ALL CASH OFFERS IN IRVINE

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2hot2buy_IHB

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Hello All,



Lately we have been encountering a lot of all cash offers on the houses we bid on. We keep hearing that these are mainly Asian buyers (not meant to be a racist statement!) making these offers. Not sure who these mysterious buyers with a ton of cash are coming from? In some cases all cash offers for what one of the forum members termed WTF pricing. If this is indeed true, then most of us don't have any hopes of getting any homes at non-WTF prices in Irvine.



What has been your experience? We keep running into multiple offers (>5) per home and keep losing it to all cash offers or folks with >40% down payments.



Would like to hear if any of you are running into the same situations in Irvine?



2Hot2Buy
 
[quote author="2hot2buy" date=1248346868]Hello All,



Lately we have been encountering a lot of all cash offers on the houses we bid on. We keep hearing that these are mainly Asian buyers (not meant to be a racist statement!) making these offers. Not sure who these mysterious buyers with a ton of cash are coming from? In some cases all cash offers for what one of the forum members termed WTF pricing. If this is indeed true, then most of us don't have any hopes of getting any homes at non-WTF prices in Irvine.



What has been your experience? We keep running into multiple offers (>5) per home and keep losing it to all cash offers or folks with >40% down payments.



Would like to hear if any of you are running into the same situations in Irvine?



2Hot2Buy</blockquote>




Have these homes been in the 700-900k range?
 
Can you provide some examples of the properties you have placed offers on and had this occur? Redfin links will do just fine.
 
Hahaha, fooled all you guys... I am 2ugly2sell.... just kidding...



Sometimes i wonder if these Cash Rich Asian buyers are so smart... I mean why in the world would you want to put down $650,000 to $800,000 when it is so cheap to borrow money at 5.375%? I would only put that kind of money down if A) mortgages rates are at 12% B) unemployment reaches 15-20%., and C) when it feels like the world is coming to an end.
 
[quote author="PANDA" date=1248348330]Hahaha, fooled all you guys... I am 2ugly2sell.... just kidding...



Sometimes i wonder if these Cash Rich Asian buyers are so smart... I mean why in the world would you want to put down $650,000 to $800,000 when it is so cheap to borrow money at 5.375%? I would only put that kind of money down if A) mortgages rates are at 12% B) unemployment reaches 15-20%., and C) when it feels like the world is coming to an end.</blockquote>


They can't qualify any other way. It think Bk has explained the nature of many of their businesses (all cash, can't document).
 
[quote author="PANDA" date=1248348330]Hahaha, fooled all you guys... I am 2ugly2sell.... just kidding...



Sometimes i wonder if these Cash Rich Asian buyers are so smart... I mean why in the world would you want to put down $650,000 to $800,000 when it is so cheap to borrow money at 5.375%? I would only put that kind of money down if A) mortgages rates are at 12% B) unemployment reaches 15-20%., and C) when it feels like the world is coming to an end.</blockquote>


To avoid getting caught by the IRS. Looks pretty fishy if you are deducting a heck of a lot in interest and you only claim 80k AGI on your 1040.



on side note, THE USE OF ALL CAPS is very telling
 
[quote author="PANDA" date=1248348330]Hahaha, fooled all you guys... I am 2ugly2sell.... just kidding...



Sometimes i wonder if these Cash Rich Asian buyers are so smart... I mean why in the world would you want to put down $650,000 to $800,000 when it is so cheap to borrow money at 5.375%? I would only put that kind of money down if A) mortgages rates are at 12% B) unemployment reaches 15-20%., and C) when it feels like the world is coming to an end.</blockquote>


If you cannot substantiate your income with tighter lending standards, a loan may not be an option. Even more scary is if they have so much money that the cost of an Irvine SFR is pennies to them.
 
[quote author="Mcdonna1980" date=1248348634][quote author="PANDA" date=1248348330]Hahaha, fooled all you guys... I am 2ugly2sell.... just kidding...



Sometimes i wonder if these Cash Rich Asian buyers are so smart... I mean why in the world would you want to put down $650,000 to $800,000 when it is so cheap to borrow money at 5.375%? I would only put that kind of money down if A) mortgages rates are at 12% B) unemployment reaches 15-20%., and C) when it feels like the world is coming to an end.</blockquote>


To avoid getting caught by the IRS. Looks pretty fishy if you are deducting a heck of a lot in interest and you only claim 80k AGI on your 1040.



on side note, THE USE OF ALL CAPS is very telling</blockquote>


I have to say that I don't really buy this argument.

It makes sense to a point, I'm sure that there's some undeclared inome.

But, really, if you've been claiming less than 80k AGI for the last 10-20 years, and then all of a sudden you're paying property taxes on a 800K property and no mortgage deduction, do you think the IRS won't notice?

The IRS is not that dumb. It's trivial to write the piece of code that will flags suspicious tax payers that have lots of property and no income.



I don't have an alternate theory to offer, but this argument is not that convincing.



Actually, here's one, based on a couple I know. They bought a house recently with a huge down payment.

One of them is asian, and the parents had been contributing the maximum amount that is tax-free each year to the trust fund.

I believe the limit is currently 12K per year. Do that for 20 years and you can easily leave your child a 300-400K down payment.

Now, I suppose that if you have two sets of well-to-do Asian parents, you can have 600-800K...

So I can see how this would be possible.

But just because it's possible it doesn't mean that it's likely or common.
 
I've been seeing quite a few houses in this price range that have gotten multiple offers (or so I've heard), then go into escrow within a couple days of hitting the market. I wouldn't be surprised if lots of them are Asian cash buyers, but I don't know any specifics.
 
[quote author="traceimage" date=1248353405]I've been seeing quite a few houses in this price range that have gotten multiple offers (or so I've heard), then go into escrow within a couple days of hitting the market. I wouldn't be surprised if lots of them are Asian cash buyers, but I don't know any specifics.</blockquote>




absolutely agree. at least 3-5 homes including the ones I mentioned in one of the earlier posts. homes have multiple offers within 3 days and goes into escrow. may be they are aggressively priced? not sure. not for us atleast :-)
 
I don't think it's that they're so aggressively priced, but that would-be buyers are in a frenzy right now due to lack of inventory. But it's definitely pretty nuts out there!
 
If you go to the <a href="http://irvinerealtorsite.com/">IrvineRealtorSite</a>, then you can go through the data of past sales, and see that on a percentage basis that cash buyers are not much higher than previous months. Just because you are noticing cash buyers, doesn't mean they haven't always been there. They were there in 06 just as they are in 09. If you weren't actively looking in 06 for a house as you are now, then you wouldn't know or hear about cash buyers, would you?
 
[quote author="graphrix" date=1248354461]If you go to the <a href="http://irvinerealtorsite.com/">IrvineRealtorSite</a>, then you can go through the data of past sales, and see that on a percentage basis that cash buyers are not much higher than previous months. Just because you are noticing cash buyers, doesn't mean they haven't always been there. They were there in 06 just as they are in 09. If you weren't actively looking in 06 for a house as you are now, then you wouldn't know or hear about cash buyers, would you?</blockquote>
Are you saying the FCBs have been there since the beginning of time?



Awesome.
 
[quote author="2hot2buy" date=1248346868]Hello All,



Lately we have been encountering a lot of all cash offers on the houses we bid on. We keep hearing that these are mainly Asian buyers (not meant to be a racist statement!) making these offers. Not sure who these mysterious buyers with a ton of cash are coming from? In some cases all cash offers for what one of the forum members termed WTF pricing. If this is indeed true, then most of us don't have any hopes of getting any homes at non-WTF prices in Irvine.



What has been your experience? We keep running into multiple offers (>5) per home and keep losing it to all cash offers or folks with >40% down payments.



Would like to hear if any of you are running into the same situations in Irvine?



2Hot2Buy</blockquote>
The back-up offer on the escrow I have my buyers in is a an all cash offer (around $750k)....my buyers are putting 25%+ down.
 
[quote author="irvine_home_owner" date=1248354875][quote author="graphrix" date=1248354461]If you go to the <a href="http://irvinerealtorsite.com/">IrvineRealtorSite</a>, then you can go through the data of past sales, and see that on a percentage basis that cash buyers are not much higher than previous months. Just because you are noticing cash buyers, doesn't mean they haven't always been there. They were there in 06 just as they are in 09. If you weren't actively looking in 06 for a house as you are now, then you wouldn't know or hear about cash buyers, would you?</blockquote>
Are you saying the FCBs have been there since the beginning of time?



Awesome.</blockquote>


The FCBs are Irvine, they were here in the 80s and 90s. I know you weren't in the area back then, but I was. Some of the comments I have in my head about Irvine from back then can't be repeated, since they are not PC today, nor do I think they deserve to be repeated. But, lets put it this way, the demographic has always been less Caucasian than some cities of OC.
 
Just curious: How does a foreign govt. with diplomatic ties invest in residential real estate? What about a foreign govt. without diplomatic ties with the U.S.? How do they invest in residential real estate?
 
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