Resale homes vs new construction

U

ucla bruin

New member
Hi guys, great forum! I've been looking to buy a home for a few months and recently passed on a counter offer (buyer wanted 870k + lease back until end of June) and now I'm back to square one. I've seen Woodbury and Woodbury East but wasn't too excited that there's no curb/sidewalk. Does anyone know if this is going to be the case with Stonegate? In general, how do you guys feel about buying a resale home (~2006) vs brand new?

Any input is appreciated!
 
Glad to see a fellow bruin here!

I'm also in the same boat as I was on the fence on buying a brand new home in WB/PS vs. a resale home in Northwood (2006 built).  I'm currently in escrow with a resale property and really praying it works out.

The reason why I decided on a resale was because of the upgrades already done to the house, lower HOA, lower MR, and this property had more of a backyard then what was offered at WB/PS.  I know I won't get the same satisfaction as owning a brand new home but I think this property really suited all my needs and wants.  The resale price is about 30k higher then a brand new place in WB/PS but the location is more central to work and other plazas I frequent.

As for how I feel about buying a resale home vs. new, I feel good about it.  The seller's bought the house brand new in 2006 for about $690k and did about $50k in upgrades, I am purchasing the house now for a lot less than that.  :p  I think at the end of the day its what you want and look for in a place to call home.  If having a brand new house really means that much to you then you might just regret buying a resale. 
 
Personally, I would prefer a newer resale (for example 2000 and after one), don't want to deal with landscaping, upgrades etc.  How do you feel the current market?
 
Thanks for the replies guys. It' just that I've exhausted all of my leads and potential candidates so I'm basically in waiting mode, which I don't really like. But I just haven't found anything else I'd like to make an offer to : /

I think the market is VERY competitive, but it is Irvine and there are a lot of power buyers out there with all cash on houses in all price ranges. I've also encountered sellers that are a little bit stubborn to negotiate but is looking to sell in the present economy for whatever reason.

On last property, the listing price was low, probably because they wanted to attract buyers, which they did. Supposedly had 12 offers, countered 6 with a price that I did not think was worth it + addendum conditions. I had to pass. Sigh.

 
ucla bruin said:
Thanks for the replies guys. It' just that I've exhausted all of my leads and potential candidates so I'm basically in waiting mode, which I don't really like. But I just haven't found anything else I'd like to make an offer to : /

I think the market is VERY competitive, but it is Irvine and there are a lot of power buyers out there with all cash on houses in all price ranges. I've also encountered sellers that are a little bit stubborn to negotiate but is looking to sell in the present economy for whatever reason.

On last property, the listing price was low, probably because they wanted to attract buyers, which they did. Supposedly had 12 offers, countered 6 with a price that I did not think was worth it + addendum conditions. I had to pass. Sigh.
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Welcome to the forum my fellow Bruin (I graduated from UCLA undergrad).  So you were also a bidder on 25 Torrey Pine, eh?  The sellers/listing agents played the buyers against each other perfectly and were able to extract the maximum possible price they could get.  Can you believe how they can back with that other counter offer after they already got the highest and best offers from the 12 buyers?  My buyers actually came in as the runner-up and are the first back-up buyers if the first buyer falls through (they and I aren't holding our breathe on that though).  That property will not appraisal for more than $850k so it will set higher comps for the neighborhood.

The current market for 4bed/3bath 2000sf+ newer built SFRs is very competitive (dare I say even in seller's market), especially if they are in a good location and show well.
 
USCTrojanCPA said:
Welcome to the forum my fellow Bruin (I graduated from UCLA undergrad).  So you were also a bidder on 25 Torrey Pine, eh?  The sellers/listing agents played the buyers against each other perfectly and were able to extract the maximum possible price they could get.  Can you believe how they can back with that other counter offer after they already got the highest and best offers from the 12 buyers?  My buyers actually came in as the runner-up and are the first back-up buyers if the first buyer falls through (they and I aren't holding our breathe on that though).  That property will not appraisal for more than $850k so it will set higher comps for the neighborhood.

The current market for 4bed/3bath 2000sf+ newer built SFRs is very competitive (dare I say even in seller's market), especially if they are in a good location and show well.
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Damn, are we all Bruins here?  I'm graduated there as well.

Wow, 25 Torrey Pine is that "famous" huh?  I took a look over the weekend and the selling agent was already telling me that I need to bid close to 850k to even be considered!  I just ate a few chocolate covered strawberries and left.  I must admit that the place was really well upgraded and the location was good since it backed a green belt.
 
Woo, 8 clap!

@USCTrojanCPA, yes sir 25 Torrey Pine was the one. I didn't particularly like the seller's aggressive style. The first counter came back and she asked for me to make a decision the same day before 7pm. I opted not to and spoke to her on the phone that night, then she sent the final counter. The property was very nice but unfortunately was not worth 870k to me. I would've been fine with 840-850 too. The tough part is that now I will be competing against the 11 (possibly your client as well?) + whoever else for similar properties :/

@woodburyowner, the Thursday night open house was pretty laid back, nice event. How do you like Woodbury neighborhood? I'm looking for something soon and is still considering WB, possibly Stonegate if I can wait.

 
ucla bruin said:
Woo, 8 clap!

@USCTrojanCPA, yes sir 25 Torrey Pine was the one. I didn't particularly like the seller's aggressive style. The first counter came back and she asked for me to make a decision the same day before 7pm. I opted not to and spoke to her on the phone that night, then she sent the final counter. The property was very nice but unfortunately was not worth 870k to me. I would've been fine with 840-850 too. The tough part is that now I will be competing against the 11 (possibly your client as well?) + whoever else for similar properties :/

@woodburyowner, the Thursday night open house was pretty laid back, nice event. How do you like Woodbury neighborhood? I'm looking for something soon and is still considering WB, possibly Stonegate if I can wait.
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My guess is that the "winner" probably offered to pay somewhere between $870k to $875k.  I'm guessing that the 2nd seller counter offer was sent out because a few buyers were probably around $860k so the sellers wanted to see how much more blood they could squeeze out of the buyers by playing on their emotions.  My buyers almost didn't want to respond to the 2nd counter as it really pissed them off initially but they did like the home enough to put in their best shot.  I wonder how many of the other buyers that 2nd seller counter really turned off because it really threw my buyers and I for a little bit of a loop.  One of the reasons why my buyers bid as much as they was partially due to my expected commission rebate.
 
I felt exactly how your buyer felt too. Very nice upgrades, flooring, master bath, location....etc but I could not agree to the lease back addendum they added. I did not respond to the seller's second counter.
 
If it's only a choice between "buying a resale or a new home", it's about even. There aren't any real advantages either way. TIC has some homes at somewhat competitive price points if you're willing to sacrifice on lot size, and in some instances a full driveway. But you will pay out the ass in taxes (1.7% on most of the new homes).

The resale market is just full of delusion. Irvine stucco boxes that sold for $350,000 pre-2000 are listing for $750,000, or more. Basically, the owners are just begging you to pay for their bad credit decisions. It's not just Irvine either.

I was with a friend in Malibu checking out an "invite only" open house property listed at $5.5 million. We both had no intention of buying, but wanted to see this "private invite" open house. This home went for $1.9 million in 1996. The listing broker was on hand with baked goods, and very nice looking brochure porn. The integrated home sound system was playing some classy music. He admitted that $5.5 might be a far reach but he was confident the house would go for $5,000,000 easily. The view was incredible at least.

The amount of $5,000,000 to $5.5 million dollar sales in the past year in Malibu: One.

Delusion.
 
USCTrojanCPA said:
ucla bruin said:
Woo, 8 clap!

@USCTrojanCPA, yes sir 25 Torrey Pine was the one. I didn't particularly like the seller's aggressive style. The first counter came back and she asked for me to make a decision the same day before 7pm. I opted not to and spoke to her on the phone that night, then she sent the final counter. The property was very nice but unfortunately was not worth 870k to me. I would've been fine with 840-850 too. The tough part is that now I will be competing against the 11 (possibly your client as well?) + whoever else for similar properties :/

@woodburyowner, the Thursday night open house was pretty laid back, nice event. How do you like Woodbury neighborhood? I'm looking for something soon and is still considering WB, possibly Stonegate if I can wait.
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My guess is that the "winner" probably offered to pay somewhere between $870k to $875k.  I'm guessing that the 2nd seller counter offer was sent out because a few buyers were probably around $860k so the sellers wanted to see how much more blood they could squeeze out of the buyers by playing on their emotions.  My buyers almost didn't want to respond to the 2nd counter as it really pissed them off initially but they did like the home enough to put in their best shot.  I wonder how many of the other buyers that 2nd seller counter really turned off because it really threw my buyers and I for a little bit of a loop.  One of the reasons why my buyers bid as much as they was partially due to my expected commission rebate.
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$875K sounds too expensive for that place but hopefully the future buyer is happy with their choice. I thought the comps for this place were in the low to mid $800K range. I put an offer a couple years ago on a Campanille home in NP SQ with the same floor plan--eventually sold for around $815K.
 
Just saw the pics on Redfin.  It's a nice house, but can you imagine keeping those dark floors clean?  Before we bought our house, we were renting a house with dark wood floors.  It was impossible to keep the dust off.  I would clean the floors and literally hours later, with the right light, I could see a layer of dust on the floors.  It drove me crazy.
 
bones said:
we thought about new versus resale too.  we ended up buying new mainly because every resale I stepped into - i wanted to extensively renovate (especially the kitchen).  we had this feeling about 8 out of 10 resales that we saw.  the 2 that we could live with were always priced too high or had too many bidders.  we're not super handy people so the thought of either DIYing or dealing with a contractor for extensive renovations was not appealing.  buying new allowed us to do what we want. 

i do think this is a personal choice and many other factors go into this decision. 
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Your situation is exactly like ours. Our other factor is location.

Anything that is updated enough to come close to new is either too expensive or will have multiple parties interested. That's the one advantage to new is that you really are not competing with other "bidders" (that is of course if there is enough inventory available).

Another problem for us is we don't like the floorplans of the new homes. We can deal with the smaller lots and maybe no driveway (MAYBE) but the internal space is less functional than we like it. Like last night, the kids wanted to watch something on TV and so did we... but they wanted to stay downstairs because we don't have chairs in our master (yet another reason for an upstairs loft). We have a downstairs room/den they could watch in and everyone is happy.

If there was a new home with our desired floorplan that fits in our budget, we would not even look at resale, and some are close but not in the location we want to live. So our hunt continues.
 
For us, there were 3 factors to consider for resolving "new vs resale" issue:
a. Price point - Most of SFR in Irvine/TustinRanch has a price point that is bloated. OR there are some condos sold as SFR (Eg. SantaCruz, PrimRose et al). We like new house smell but not that much, especially when it comes with more mello-roos and more HOA. And, dont forget you have expenses even if you buy a new home (like landscape the patio etc.,).
b. Full Driveway - Most of the new homes in Irvine do not have full driveway. After a tiresome day at work, we did not want to go and "circle" in search of parking our cars. Resales are from good old days and most have driveways. We drove by a fully developed new community in the night and saw the parking situation to be horrible - that was the last straw!
c. Yard (Front/Back/Side) - Most of the new homes in Irvine either have very small yard or a tight patio. For our growing kids, we wanted more room both inside and out.

We are fortunate to a buy a resale that had single owner since its been built, that meant it was taken care pretty well. We looked at resale, not older than 1990 (most home building standards are set during that time).

And yes, we did have a "competition" too (some one who has 800 avg score and 40% down compared) - but we wrote a heart touching letter to sellers and got the deal.
 
I've never bought a new home before so please excuse my ignorance.  What other misc. fees or items should one consider when purchasing new?  I know some of you guys mentioned landscaping, upgrades and etc.  What else?  Thanks!  :)
 
I felt the same way as bones about most of the resale houses I've seen, and I've seen I believe all the ones out there that fit my criteria. I actually really like the floor plan in the new homes. Single + open space = :). I just find it difficult to commit to something without a drive way or curb, which give more of a "house" feel for me.


For a new home, is the backyard untouched (dirt?) until you landscape it?
 
ucla bruin said:
For a new home, is the backyard untouched (dirt?) until you landscape it?
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Usually.

Not sure on new homes but the ones I saw before a few years ago had at least the drain pipes from the back to the front (leads to curb outlets) that you could tap into.
 
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