Q&A: Michael Edlen

With more than 30 years of experience in the industry, real estate consultant Michael Edlen answers questions from readers.

Do we still have to hire a broker to buy a house or can we do it ourselves?
I heard the rules changed.

Yes, a buyer can purchase a house without hiring an agent. They always could. However, considering the procedures around real estate transactions have evolved, and with no more seller offers of buyer-broker compensation, more buyers might choose to represent themselves in the future. However, here are some key points to consider:

1. Self-Representation: Buyers can navigate the home-buying process independently, handling tasks like searching for properties, negotiating offers and managing paperwork. They would also need to be responsible for arranging and being fully involved in the inspection process, resolution of any issues or concerns arising out of seller disclosures, and various inspections.
2. Resources Available: There are numerous online platforms and resources to help buyers with market research, pricing and legal documents. Buyers can also find information about the inspection process, obtaining of insurance and financing, etc.
3. Considerations: While saving on agent commissions can seem appealing, buyers should be aware of the complexities of real estate transactions. Professional agents provide valuable expertise and negotiation skills, and may minimize the making of any costly mistakes or omissions. Also, sellers may be quite concerned about being in escrow with a buyer who does not have their own representation.
4. Legal and Financial Guidance: It may be wise to consult with a real estate attorney or financial advisor to navigate specific legal and financial aspects. Unless one is experienced in residential home sales and purchasing, having someone in your corner can be invaluable.

Ultimately, whether to hire an agent depends on the buyer’s comfort level with the process, their knowledge of the market, and willingness to take some personal, legal and financial risks.

How common are bidding wars in today’s market, especially in the Palisades?

While multiple offers are fewer today than they were a couple of years ago when interest rates and prices were lower, bidding wars are still common in competitive real estate markets like the Palisades, especially for desirable properties. Factors contributing to this include:

1. High Demand: Limited inventory and strong demand still lead to multiple buyers vying for the same property, resulting in upward pressure on prices. This is especially the case for homes selling below $4 million today.
2. Desirable Location: Pacific Palisades is known for its attractive family lifestyle, coastal views, and proximity to schools and recreational amenities, which intensifies competition.
3. Market Conditions: Economic factors, interest rates and buyer sentiment play significant roles. More than 25% of the sales are all-cash buyers, and even though interest rates are nowhere near as low as they were a few years ago, they are once again below the long-term average. Lenders have evolved solutions to creatively help more potential buyers become approved for financing, which, in turn, keeps the pressure on buyers to compete with others.
4. Luxury Market Dynamics: The luxury segment often experiences bidding wars due to affluent buyers looking for move-up properties.For the most accurate and up-to-date information, consulting a local real estate expert can provide insights specific to current market trends and neighborhood differences in Pacific Palisades.

For the most accurate and up-to-date information, consulting a local real estate expert can provide insights specific to current market trends and neighborhood differences in Pacific Palisades.

We are thinking of selling our home in the next two years. What are the most
important things we can do in the meantime to potentially raise the value?

Here are some effective strategies to potentially raise your home’s value before selling:

Enhance Curb Appeal: Improve the exterior by maintaining landscaping, painting the front door and ensuring the property looks inviting.

Update Interior Spaces: Consider minor renovations, such as fresh paint, updated fixtures or new flooring. Kitchens and bathrooms typically yield the highest returns on investment.

1. Energy Efficiency Improvements: Upgrade windows, doors, insulation or appliances to make your home more energy-efficient, which can attract eco-conscious buyers.
2. Declutter and Depersonalize: Clear out personal items and unnecessary clutter to help potential buyers envision themselves in the space.
3. Regular Maintenance: Keep up with regular maintenance tasks, like servicing the HVAC system, fixing leaks and addressing any cosmetic issues.
4. Smart Home Technology: Adding smart home features, such as smart thermostats, security systems or lighting, can appeal to tech-savvy buyers.
5. Outdoor Living Spaces: Enhance outdoor areas with patios, decks or landscaping to create attractive, usable spaces.
6. Research Local Market Trends: Stay informed about market conditions and buyer preferences in the Palisades to make strategic improvements.

Taking these steps can help you maximize your home’s value when you’re ready to sell. Going beyond these types of actions may not have a positive return on your investment, though. It is highly advisable to consult with a local expert a few months before you plan to sell your home, so you have professional guidance on what could really make differences to do.

Are there any trends standing out in terms of what buyers are looking for in the Palisades now?

In Pacific Palisades, there are several key trends regarding what buyers are looking for:

1. Proximity to the Village: The village center has become an increasingly strong magnet, especially for young families wanting to live within a mile if at all possible.
2. Move-in Condition: Unless the price is quite attractive, buyers will pay a premium to feel that the home needs no work other than cosmetic.
3. Home Office Space: With remote work now more common, dedicated office spaces or flexible areas that can serve as home offices are in demand. Even a converted garage for this purpose will add to the desirability.
4. Open Floor Plans: Buyers prefer open layouts that create a spacious feel and enhance natural light, making homes more inviting.
5. Sustainability: Eco-friendly features, such as energy-efficient appliances, solar panels and sustainable building materials, have become more appealing to environmentally conscious buyers.
6. Luxury Amenities: High-end finishes, smart home technology, and luxurious kitchen and bathroom upgrades are popular among buyers looking for a premium experience.
7. Modern Design: Contemporary aesthetics with clean lines and minimalistic designs are trending, aligning with buyers’ preferences for stylish living spaces.
8. More Affordable “Fixers”: Many buyers would rather get a discounted price and then remodel to suit their own tastes and preferences. Often they succeed in outbidding investor-developer buyers because for them it is a future home, and usually the structure has significant value that a builder would tear down.

These trends can guide sellers in making targeted improvements to attract potential buyers in the area. If you are thinking of benefitting from some of these trends in ways that could be done with your property, check with an agent who has sold many homes around the area yours is located to be sure the changes would be cost-effective.

Michael Edlen has been a leading consultant in real estate for 30-plus years and is available for a complimentary and confidential conversation upon request at 310-600-7422 or michael@edlenteam.com. Have a question you want to see answered in a future column? Send it to mypost@palipost.com for consideration.