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Month: October 2010

Selling Your Las Vegas Home in a Slow Market

When a Las Vegas listing agent and a client talk strategy, there is one question the agent does not have to ask his/her client: “what are your priorities?” And the reason the agent doesn’t have to ask is because the answer is already known:sell my house quickly and at the highest possible price!

In today’s market that is a tall order, even if the house is exceptional and the pricing attractive, although a property such as just described would certainly sell quicker than most.

But the more houses that are on the market the more hesitation enters a buyer’s mind, like somebody in a singles bar who sees an attractive girl and strikes up a conversation, but always has one eye on the door, wondering if someone better might come in.

How then do you, the seller, overcome the hesitancy of the buyer, the neighborhood competition and the prevailing buyer’s attitude that even if the home looks good and is priced right, will prices continue to fall, and will I be able to buy this home at an even lower price in a few months or less?

There is no question that selling your home at the present time represents a real challenge for you and your agent. A challenge, yes! An impossibility, definitely NO!

There are strategies to implement and things to be done that can turn the odds in your favor. Keeping a confident mind set and a belief in your strategy is the way to set about marketing your home with determination.

In boxing, a fighter with the determination and the will to win can often overcome superior skill, by causing the less determined fighter to lose confidence. Don’t lose confidence in yourself or your agent.

The first things to do are no-brainers to anyone, either buyer or agent who has done the research, and knows the basic procedures required prior to putting the property up for sale, and that is:

  • Fix the place up! Clean, straighten, neaten, organize, that’s known as “staging.” An important part of staging is making the home spotlessly clean and eliminating ALL clutter everywhere, including the garage.
  • “Curb appeal” means getting the lawn mowed, shrubbery trimmed, potted flowering plants strategically placed, clean, uncluttered driveway, etc.
  • Make all necessary repairs recommended by the house inspector you should definitely hire.
  • Your agent knows this, but you should be aware that equally important to the above steps to take is to price the home properly in accordance with current market conditions.
  • In order to arrive at a figure that will lure buyers and leave you a decent profit, your agent must do a comparative market analysis, taking into consideration many factors that influence fair market values.

If you want to sell your home in Las Vegas quickly and at the best possible price, give us a call at 702-376-0088 as we have the expertise and negotiating skills that you need in an agent.

Property Flipping

Property “flipping” earned a bad reputation is some areas such as Las Vegas, when speculators descended on the Valley a few short years ago, and bought houses at prevailing rates and immediately resold for much higher prices as the demand for housing remained strong. The practice soon resulted in the rapid escalation of residential housing market prices, sending them soaring sky-high.

However, there is nothing wrong or illegal about flipping, except in fraudulent cases, when an unethical flipper in collusion with an equally unethical appraiser conspires to artificially inflate the market value of a property.

When the flipping market was strong, due to the demand for housing, flippers were for the most part selling homes in ready to move in condition. These were homes that received multiple offers as soon as they were put up for sale.

In today’s market flipping has become a greater gamble, since homes in good condition are selling at market price, with not much-if any- profit margin left for the flipper due to housing prices continuing a slow but steady downward spiral.

In fact, because of the unpredictability of today’s housing market, the flipper may buy a house today that will have lost value by tomorrow.

Additionally, if the home is in need of repair, depending upon the extent of the repairs and the time and expense involved, the flipper might be better off holding and renting until the market trends become more favorable. If that strategy is followed the flipper will then be a long-term “investor” and landlord as well.

The flipper who converts to a long-term investor is aware that many properties on the market today are undervalued, and healthy profits will be had in the near – or possibly distant – future, when demand is greater than supply.

Certainly, the cost of buying and repairing a property, the time required to find a tenant, as well as overhead costs as compared to rental income must be considered by the careful flipper/investor before making a commitment to purchase.

Good timing is a very important factor in any real estate investment, but even more so for the investor who specializes in flipping. How much risk is the flipper willing to take? Is the flipper confident in his/her ability to read and forecast market trends? Is the flipper willing to become a temporary landlord?

Another factor to consider, is that a home that seems suitable for flipping may not be as suitable as a rental property for one reason or another.

Another most important consideration in any real estate investment is the exit factor. An exit strategy must be considered before purchasing any property. Since no one can predict the future, market trends can be evaluated intelligently, but it all still amounts to guesswork.

Investors need to have exit plans A, B and C in order to be able to adapt and adjust to any changes and variations in housing supply and demand, as well as the kind of properties that will be most in demand now and in the future.

Mortgage and Real Estate Fraud

Certainly, most people involved in the business of real estate are honest and hard-working but, as in any business, or enterprise if you will, there are “bad apples.” And, when times are tough, and economic hardships prevail, bad apples proliferate.

Fraudulent real estate practices are nothing new, of course, but in the last few years, unsuspecting people are being victimized in unprecedented numbers, directly as a result of the housing crisis we are now experiencing.

There are “vultures” in every walk of life that prey upon the misfortunes of others, and when people are in a difficult situation they will often turn to anyone who offers a ray of hope.

Famed bank robber Willie Sutton was once asked why he robbed banks, and his answer was, “because that’s where the money is!” So it is with the robbers who commit real estate and mortgage fraud.

Mortgage and real estate fraud are multi-million dollar enterprises, and since there is much less of a chance to be shot at, mortgage and real estate fraud is a lot less risky than bank robbing.

Real estate scam artists often focus on desperate people who are facing foreclosure, and don’t know where to turn for legitimate help. The scam artist will try to convince the property owner that the only way to save the home is to deed it to another person -on a temporary basis. The intent, of course, is to steal the property.

Mortgage fraud, as opposed to real estate fraud -even though there isn’t really much of a difference- involves the misrepresentation of information. For example, the use of false appraisals which are designed to fraudulently increase property values, falsifying loan applications and the like.

False documentation and identity theft are often part of a real estate scammer’s methods of operation as well. Delays in the processing of deeds and other relevant documentation often give these thieves the opportunity to actually sell a single property a number of times before the paperwork on the original sale has been recorded.

Scammer’s recruit unethical notaries who conveniently “overlook” the verification of signatures, and allow blank spaces on documents that can be filled in by the scammer at a later date.

To qualify for a mortgage loan, other types of fraudulent practices often employ such schemes as falsifying assets by disguising rental property as owned property, counterfeit pay stubs, and adding their names to the credit cards of accomplices with excellent credit in order to increase credit scores.

There are countless variations of real estate and mortgage fraud scams, and they all pose a serious threat to the functioning and integrity of the real estate industry as a whole, as well as to individuals who are honest buyers, sellers, and investors.

If you or someone you know has been victimized by a fraudulent real estate scheme, you should contact the FBI and/or the HUD Inspector General.

Home Value Factors

Although the market value of a property is largely determined by the comparison between similar properties in a given area, the value of a home is, in the long run, determined only by what a buyer is willing to pay.

This means that, if a seller asks $300,000 for his/her home, but the best offer received is for less than that, then the value of the home is actually less then $300,000, regardless of the studies that were done to establish the home’s fair market value at $300,000.

There are a number of factors that can influence a buyer to pay fair market value, location being among the most important of influencing factors.

Good school districts are a powerful influence on market value, and are most likely of greatest importance in considering location relevance.

Convenience to the workplace, shopping, major thoroughfares, public transportation, entertainment districts and recreational facilities offer other location factors that can have an impact upon a property’s desirability, and as a result, market value.

Condition of the home and property is another strong influencing factor in establishing a selling price. Size of the home and lot, as well as upgrades and amenities are still more influencing factors.

Interest rates, time of the year, high or low inventories of available homes, number of distressed properties in a given area, specific neighborhood conditions, proximity to beaches or mountain areas, proximity to industrial areas, high or low crime areas; any or all of these factors will positively or negatively affect home values

Certainly, it is unlikely that any particular area or neighborhood will meet all of a homebuyer’s criteria, so it is important that the homebuyer look at needs versus wants in location and neighborhood amenities, and consider those options along with affordability; home prices, property taxes, etc.

Real estate agents rate a good location as one with high dollar value and an excellent prospect for substantial appreciation. Buyers have a more complex formula for deciding if a home’s price is suitable and its location is what they are searching for.

A buyer’s real estate agent can be a valuable resource in not only finding the kinds of homes that meet the buyer’s criteria, but can be additionally helpful in obtaining data relative to the neighborhood’s school district, shopping and commuting information, crime statistics, etc.

Since location is so important in so many ways, when the potential buyer finds a property of interest he/she should look over the neighborhood BEFORE making an offer.

Drive around during the daytime and at night, during the week and on a weekend to get a good indication of the noise factor, and overall condition of the neighborhood homes. Look for the number of occupied stores as compared to empty, and check with your real estate agent as to rising or declining neighborhood home values.

Team Sena Gets Bank of America Deficiency Waived on Las Vegas Short Sale

Team Sena Gets Bank of America Deficiency Waived on Las Vegas Short Sale

It has been a long road in fighting Bank of America (BofA) over the past few years while trying to help Las Vegas homeowners settle their debt through the short sale of their homes. Bank of America steadfastly refused to release almost every seller here in Nevada because of its status as a recourse state, even if it meant that seller would not cooperate. The home would then needlessly become a foreclosure.

I am going into my 3rd straight year of managing the short sale division here for the Sena Team and tried many different tactics in dealing with BofA. There had been rumors that Bank of America was going be more open to releasing deficiencies for some time. I had even seen one of these infamous letters myself, but now, I got to enjoy seeing my own clients’ name at the top of the letter! It was so rewarding to know that we had not only found a willing buyer but also that the seller is being fully release from their loan obligation.

Potential sellers should be aware that Bank of America is not releasing deficiency as a standard policy. The actual holder of your loan (known as the investor) is and who is fighting your battle will go a long way in your deficiency being successfully released.

Las Vegas homeowners should be heartened that by this development and if interested in a short sale, should contact an experienced REALTOR for an assessment of the situation and potential for deficiency release based on who holds their mortgage note. Your agent should have a minimum of of at least 25 closings to their credit. Every short sale is unique and therefore you need a wide variety of short sale experience to contend the vast number of roadblocks that may prevent a successful closing.

Sellers who may be considering a short sale in Nevada may call 702-376-0088.

Las Vegas Real Estate Market Seems to be Slowing Some, Affecting Short Sales

The current real estate inventory here in Las Vegas has been steadily creeping up over the past 5 months. At present there are 15,063 homes on the market which are not yet under contract. Of those 7,400 are short sales. That is a pretty good sized inventory in itself. Foreclosures make up 3,000 and that number is expected to climb.

This has an effect on sellers who are trying to short sell as properties take longer to get an offer due to the higher competition. Short sales have increased in popularity as an alternative to foreclosure. This is a good thing, but unfortunately, the numbers of buyers in the real estate market have not.

There is good news. Short sale processing times have come down significantly as the government has encouraged short sales and lending institutions have been moving quicker on approvals. The most important information sellers should take away from these trends is not waiting to long to get their home on the market. You can’t assume it will get an offer right away. You may eat up valuable time waiting for an offer and be left with a very short time to get a short sale approval before foreclosure.

Paul Rowe is the managing agent for the short sale division with Team Sena and can be reached at 702.376.0088.

Las Vegas Master Planned Community – Silverstone Ranch

Silverstone Ranch is a master planned golf course community situated on the fairways of the Silverstone Golf Club, a 27 hole championship course.    Construction began in 2003 and has mostly been completed; however, some new homes are still being built by Pulte.  This community is located in the northwest area of Las Vegas near Grand Teton and Buffalo Drive in the foothills of the Sheep Mountain range.

Silverstone Ranch features six different collections of homes including town homes to estates with views of the mountains and city.   The amenities offered to the residents are a swimming pool, six acre family park, playgrounds, basketball and tennis courts, picnic and barbecue areas, walking trails and lush greenbelts.

As of this writing, current resale home prices for the last three months range from around $125,000 to $420,000.  Median selling price is approximately $194,000.  A number of these resales are foreclosures or short sales.

The Princeville Collection at Silverstone Ranch is comprised of single family homes ranging in size from 3,064 to 3,744 sq. ft. selling for $416,990 to $459,990.  These homes, located adjacent to the Silverstone Golf Club, offer 3 to 4 bedrooms and 2.5 to 3.5 baths.

Pinehurst is a gated community built in 2004-2006, adjacent to the Silverstone Golf Club, and offers single and two story townhomes ranging in size from 1,345 to 2,015 sq. ft. with 2 – 4 bedrooms and an attached two car garage.  Some feature an island kitchen, great room, fireplace, covered patio and golf course or mountain views.  Other options include a split floor plan and master bedroom down stairs.

The Palms is a guard gated community comprised of single story and two story homes built in 2004-2009 with some lot sizes up to one third acre.  Home sizes range from approximately 1,900 to 4,050 sq. ft. offering 3 to 5 bedrooms and 2 to 3 car garages.

Some options include golf course or mountain views, wet bar, bonus room, den, fireplace in courtyard and other features.

Silverlake is a gated community of single story homes built in 2004-2006.  Home sizes range from approximately 2,025 to 2,825 sq. ft. featuring 3 to 4 bedrooms and 2 to 3 car garages on lots approximately 7,000 sq. ft to one quarter acre.  Some home options include an island kitchen, great room, courtyard fireplace, golf course view and split floor plan.

A popular amenity is the Silverstone Golf Club which is open to the public as well as community residents, featuring a 34,000 sq. ft. club house with restaurant, valet service, golf school, pro shop and locker rooms.  The club offers a state of the art practice facility with driving range, putting green and short game areas.

The club’s Mountain Course hole #3 is the longest hole in Nevada – a par 5 for 653 yards.   The club does not close in September for overseeding as do other courses in town and is available all year round – weather permitting.

For more information on homes in the Silverstone Ranch master planned community call 702-376-0088.

Buy or Rent – Which is Better?

There are literally zillions of pros and cons that come to mind when discussing whether it is better to be a renter or a home owner, and guess what? There is no right or wrong answer to the question, because each individual’s financial situation and lifestyle preferences are inherently different.

A basic overview of rent versus buy pros and cons can provide guidance, but not answers. The answers can only be found by analyzing these pros and cons within the context of one’s own individual circumstances.

For example, for some people, purchasing a Las Vegas home is out of the question, either temporarily or not ever likely. These persons may have poor credit, low income, have no down payment money and no way to raise money for one reason or another.

On the other hand, there are those renters who are financially stable, have good credit and a healthy bank account, but just don’t want to deal with what they feel are the “hassles” of overall expenses and long-term financial commitment that go hand in hand with home ownership.

Obviously, there are no rights and wrongs here, it just depends on individual circumstances, as well as likes and dislikes.

What are some of the pros and cons of renting or buying?

  • Renters have the flexibility to freely change residences without having to sell –once the lease has expired – with moving expenses, first and/or last month’s rent, and a new security deposit constituting the major up-front expenses.
  • Renters have limited responsibility for maintenance.
  • Renters monthly insurance premiums are much lower than a home owner’s insurance policy.
  • Renters can call the landlord to fix a plumbing leak or A/C problem.
  • Homes provide a better environment for children.
  • Home ownership builds equity over time (when home values are on the rise.)
  • Home ownership offers tax benefits (property tax and mortgage interest deductions for example.)
  • Fixed rate mortgages offer reasonably stable monthly payments  as opposed to  annual increases in rental costs.
  • Many retirees have paid off their mortgages and are now only responsible for property taxes.
  • Renters are never free of monthly payments to the landlord.
  • Home ownership offers more privacy and the option of decorating in any way you may choose.
  • A mortgage can be considered a “forced savings” in some ways due to the equity build up in the property as the mortgage is paid down. That definition is open to argument, and there is not enough space to cover that subject here.
  • Home improvements can increase the value of your investment. Improvements to an apartment can only be made with the landlord’s permission, and would only benefit the renter aesthetically.

So, as you can see, owning or renting is a judgment call if you have the option to buy or not, and if you don’t qualify to buy then there are no options.

If you have any questions about buying or renting a home in Las Vegas, feel free to give us a call at 702.376.0088.

The Sale Leaseback Option

The Sale Leaseback Option

A leaseback option more commonly occurs in commercial real estate transactions than in residential real estate negotiations, however, a buyer of residential rental property will occasionally come across a situation of this nature.

In a leaseback arrangement, a seller may have the need to market the property for sale for some ready cash to clear debts or to free up capital for investment purposes or other reasons, but knowing of the need to rent after selling his/her property, may feel more comfortable staying in familiar surroundings, and would prefer to remain on the premises as a tenant.

If the rental arrangement seems reasonable to the former property owner, the new owner is satisfied that the rents received from the former owner will satisfy the landlord’s expected profit potential for the property, and the length of lease is agreeable to both then a deal can be made.

Both parties can benefit from this arrangement, since the former owner will not have to deal with the expense and hassle of moving, and the new owner will save the time and expense of interviewing and screening prospective tenants.

Expense meaning the time it takes to find a tenant during which no revenues are being collected, instead of having a reliable source of income from a tenant that is more likely to treat the former property with respect.

The benefits to both buyer and seller could be in the form of an agreement that would allow the buyer to purchase the property at a very attractive below market price, and benefit the former owner by agreeing to a long-term leasing arrangement at a premium rate.

Additionally, since the buyer would derive depreciation tax benefits from the rental property, it is important for the buyer to conference with a real estate savvy CPA in order to assure that the timing and structure of the sale are designed to derive maximum taxable credits.

There can be legal complications detrimental to buyer and seller if it is determined that the seller has disposed of the property to hide assets, so the buyer should approach this arrangement with caution and should rely on the counsel of a skilled real estate attorney before making a commitment.

Some leaseback options may include terms which would allow the former owner to buy back the property after a previously agreed-upon time has elapsed.

Attorneys usually advise against the buy back arrangement, since there can be the possibility the  former owner may  construe the original transaction as a loan, and may take court action, which can become a serious headache for the buyer, and may result in unwanted consequences.

In some cases a lease back option could be beneficial to owners of distressed properties, who want to stay where they are but have the need to get out from under oppressive mortgage payments and avoid foreclosure.

If you have any questions about rental properties or leasebacks in Las Vegas, feel free to give us a call at 702.376.0088.

Buying a Las Vegas "As-Is" Property

“As is” properties are properties that are not warranted to be free of defects. Of course, selling a Las Vegas property “as is” does not free the seller from the legal responsibility to the prospective buyer to freely and openly disclose all defects.

However, if the buyer has been informed of these defects and still chooses to knowingly purchase the property, than the seller can no longer be held responsible nor will be legally required to undertake any repairs.

However, if a home inspection uncovers defects not disclosed by the seller, either purposely or accidentally overlooked, the seller would then be held responsible for those repairs.

In considering a property in need of repairs, repairs in which the buyer knows he will have to foot the bill, a thorough home inspection prior to purchase is an absolute necessity.

For example, the seller may say that the roof “needs some work” but a home inspection may reveal that the roof needs to be replaced. If the cost of roof replacement amounts to approximately $35,000, by how much would the seller be willing or able to lower the selling price?

“As is” properties are considered bargain properties because the seller would have to offer the residence at a considerably under market price in order to attract a buyer who would willingly undertake repairs to the property.

But, as in the case of a major repair, what would a “bargain price” to the buyer actually be? That is why “as is” property purchases should be undertaken with extreme caution.

If the “as is” property is Real Estate Owned, (an REO) and is being marketed by a government agency such as HUD or Freddie Mac, or by a nationally chartered bank, then full disclosure to the seller can be waived, as these entities are not required by law to advise the prospective buyer of any defects.

Unlike the purchase of a home in the conventional manner, these large REO sellers will not accept, and in fact will outright reject any submitted sales contract that contains a required, “subject to inspection” clause.

In other words, when buying an “as is” property from one of these large institutional entities, you are stuck with the deal, even if an after purchase inspection turns up major defects.

A prospective buyer of an “as is” property should not be so short sighted as to be blinded by a very low asking price, and willingly make the purchase without pausing to realize that the property definitely has repair problems.

A thorough home inspection could reveal major problems that would negate the low asking price and become a “money trap” for the buyer. If the house has structural or foundation problems, that would be an indication to the buyer to look elsewhere for his “bargain property.”

If you have any questions about investing in Las Vegas Real Estate, feel free to give us a call at 702-376-0088.

FHA Financing

For the home buyer with somewhat limited financial assets and down payment affordability, but good credit, and of course the means to carry a monthly mortgage, which includes many first-time home buyers, the Federal Housing Authority (FHA) offers a very cost-effective method of financing a home.

For instance, the FHA currently allows some of your closing costs to be paid by the seller; up to 6 percent of the loan amount, but as of October 4th, 2010 the seller’s contribution to closing costs will be lowered to 3 percent. Of course, the buyer may have to pay a somewhat higher price for the property due to the seller’s contribution towards closing costs. FHA programs include the one-year ARM, the buy-down, in which the borrower can lower the interest rate through payment of points or interest at closing, and the fixed-rate loan.

The FHA down payment requirement is also lower than for most conventional loans, but there will be some changes regarding required mortgage insurance payments under FHA’s Mortgage Insurance Program (MIP) that will be affected by the new FHA regulations that will be in force beginning on October 4th.

Beginning with this change, upfront costs of the MIP factor will increase from the current .55 to .90. The premium, which is usually financed into the loan, will be reduced from the present 2.25 percent to 1 percent, which would allow the buyer to finance a smaller mortgage. Applying for an FHA loan prior to October 4th would save the buyer the cost of paying the MIP increase.

Under FHA financing regulations, the seller must pay certain closing costs, such as the underwriting fee, document preparation fee, courier and assignment fees. Contract wording will specifically designate buyer and seller payment responsibilities.

It is a common misconception that the federal government finances an FHA loan, when in fact, FHA loans are actually brokered to the secondary market as are conventional loans. Quicker appraisals mean that closings can be accomplished in thirty days or less since loan officers can use an FHA appraiser of their choice.

It’s important to point out that sellers are not as reluctant as they were in the past to accept buyers who were planning to finance through an FHA loan, since once stringent repair requirements have softened over the past few years.

Furthermore, depending on how the contract is written, the seller and buyer can share some of the responsibility for affecting certain repairs, and/or the seller could request that a dollar cap on the cost of repairs be written into the contract in order for the seller to accept a buyer’s FHA loan purchase proposal.

It is also important to remember that the FHA requires any and all additions, renovations, upgrades, etc. be up to code or brought up to code, and that any health and safety issues have been addressed, and the building is structurally sound.

Looking for information for an FHA loan in the Las Vegas market? Please feel free to give us a call at 702.376.7379 so we can answer any questions you may have.

Walk Through – The Final Inspection

When a person buys a home, they are making what is for most people, the largest financial commitment of their lives. Unless you are buying a home that you know is in need of repair, you will want to make absolutely sure that the property you are buying has no problems –obvious or underlying – that should be taken care of by the seller prior to closing.

However, a walk-through is not a substitute for a home inspection. Home inspections are done by licensed professionals who are trained to examine a property and either give the home a clean bill of health or make note of current or possibly potential problems that would require repair or replacement.

The walk-through is a cursory inspection by the buyer that can be performed a few days or a few hours prior to closing. The buyer should not underestimate the importance of a walk-through, and it is never a good idea to forego this step in the home-buying process.

Certainly, it would be in the buyer’s best interests to arrange a final walk-through as early as conveniently possible, so that in the event some problem is uncovered, the seller would have ample time to correct the problem without delaying the closing.

To avoid any complications, the buyer and seller should have agreed in writing that any problems found during the walk- through must be corrected prior to closing, and should additionally specify who will fix the problem and a deadline for completion of repair.

The walk-through could uncover a problem that had been overlooked by the home inspector, or find a problem that arose after a professional home inspection.

The walk-through can also uncover problems that home inspectors do not concern themselves with, such as windows that won’t stay opened or closed, toilets not flushing properly, etc.

A Walk-through is also important to assure the buyer that all the items that the seller has agreed will remain in the home are still there, such as appliances, window treatments, etc.

A walk-through should include checking the following:

  • Check appliances for proper functioning
  • Open all sink faucets and check under sinks for leaks
  • Turn on bathtub faucet and showers
  • Open and close windows
  • Run garbage disposal
  • Turn on heating and air conditioning
  • Open and close all doors
  • Check garage door functionality
  • Turn all lights on and off
  • Check outlets by plugging in a small lamp, such as a desk lamp
  • Check for exhaust fan functionality
  • Scan ceilings walls and floors for any signs of damage such as cracks, water stains, etc. that could have been overlooked, or water damage that might show up if the walk-through was done right after a heavy rain, for example

If problems are uncovered during the walk-through that are more than minor in nature, the buyer should postpone the closing until all issues have been satisfactorily resolved.