things to know about buying a luxury property
For the most part, buying a high-end home is similar to buying a property within a more standard price range. However, the luxury market can be highly nuanced, so it’s best to be armed with the right preparation and professional guidance.
Here are two of the most significant factors that separate a luxury home purchase from conventional properties:
- Luxury homes are often paid for in cash or jumbo mortgages. Luxury buyers typically pay cash for their purchases. Some, on the other hand, choose to finance their purchase with a jumbo loan. Unlike conventional or conforming home loans, jumbo loans usually exceed the limits imposed on lenders by the Federal Housing Finance Agency. In Los Angeles County, that means any home loan exceeding $1,089,300.
With the considerable amount involved, jumbo loans expose lenders to greater risks. To address this, lenders generally follow more stringent underwriting standards such as higher credit scores, a healthy debt-to-income ratio, and enough funds to cover at least 12 months of payments.
- Many luxury homes don’t appear in popular listing sites. Luxury homes aren’t always listed publicly on the Multiple Listing Services or MLS, which can make finding the right property quite difficult. This is why it is best to work with a trusted real estate agent who specializes in this type of property. Luxury home specialists have access to unlisted properties usually through their network and contacts.
Costly mistakes to avoid when buying a home
The Studio City housing market is quite competitive, and for good reason. The neighborhood boasts a great central location within the city of Los Angeles, and features an eclectic array of luxurious homes with top of the line finishes, spacious lots, and topnotch security.
When there’s tight competition for homes for sale, it’s easy for buyers to get carried by the excitement and make the wrong turns in the homebuying process. Here are some of the most common mistakes to avoid when buying a home:
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Not setting a realistic budget. One easy way to set yourself up for failure is not having a clear and realistic budget. Because luxury residences cost significantly more than your average home or condo, you have to first make sure that you have a clear idea of how much property you can afford before even looking at listings. Aside from factoring in your monthly mortgage payments, the down payment, and closing costs, you should take into account other long-term expenses such as maintenance costs and utility bills, all of which can be considerably higher when compared to more modest properties.
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Overpaying and equating higher prices with higher quality. One of the easiest mistakes that people make when purchasing a luxury home is overpaying. Buyers tend to be easily swayed by their emotions and fall for things such as high-end amenities and exclusive locations without checking for any caveats. Furthermore, inexperienced buyers may also fall victim to a seller’s inflated asking price without first looking into the market value of similar properties in the area.
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Not doing enough research. Another item on our list of crucial mistakes to avoid when buying a home is failing to conduct proper research on the important factors that can affect day to day living, such as proximity to schools, offices, shops, and other places that are important to you. Aside from that, you also have to take a good look at other factors such as the neighborhood’s crime rate, the cost of living, and upcoming developments which can significantly affect the property’s value at resale.
- Overlooking property taxes and Mello-Roos taxes. Property taxes and Mello-Roos taxes are two important factors that many tend to overlook when purchasing a home in Studio City—and several other cities in California for that matter. At present, Studio City has a property tax rate of around 0.8%, which translates to an average of $4,000 per year.
Mello-Roos taxes, on the other hand, are levied on properties located in special tax districts called Community Facility Districts. Mello-Roos taxes are used to fund community infrastructure and services within a CFD, such as schools, museums, parks, hospitals, and police services. Because these taxes can add thousands of dollars to your yearly tax bill, it is important to research and factor them into their budget before closing a home purchase. Not only that, buyers also have to keep in mind that unlike property taxes, Mello-Roos taxes are not based on the value of the real estate property, which means they cannot be written off on one’s tax returns.
On the other hand, it’s also important to know that Mello Roos funds are used in community improvements that can enhance not only the quality of life but also property values in the neighborhood. Weigh the benefits of living in a CFD and decide if they’re worth the costs.
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Not being realistic with your timelines. The process of finding, negotiating, and closing on a property can take longer than expected—especially in a competitive market like Studio City. With this in mind, it’s important to be realistic about your timelines when buying a home, as not allowing enough time for loan approval, inspections, and other contingencies can lead to frustration and disappointment, as well as missed opportunities and added stress.
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Not having a contingency clause in your offer. The home-buying process is not without its risks and misses. It’s important for homebuyers to always be prepared in case a deal doesn’t pan out, or if the process takes longer than anticipated. One way to do this is by including contingency clauses in your offer. This will allow you to back out of the deal and get your earnest money back in case things don’t go as planned or unexpected problems arise. Some of the contingency clauses you can include in your offer include home inspection contingencies, appraisal contingencies, and mortgage contingencies.
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Skipping home inspection. This is one of the biggest mistakes to avoid when buying a home in Studio City, CA. A thorough house inspection is often recommended by real estate agents as it allows you to check for potential problems such as water damage, structural issues, or even mold and pest infestations. These problems can not only endanger your family’s safety, but they can also cost you thousands of dollars in repairs in the long run. It’s easy to think that an expensive home will not have major issues but this is not always the case, especially for older properties. With such a large amount at stake, it’s best to err on the side of caution and make sure you’re getting your money’s worth.
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Not properly vetting the sellers. Another mistake to avoid when buying a home is failing to research the seller’s background. Without the proper investigation, you can end up with a property with undisclosed liens or title issues. Working with an unethical seller might also result in unforeseen expenditures and closing delays that could negatively impact your purchase.
- Not hiring a real estate agent. This is one of the worst missteps you can make when buying a luxury property. As previously mentioned, many luxury homes for sale can’t be found on public listings primarily because the sellers want to keep the sale private. More often than not, the only way you can gain access to private listings is through a Realtor with the right connections in the market.
In addition, financing a luxury home is more complicated than financing a regular home, so you’ll need assistance with the additional paperwork. Hiring a real estate agent—especially one who specializes in luxury real estate—will also help ensure the right representation in negotiations, inspections, repairs, and the like.
Where to buy luxury homes in Studio City, CA
Luxury homes in Studio City range from stunning hillside houses to private estates, as well as mid-century modern architectural gems. These homes are consistently in high demand, as they offer residents a combination of privacy, luxury, and convenience.
Thinking of investing in your very own Studio City luxury home? Here are some of the best Studio City locations for interested buyers:
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Fryman Canyon Estates: Nestled in the very heart of Studio City, Fryman Canyon Estates is an affluent neighborhood best known for its beautiful tree-lined streets and upscale homes. A long-time oasis for celebrities, this neighborhood is situated near Fryman Canyon Park, a popular hiking spot offering panoramic views of the San Fernando Valley. The majority of homes in Fryman Canyon Estates feature modern architectural designs, large yards, and high-end finishes. Aside from its breathtaking views of the valley, Fryman Canyon Estates also offers the best urban conveniences, given the neighborhood’s proximity to the trendy shops and restaurants of Ventura Boulevard, as well as major film studios such as Warner Bros. and Universal.
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Silver Triangle: An upscale community located just north of Ventura Boulevard, Silver Triangle offers an abundance of spacious homes, most of which feature beautiful views of the nearby mountains. Aside from its stellar housing stock, Silver Triangle’s main draw is its privacy and exclusivity, two factors that have made it the neighborhood of choice for many celebrities, corporate executives, and other high net worth residents.
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Woodbridge Park: A quiet neighborhood east of the Tujunga Village Commercial Historic District, Woodbridge Park takes its name from a charming little park and is considered one of the best places to live in Studio City. Conveniently located just minutes from both downtown Studio City and Hollywood, Woodbridge Park has an amazing variety of housing options, most of which were built in the 1930s and have been beautifully maintained, with many featuring updated interiors and modern amenities.
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The Grove: The Grove is a small historic neighborhood in Studio City established on the site of the original Mack Sennett Studios and located directly across the street from the CBS Studio Center. This quiet Studio City neighborhood is mostly made up of condos and flats, with a few single-family homes thrown in as well. One of the key factors behind the desirability and popularity of The Grove in Studio City is its central location, which puts residents just a few steps away from fantastic stores and restaurants on Ventura Boulevard, as well as the famous Studio City Farmers Market, which takes place every Sunday morning on Ventura Place.
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The Longridge Estates: Located on the western edge of Studio City, just south of Ventura Boulevard between Longridge Avenue and Coldwater Canyon Avenue, Longridge Estates is a neighborhood made famous by its abundance of large estates and towering trees. Because of its secluded location, this part of Studio City has little to no passthrough traffic, making it the perfect spot for families with children, as well as those who value peace and quiet.
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Laurelwood: Laurelwood, also referred to as The Donas, is a subdivision of posh, single-family houses built in the Studio City Hills neighborhood back in the 1960s. Located below Mulholland Drive, south of Ventura Boulevard, and east of Laurel Canyon Boulevard, Laurelwood gives residents quick access to West Hollywood. Homes in Laurelwood come in the Mid-Century Modern style, although Mediterranean, Victorian, and Craftsman-style homes can also be found in this part of the city.
Invest in a Studio City, CA luxury home the right way
Get the home of your dreams in Studio City. In finding the perfect property, don’t hesitate to give me, Clinton Wade, a call.
I am the broker and owner of CLUTCH / ABODE, INC., a boutique luxury real estate brokerage in Los Angeles. I have over 20 years of industry experience and have represented both sellers and buyers throughout my entire career.
I specialize in a wide range of residential properties, including multi-million-dollar homes in highly sought-after neighborhoods such as Beverly Hills, BHPO, Trousdale, West Hollywood, Bel Air, Brentwood, and Santa Monica.
Aside from helping you find potential homes, I can also provide valuable insights into any property you’re considering, including information on past sales and current market trends.
I understand that buying a home is a big decision, which is why you can count on me to guide you every step of the way. I’ll be there to answer all of your questions, address any concerns, and provide you with all the information you need to make an informed decision regarding your purchase, as well as help you identify mistakes to avoid when buying a home.
Ready to start your luxury home-buying journey? Give me a call at 310.403.9497 , or send me an email here to get started.