Address: 61 Edgewood, Irvine, CA 92618 (Oak Creek)
Plan: 1910 sq ft – 3/2.5
MLS: S462503 DOM: 6
Sale History: 2/15/2006: $819,000
8/02/2000: $347,000
Current Price: $849,000
This Plan 2 in the Kelsey Lane tract built by California Pacific Homes was purchased with 5% down earlier this year for $819k. 8 months later and it’s back on the market for only $30k more. Apparently, these guys think prices have increased in the last 8 months (even though the same plan at 30 Pembroke sold for $825k on 6/16/2006). Or maybe they are just trying to recoup some of the commissions they’ll have to pay. They obviously missed the peak summer period for listing their home. We’ll have to wait and see how motivated these sellers are. Assuming selling costs of 5% (since the agent is related to the seller), our flipper will be in the hole at least $12,000.
Relating to your comments on the Oak Creek listing at 61 Edgewood. You are calling this seller (and, it appears most of the sellers) “flippers”. This implies they bought with the intention of flipping.
I have sold over 700 homes in the city of Irvine since the year 2000. I do have a few “flippers” as clients, but it is the minority of my sellers. Most are “need” sellers (not “greed” sellers). They are divorcing, job relocating, or making babies and need a bigger (or sometimes smaller) home.
Also, relating to 61 Edgewood you mentioned the current seller paid $819K for the home. You are making an assumption. You are assuming the current seller, when he bought, did not receive any $$$ back from the buyer. If he received, say, $20,000 back from the seller at the time of closing is his real purchase price “$819K” ? Be careful of assumptions.
Otherwise, I have found your Blog postings interesting. However, also be careful to generalize the markete, based on a few select listings (such as 741 Timberwood). This seller truly bought at the peek two years ago, and he is now suffering, without question.
T.
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Congrats, you just proved the point that realtors are this ages used car salesmen. All old jokes, please insert real estate agent will screw their own mothers for the commission and the current sale. Why you ask, because by using the cash back you have raised the comps to the point that average people can no longer afford a house in Irvine. Plus in states other than california you have just raised everybody’s taxes. All for an extra few bucks that went to get that new TV and add to the realtor whores commission check. Was that extra assumed 20,000 really worth all the people that are going into foreclosure and all the jobs that will be lost.
T.M. – Thanks for your feedback. Yes, I’m making several assumptions in my articles (another one is the amount of selling costs). For the purchase and sales price info I am using data listed in MLS and County Records. There is no way for me to know IF the buyer received money (and how much) from the seller at closing. There is also the possibility that the same owner who received money from the seller when purchasing, will now have to offer money to the new buyer in the same fashion. If there is a way to find this information out, I’d love to know as I want to be as accurate as possible in what I report.
When I’m writing about the flips turned into flops, I’m generally looking for two things: 1) someone who bought a property about 2 years (or fewer) ago AND 2) situations where the listing price is close to their purchase price. When I see people that have purchased and then listed the property a few months later, I label them as flippers. You’re absolutely right, I don’t know what their actual situation may be or what their intentions when purchasing may have been. I am confident though that many people purchasing homes in Irvine over the past few years have believed that prices will only go up and that they will make easy money in a few months or years. In the past, there have been tons of stories of flippers making easy money and that has just encouraged more flippers. People should buy homes which they can afford and they should buy them to live in. If they are buying them as a speculative investment, then they deserve what they get. Unfortunately, there are a lot of novices (as opposed to well funded investors) who can’t weather the storm of their investment going bad.
I’m glad to hear from someone who is working with many sellers in Irvine. Out of all your current sellers, what percentage have purchased their property 2.5 years ago or less? Out of all those sellers, what percentage will be making 5% or less or actually losing money after selling costs? Now, out of all these sellers, how many are flippers versus divorce versus job reloc versus baby? It’s this group that I’m focusing on and I’m curious to hear your answers.
Thanks again for your feedback!
Hey jackass. We are selling 61 Edgewood because we are moving out of the state. We are not flipping it. You are an idiot.