Irvine Pacific: Do they offer retro incentives after purchase

[zakami]

We have our second baby coming in Jan 2012 and the wife is in a rush (yes, stupid but emotions win) to buy a home. We are thinking of purchasing in Laguna Altura. I fully expect Irvine Pacific to either lower prices and/or offer incentives come Oct 1 (perhaps a few weeks later). The home we are looking at will not be ready for move-in until Dec (Phase 2). Do builders typically lower prices (I expect not) or offer incentives retro-actively to people who already purchased when no incentives were being offered? Of course there is the option to lose our deposit and attempt to purchase again (and I realize they do not have to sell to me then), but hopefully it doesn't have to come to that.

I've never bought a new home, so not sure what to expect. Should one be negotiating with Irvine Pacific even though they are still in Phase 1 and starting on Phase 2?

 

[iacrenter]

Maybe some of the other RE professionals can chime in but I would really wait on buying in LA. Even with a baby coming, rent month to month if you can. Sounds like sales are going slow and things can only get worse after October 1st. I can only foresee more incentives ahead and I don't believe the builders are obligated to pay you the difference.

Even with a price guarantee of say 12 months, the builder may simply offer larger design credits and/or upgraded standard features, or larger broker coop fees to circumvent price drops.

 

[IndieDev]

We have our second baby coming in Jan 2012 and the wife is in a rush (yes, stupid but emotions win) to buy a home.

Renting is a big winner in Irvine right now over buying. Why not rent, save the money for a bigger down payment, and then buy in LA when the prices are down even more?

 

[irvinehomeowner]

I'm in agreement with IndieDev on this in pure terms of bang for your buck.

Although... there are some places where private rentals aren't very available... or cheap.

 

[The I-R-V]

They usually do not offer any rebates or incentives after a sale.  In fact, they're still pretty cocky about it at the sales offices. If you're buying now, be prepared to view it as a long term investment at best and be prepared for lower prices.  On the flip side, you can get a 30 year loan for 4.5%.  Haven't seen that since the financial crisis.

It goes down, so what?  If you can afford the payments and have job stability, buying may be the right thing for your family long term.  Renting something comparable ain't that cheap!

 

[usctrojancpa]

We have our second baby coming in Jan 2012 and the wife is in a rush (yes, stupid but emotions win) to buy a home.

Renting is a big winner in Irvine right now over buying. Why not rent, save the money for a bigger down payment, and then buy in LA when the prices are down even more?

Depends on where and what you are buying in Irvine.  Just closed on a small condo for one of my buyers in Irvine and it is right at rental parity BEFORE the tax benefits (with 20% down and a 4.50% 30-year fixed mortgage). 

 

[IndieDev]

We have our second baby coming in Jan 2012 and the wife is in a rush (yes, stupid but emotions win) to buy a home.

Renting is a big winner in Irvine right now over buying. Why not rent, save the money for a bigger down payment, and then buy in LA when the prices are down even more?

Depends on where and what you are buying in Irvine.  Just closed on a small condo for one of my buyers in Irvine and it is right at rental parity BEFORE the tax benefits (with 20% down and a 4.50% 30-year fixed mortgage).

I haven't seen anything in Irvine at rental parity, not saying it's impossible, just saying I don't know a single community where it's true.

I know it's definitely not there yet around the LA/QH area.

 

[villiagepeople]

We have our second baby coming in Jan 2012 and the wife is in a rush (yes, stupid but emotions win) to buy a home.

Renting is a big winner in Irvine right now over buying. Why not rent, save the money for a bigger down payment, and then buy in LA when the prices are down even more?

Depends on where and what you are buying in Irvine.  Just closed on a small condo for one of my buyers in Irvine and it is right at rental parity BEFORE the tax benefits (with 20% down and a 4.50% 30-year fixed mortgage).

usc.. do you mind giving us a little more general detail... how much it would rent for, how much it sold for?  i would understand if you didn't... but giving us "just the numbers" will allow us to see at what price point rental parity is coming to irvine, also everyone's "rental parity" calc seems to be a little different... just seeing how you calculate it.

 

[usctrojancpa]

We have our second baby coming in Jan 2012 and the wife is in a rush (yes, stupid but emotions win) to buy a home.

Renting is a big winner in Irvine right now over buying. Why not rent, save the money for a bigger down payment, and then buy in LA when the prices are down even more?

Depends on where and what you are buying in Irvine.  Just closed on a small condo for one of my buyers in Irvine and it is right at rental parity BEFORE the tax benefits (with 20% down and a 4.50% 30-year fixed mortgage).

usc.. do you mind giving us a little more general detail... how much it would rent for, how much it sold for?  i would understand if you didn't... but giving us "just the numbers" will allow us to see at what price point rental parity is coming to irvine, also everyone's "rental parity" calc seems to be a little different... just seeing how you calculate it.

Rent - $1,700 to $1,800/mo (based upon closed MLS rental comps)
Mortgage payment - under $1,200/mo
HOA - $340/mo
Property Tax - around $250/mo

That does not include the approx. $350/mo to $400/mo tax benefit my buyer will see when they do their taxes.

 

[shadax]

We have our second baby coming in Jan 2012 and the wife is in a rush (yes, stupid but emotions win) to buy a home.

Renting is a big winner in Irvine right now over buying. Why not rent, save the money for a bigger down payment, and then buy in LA when the prices are down even more?

Depends on where and what you are buying in Irvine.  Just closed on a small condo for one of my buyers in Irvine and it is right at rental parity BEFORE the tax benefits (with 20% down and a 4.50% 30-year fixed mortgage).

usc.. do you mind giving us a little more general detail... how much it would rent for, how much it sold for?  i would understand if you didn't... but giving us "just the numbers" will allow us to see at what price point rental parity is coming to irvine, also everyone's "rental parity" calc seems to be a little different... just seeing how you calculate it.

Rent - $1,700 to $1,800/mo (based upon closed MLS rental comps)
Mortgage payment - under $1,200/mo
HOA - $340/mo
Property Tax - around $250/mo

That does not include the approx. $350/mo to $400/mo tax benefit my buyer will see when they do their taxes.

Since you didn't mention Mello Roos I imagine this is something old.

 

[usctrojancpa]

We have our second baby coming in Jan 2012 and the wife is in a rush (yes, stupid but emotions win) to buy a home.

Renting is a big winner in Irvine right now over buying. Why not rent, save the money for a bigger down payment, and then buy in LA when the prices are down even more?

Depends on where and what you are buying in Irvine.  Just closed on a small condo for one of my buyers in Irvine and it is right at rental parity BEFORE the tax benefits (with 20% down and a 4.50% 30-year fixed mortgage).

usc.. do you mind giving us a little more general detail... how much it would rent for, how much it sold for?  i would understand if you didn't... but giving us "just the numbers" will allow us to see at what price point rental parity is coming to irvine, also everyone's "rental parity" calc seems to be a little different... just seeing how you calculate it.

Rent - $1,700 to $1,800/mo (based upon closed MLS rental comps)
Mortgage payment - under $1,200/mo
HOA - $340/mo
Property Tax - around $250/mo

That does not include the approx. $350/mo to $400/mo tax benefit my buyer will see when they do their taxes.

Since you didn't mention Mello Roos I imagine this is something old.

Yeah, it's an older condo with no MR in one of the desirable villages.

 

[irvinehomeowner]

Aren't some of the $600-$700k condos in QH at rental parity with 20% down? It's been a while but I remember seeing some of them rent listed at high $2k to low $3k per month and that covers a $500k LTV mortgage w/ taxes/HOA doesn't it?

 

[usctrojancpa]

Aren't some of the $600-$700k condos in QH at rental parity with 20% down? It's been a while but I remember seeing some of them rent listed at high $2k to low $3k per month and that covers a $500k LTV mortgage w/ taxes/HOA doesn't it?

Not quite....let's take the condo that I used to own (Ambridge Plan 3 - 1,843sf)

Rent - $2,700 to $2,800/mo
Mortgage - $2,229/mo (assuming a rate of 4.50% with 20% down on a purchase price of $550k)
HOA - $300/mo
Property Tax & MR - $650/mo

So my particular condo is trading at a 10-12% premium to rental parity. 

 

[irvinehomeowner]

That seems close... I see some condo rentals in QH listing for above $3k... if you factor in tax savings you might be paying a few hundred more which to some people may be worth owning over renting.

Much closer than when those condos were selling for over $700k.

Are your units really selling for $550k now? How much did you end up selling for?

 

[usctrojancpa]

That seems close... I see some condo rentals in QH listing for above $3k... if you factor in tax savings you might be paying a few hundred more which to some people may be worth owning over renting.

Much closer than when those condos were selling for over $700k.

Are your units really selling for $550k now? How much did you end up selling for?

Yeah, my exactly floor plan has sold comps ranging from $545k to $555k in the past 6-9 months.  I sold mine for $620k back in 2008 (at the peak I probably could have gotten around $750k as one that wasn't even upgraded that much sold for $715k in early 2007).

 

[irvinehomeowner]

Wow... $750k at peak, down to $550k now... what did these start at? Are we back to 2003 pricing (at least for condos)?

 

[usctrojancpa]

Wow... $750k at peak, down to $550k now... what did these start at? Are we back to 2003 pricing (at least for condos)?

Phase 1 pricing for my unit was $505k (back in Nov. 2003).  Phase 2 pricing was $528k in Dec. 2004 and Phase 3 pricing was $552k in Jan. 2004 (which is when I bought).  I think the models or the last phase went for around $680k-$690k.

 

[IndieDev]

We have our second baby coming in Jan 2012 and the wife is in a rush (yes, stupid but emotions win) to buy a home.

Renting is a big winner in Irvine right now over buying. Why not rent, save the money for a bigger down payment, and then buy in LA when the prices are down even more?

Depends on where and what you are buying in Irvine.  Just closed on a small condo for one of my buyers in Irvine and it is right at rental parity BEFORE the tax benefits (with 20% down and a 4.50% 30-year fixed mortgage).

usc.. do you mind giving us a little more general detail... how much it would rent for, how much it sold for?  i would understand if you didn't... but giving us "just the numbers" will allow us to see at what price point rental parity is coming to irvine, also everyone's "rental parity" calc seems to be a little different... just seeing how you calculate it.

Rent - $1,700 to $1,800/mo (based upon closed MLS rental comps)
Mortgage payment - under $1,200/mo
HOA - $340/mo
Property Tax - around $250/mo

That does not include the approx. $350/mo to $400/mo tax benefit my buyer will see when they do their taxes.

That definitely seems to be near rental parity, if not right on the button (have to do my calculations). I'm going to go ahead and guess that the condo might even be older than Westpark I homes (I haven't seen rental parity in Westpark I). Perhaps College Park, El Camino Real, etc.

 

[usctrojancpa]

We have our second baby coming in Jan 2012 and the wife is in a rush (yes, stupid but emotions win) to buy a home.

Renting is a big winner in Irvine right now over buying. Why not rent, save the money for a bigger down payment, and then buy in LA when the prices are down even more?

Depends on where and what you are buying in Irvine.  Just closed on a small condo for one of my buyers in Irvine and it is right at rental parity BEFORE the tax benefits (with 20% down and a 4.50% 30-year fixed mortgage).

usc.. do you mind giving us a little more general detail... how much it would rent for, how much it sold for?  i would understand if you didn't... but giving us "just the numbers" will allow us to see at what price point rental parity is coming to irvine, also everyone's "rental parity" calc seems to be a little different... just seeing how you calculate it.

Rent - $1,700 to $1,800/mo (based upon closed MLS rental comps)
Mortgage payment - under $1,200/mo
HOA - $340/mo
Property Tax - around $250/mo

That does not include the approx. $350/mo to $400/mo tax benefit my buyer will see when they do their taxes.

That definitely seems to be near rental parity, if not right on the button (have to do my calculations). I'm going to go ahead and guess that the condo might even be older than Westpark I homes (I haven't seen rental parity in Westpark I). Perhaps College Park, El Camino Real, etc.

It's in Woodbridge.  Also, the HOA takes care of the insurance and trash.