usctrojancpa
Well-known member
I wanted to take this opportunity to share with everyone my 2-year journey on finding my unicorn home but before I start I wanted to say thank you to everyone on Talk Irvine who entrusted me with their real estate needs over the year and having provided me both their repeat and referral business. If not for all of my clients, there would have been no journey to make.
Let me first describe what my unicorn home was in my mind but in terms of must-haves and want-to-haves.
Here were the must-haves...
1) single story home
2) on a larger view lot
3) south of the 405
4) in Irvine or close drive to Irvine (Newport and CDM)
Then here were the want-to-haves...
1) 3-car garage, preferably 3-car wide garage
2) relatively turnkey
3) had a pool and spa
4) good floor plan
Over the course of the 2 past years I only made offers on these 2 other homes besides the one that I ultimately purchased last month...
https://www.redfin.com/CA/Irvine/10-Dreamlight-92603/home/5929516
I made an offer of $2,600,000 initially on this home and then went up to $2,650,000 on counters but it sold for $2,680,000 ultimately. The location was great but it lacked the 3-car garage and the house needed some updating hence I didn't go higher on my counter.
https://www.redfin.com/CA/Newport-Coast/10-Observatory-92657/home/5928749
I made an offer of $4,720,000 on this home and was basically ghosted by the listing agent after she confirmed receipt of my offer (listing agent said she didn't accept escalation clauses with offers). Then it goes into escrow so I kept an eye out on it to see what it would sell for. It showed that it sold for $4,721,000 on MLS where the listing agent represented the buyer so I thought to myself well that was fine of funny, let me wait a few weeks to see what it actually recorded for. Surprise surprise I see that $4,673,000 so I reported this agent to CRMLS compliance for putting a false sales price on MLS for the home. A part of was really curious if she even presented my offer to the seller and whether I should report her to the realtor association but I got busy and let it go. This home was missing the 3-car garage and was missing a pool/spa but had a good floor plan and a nice view.
Then my Turtle Rock home that I bought pops onto the market and I got excited. I moved one of my open houses from starting at 1pm to 2pm so that I had time to go see the home during their open house and talk to the listing agent. I spent about 20 minutes in the home looking at the upgrades/remodel work that the owner had done and really liked what I saw, they used mostly higher end finishes and the quality of work was good. The home literally checked all of the boxes for me so I talked to the listing agent about submitting an offer and asked if he and the seller would be fine with an escalation clause with the offer and he said that he used them on the buy side himself (he also mentioned that the seller needed a 30-60 day rent back after the sale).
I submitted an offer of $4,000,000 on Monday morning after the open house with an escalation clause of $20,000 above the highest offer/counter with no limit (they were reviewing offers on Tuesday night) along with a 2 month free rent back. On Wednesday morning I got a call from my lender telling me that he called her to check in on my financial strength and ability to close and of course she said I was good to go. Then a few hours later I get an email showing me the highest offer of $4,130,000 and shortly after that the listing agent calls letting me know that he sent the highest offer and if I'm willing to go to $4,150,000 the home would be mine (he also mentioned that they had 12 offers, no surprise there as the open house was busy during the 20-25 minutes that I was there). I told him I'm good to go and to send me the seller counter to sign so we can open escrow and also mentioned that I'd be reducing the purchase price by $100,000 along with a $3,750 seller credit in lieu of my commission which he said would be fine.
Now more on the lender part of the equation. I decided to move forward with 3 lenders to not make any chances of losing the home as the biggest risk was whether the home would appraise at the adjusted contract price of $4,050,000 or something close to it. There were 2 lender appraisals that came in at the adjusted contract price and one that came in at $3,600,000 (that appraiser used horrible comps...2-story non view lot homes in Turtle Rock) which I appealed but to no avail. So then I continued with the other 2 lenders, it wasn't too bad because I was basically sending them the same information and back-up for the loan approval.
Both loans were conditionally loan approved and moving towards final loan approval when I came to find out that one still had a Covid overlay required of where a buyer with 4 or owned properties needed to maintain 50%+ of the total loan balances as cash reserves. I came up short by several hundred thousand even those I had roughly 8-9 years of reserves for all my properties assume no rent on investment properties. So I was left with one lender (the one that gave me the loan pre-approval) which I closed with.
Over the course of these 2 past years I had to keep increasing my budget just like a lot of my buyers had to do as prices were rising. Then of course rates went up from the high 2% to mid 4% range so I opted for a 3.875% 10-year ARM as I believe that rates will be coming down over the next 12-24 months when I'll refinance into a lower rate loan. Did I buyer at/near the top of the market? Probably but in the course of 2 years I only made offers on 3 homes because my search parameters only yielded a few homes that were of any interest so who knows how long it would be before I found another home that checked off all the boxes like the Turtle Rock home did. I plan on living in this home for 10+ years if not longer so I don't really care what the market does in the short and intermediate term. What's interesting is that the strategy, using an escalation clause with an offer/counter, that got me my unicorn home is the same strategy that I used to help a few dozen buyers to purchase homes over the past 2 years.
There are a few things that I plan on doing to the home besides furnishing it. I have got into contract to install a 9.6 kw solar system since the home has a pool and that I have an EV car coming this year. I also got into contract on a pool solar system which will enable me to use the pool 9-10 months out of the year because the pool also has pool cover system. The seller did put a wall up between the 1-car garage and 2-car garage space as they were using the 1-car garage space as a workout room so I'll be taking that wall down as I need the extra space and will redo the garage epoxy as they put rub floor tiles down in that 1-car garage space. I'll also install an aluminum cantilever pergola next year as there is no patio cover in the back yard and it faces almost directly south. I can't wait to move into the home.
And a BIG THANK YOU to all of my clients, I couldn't have done it without you!
Let me first describe what my unicorn home was in my mind but in terms of must-haves and want-to-haves.
Here were the must-haves...
1) single story home
2) on a larger view lot
3) south of the 405
4) in Irvine or close drive to Irvine (Newport and CDM)
Then here were the want-to-haves...
1) 3-car garage, preferably 3-car wide garage
2) relatively turnkey
3) had a pool and spa
4) good floor plan
Over the course of the 2 past years I only made offers on these 2 other homes besides the one that I ultimately purchased last month...
https://www.redfin.com/CA/Irvine/10-Dreamlight-92603/home/5929516
I made an offer of $2,600,000 initially on this home and then went up to $2,650,000 on counters but it sold for $2,680,000 ultimately. The location was great but it lacked the 3-car garage and the house needed some updating hence I didn't go higher on my counter.
https://www.redfin.com/CA/Newport-Coast/10-Observatory-92657/home/5928749
I made an offer of $4,720,000 on this home and was basically ghosted by the listing agent after she confirmed receipt of my offer (listing agent said she didn't accept escalation clauses with offers). Then it goes into escrow so I kept an eye out on it to see what it would sell for. It showed that it sold for $4,721,000 on MLS where the listing agent represented the buyer so I thought to myself well that was fine of funny, let me wait a few weeks to see what it actually recorded for. Surprise surprise I see that $4,673,000 so I reported this agent to CRMLS compliance for putting a false sales price on MLS for the home. A part of was really curious if she even presented my offer to the seller and whether I should report her to the realtor association but I got busy and let it go. This home was missing the 3-car garage and was missing a pool/spa but had a good floor plan and a nice view.
Then my Turtle Rock home that I bought pops onto the market and I got excited. I moved one of my open houses from starting at 1pm to 2pm so that I had time to go see the home during their open house and talk to the listing agent. I spent about 20 minutes in the home looking at the upgrades/remodel work that the owner had done and really liked what I saw, they used mostly higher end finishes and the quality of work was good. The home literally checked all of the boxes for me so I talked to the listing agent about submitting an offer and asked if he and the seller would be fine with an escalation clause with the offer and he said that he used them on the buy side himself (he also mentioned that the seller needed a 30-60 day rent back after the sale).
I submitted an offer of $4,000,000 on Monday morning after the open house with an escalation clause of $20,000 above the highest offer/counter with no limit (they were reviewing offers on Tuesday night) along with a 2 month free rent back. On Wednesday morning I got a call from my lender telling me that he called her to check in on my financial strength and ability to close and of course she said I was good to go. Then a few hours later I get an email showing me the highest offer of $4,130,000 and shortly after that the listing agent calls letting me know that he sent the highest offer and if I'm willing to go to $4,150,000 the home would be mine (he also mentioned that they had 12 offers, no surprise there as the open house was busy during the 20-25 minutes that I was there). I told him I'm good to go and to send me the seller counter to sign so we can open escrow and also mentioned that I'd be reducing the purchase price by $100,000 along with a $3,750 seller credit in lieu of my commission which he said would be fine.
Now more on the lender part of the equation. I decided to move forward with 3 lenders to not make any chances of losing the home as the biggest risk was whether the home would appraise at the adjusted contract price of $4,050,000 or something close to it. There were 2 lender appraisals that came in at the adjusted contract price and one that came in at $3,600,000 (that appraiser used horrible comps...2-story non view lot homes in Turtle Rock) which I appealed but to no avail. So then I continued with the other 2 lenders, it wasn't too bad because I was basically sending them the same information and back-up for the loan approval.
Both loans were conditionally loan approved and moving towards final loan approval when I came to find out that one still had a Covid overlay required of where a buyer with 4 or owned properties needed to maintain 50%+ of the total loan balances as cash reserves. I came up short by several hundred thousand even those I had roughly 8-9 years of reserves for all my properties assume no rent on investment properties. So I was left with one lender (the one that gave me the loan pre-approval) which I closed with.
Over the course of these 2 past years I had to keep increasing my budget just like a lot of my buyers had to do as prices were rising. Then of course rates went up from the high 2% to mid 4% range so I opted for a 3.875% 10-year ARM as I believe that rates will be coming down over the next 12-24 months when I'll refinance into a lower rate loan. Did I buyer at/near the top of the market? Probably but in the course of 2 years I only made offers on 3 homes because my search parameters only yielded a few homes that were of any interest so who knows how long it would be before I found another home that checked off all the boxes like the Turtle Rock home did. I plan on living in this home for 10+ years if not longer so I don't really care what the market does in the short and intermediate term. What's interesting is that the strategy, using an escalation clause with an offer/counter, that got me my unicorn home is the same strategy that I used to help a few dozen buyers to purchase homes over the past 2 years.
There are a few things that I plan on doing to the home besides furnishing it. I have got into contract to install a 9.6 kw solar system since the home has a pool and that I have an EV car coming this year. I also got into contract on a pool solar system which will enable me to use the pool 9-10 months out of the year because the pool also has pool cover system. The seller did put a wall up between the 1-car garage and 2-car garage space as they were using the 1-car garage space as a workout room so I'll be taking that wall down as I need the extra space and will redo the garage epoxy as they put rub floor tiles down in that 1-car garage space. I'll also install an aluminum cantilever pergola next year as there is no patio cover in the back yard and it faces almost directly south. I can't wait to move into the home.
And a BIG THANK YOU to all of my clients, I couldn't have done it without you!
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