New Listing - Talise Plan 4 detached condo in Portola Spring (116 Soaring Eagle)

[The Motor Court Company]

Seller owns the home free and clear and will just rent it for a few years if they don't get the price they want so not a hugely motivated seller that needs to sell.

the sellers missed the peak pricing, not sure if there was a slightly lower all cash offer but thats why all cash matters. for example all cash may be 1% lower but if you miss the peak pricing you could lose more than that 1%.

 

[OCtoSV]

I am sure Martin will sell it again.

Definitely house will be sold w/o any issue under Martin. It just amazes me that some buyers are pushing the envelop to get a home they can barely afford especially paying a premium for home with views.

Wait a minute - I thought Irvine buyers are strong. First it goes into escrow under asking them it falls out after a layoff because these ?strong? buyers required 2 incomes to barely qualify, until they couldn?t. You?re going to see this scenario repeated as often as Larry used to find Irvine buyers to profile  that went belly up. The OC buyer pool will dry up. What remains to be seen is how much must sell inventory comes on the market over the next 2 years as mortgage rates march to 10%. Powell talks in very hawkish terms.

For the record, I hope I?m wrong. I don?t want to see anyone experience negative financial outcomes but my knowledge and experience are guiding my opinions.

 

[The Motor Court Company]

exactly. it sounds like the buyer couple stretched to buy and seller wanted maximum price that is financed offer. hopefully the buyer waived financing contingency and the seller kept the deposits.

I am sure Martin will sell it again.

Definitely house will be sold w/o any issue under Martin. It just amazes me that some buyers are pushing the envelop to get a home they can barely afford especially paying a premium for home with views.

Wait a minute - I thought Irvine buyers are strong. First it goes into escrow under asking them it falls out after a layoff because these ?strong? buyers required 2 incomes to barely qualify, until they couldn?t. You?re going to see this scenario repeated as often as Larry used to find Irvine buyers to profile  that went belly up. The OC buyer pool will dry up. What remains to be seen is how much must sell inventory comes on the market over the next 2 years as mortgage rates march to 10%. Powell talks in very hawkish terms.

For the record, I hope I?m wrong. I don?t want to see anyone experience negative financial outcomes but my knowledge and experience are guiding my opinions.

 

[sgip]

Don't get me wrong here.The buyers could afford this purchase but the risks with job instability was too great. This happens all the time, during recession or plenty.

 

[qwerty]

I was not working with Martin's buyers, so this IS NOT HIS BUYERS SCENARIO. I'm answering the post by @Danimal

A $2m home with 30% down is about $9,000 per month (PITIHOA) assuming an average 4.5% rate.

Two buyers each with $150kpy incomes, assuming 40% tax burden, brings home about $15,000 net per month. After the mortgage, that leaves $6,000 to spend on utilities, car, car insurance, gas, streaming services, food, etc. It's not a thin margin by any means, but it's not wide enough to give room for error. There may be some RSU or bonus income that comes into play but it can't be relied upon.

If one of two buyers has the rug pulled out from under them, yes it's a pretty risky scenario.

Lenders unfortunately will focus on "Gross Income" for qualifying. It's the Net Income that needs to be the real decision driver. I ask my buyer clients who are just starting to look at their home purchase plans to start "paying" their mortgage now to build financial muscle memory. Example - if rent is $5,000 and Mortgage is $7,000, every time a $5,000 rent check is paid, also put $2,000 in the bank. This does help a buyer get used to the new payment, it builds savings, and demonstrates to an Underwriter that indeed a buyer with tight ratios can make the payment.

My .02c

300k a year for this mortgage would be tight from a practical perspective. Especially if they were maxing out retirement contributions. The 15k net per month becomes more like 13k per month, leaving 4K for all expenses. If you have two working parents with two kids daycare will likely eat up at least 1,500/month (unless family is watching them) then you are down to 2,500 month for all other expenses. Between bonus and equity perhaps they gross another 150k (although people who make $150k per year generally don?t have bonuses and equity that add up to 50% of their salary) per year but I would never rely on those payouts to buy a $2M home, perhaps I?m just too conservative

 

[OCtoSV]

I was not working with Martin's buyers, so this IS NOT HIS BUYERS SCENARIO. I'm answering the post by @Danimal

A $2m home with 30% down is about $9,000 per month (PITIHOA) assuming an average 4.5% rate.

Two buyers each with $150kpy incomes, assuming 40% tax burden, brings home about $15,000 net per month. After the mortgage, that leaves $6,000 to spend on utilities, car, car insurance, gas, streaming services, food, etc. It's not a thin margin by any means, but it's not wide enough to give room for error. There may be some RSU or bonus income that comes into play but it can't be relied upon.

If one of two buyers has the rug pulled out from under them, yes it's a pretty risky scenario.

Lenders unfortunately will focus on "Gross Income" for qualifying. It's the Net Income that needs to be the real decision driver. I ask my buyer clients who are just starting to look at their home purchase plans to start "paying" their mortgage now to build financial muscle memory. Example - if rent is $5,000 and Mortgage is $7,000, every time a $5,000 rent check is paid, also put $2,000 in the bank. This does help a buyer get used to the new payment, it builds savings, and demonstrates to an Underwriter that indeed a buyer with tight ratios can make the payment.

My .02c

300k a year for this mortgage would be tight from a practical perspective. Especially if they were maxing out retirement contributions. The 15k net per month becomes more like 13k per month, leaving 4K for all expenses. If you have two working parents with two kids daycare will likely eat up at least 1,500/month (unless family is watching them) then you are down to 2,500 month for all other expenses. Between bonus and equity perhaps they gross another 150k (although people who make $150k per year generally don?t have bonuses and equity that add up to 50% of their salary) per year but I would never rely on those payouts to buy a $2M home, perhaps I?m just too conservative

The only good thing here is underwriting rules prevented these folks from making a financially ruinous decision. The detached condo is a product developed specifically to soak profligate buyers such as these 2 - shiny on the surface but worthless underneath.

 

[The Motor Court Company]

I am very fiscal conservative. My rules:
1. PITI plus HOA needs to be on par with equivalent rent or cheaper.

2. Monthly payment can be supported by the lowest single income level for a dual income household.

3. Have enough liquid assets in reserve that can pay off the principle any time if I feel like.

 

[Irvinehomeseeker]

I am very fiscal conservative. My rules:
1. PITI plus HOA needs to be on par with equivalent rent or cheaper.

2. Monthly payment can be supported by the lowest single income level for a dual income household.

3. Have enough liquid assets in reserve that can pay off the principle any time if I feel like.

You must be a very rich person to he able to do so,atleast for Irvine prices!

 

[Danimal]

I am very fiscal conservative. My rules:
1. PITI plus HOA needs to be on par with equivalent rent or cheaper.

2. Monthly payment can be supported by the lowest single income level for a dual income household.

3. Have enough liquid assets in reserve that can pay off the principle any time if I feel like.

You must be a very rich person to he able to do so,atleast for Irvine prices!

Not sure about rich but racist for sure.

 

[CalBears96]

I am very fiscal conservative. My rules:
1. PITI plus HOA needs to be on par with equivalent rent or cheaper.

Yeah, that's not happening. If that's the case, all the homes will become rentals.

 

[The Motor Court Company]

well we are not as rich as Chinese FCBs for sure. I guess you like FCBs in general because it helps the house price of your neighborhood in Irvine, even in a downturn, right?

I am very fiscal conservative. My rules:
1. PITI plus HOA needs to be on par with equivalent rent or cheaper.

2. Monthly payment can be supported by the lowest single income level for a dual income household.

3. Have enough liquid assets in reserve that can pay off the principle any time if I feel like.

You must be a very rich person to he able to do so,atleast for Irvine prices!

Not sure about rich but racist for sure.

 

[usctrojancpa]

This home was asking about $1,000/sf before the $260k price drop but it's still way overpriced...
https://www.redfin.com/CA/Irvine/2-Conifer-92620/home/5959433

Backing up to Trabuco and siding to Keystone is not helping.  This home won't even sell for $2,500,000.

 

[usctrojancpa]

Received an offer over the weekend and after a few counters the buyer and seller have come to terms and we have opened escrow.

 

[mariarandall]

I am very fiscal conservative. My rules:
1. PITI plus HOA needs to be on par with equivalent rent or cheaper.

2. Monthly payment can be supported by the lowest single income level for a dual income household.

3. Have enough liquid assets in reserve that can pay off the principle any time if I feel like. drift hunters

I'm not sure about wealthy, but I know they're prejudiced.

 

[usctrojancpa]

Got word from escrow earlier today that the transaction has recorded.  The sales price was $1,875,000 but both the buyer agent and I split the difference to get the seller to $1,900,000 as that was their minimum price to seller and what the previous offer was $1,900,000. 

 

[potsticker]

Congrats! Love when agents help bridge the gap between buyer/seller. Really shows that all parties are invested.

 

[OCtoSV]

Got word from escrow earlier today that the transaction has recorded.  The sales price was $1,875,000 but both the buyer agent and I split the difference to get the seller to $1,900,000 as that was their minimum price to seller and what the previous offer was $1,900,000.

congrats USC! Slow market and falling prices doesn't seem to be hindering your biz - nice to see.

 

[TestingIrvine]

$884psf for condo is a high selling price esp in Portola Springs. I?m sure your client was happy Martin.


?bbbbbut but but the price is $100K less than listing and falling like a rock? - You Know Who

 

[bones]

Congrats Martin! I've always liked this floorplan.

 

[usctrojancpa]

Congrats! Love when agents help bridge the gap between buyer/seller. Really shows that all parties are invested.

He knew his clients wanted the home and was willing to work with me to bridge the gap which was very refreshing.  At the end of the day, we both had very happy clients and that's all you can ask for.  It's never about the transaction, it's about the relationship...this is how I look at things.  A realtor makes their money on the relationship, not one transaction.