Following in the footsteps of IPO...listing my condo Quail Hill condo for sale

NEW -> Contingent Buyer Assistance Program
[quote author="ipoplaya" date=1223122301][quote author="freedomCM" date=1223114060]<blockquote>Amazing that someone would do PMI at all if they had the capital to make 20% down. Even at the .55% rate, she?d have to do one heck of return on that extra 10% to make out ahead, assuming PMI is non-deductible for tax purposes?</blockquote>




really?



600k/10%=540k@0.5% is $2700/year. add another 10% is 60k, so 2700/60k=4.5%



did i do something wrong?</blockquote>


That 4.5% gets taxed at 37% likely so it's really 2.8%. That's why I said "assuming PMI is non-deductible"... Tax effect makes a big difference. If I recall correctly, the deductibility of PMI got extened into 2010 but it phases out quickly with incomes of $100K. If the PMI wasn't deductible, the necessary return would be 7.25% pre-tax to B/E. That is not easy to earn.</blockquote>
In her case, the PMI isn't deductible as her annual income is in the 200k/yr ballpark.
 
just buy a CA muni, they are yielding about 4.5% taxfree right now



but it is funny to read that after years of hearing how the stock market appreciates 8-10%/year from all the retirement/401k firms
 
spoke with a couple friends of mine who were buying some property out in SD for about $600K.



Initially they were putting down 15%, at 6% for 30 year fixed, which, up until they were about to sign the docs, found out PMI was $285/month! Initially they were quoted about $170 in the loan process This happened within the last 2-3 weeks. They scrambled to come up with another 5% (parents of one of them offered to help them out using HELOC at 4.5%). Unfortunately, at 20% for some reason the rate went up to 6.25% using the same rate chart on the day they locked. They thought something was fishy, but they were also down to the wire and didn't have much choice since closing was the next day. But they also thought their loan officer was being honest with them throughout the process. who knows.



But that PMI is just getting ridiculous. Better to use those monthly payments to pay off equity already in the property rather than a black hole that's for the lender's peace of mind, not theirs.
 
[quote author="JLegend" date=1223200568]spoke with a couple friends of mine who were buying some property out in SD for about $600K.



Initially they were putting down 15%, at 6% for 30 year fixed, which, up until they were about to sign the docs, found out PMI was $285/month! Initially they were quoted about $170 in the loan process This happened within the last 2-3 weeks. They scrambled to come up with another 5% (parents of one of them offered to help them out using HELOC at 4.5%). Unfortunately, at 20% for some reason the rate went up to 6.25% using the same rate chart on the day they locked. They thought something was fishy, but they were also down to the wire and didn't have much choice since closing was the next day. But they also thought their loan officer was being honest with them throughout the process. who knows.



But that PMI is just getting ridiculous. Better to use those monthly payments to pay off equity already in the property rather than a black hole that's for the lender's peace of mind, not theirs.</blockquote>
Very interesting...the rate on my buyer's loan did not change from her going from a 90% loan to a 80% loan.
 
[quote author="usctrojanman29" date=1223201000]

Very interesting...the rate on my buyer's loan did not change from her going from a 90% loan to a 80% loan.</blockquote>






I suppose if they got you by the nuts, possible rate change shouldn't be surprising. I would have thought at least rate stays the same, or even goes down an 1/8th.
 
[quote author="JLegend" date=1223201656][quote author="usctrojanman29" date=1223201000]

Very interesting...the rate on my buyer's loan did not change from her going from a 90% loan to a 80% loan.</blockquote>






I suppose if they got you by the nuts, possible rate change shouldn't be surprising. I would have thought at least rate stays the same, or even goes down an 1/8th.</blockquote>
Maybe the difference is because my buyer got her loan directly from BofA without using a loan broker.
 
UPDATE...



I got a call from Escrow letting me know that the loan has funded and they will attempt to get the transaction recorded this afternoon at the record's office. Since this is essentially a done deal....the sales price is.....DRUM ROLL....











































































































































$619,900 (appraised value at $620,000) with no concessions
 
[quote author="usctrojanman29" date=1223352404]UPDATE...



I got a call from Escrow letting me know that the loan has funded and they will attempt to get the transaction recorded this afternoon at the record's office. Since this is essentially a done deal....the sales price is.....DRUM ROLL....



$619,900 (appraised value at $620,000) with no concessions</blockquote>


Congratulations... Or should be be offering condolences to the buyer...
 
[quote author="IrvineRenter" date=1223352502][quote author="usctrojanman29" date=1223352404]UPDATE...



I got a call from Escrow letting me know that the loan has funded and they will attempt to get the transaction recorded this afternoon at the record's office. Since this is essentially a done deal....the sales price is.....DRUM ROLL....



$619,900 (appraised value at $620,000) with no concessions</blockquote>


Congratulations... Or should be be offering condolences to the buyer...</blockquote>
Thank you...taking a bow. haha The reality is, at $336/sf the property comp'd out just fine especially considering it's highly upgraded. The question is...will the value hold up??? No comment there. =X
 
[quote author="IrvineRealtor" date=1223353159]Congrats trojanman. The buyer got a nice property that you took good care of, and you did well to get out....</blockquote>
Thanks IR2, I still owe you lunch. Let's do it sometime next week as I'm going out of town for work starting tomorrow.



After all costs (including the costs of the materials for the upgrades and closing costs), I did come out ahead with about a ~$10k gain on sale so I'm a happy camper.



I'll give you guys the detailed play-by-play later on tonight.



Edit - I just noticed there are two additional of my floor plans for sale which makes 6 out of 32 with the lowest priced unit being $629k going up to $699k. I hope they aren't too upset at my sales price. hehe
 
Now I'll give you guys a more detailed play-by-play...



I listed the property for $599k to $649k in hopes of getting a sales price of $620k-$630k. The Buyer submitted an offer of $600k on Friday morning after her agent previewed my property and took pictures (she was already very familiar with my floorplan and checked out my competition before). I asked the buyer's agent to provide me more information about his buyer. He told me that he was a divorced middle aged woman who was moving from Las Vegas to Orange County for a job transfer at the end of September (I sensed she was anxious to close by then). He told me that she loved Quail Hill and liked my floorplan the best out of all the other condos for sale in QH. Her lender's pre-approval lender indicated that she was approved for a loan of up to $625k.



On Saturday afternoon I received another offer of $600k from a couple with a child who were pre-approved for an FHA loan (they were looking for a 2% credit for closing costs). Their combined income was approx. what the buyer's income was but their FICO scores were lower. Then Sunday rolled around and we got the news that Fannie & Freddie got taken over by the Feds which told me that rates were heading out.



I called the first buyer's agent to let them know that I have another offer and that I have chosen to give his buyer the right crack at the property instead of a mutliple counter situation. I stated to him that my counter offer would be my best and final counter and that his buyer had until Monday evening to respond as I had to respond to the second offer by Tuesday 5pm. I knew that if I countered back at $625k that it was gonna be obvious that I was doing that because I have her pre-approval letter. So I decided that $620k was a number that was fair and I could live with. He told me that $620k may be a bit high for his buyer but that he would talk to her and see what he can do. On Monday I called the first buyer's agent and told him that mortgage rates have dropped by about .50% and he indicated that he already mentioned that to his buyer which seemed to bridge any gap we may have had.



So Monday evening the buyer drove out from Las Vegas to see the property for herself and sign the counter offer & drop off the earnest depost of $10k. She asked for no concessions other than a one-year home warranty which was like $400. I called the second buyer's agent to let him know that the first buyer accepted my counter and that they could be my back-up if things fell through (he wasn't interested in that). The inspection came up clean with only 2 minor things which I fixed before closing. The buyer of my property came up with her downpayment from savings.



If you guys have any questions, fire away...



I hope this thread was both informative and entertaining. Overall the escrow went relatively smooth and I feel really fortunate about the timing of the listing as well as getting the price that I got. I updated MLS to reflect the transaction as closed and picked up the check for my proceeds this afternoon.



Btw, IPO where does my sales price fall on the Case-Shilfer index?
 
[quote author="irvine_home_owner" date=1223441394]Did you find the "range pricing" to be effective?</blockquote>
I believe so because I think it brought in the couple that make the second offer (the buyer's agent said they were looking for something in the high $500k but my place was so nice that they put an offer in on it). I probably got more showing because of the range price because the low end pops up when people did a search on price.
 
Did knowing more about the buyers (personal info like divorced male, couple with child) make any difference in who you gave counter offer to?

Or was it just based on their loans?
 
[quote author="usctrojanman29" date=1223440227]Now I'll give you guys a more detailed play-by-play...



I listed the property for $599k to $649k in hopes of getting a sales price of $620k-$630k. The Buyer submitted an offer of $600k on Friday morning after her agent previewed my property and took pictures (she was already very familiar with my floorplan and checked out my competition before). I asked the buyer's agent to provide me more information about his buyer. He told me that he was a divorced middle aged woman who was moving from Las Vegas to Orange County for a job transfer at the end of September (I sensed she was anxious to close by then). He told me that she loved Quail Hill and liked my floorplan the best out of all the other condos for sale in QH. Her lender's pre-approval lender indicated that she was approved for a loan of up to $625k.



On Saturday afternoon I received another offer of $600k from a couple with a child who were pre-approved for an FHA loan (they were looking for a 2% credit for closing costs). Their combined income was approx. what the buyer's income was but their FICO scores were lower. Then Sunday rolled around and we got the news that Fannie & Freddie got taken over by the Feds which told me that rates were heading out.



I called the first buyer's agent to let them know that I have another offer and that I have chosen to give his buyer the right crack at the property instead of a mutliple counter situation. I stated to him that my counter offer would be my best and final counter and that his buyer had until Monday evening to respond as I had to respond to the second offer by Tuesday 5pm. I knew that if I countered back at $625k that it was gonna be obvious that I was doing that because I have her pre-approval letter. So I decided that $620k was a number that was fair and I could live with. He told me that $620k may be a bit high for his buyer but that he would talk to her and see what he can do. On Monday I called the first buyer's agent and told him that mortgage rates have dropped by about .50% and he indicated that he already mentioned that to his buyer which seemed to bridge any gap we may have had.



So Monday evening the buyer drove out from Las Vegas to see the property for herself and sign the counter offer & drop off the earnest depost of $10k. She said for no concessions other than a one-year home warranty which was like $400. I called the second buyer's agent to let him know that the first buyer accepted my counter and that they could be my back-up if things fell through (he wasn't interested in that). The inspection came up clean with only 2 minor things which I fixed before closing. The buyer of my property came up with her downpayment from savings.



If you guys have any questions, fire away...



I hope this thread was both informative and entertaining. Overall the escrow went relatively smooth and I feel really fortunate about the timing of the listing as well as getting the price that I did. I updated MLS to reflect the transaction as closed and picked up the check for my proceeds this afternoon.



Btw, IPO where does my sales price fall on the Case-Shilfer index?</blockquote>


You rocked the CS SC, a 241. I'd say it was because you did upgrades yourself not included in the purchase price blah blah, but I did that as well in my condo, and still hit just a smidge better than the Irvine CS median. Like I said previously, anything over $600K on yours was a great deal for you and bad one for your buyer. Hope that job transfer works out for her or we'll be seeing your unit on the bank rolls down the line...
 
[quote author="usctrojanman29" date=1223443479][quote author="irvine_home_owner" date=1223441394]Did you find the "range pricing" to be effective?</blockquote>
I believe so because I think it brought in the couple that make the second offer (the buyer's agent said they were looking for something in the high $500k but my place was so nice that they put an offer in on it). I probably got more showing because of the range price because the low end pops up when people did a search on price.</blockquote>
So basically the low end is the a bit below what you want and the high end is more than you want.



I was wondering if the $50k range was too broad?
 
[quote author="halfnote19" date=1223444638]Did knowing more about the buyers (personal info like divorced male, couple with child) make any difference in who you gave counter offer to?

Or was it just based on their loans?</blockquote>
From the information presented to me from both buyers, I could tell that the ultimate buyer was the stronger of the two. I knew I'd have more leverage with her as he had to move to Orange County by the end of Sept. because of the job transfer plus what her buyer's agent told me made me think I could get her to up her price. I was involved in a multiple counter offer situation as a buyer and didn't like it. So I decided to give the first buyer the first chance on my property with the added pressure that I had another offer right behind her's. I also knew that conventional financing takes less time than FHA but that was only a minor factor. Dead down inside, I wanted the first buyer to accept my final counter offer because she wanted a quick escrow and was very well qualified for the loan (very high FICO scores, significant savings, and high income).
 
[quote author="irvine_home_owner" date=1223445629][quote author="usctrojanman29" date=1223443479][quote author="irvine_home_owner" date=1223441394]Did you find the "range pricing" to be effective?</blockquote>
I believe so because I think it brought in the couple that make the second offer (the buyer's agent said they were looking for something in the high $500k but my place was so nice that they put an offer in on it). I probably got more showing because of the range price because the low end pops up when people did a search on price.</blockquote>
So basically the low end is the a bit below what you want and the high end is more than you want.



I was wondering if the $50k range was too broad?</blockquote>
Yeah, essentially my "reserve" price was right in the middle of the range. My range may have been a little wide, but it seemed to have worked out. I've seen a few range prices and they range about $20k to $50k.
 
When a buyer presents their pre-approval letter to the seller, can the amount be adjusted below the max amount?

USC, could your buyer have provided a letter stating she was only approved to $605 (or some other number below her max)?

Obviously it was to her disadvantage for you (the seller) to know she could afford more.

Does anyone know how the pre-approval letter works?

Thanks.



P.S. Congrats, USC!
 
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