Getting nervous!

NEW -> Contingent Buyer Assistance Program
Paris167 said:
eyephone said:
Why are you nervous? Shouldn't you be happy when you sign the contract?
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Only because it's a big investment. We own businesses and even the largest one purchased was about $1mil.  Isn't everyone a little apprehensive when purchasing a home with that kind of price tag? Despite being able to afford it - it's a big step.  But overall yes it is a happy day as well.

Maybe in Irvine it's a common move to spend so much on a home. We moved here from out of state where $500k can get you a McMansion. I guess we're still getting use to OC sticker shock lol
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You shouldn't look at your primary residence as an investment, it's a big financial purchase.  A home that you occupy as your primary residence is a commodity that you use/enjoy versus a rental property which is an investment in my eyes.  I believe that if you buy and own the home for the longer term (7+ years) you will sell your home for equal to or more than what you paid for it today.  I really think we'll get a "pop" in prices once there are no more new homes to be built in Irvine (excluding the great park homes) as buyers will be forced to buy resale homes.  That's one of the reasons why I bought in Irvine.
 
I would agree that most people get a little nervous. It's not a risk free purchase. If certain scenarios plAy out purchasing a home can be the worst thing you ever did. This is a falling sky scenario but if rates shot up in the next month to 6.5% and stayed there or higher permanently, it would likely have a significanct impact on prices/affordability trying to sell in the next 5 years could be difficult without taking a significant loss. If rates shoot up it will have downward pressure on prices and even an fcb doesn't want to overpay but too much relative to the financed buyer. There won't be a cash buyer price and a financed price. All prices will come down together. Perhaps not proportionately to the rate increase (that was for IHO)
 
I can almost gaurantee that it won't go below 1.3m for these homes. Not when they are increasing by an average of $15k per phase release.  Home prices aren't going to tank anytime soon.
 
Hello future neighbor!
Did you get a Plan 1 in Phase 1? 

So far, sales in the development seem to be  strong.
Hopefully it's a good sign for future returns.

I agree that Plan 1 is the best and think it's much better to be the "cheapest" house in the neighborhood than the most expensive.

Maybe we'll see you at the money extraction  . . . I mean, design center.

Good luck!
 
irvineboy said:
I can almost gaurantee that it won't go below 1.3m for these homes. Not when they are increasing by an average of $15k per phase release.  Home prices aren't going to tank anytime soon.
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Hmm-we have a fortune teller. How long do you think prices will continue to rise?
 
O Hills said:
Hello future neighbor!
Did you get a Plan 1 in Phase 1? 

So far, sales in the development seem to be  strong.
Hopefully it's a good sign for future returns.

I agree that Plan 1 is the best and think it's much better to be the "cheapest" house in the neighborhood than the most expensive.

Maybe we'll see you at the money extraction  . . . I mean, design center.

Good luck!
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Just curious, how much of a deposit is Taylor Morrison requiring for options. I purchased in Amelia and the design center is requiring a 50% deposit on all upgrades except flooring. For flooring they're requiring a 20% deposit.
 
Paris167 said:
eyephone said:
Why are you nervous? Shouldn't you be happy when you sign the contract?
Click to expand...

Only because it's a big investment. We own businesses and even the largest one purchased was about $1mil.  Isn't everyone a little apprehensive when purchasing a home with that kind of price tag? Despite being able to afford it - it's a big step.  But overall yes it is a happy day as well.

Maybe in Irvine it's a common move to spend so much on a home. We moved here from out of state where $500k can get you a McMansion. I guess we're still getting use to OC sticker shock lol
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I can understand why you feel nervous about a big purchase like this.  I felt the same way when I purchase my Irvine home, the previous home I purchased was only in the $300k range. 

Whether the home gains or lost it's value in the future, in the end,  it doesn't really matter as long as you like the home and you are not selling it.  If the home value go up, great.  If it doesn't and if a worst case scenario happen in which home value plummet 20% or more in Irvine,  in that case,  it's time to buy another home as investment.

BTW, congrats on your new home.

 
Paris167 said:
Dresden215 said:
Just curious, how much of a deposit is Taylor Morrison requiring for options. I purchased in Amelia and the design center is requiring a 50% deposit on all upgrades except flooring. For flooring they're requiring a 20% deposit.
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They are requiring a 30% deposit for all design upgrades. That's so annoying - I didn't know they required anything until escrow closes.  I'm learning a lot as I go through this new construction process. But 50% is even more annoying - I'll take the 30% then

Any tips from anyone that's bought new construction is appreciated!
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Yeah, don't do your wood flooring and window coverings through the builder unless you want to be royally ripped off.
 
I recommend getting recess lights for all bedrooms and extra in the great room. Upgrade the kitchen cabinets/counter top (if need be), kitchen backsplash - get an outside contractor upgrade bathroom tile (I don't like the standard white tile, it all depends on the standard tile)
If you want to upgrade carpet, wood, tile for floor - go with an outside contractor. Epoxy flooring for the garage go with outside contractor. Wall paint for bedrooms/other rooms go with an outside contractor or if your handy do it yourself.

Also, it all depends on your situation, people go with the builder for convenience. If you don't have time/just want everything finished when you move in then go with the builder.

Remember your deadlines for your upgrades. (Stay on it)

 
Paris,

25-30% deposit is standard for upgrades.  No getting around it.

In terms of what to upgrade with the builder and what to do with an outside contractor after COE, the rule of thumb is anything structural, electrical or plumbing should be done with the builder.  For example, conservatory, fireplaces, recessed lighting, bifold doors, hose bibs, extra outlets and low voltage wiring should be done with the builder.  Other options are personal preference and depends on your cash availability and time after COE.  Some are easy after COE like crown moldings and painting, others are bit more challenging.  I always caution ppl on flooring after COE as even tho it's always cheaper, sometimes it's a royal PIA especially if you're planning on moving in right after you get keys.  The aftermarket flooring CO will have to move out the big ass range, unbolt and re bolt the built in fridge and remove & replace the toilets.  Flooring companies do this all the time and usually everything is fine.  But in rare circumstances, there can be a water leak and going with an outside flooring company will void your plumbing warranty from the builder.  And something ppl never think about is the stairs.  Say you want all wood stairs but got standard carpeting on it from the builder, it's very difficult and cost prohibitive to change the treads after COE once the newels and balusters are in place, in fact basically logistically impossible, unless you wanted to change your whole stair system.  Just food for thought.  Cabinetry, I would go with the builder.  One thing I always recommend is added insulation.  I think it's a must.  Good luck and enjoy the process.  It's exciting.
 
WTTCMN said:
OCgasman said:
Paris,

25-30% deposit is standard for upgrades.  No getting around it.

In terms of what to upgrade with the builder and what to do with an outside contractor after COE, the rule of thumb is anything structural, electrical or plumbing should be done with the builder.  For example, conservatory, fireplaces, recessed lighting, bifold doors, hose bibs, extra outlets and low voltage wiring should be done with the builder.  Other options are personal preference and depends on your cash availability and time after COE.  Some are easy after COE like crown moldings and painting, others are bit more challenging.  I always caution ppl on flooring after COE as even tho it's always cheaper, sometimes it's a royal PIA especially if you're planning on moving in right after you get keys.  The aftermarket flooring CO will have to move out the big ass range, unbolt and re bolt the built in fridge and remove & replace the toilets.  Flooring companies do this all the time and usually everything is fine.  But in rare circumstances, there can be a water leak and going with an outside flooring company will void your plumbing warranty from the builder.  And something ppl never think about is the stairs.  Say you want all wood stairs but got standard carpeting on it from the builder, it's very difficult and cost prohibitive to change the treads after COE once the newels and balusters are in place, in fact basically logistically impossible, unless you wanted to change your whole stair system.  Just food for thought.  Cabinetry, I would go with the builder.  One thing I always recommend is added insulation.  I think it's a must.  Good luck and enjoy the process.  It's exciting.
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But you're not an expert though right?  This is just you as a talking head behind a computer screen giving your opinion?  Just want to clarify because it sounds so legit and authoritative.

Agree on insulation. Didn't have it in my last house. Have it in my current one (both garage and interior). Makes a difference.
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Yup, not an expert.  Just someone that's gone thru the process a couple of times and have thought about the upgrades in depth.  I've also priced out options with outside companies and compared.  But in the end, I'm just a talking head.

Most options are overpriced but that's the price a buyer pays for convenience and turnkey.  Some ppl don't wanna deal with doing things after COE.  Some ppl are also cash poor during the buying process and wanna roll in upgrades into the mortgage, even tho it's more expensive upfront and in the long run.

Pre-wiring is really key and you really have to envision what you want the room to look like.  Pendants, chandeliers and ceiling fans are usually limited in choices by the builder but it's important to get the pre wiring done in advance and buy and install those elements yourself after.

Same with gas stubs.  Sometimes adding an extra higher capacity gas stub is important if you want a jacuzzi and a fireplace in your yard, but you have to think about it in advance.

It's also a pain to rip out the standard tub and/or shower to upgrade those after COE.

This is just my 2 cents and prob not even worth that much. :)
 
Paris167 said:
Agreed, as many people found out the hard way with home purchases just prior to the real estate crisis it is definitely a risk to purchase a home especially in a market that's been volatile lately. Based on recent economic data including a drop in GDP in the last quarter there are still strong signs that the economy is wavering and not quite steady on it's feet. During those conditions I doubt Yellen will hike up interest rates so rapidly. They'll have to continue to taper bond purchases at some point and interest rates will start to rise in 2015 but I believe it'll be in a very gradual manner. 6.5% in the next 2 years will be detrimental to the real estate market and economy overall. On the upside the bull market has been quite profitable - my investments over the last 2 years have averaged 20% - way better than any real estate investment!  ;D
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My real estate investment did a lot better the last two years than my stock investments.

Real Estate: put 20% down, home appreciated 27%.  = 133% gain
Stock Market: Up about 30% since I don't leverage

Leverage amplifies gains (and losses) and most home owners are leveraged.
 
Last thing to consider is the property tax . . . at the OH rate.

FOREVER . . . .

I agree that it would be very convenient to have the builder do the upgrades.
I can even handle paying for the convenience.
But I can't take getting hosed in perpetuity, so will do as much as possible after COE.
 
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