I bought a home

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irvine_native_IHB

irvine_native_IHB

New member
First let me disclose that I am a bubblehead. I have been obsessively reading sites like this and thehousingbubbleblog for what seems like years. Yes, I believe that the market is quite overpriced and is due for a correction. Buying right now is madness right?





Well, we closed on a home last week. I wish to attempt to stay anonymous, so I will refrain from posting specific numbers. We put 36% down and the mortgage is 2.6 times our income.





Why did we buy now of all times? It is the right home in the right place. I could easily see us staying in this home for the rest of our lives. This is not a "move up" home, this is it. It is in the neighborhood I grew up in and loved. My kids will get to enjoy the same parks that I did. Yes, it will drop in value from now, but I don't care since I don't plan on selling it.





We used a ziprealty agent and everything went smoothly. Everything was handled by emails, scans and faxes. There was very little face time (this is a plus in my book). We applied the ziprealty rebate directly to our closing costs. The ziprealty rebate is 20% of the buyers commission. The zip agents work out of their homes, so I assume that the quality of service is all over the map. We were lucky that we got a good agent.
 
I'm pretty excited about this. Sorry if it sounds like I'm pumping zip or something like that. For what it is worth, we went through two zip agents before we found one I was willing to use. One was an old blinged out lady who fit the stereotypical RE agent mold "now is always the time to buy" mantra.. no thanks. The second was very slow to respond to emails so we dumped him.





We made several offers on homes over the past few years. All older homes and until recently, all fixers (remember, we only like older neighborhoods). Only recently have priced dropped enough where nice homes started showing up in our range. Also, most sellers are clueless. Sorry I don't care what you think your home is worth, here is what I'm willing to pay for it. One home that we made an offer on which was refused ended up selling for much less than our offer 3 months later. Duh. We almost made the mistake of our lives by using the same listing agent as our buyers agent on a home. That deal fell through luckily and after the fact we realized that the agent was 100% in the sellers favor.
 
<p>IN - I have seen you post a bunch here and am curious to understand why you bought right now. I guess finding the ideal house is great but it still wouldn't get me to open up my wallet unless the pricing made sense. A few questions for you.</p>

<p>Were you able to negotiate down the price from the relocation company's original asking price to what you finally ended up with? When did the company buy the house in the first place? That is, is the $85K drop from last years price, 2005, 2004, etc? </p>

<p>Finally , do you believe this type of ideal house would not be back on the market in the next 2-3 years? </p>
 
RKP- Yes, we did negotiate the place down from their asking. They countered, then we countered, this went back and forth a few times before we agreed on a number.





If we bought in 2 years we could either buy a bigger home for the same money, or buy a similar home (assuming it existed) for less money. We don't want a bigger house. I don't see the point of waiting to buy the same home for less when we can afford it now. In 2 years the market will still be dropping. Why then not wait 5+ years? If you can find the home you like and can afford it with a sane loan, why not buy it? We found a nice place and are done with this housing obsession. We still have plenty of savings and our retirement funds are untouched.
 
<p>irvine_native,</p>

<p>The point of waiting is pretty simple: to get more for your money. Potentially saving hundreds of thousands of dollars (or getting a much better home for the same $$) is a really big incentive. I plan on watching the leading indicators and buying once it looks like prices are not going to fall too much more. If that takes 5 years so be it.</p>

<p>Some of my friends always have to have the latest and greatest electronic gadgets and computer stuff. It doesn't matter to them that the lcd tv or video card they have their eye on is going to be half the price next year; they want it now, they can afford it, they buy it. It's not what I would choose for myself, but I don't like to pass judgement on what people choose to spend their money on. Anyone who wants to spend their money on satisfying their impatience has every right to do so. Hopefully your extra time in a home you own is worth it to you and brings you happiness.</p>
 
Bigmoneysalsa,





You replaced my word bigger with better. I do not believe that we can find a better home. We can certainly find a bigger home, but as I said bigger != better.
 
<p> </p>

<p>Trophy property is in the eye of the beholder. For Irvine Native the neighborhood has sentimental value and especially when he knew every facet of the land around the lake. The knowledge and the intimacy of his childhood memories in this neighborhood has been overwhelmingly positive that he would want his spouse and children to share and for Irvine Native to relive the good time of his youthful years. The precise location is extremely important for this purchase. The proximity to family social support group is also a factor to be considered for the young children. </p>

<p>This is a purchase that is not based on numbers but by emotion. The satisfaction living at this location and the family oriented lifestyle is priceless for Irvine Native. Children’s are growing up very fast and the limited window of time for the children to live that particular phase of childhood in this location is crucial for him . The slight discount is already an incredible incentive for Irvine Native. Even without the price reduction Irvine Native would have purchased it anyway.</p>

<p />

<p> </p>
 
<p>irvine_native,</p>

<p>Didn't mean to imply that you are a spendthrift or that your purchase was on impulse. If you have been reading housing bubble blogs for many months than obviously there is some serious thought behind your decision. And, um, yeah, I know that bigger != better. "Better" was exactly what I meant, in the sense that buyers will have more spending power to put towards whatever it is that they happen to value (size, location, school districts, etc).</p>

<p>I appreciate that you are not a stereotypical FB who is in way over their heads and buying a house you can't afford. However, I vehemently disagree that just because one can afford to own a home that one loves means its a good idea to go ahead and buy it right now. For some people it is and for others it's not. It depends on whether getting what you want sooner is worth foregoing all the money that can be saved by waiting, and that is a very personal question that everyone ultimately has to answer for themselves.</p>
 
irvine_native,





Just curious, is there a reason you used ziprealty over redfin ? Don't you get more cashback from Redfin ? Congratulation on your purchase, I think you made a wise choice. If you're buying to live and not invest, and you think it's the perfect home for you, why not buy if you can afford it.
 
Redfin seemed a little too scaled down. They only have one agent for all of Orange County. Since we are newbies to buying a home, Zip seemed like a good compromise to help us through the process. I love the layout of their site for searching. In hindsight I probably should have given Redfin more of a chance. Keep in mind that we started this process last summer - I hadn't even heard of Redfin then. With only one agent, I'm sure Redfin would have been sick of us after a year of not buying.





I want to add that bkshopr is right on the money.
 
IN -





Congrats on your purchase! You sound really happy, and at the end of the day, that is all that matters. Well, that and the fact that you won't be stressing about your loan in two or five years.





I'm glad you found an area that you love at a price you could tolerate. I wish you and your family many years of joy!
 
Congratulations on your new home.





With as bearish as I am, I can completely understand why you bought now. If you can truly afford the home, your financing is not exotic, you plan to stay in it for many years, and you aren't fantasizing about wild appreciation, the price is irrelevant.
 
<p>IN,</p>

<p>I wanted to say the exact what IR just said! Congratulations!</p>

<p>I still remember one family man who bought in 1990 for a starter home in Orange for $240K, 5% down. He bought because it was a long time dream that he had and he was able to buy for just 5% down. Everyone was against him, including me, and so his home did dropped to $180K a year later. He held on to the house and now it's worth at least $600K. He was very proud of his accomplishment and his family of 12 had a nice place of their own, no landlord raising rent, or telling him he could not have 12 people living in a home.</p>
 
<p>Seriously - this blog sounds like a real commercial everytime somebody buys a home and list the right reasons for buying. We all congratulate them like a support group to say that they did the right thing, in their situation that is. I'm going to be honest with irvine_native, "YOU GAVE IN TO THE WIFE!"</p>

<p>C'mon man. I still dont believe you. You've been saving and living like paupers and now you blow a load of cash on a depreciating home. Then you go and post it on a bearish blog. Why?</p>

<p>We appreciate the fact that you shared but why? What's in it for you?</p>
 
Why post here? This is an Irvine housing blog. Seems appropriate. Other people have posted that they bought here. This forum is more than just a bunch of bears patting each other on the back for waiting and timing the market perfectly. Since I am anonymous, why not share what the buying experience is like? You can avoid my posts if you want.





Gave in to my wife? I don't know. A pregnant woman is quite determined indeed. Initially I wanted to keep renting in our crappy rental. We were paying only 8% of our monthly income in rent adding quite a bit to our savings every month. I wasn't too happy about buying a fixer since that is all we could afford last year in the few blocks that I wanted to buy in. But when I found a nice place that was affordable to us, I jumped on it. I think you have me confused with a different poster who started the "what if you have to buy" thread. We were also looking into a bigger rental, but our monthly payment would have doubled and all of the rentals in this area have 1970s original everything (they suck). Moving with kids is a major PITA and I want this move to be our last.





There are wrong reasons for buying a home. Specuvestors, flippers, suicide loans, etc. We didn't buy a home earlier because the homes we wanted were out of our reach using conservative financing. Prices have dropped pretty drastically in the past year enabling us to find the home we want. We are buying our home 19% below it's starting asking price and way below it's comps from last year. This should be good news to the bears here. I'm sorry if I didn't time the market perfectly to the approval of the perma bears.





My wife doesn't like me posting here. She just told me that thinks you guys will find out where we live and picket outside our house for buying now. I think she is joking. I hope . Maybe posting here was a bad idea.
 
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