Help with Foreclosure homes

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iceeman_IHB

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<p>I'm new to the whole real estate game. I'm 31 and recently engaged. My fiance and I are looking for a decent property to make our home. We were looking at new homes for about 8 months, but with the slumping market..decided to wait it out. I've been fixated on new homes only...because it'll be our first home and just thought it's the best way to go. But after consulting with few friends, many suggested looking at foreclosure homes due to pricing.</p>

<p>Here's what I am looking for:</p>

<p>1) home that's not older than 15 years</p>

<p>2) Irvine area ( tustin, Lake Forest, RSM, Newport) okay.</p>

<p>3) 3-4 bedroom with 2.5 or more bath</p>

<p>4) price : $400k or below.</p>

<p>5) townhouse okay depending on location </p>

<p>6) purchase timeframe: hopefully by end of 2008</p>

<p>If anyone has some recommendation or advice, please let me know. Thanks.</p>

<p> </p>

<p> </p>
 
Assuming you're working in Irvine because you said Irvine area - there is a <em>huge </em>difference between say Lake Forest and RSM in terms of commute.





If you're looking for a house thats <15 years old, here are a couple areas contain a lot of relatively newer housing:


Ladera Ranch, Aliso Viejo, RSM. All are seeing huge price reductions right now. These are probably the areas you might want to consider targeting for that price range, though who knows how far everything will actually fall by the time this is over.





I would recommend you try and stay as close to the freeway as possible without obviously being right next to the freeway. Aliso Viejo gives you good access to a few freeways (133 -> 405 and 5), so that's one good one. Ladera Ranch is farther from the freeway. Expect to pay a lot of tolls if you live in RSM, otherwise it's a very long commute.
 
IMHO...



i say buy new and look in columbus grove or columbs square. builder are more willing to negotiate. forclosure is risky business if you don't know what you are doing, especially being a first time home buyer. short sale is the worse.... i say find out when the builder is closing their books and target any standing inventory. haggle like crazy. pick a target and study their pricing patterns. they play games with their pricing.... raising and lowering each month. don't just look at prices... look also at best interest rate you can get at the time. you want the lowest payments so you can ride out the long.......... slump.
 
I would say look for a wonderful rental home, save more money for a downpayment, and buy in a few years.
 
Thanks everyone for the great input.



jbatzmaru...that's what I've been preaching or attempting to brainwash my fiance with the new home deal. I prefer to buy a new home as first time buyer. I have heard horror stories about foreclosure properties and the amount of rework that needs to be done on many homes. I'm pretty handy but I don't want to be spending time fixing up homes.



I have looked at Columbus Grove and Square. I personally like the Camden place bu Lennar Residence 4 ( 3 bedroom plan). Although it's sold-out at this time, I believe there's 5 more phases coming with the newest one end of this Month. Pricing hasn't been released yet, but last time we checked...it was about $480k. I'm hoping the new prices will be significantly lower or close to $440k or so. I personally like the layout and the fact everything is included ...granite counter, all kitchen appliances, etc...



awgee... I've been renting for a long time right now. My fiance and I pay close to $2500/mo on rent. It's like throwing money down the drain. Income tax is killing us too..so we need a property to write off some taxes and I think buying our first home will be a good avenue for that.



Time will tell..but I'm really hoping the pricing of the homes drop during 2008.
 
ice - If paying rent is throwing your money away, what is paying interest?<p>

Consider that the supposed tax advantage to buying a home, (paying interest), is discounted into the price of the home. In other words, you have to pay for the priviledge of deducting mortgage interest.<p>

I know the above is different than what you will hear from you family, friends, and realtor, so let me establish my credentials.<p>

I owed, (sp), one home or another for the last 25 years, and have now rented for the last two years, and will probably buy again in a few years. I am an Enrolled Agent.
 
<p>iceeman,</p>

<p>I am in a similar position as you are and would recommend you to think twice about buying. The tax write off deal is a canard because you will paying property tax, hoas, mello roos, and other misc. expenses. It saves you almost nothing in the end.</p>

<p>If the value of the property that you buy does not increase, you are basically renting, especially since the payments in the first ten years of a 30-year loan go mostly to interest. Not to mention you will be locking down your down payment in a non-appreciating/depreciating asset. Sounds like fun? </p>

<p>There are many threads on this board that talk about this topic. The conclusion I get is that if you are buying for economic reasons (i.e. tax write off or investment), do not do it. Buy if you have non-economic reasons (i.e. family or love the house) and plan to stay there for 7-10 years, go for it. </p>

<p><a href="http://forums.irvinehousingblog.com/discussion/1394/rent-vs-own/#Item_50">forums.irvinehousingblog.com/discussion/1394/rent-vs-own/#Item_50</a></p>
 
awgee,



I understand that I will be paying interest, HOA, Melloroos, etc..which will prob cost more than any rent. However, I am sick and tired of paying for someone's home.



IrvineCommuter,



I am looking to buy a home not for the financial reason, but for personal reason. I would like to live in my own space for the next 7-10 years. If I buy, I am planning to move in and stay there for atleast 10 years.



I will play by ear, but from what I can gather from this forum and my friends...it seems as though 2008 and into 2009 may be best time to buy. Correct me if I'm wrong.
 
<p>Be extremely careful at buying from Lennar. They are in serious trouble. When trouble gets bad enough, builders in trouble stop paying their subcontractors and then they file mechanics liens. If you give a deposit, make sure it is held by an atty or title company that is not owned by Lennar.</p>

<p>Make sure the title agency specifically agrees to remove the standard Mechanics Lien Exception. Then, if liens are filed after you buy, the title company is on the hook.</p>

<p>Do not accept a title policy from Stewart Title or Commonwealth/Lawyers of Richmond. You have to sue them to honor their policies. I don't know who is good in California. I won't be at all surprised if a big national title company goes down the drain, by the way; they have more claims due to defalcations, and far less money coming in. I don't know what their financial shape is specifically, this is just a general comment.</p>
 
It always amazes me how people view tax deductions. Lets see, im going to spend a dollar so i can save 30 cents?, so i end up spending a net of 70 cents. it amazes me how financially ignorant people in this country are (no offense iceeman). Deferring taxes, now that is a great thing, but spending to get a tax deduction not so much.
 
<p>qwerty,</p>

<p>my purpose of buying a home is not solely for tax deduction. I'm not financial guru..but I understand there are benefits in buying a home ( long run). I'm in the for the long haul and i'm sure the market will recover within next 10 years. </p>

<p>renting is great..but temporarily not permanently. </p>

<p>I know this is a bear market forum..but i'm just trying to get a reality check as to when to buy. </p>
 
iceeman - i didnt mean too sound harsh, i agree that a benefit of buying is the tax deduction, but one shouldnt buy just for that reason, and it appears you have other reasons. we are all in the same boat, good luck whenever you purchase!
 
qwerty,



no..u weren't harsh. I fully understand your point of view. But to clarify, I am not simply buying a new place for tax deduction purpose. That is only one of many reasons. To be honest, i want my own place where I can call my own and decorate the interior as I want. To have my own lovely garage and working space. To really and truly come 'home.' I plan on living at the new property for atleast 10 years.
 
How about forfeiting your security deposit and painting/decorating as you wish? Definitely know some people who have done just done that - don't know about the Irvine Company and their penalties.





As long as you owe money to the bank, you can't "truly" call your home yours. So much for that argument.





Rentals do have garages as well you know ... :P





I find that the argument of homeownership as the American Dream is only a ploy to get people to buy and buy and buy. If you don't manage to buy you are seen as some sort of inept member of society. And getting a foreclosure all the sudden makes you homeless (even though it just put you in the renter pool like the rest of us). Then again, in a consumer driven society as ours I don't really expect more - I just wish people would take a step back and look at it from a fresh perspective.





In other words, rent and don't feel bad about it - it's the reasonable thing to do right now.
 
ice - 2008 sounds <strong>way </strong>too soon and 2009 sounds too soon. 2011 and 2012 sound just right. How many months of savings will you have saved up so you can still make your payments if you or your wife get laid off or have to stop working or for some reason your income decreases. I would recomment <strong>at least</strong> six months of complete expenses and better if closer to a year's worth. I know you are just looking for opinions, so I am giving mine.
 
I like owning my own place. When I rented, I always felt at the whim of the landlord, someone else controlled what I could do with my own house. When the patio cover needs to be repainted, I'm sure as heck not going to fix up someone else's house. But the landlord never "got around to it" so you have to look at a cosmetic eyesore until someone relents.





Its not a big deal but I like controlling my own home. The tax break concept makes no sense unless it helps to make the rent=buy equation work out for you. Owning usually costs more.





As an aside, I leased a few cars, because I change cars often. Every mile I put on it made me think whether or not I would go over my limit 4 years from now. And spilling my tea made me feel like I would get charged for it. Now I just buy.





Again, its a completely personal issue, so if owning makes you happy, and that's where you want to sink you money right now, then you won't hear an argument from me. As builders take huge losses, quality of new homes will go down. It always does. Yes, you may get a great deal on a brand new home 3 years from now, but it will probably have vinyl floors and plastic shower units. Just look at IE.





Final thought... if you're about to have kids, then make sure you buy enough rooms and space. You won't be able to sell any time soon.
 
If you rent you don't have to live with an eyesore - you just move (hence, short leases or month-to-month from private landlord).



If you own and your neighbor buys his kids a new drum set for Christmas - guess what? Or if you are expanding your family - what happens then?
 
thanks for the great feedback and opinions everyone.



that's what i love about this forum...everyone will put in their 2 cents and not hold back. It's a great reality check for me.



I guess i'm one of those suckers who have been lured into the "american dream" campaign. Owning a home have been a dream or goal of mine for the past 5 years. I guess when you're around people who own homes, you become envious at times. Most of my friends own a property of some type whether it's a small condo or a single-family house. I've been holding off because of my financial situation, but I've lived in Irvine for the past 2 years...rent seems to be ridiculously high and sometimes senseless. $2400/mo is alot IMO.



I am waiting for the right time to buy a home, but i can't wait for all the stars to line up. I just feel this is the year I need to jump in. Call me ignorant or stupid, but I am just sick of renting. You have to understand I paid premium rent while I was in school at UCLA..and westwood area isn't cheap. Coming to Irvine was actually cheaper if you can imagine that.



But as I am getting older and settling down, having a house of my own seems appropriate. Eventually the home will be paid off or sold (hopefully with appreciation) at later date. Yes, I can save as well by renting..but there's certain things you can't feel content with (and renting is one of them for me).
 
If you check my comments on today's thread you'll see me argue that current prices are approaching reasonable from a long-term point of view. That said, as long as prices keep falling you will save vast amounts of money delaying. We could easily see 20% more in declines. You might want to ask yourself if buying now as opposed to next year is worth even 5% of the price.
 
FairEconomist,



if your argument is true (which i wouldn't mind at taking side with), I would love to hold off. But Irvine seems to be one of those interesting bubble in the real estate market. The national average may fall 20 %, but irvine will take maybe 5% hit during the same period. But back to your argument, yes..i wouldn't mind waiting another year to save 5%... i just don't want to be left at the station waiting for a non-arriving train.
 
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