Buying Property in Las Vegas: Know Before You Go (Part 2)

This is part two of a two part blog on buying Las Vegas residential property. By now it is assumed you have a lender and I am your Realtor (if your in Southern Nevada), so it is time to start deciding your priorities. What are the most important things you want in a house?

The old joke is, what are the three most important factors in buying a house are——–location, location, location! Do you want to be close to certain schools? Do you want to be close to your work? Do you want to be far away from freeways, airports, fire stations (noise), 24 hr stores (lights), etc. How did the neighborhood look as you drove to the property? Are there cars on blocks in some drive ways nearby? Is there graffiti on the walls everywhere you look? What about having to many two story house around yours (privacy)? Do the neighbors dogs bark uncontrollably every time you go near your potential house? These are all important factors when deciding if a houses location is right for you.

What kind of amenities do you want in a house? Most people can quickly decide how many bedrooms, bathrooms and garage spaces they want. They can also determine story preference and minimum square footage they are looking for. What about minimum square footage for your yard? What direction you want the house to face (important in this climate)? Pool or no Pool? Grass or desert landscaping? Maximum age of the house? The more of an idea of what you want before you start looking, the better the Realtor can filter the choices presented to you.

The next step is to search for properties via the Multiple Listing Service (MLS). The MLS is a Realtor produced database of all properties (for sale by Realtors) in a given area. Take the time to sit down and review the pictures of prospective properties before you start driving all over town. Many times properties can be eliminated from consideration just by looking at the pictures on the computer. This is a huge time saver for everyone involved.

Now it is time to go physically look at properties. Pay attention to the condition of the neighborhood, especially everything directly around your potential house. If the neighbors are around, ask them what they think of living there. Look at the house for obvious problems like water stains, major cracks in the frame or foundation, unpermitted additions, etc. Are the problems you find structural or cosmetic? Do you want to take the time and expense to fix said problems? If the answer is no, move on, there are plenty of houses to choose from.

After you find a house you want to make an offer on, you have to go back to the computer to see what a reasonable estimation of it’s value is. Your Realtor should be able to SHOW you  (on the MLS) similar houses that have sold recently in the neighborhood. Remember to look at SOLD prices and to have your Realtor factor in Seller’s contribution to Buyer closing costs (if any) for a more accurate estimation of value.

Now that you have an estimation of value for your potential future home, it is time to write the offer. How bad do you want this house? You can start with a low offer and go up from there (but there are risks to doing so). How upset would you be if you lost the house to a higher offer? If the answer is VERY, start with a stronger offer. If you have looked at many houses and this is your dream house, is it worth losing for a few thousand dollars? Expect a counter offer and be prepared to negotiate (remember the seller wants to get as much as they can when they sell). Always make sure your offer is contingent on a professional inspection. This probably is the most expensive purchase of your life, don’t skimp on an inspection that might cost a few hundred dollars.

Now you have an accepted transaction, but the work isn’t over yet. Make sure you get every scrap of paperwork the lender asks for (in a timely manner). If you delay the closing because your lender didn’t have everything  he/she needed, it could cost you a lot of money. You could even lose your earnest money deposit and the house to another buyer. Don’t let anyone else (except your second opinion lender) pull your credit until close of escrow (COE). Your loan could be credit score driven and (most) times when your credit is pulled your score drops. Don’t buy any big ticket items on credit prior to COE  because it could effect you ability to get your mortgage (by changing your debt to income ratio). Most lenders will pull your credit right before COE to make sure nothing has changed to make you a credit risk. Don’t quit your job or change careers prior to COE, it may disqualify you for your mortgage. When in doubt, ask your lender for guidance before you do ANYTHING that may jeopardize your loan.

There is a bankruptcy bill that is being pushed by Democrats that would give Judges the power to dictate mortgage terms.

If this bill were to pass, a homeowner could file bankruptcy and the Judge could change the terms of his primary residence mortgage to make it more affordable for the homeowner so one they can afford their monthly mortgage payment and two to bring the mortgage down to market value.

The Mortgage Bankers Association, American Bankers Association and the U.S. Chamber of Commerce oppose this bill and have spent millions to try and prevent it from being passed.  According to the chief lobbyist for the Mortgage Bankers Association, Steve O’Connor, said “new homebuyers would end up paying higher interest and bigger down payments if lenders are saddled with the risk that a judge could change mortgage terms.”  Why would homebuyers end up paying a higher down payment and interest rate?  The lending guidelines are very stringent now and you can’t buy a home anymore without at least 3.5% down so I would imagine that the default rate on these new home loans would be very small?  So the risk for Lenders and Banks have dropped considerably compared to loans they gave out back in 2003-2006.

I can see why the Mortgage Bankers Association and American Bankers Association would want to prevent this bill from passing because it certainly would harm the bottom line for lenders and investors holding mortgages or would it?  How much harm would it really cause Lenders and Banks with the Government bailout?  Bank of America just received a 2nd bailout of $20 billion dollars!  Banks appear to be using their bailout money to acquire other banks so I am not too concerned with them complaining that they would lose money if this bill passes.  What I am concerned with is Lenders and Banks requiring homebuyers to come in with a higher down payment and increases in interest rates.

We need a solution to the foreclosure mess since Banks and Lenders can’t get short sales or loan modifications approved in a timely manner.  The passing of this bill would help streamline the process and allow homeowners to keep their homes by bring their mortgage down to market value and giving them a payment they can afford.  This will prevent more homes from going into foreclosure which helps keep inventory levels from increasing and should help prices begin to level out.  When there is confidence again in the real estate market, it will begin to spill over to other industries which will help lead us out of the recession our Country is facing.

What is a Loan Modification and does it fit the needs of homeowners who cannot afford their mortgage payment and who owe  more on their mortgage than the home is valued?

“A Loan Modification is a permanent change in one or more of the terms of a mortgagor’s loan, allows the loan to be reinstated, and results in a payment the mortgagor can afford.”

In the State of Nevada, an Attorney should negotiate on the behalf of a homeowner to get a loan modification approved.  There are those that aren’t Attorneys that attempt to help homeowners, which is fine,  but it’s against the law for them to charge you any up front fees.

A Las Vegas Homeowner does not have to be late on a payment in order to be approved for a loan modification.  However; I have seen some Lenders deny a Loan Modification because the homeowners weren’t late on their mortgage, so it does come down to who your lender is.

We work with several reputable Attorney’s in Las Vegas they we can recommend to you if you are in need of a Loan Modification for your Las Vegas Home Loan.  We can be reached at 702.838.7522 or complete our contact form and one of our representatives will contact you for a private consultation.

Buyers Beware! The disturbing trend of low ball listings in Las Vegas!

A disturbing practice I am seeing more and more of lately is the low ball listing of Las Vegas short sale/foreclosed properties. A low ball listing is a listing that is priced, by the Listing Agent, SUBSTANCIALLY below what a common sense comparative market analysis says the property is really worth.

I have spoke to many Las Vegas Listing Agents and asked them why they priced their listings so artificially low. They tell me they were not getting any offers at a higher (more realistic) price. OK, I understand that logic but are they really helping to sell the listing any faster with an unrealistic price.

I would argue that low balling the listing doesn’t help sell the property any quicker and in fact hurts the chances of a sale for the following reasons:

1. Buyer expectations – The Buyer sees the artificially low price and thinks they can get the house for that amount. Even after it is explained that the Seller’s Bank has the final say on what they will or will not accept, this is a difficult psychological hurdle to latter overcome.

 

2. Wasted Time – So the low offer is in and the waiting begins. Banks are not known for quick decisions and several weeks could go by before they respond to the offer. During this time the Listing Agent is required to place the property as Contingent in the Multiple Listing Service (MLS). This could lessen the chance of the property being shown since other potential Buyers could see the property as possibly being sold already. It is also against Nevada law for the Listing Agent to submit other offers while the first offer is pending review by the Bank. Many times the offer will come back from the bank 10% or more higher than what the Listing Agent had it listed for. This tends to anger the Buyer and often causes a complete breakdown of negotiations.

The best way to mitigate against this practice is to educate the Buyer in advance. Las Vegas Buyer’s Agents need to prepare their clients for the possibility of a counter offer above the listing price. If the comparative market analysis shows that the property is worth more than the asking price, share this with your client, it might be what saves the deal in the end.

Las Vegas short sales have always been around but in general were pretty rare. Usually, someone would endure a personal or professional hardship and had to sell their home. Perhaps the home had depreciated a bit and factoring in selling costs, the homeowner found they were unable to cover these costs. The homeowner would then contact their Realtor and assuming they could find a qualified Realtor, they would work with their bank and the bank might take a small loss to avoid taking the home in a foreclosure.

Back in those days however, exotic mortgage products were not the norm. Recently, we have had mortgages such as interest-only, Alt-A, negative amortization loans, as well as having a 2nd even 3rd mortgages against the house which allowed a normally unqualified buyer to purchase a home. The negotiation with the bank was a little more straight-forward back then. Fast forward to 2009 where depreciation on real estate is rampant and whole regions have been has seen home prices down 30-50%, unprecedented since the Great Depression, when one considers the breadth of scale.

The first step is to accurately and HONESTLY take a look at your finances. Set up a place in a corner of the house; pull out your bills and a blank sheet of paper. Write out your all your monthly obligations as well as your gross monthly income. If you are under and it isn’t going to change just by modifying your lifestyle, you have some hard decisions to make. You’ll have to justify your situation as a hardship which will prevent you from recovering in the eyes of your bank. A Realtor proficient in short sales will be able to guide you with this process.

Talk with your lender and if they can modify your loan in a way that makes sense both near-term and long-term, that might make sense for you. Be very aware of how they will want to address the issue of future equity in your home when hopefully, prices might actually increase. Also, keep mind there is always a time crunch. Banks do not move fast except when agreeing to accept your money! The clock is ticking against foreclosure. When you’re going to be behind or certainly when you’re already behind, you cannot afford to spend all your time trying to do a loan modification and then not leave any time to attempt a short sale.

Next talk to a CPA or tax professional that is familiar with the tax ramifications of doing a short sale as well as being responsible for any potential deficiencies against your mortgage loss. If the CPA advises you that a short sale makes sense from their prospective, you can begin start scouting for a qualified Realtor.

The good news is that the entire industry is seeing the benefits of doing a short sale instead of foreclosure. Banks avoid having to take the property back in foreclosure. The home is only going to sell for what the market will bear anyway, so why they would want to go through the extra expense of having to own the home and re-sell it is baffling. The new bank generating the loan (if they didn’t pay cash) now has a new customer. The buyer got a great deal, and I am quite sure most of the neighbors are happy about having a viable owner as opposed to a distressed one.

Please check my next blog article when I will give you industry insider techniques to interview and select the right Realtor to successfully manage your short sale.

Paul  Rowe is 5 year veteran of the Las Vegas real estate market, having seen both the incredible highs and now the lows of 2008 and 2009.

I don’t mean to rant but Las Vegas Real Estate Agents that have no experience in listing short sales make it difficult to get the short sale approved.  In this market, short sales are very prevalent and require an agent that has experience handling short sales.  Not all short sales will close but an agent experienced in short sales will start the short sale process just as soon as they list the home which increases the chances of getting the home sold and sold much quicker.

I currently have several deals with listing agents that do not know what they are doing and it’s going to cause my buyer’s to walk away from the transaction.  Out of all the short sale deals that I have done this year, there was only 1 listing agent that was on top of everything and it was one of the reasons why our short sale transaction closed within 45 days.

When we take a short sale listing, we go through the whole process with our client so they know exactly what to expect during the short sale process.  We submit our short sale package to the bank/lender within 48 hours of taking the listing.  We continuously contact the bank/lender to get our paperwork processed as quickly as possible to ensure we can move quickly as soon as we get an offer.

If you are thinking of selling your Las Vegas Home, make sure you contact Sena & Associates for a free consultation at 702.376.0088.

If you read the newspaper or watch the news, it makes you wonder why you would want to buy a home in this real estate market.  All the media has been reporting is that home prices in the Las Vegas Real Estate market are dropping and more homes are being foreclosed on every month.  I won’t deny that’s true but there’s other information that is not being reported that might give you a different perspective on the Las Vegas Real Estate Market.

Las Vegas sales of existing homes and condos are up from the same time over the previous two years. For November, Las Vegas’ existing home sales were 120% higher than the same month in 2007.  The increase in home sales has reduced the standing inventory even with all the new foreclosed homes that are entering the Las Vegas Real Estate Market every month. Available inventory of homes for sale sits at 10.4 months compared to a 24 month supply at the end of 2007.  Homes that are priced below $200K are receiving multiple offers and are selling above list price.

If you are interested in buying a home in Las Vegas, make sure you act now as housing inventory continues to decrease, you can expect prices to stabilize and even begin to rise.

If you have any questions about the Las Vegas Real Estate Market or would like us to send you properties for sale in the Las Vegas Valley, contact us at 702.376.0088.

Today has been a strange day as it has pretty much snowed for about 8 hours straight in the Henderson area.  I measured over 5 inches of snow that accumulated on a table in my backyard and in some parts of Henderson they were reporting 10 inches.  Read More

Christmas is only a few weeks away and home sales have slowed down a bit in Las Vegas as it usually does every year around this time.  Most people are spending time getting ready for the holidays and buying a home is not on the top of their list of things to do.  Getting presents for Bobby and Susy is at the top of their list.

With home prices in Las Vegas at levels we haven’t seen since 2003 and 2004, with so many bank owned homes for sale and interest rates at historic lows, a new home should be at the top of your Christmas List!  Homes on the market for sale have dropped over the last year and will probably continue to decrease which will inevitably cause prices to level off over the next 18 months, so don’t wait and pass up the opportunity to buy a home in Las Vegas below market value!

If you have any questions about the Las Vegas Real Estate Market or would like us to send you properties for sale in the Las Vegas Valley based on your criteria, contact us at 702.376.0088.

Ok, you have been researching Las Vegas short sales on Google, Suze Orman, talking with friends etc. You know that you may have a way out of a dreadful situation and avoid foreclosure. You know you need to take action, but can you? Yes you can! Many people never get past the research phase because they are afraid to reach out and seek the help they need.

First, talk to your tax professional. If you don’t have one, get one! You need to know the ramifications of doing a short sale. You must get the facts on what potential tax liabilities you might owe and what strategies your tax professional can suggest to mitigate any tax burden.

For those of us who live in “deficiency” States such as Nevada where I live, you need to know if a lender can obtain a judgment against you for any portion of the debt that is lost during a short sale by a lender. Recent bills passed by Congress have made it much easier for homeowners doing short sales to avoid deficiencies.

Hire a Las Vegas Realtor who specializes or at the least has significant experience in short sales. The days of hiring Aunt Sallie or your girlfriend’s brother to be your Realtor because you want to do them a favor or because you’ll feel guilty at the next Thanksgiving Day dinner if you don’t, have been suspended during this horrible market for sellers. You need a professional who will know how to deal with the bank bureaucracies as well as run the real estate portion of a short sale.

Remember your Realtor has four phases to manage:

1. List the property.
2. Negotiate the settlement on your behalf with your bank(s).
3. Manage the offers and negotiate with potential buyers.
4. Manage a good portion of the escrow as there will be heavy coordination between the bank, the listing agent and title. If you’re a buyer’s agent, encourage your buyer to let the listing agent choose title, as they are the ones that have most of the information related to the transaction and are performing the negotiations with the bank.

Remember sellers, the key to moving on beyond your own research is seeking professionals who can help you. They have facts and experience necessary to guide you to your ultimate goal of a successful short sale.

You can contact us at 702.376.0088 to set up a free consultation and we can discuss the short sale process.

If you have made the decision to sell your Las Vegas Home after looking at all other options such as Loan Modification than the next step is finding an experienced agent specializing in short sales.  Short Sales require a real estate agent to not only list your home, market your home but negotiate on your behalf with your lenders to accept an offer for less than you owe on your mortgage. If you have a 1st Mortgage and a 2nd Mortgage it can be even more of a challenge, which is why your real estate agent needs to specialize in short sales.

When you interview perspective agents, make sure you ask them how many short sales they have sold in the last 6 months and how many where they actually represented the seller. There is a difference in selling a short sale when you represent the buyer as opposed to representing the seller.  Make sure you ask them what you can expect during the process and what they will do to ensure you get your home sold.

You can contact us at 702.376.0088 to set up a free consultation and we can discuss the process of selling your Las Vegas Home.

According to the Greater Las Vegas Association of Realtors, over 30% of homes for sale are Short Sales.  A successful short sale is where the Lender/Bank agrees to take less than what is owed.  The homeowner usually has to show some type of hardship in order to get approved to do a short sale.

A hardship could be the loss of a job, divorce, or job relocation.  Some Lenders/Banks won’t approve a short sale unless the homeowner is at least 1 month behind in payments.

Short Sales are definitely not “short”!  Short Sales usually take anywhere from 90 days to 180 days to get approved.  The reason why most short sales don’t close successfully is because buyers don’t have the patience to wait that long for the transaction to be approved.  There are a few things that can be done by the listing agent to help improve the chances of the short sale getting approved and in less time.

If you are interested in selling your home and you owe more than it is worth, we should talk about doing a short sale.  We can be reached at 702.376.0088 or you can complete our contact form.  Click on the link for more information on Las Vegas Short Sales.