Five tips for buying a home in Palm Springs, California.
Palm Springs real estate is different than almost any other market. There are some local issues you should be aware of. Here's what you need to know about living in Palm Springs and some things I wish I knew before moving to Palm Springs.
TIP ONE FOR BUYING A HOME IN PALM SPRINGS
You need to know whether the home you are thinking of buying is on leased land or land you own.
Land you own is also referred to as fee simple ownership and is considered the highest level of ownership of real estate. You own the land and any buildings on it.
When you buy a house on leased land, you do not own the land. You own the house only. Typically homes on leased land sell for less than the same home would if you owned the land. That's because in most of California, the land has great value. Some people are attracted to this form of ownership because they are able to live in a home that would be otherwise unaffordable if the ownership was fee simple.
There are also some negatives to buying a home on leased land.
You will be paying a land lease which in Palm Springs can be thousands of dollars a year, sometimes multiple thousands of dollars.
Additionally, it can be more difficult to obtain a mortgage for a home built on leased land because most lenders will look at the balance of the lease term.
Some condos are also built on leased land. In that case your ownership is the space between the walls only.
The Agua Caliente Band of Cahuilla Indians own the leased land in Palm Springs. The tribe leases land to people for residential homes and businesses. It has been estimated that there are more than 23,000 homes built on leased land in the Coachella Valley including the homes in the City of Palm Springs.
TIP TWO FOR BUYING A HOME IN PALM SPRINGS
Find out whether the home you want to buy is under the control of a Home Owners Association (HOA). This includes not only condos and townhomes - which you would expect, but also some Single Family Residences (houses). The SFRs in gated communities typically have a HOA. Examples would be the large gated communities of Miralon and Escena in Palm Springs.
Other than the cost of the monthly HOA dues, buyers should explore whether the HOA will place any restrictions on the property usage - like for short term rental, or modifications to the property such as exterior colors or windows.
TIP THREE FOR BUYING A HOME IN PALM SPRINGS
If using the home for short term rental in any capacity is in your plans, you need to obtain a permit from the city. Many neighborhoods are at the maximum already and some are above the 20% maximum penetration. Additionally if the property you want to buy is in a HOA, the HOA may have restrictions on short term rentals.
TIP FOUR FOR BUYING A HOME IN PALM SPRINGS
You might want to avoid the windiest neighborhoods. Those are found closer to the Interstate 10 Freeway in the north of Palm Springs. Wind gusts during the Spring months can be over 25 miles per hour and 40-50 mph is not unusual.
The wind subsides at approximately Vista Chino and neighborhoods in South Palm Springs are much less windy. As a rule of thumb, the closer you are to the windmills, the windier it is. There's a very good reason the windmills were placed where they are.
TIP FIVE FOR BUYING A HOME IN PALM SPRINGS
The rules for how buyers work with agents and real estate brokers was changed forever in August of 2024. Buyers can no longer work casually with agents and now have to sign agreements for many activities that weren't regulated previously. Even asking an agent to show you a listing (other than their own), may require signing some paperwork.
Buyers have to be very careful about what they sign so that they don't inadvertently commit themselves to paying a broker fee that they weren't anticipating.
Contact me to learn more about the new rules and how you save when I'm your agent.
CHAPTERS IN THIS VIDEO
00:00 - Intro
00:52 - Buying a home in Palm Springs tip number one: is the home on leased land or fee?
04:40 - Buying a home in Palm Springs tip number two: is there a home owner's association?
06:34 - Buying a home in Palm Springs tip number three: can you get a permit for STR?
09:50 - Buying a home in Palm Springs tip number four: are you in a windy area?
12:53 - Buying a home in Palm Springs tip number five: understand the new rules
14:34 - Recap of tips for buying a home in Palm Springs
15:50 - Outro
If you have questions about buying or selling a home in Palm Springs California or want to know more about the pros and cons of living in Palm Springs, feel free to reach out.
Ellis Posner, Real Estate Broker
CA DRE 01416970
Call / Text 760.235.1471
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