Give An Offer To Short Sale Home In Irvine

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dealrep_IHB

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Hi All,



We have just given an offer to a Single Family Home build in 1973 in Irvine. It's in El Camini Real (Deerfield) commnunity and 1600 SQF Living Area. The Total Lot is 4400 SQF and it's 3 BR and 2BA Single Family Home.



We are waiting since last 1 year for the prices to come down but haven't seen significant drop in Irvine Market, specially Single Family Home.



It's a Bank Approved Short Sale, The asking price for the home was 545K and we our agent suggested us to give the full price offer, as the house already has the couple of offers. We gave the offer at full price and today got an conformation from my agent that Seller bank considered our offer as the most attractive one and working with their legal department to review the terms.



We are looking for the since last 5-6 months as our kids are already going to Irvine Schools and now my Son will start going to Middle and daughter to 2nd Grade. The home schools in the new home neightbourhood are Deerfield Elementary and Vanado Middle.



The same home sold for 700K in 2006 but now due to short sale we are getting it for 545K. The house may need some work for about 10-15K but we can do the same later, it's not required immediately.



I am not sure about the neighboorhood and the decision to buy the home at this time (due to so many short sales and foreclosuers) and price. I will really appreciate if blog members will let me know some input about our decision. We are planning to put 20% down to keep our loan to conforming for better rates.



Also if anybody has some thoughts about the Deerfield Neigbourhood or Schools (Deerfield Elementary or Venado Middle) so that will also help us to make our final mind, as Schools are also important for us.



Thanks,

Dealrep
 
<em>I am not sure about the neighboorhood and the decision to buy the home at this time</em>



My goodness dealrep, then why did you put the offer in?



In theory, the price sounds attractive.... but you wouldn't be posting here if you weren't doubting yourself. Are you renting in the same school district ?
 
You're getting a discount of 23% off a 2006 price, which doesn't seem like a huge discount relative to the market as a whole. What are the HOA and Mello Roos, if any? What would it cost to rent a comparable home in that neighborhood?



The attractiveness of dealing with banks is they don't have emotional ties to the properties and they may have slightly different goals than owners. IMO if you're not low-balling the bank you're not exploiting their situation. I think the opportunities will only get better.
 
Sorry, There is no Mella Rose and HOA is only $35.00 dollars. The only reason we have put the asking price offer is that in the past we have put the offer for couple of homes in Irvine below the asking price and they all got out bidded.



It seems now a days bank put the houses in the market below the price to attract peoples and later when they got the multiple offers, somebody always out bid the asking price and bank got their money. Therefore we put the offer for the asking price and already make up our mind not to increase our bid in case of counter offer.
 
dealrep.... i know what you are going though... cause i was there.... you need to take a step back and stop house searching. after seaching for 5-6 months you just get tired and you will just settle for something and at 545k you talk yourself into it. somebody will buy that house thus lowering the comp... the longer you wait the better the deal.... cause the next buyer will use that 545k as a comp and lower it another 15-35k and thus the houses in the neighborhood will begin to go down to where it should be. i say if you can wait it out... then wait it out... if not... then you got face the fact that the house you are buying might be overprice...
 
Small house, small lot.



You shouldn't be posting here for an endorsement of your purchase.



Obviously we think there will be better deals a year from now, but it sounds like the timing was right for you.



Hopefully it works out for you.
 
Hi Zigzag, I really appreciate your input. My only concern is to make sure is it worth to buy about 32 years old home for that much money (545K) in the current market. Nobody can predict the fucture, but just want to make sure that we are no paying overpriced amount for the home.
 
Dealrep,



It's a big committment so I understand that you want confirmation of your purchase. However, it really is in your court for you to decide. Numberwise, you know what to do. Is it affordable? Does 28%/38% rule hold? 4X of your household income?



Another aspect is emotional and non concrete stuff. Do you like the house? Do you like location/neighborhood/school? Are you planning to stay there for 7 yr plus? You know the usual...



My gut feeling however, it that you should back out of the offer and as someone mentioned, take a break. Looks like you have two kids. You can always get a 3 bed apartment or condo lease. You didn't even find out about El Camino or home schools and your main reason buying this house was because kids were going to school.



I hope you don't get this wrong but get the cold, hard reality. You are not ready to buy this house and you should not buy a house at this point. You'll save your 20% downpayment and a lot of heartache.



Even if you have to stretch your budget little bit, if you "love" and are willing to stick with payment schedule, go ahead and get the best deal you can but even if the price is attractive and you are getting a hefty discount, if you don't know what you are buying, don't do it. Educate yourself first. Paying a bank several k for 30 yrs a long time and a lot of money. It's not just your money and time. It's your life as time is fractions of your life...
 
Okay, I am supposed to be nice to the newbies, <a href="http://www.irvinehousingblog.com/forums/viewthread/346/">so... have you checked out the foreclosure thread yet</a>?



I have to ask, would you rather have a newer home, with the same specs, for the same price? Because I think you could find it, if not right now, but in a few months you could. Yeah, I can't predict the future, but I do have a good idea of what is to come.



If you really love, and I mean <em>love</em> this house, can easily afford it, and you plan on staying there for a long time, then sure you could be making the right decision. If not, then you should balk, and not settle for a home built at a time when the crew was high on more than just the paint.
 
Dealrep,

I think it is really up to you and the motivation for buying. I think it is a no brainer that the house you buy today will be worth less in 1 or 2 years. I can easily see the house that you are buying being worth $450 within one year. With all that being said if you have to buy now and you plan on being in this house for at least eight years + you will probably be OK. Just remember when you are trying to buy a house it is not about outbidding other people it is about getting a good value for your purchase, especially in this buyers market we are in now. Never think that your realtor is working on your side when he tells you that you should submit a full price offer. That realtor is trying to secure a commisision for him or herself. If it matters to you I'm in the same boat as you. I will be buying in Irvine. I will be waiting at least until November of this year. Irvine will drop another 20-25% before we hit bottom in my opionion. Before we hit bottom the median income in Irvine needs to be able to afford the median house in Irvine. Currently the median income in Irvine is about 120K which you could possibly buy about a 500K house. The median house in Irvine is still over 900K. So it doesn't take a rocket scientist to figure out that we still have room to fall. Also Dealrep I didn't get the impression from you that this house has a wow factor for you. I think from what I'm hearing from you I would wait it out, rent a nice smaller house for the next year and benefit from the price drop we will see in the next year. You will be able to buy a newer house in Irvine for the same price within a year. It seems as though you are worried about the age of the house. The foreclosures in the next year will be through the roof and you will be in a better bargaining position. My two cents.



Bill
 
We really appreciate all of responses and that really helps us to get an idea. We are planning to stay in this home for more than 7 years for sure. As the ball is in our court at this time and we have added lots of other contigencies to our offer therefore if bank will accept our offer with all of those contigencies (along with home inspection & fixtures etc. as we mentioned earlier need an 10-15K fixes) then we may consider to take this home for offered price, otherwise will walk out and as you all suggested will rent for next 1 more year.



I will really appreciate if somebody has an idea of that neightbourhood (Deerfield/El Camino Real Community) like association, schools and traffic etc. Because good and safe neightbourhood is our 1st priority, along with schools.
 
I think you are paying too much. I recently checkout one house in WestPark, 7 Andalucia, 2800 sqft for $799K($285/sqft). The realtor also told me there are several bidders over the price of the house which is bank owned. I told him to go ahead and sell to others because back in Fall 2004, I also refused to buy similar house in this neighborhood with much bigger yard that was sold for $839K(I think 3 or 5 bergamo). I believe Westpark I is a lot newer than El Camino Real. Do not be in a hurry. I have been renting since 2004 and will not budge until 2010.
 
[quote author="dealrep" date=1212376867]We really appreciate all of responses and that really helps us to get an idea. We are planning to stay in this home for more than 7 years for sure. As the ball is in our court at this time and we have added lots of other contigencies to our offer therefore if bank will accept our offer with all of those contigencies (along with home inspection & fixtures etc. as we mentioned earlier need an 10-15K fixes) then we may consider to take this home for offered price, otherwise will walk out and as you all suggested will rent for next 1 more year.



I will really appreciate if somebody has an idea of that neightbourhood (Deerfield/El Camino Real Community) like association, schools and traffic etc. Because good and safe neightbourhood is our 1st priority, along with schools.</blockquote>




by putting in all the contigencies... you are going to kill the deal. the bank won't go for it. so in realty you subconciously wanting out of the deal. Usually bank sells the house as is.... unless they have change lately... i could be wrong.
 
And if your short sale bank is Countrywide, you may wait as long as 4-6 months for a response. A lot can change in the time it takes some of these banks to decide on your offer. Short sale definitely does not mean short time frame.
 
dealrep,



I think what you are feeling is buyer's remorse. Don't sweat it because it's a natural reaction to second guess your decision. The Deerfield area is a nice and quiet area. There are no big streets that lead through there so there is not much traffic that goes through the neighborhood. I also believe it is a safe neighborhood. The Deerfield community park used to have some awesome fortlike play areas when I was a kid. Hopefully they are still there. I have friends that live at the Ranch just across Yale, and have never heard anything about crime. The train tracks are pretty close by, but the metrolink is not that loud and that's what mostly passes through. Double paned windows will mostly drown out any noise.



Financially, you can be the only judge of what you can or cannot afford. It seems like you are comfortable with your payments.



Price wise, you are currently getting a decent deal. 1600 sq ft for your price seems to be on the high side of the range of current prices on the market. Most in that range have only 1200 sq ft. It seems like the Irvine market is holding on to prices at this current time. But if more foreclosures come onto the market (which graph's foreclosure thread is indicating), the prices could go down further. Looking at the numbers, your monthly payment would be around $3300 PITI which after deducting the mortgage interest would be a total payment of around ~$2750. I'd say market rent is around $2400-2500 which would be what I would consider the absolute bottom of what the prices will go to (with 20% down, traditional financing). At that price with current interest rates, I would put your downside risk at around $50,000. Over seven years, I do not think you have anything to worry about. No mello roos and low association is also a bonus for that area.



I hope this helps. Let me know if you have any other questions.
 
Check with your agent/broker, but if your offer has not yet been accepted, then I think you can rescind your offer. **But be sure to check with your agent on this first.**
 
Dealrep,

Besides comparing the price, have you compared raising kids in a rental apartment or in your own house?

You bought a house for live, not for trade, as long as you can afford it, whether the price will go up or down is no longer important.

After your kids graduated from the excellent Irvine High School, it might be the time for you to compare the price again.



Stop looking for a house, start your new life as a house owner, how good it is. Life biggest moment starts at home, is it? Look at this blog, how many people are waiting for purchasing a house in Irvine. If you can afford it now, congratulations!!! No need to wait, kids grow up fast.



So what if the price drops another 20%, or even 50%. The value of the house is solely decided by you & your family members, not the market. Wish you & your family all the best & welcome to settle down in Irvine.
 
sure it doesnt matter. if you can afford it, it's ok to waste money. lets say you take out a 400k loan to buy a home. another family moves in next door, paying much less for essentially the same home and only takes out a 300k loan with the same amt as you put down. over the next 20 yrs you will spend several hundred k more in interest and taxes.



when your neighbors are taking their kids to private tutoring, piano lessons, and on world travel, while you're putting that same money into interest and taxes, see if you still think prices going down is unimportant.
 
By waiting, I mean renting I have save $300K of loss(Woodburry, MilleFleur, $1.5M 2005, now $1.2M). I also save $400K(Columbus, Lennar, $1.2M 2006, now $800K). My kid started Middle school in Irvine and graduated from one of the best high school in Irvine. She now can afford private colleges. I have to thank the Irvine Housing Blog, HousingBubbleBlog for saving me so much money.
 
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