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Hiring a Las Vegas Property Management Professional

Hiring a Las Vegas Property Management Professional

When it comes to owning investment real estate in Las Vegas, Nevada it is easy to learn that there are a lot of responsibilities that come along with the job. The more properties you own, whether you are fixing them up to sell them or you are renting them out, you have to have a lot of organization going in order to keep everything in line. With so many laws to watch out for, so many expenses to pay for, and so many people to please, it can be hard to take care of such a job by yourself. This is why developing a relationship with a good Las Vegas Property Manager is a great idea.

By taking advantage of what a property manager can do for you, you will be able to run your real estate investment business in a much smoother manner. When you are looking into such an avenue though, you will want to make sure that you are being honest with yourself in what you are expecting from the person handling your investment properties. The person you hire to work on your team must have experience under his or her belt. Hiring someone with little or no experience is only going to cause you a headache in the end.

There are many people out there offering their services as Las Vegas Property Management professional. Such advertisement can be found in the classifieds, both the online and print versions. Start looking through those and do not forget to write up your own ad in regards to the position you are trying to fill. The sooner you find someone to help you keep everything in line, the more secure your investment will be.

You will also be perceived to be a true professional, which is something that is highly sought after by many people who work for themselves. One word of advice though, you will want to make sure that you scan your applicants very well. This is because the person you hire will have access to your properties and to a lot of your money if they handle such things as rent payments and evictions.

Las Vegas Short Sales: Why Does It Take So Long to Approve a Short Sale?

Anyone that has been involved in a short sale in Las Vegas knows it can take a very long time to close and even then, there is no guarantee it will.  From the time we enter into a short transaction, whether it is with a buyer or seller, we explain the process so they know what to expect.  Even though we thoroughly explain the short sale process to our clients, we still get asked 30-60 days into the transaction, “Why does it take so long to close a short sale?”  I can understand their frustration and disbelief that it can actually take a bank over 60-120 days to respond to an offer.

So why does it take so long for a bank to approve a short sale?  Well, it really depends on the Bank that is holding the mortgage.  Some banks can get a short sale approved within 45-60 days but for the most part most get approved within 60-90 days.  One of the reason it takes so long is the bank requires copies of all bank statements, tax returns, w-2s, and other supporting documents to verify that the homeowners cannot afford to keep making their payment and have a financial hardship.  Once this paperwork is received, it is reviewed by a loss mitigation specialist.  After they review the paperwork and BPO (broker priced opinion), a fair market value of the home, and it’s approved, it just moves to the next step.

The next step is having the investors sign off.  This may include a long list of investors who own pieces of this mortgage loan.  If this is the case, each investor must sign off on the short sale.  You can imagine these investors aren’t very happy about taking a loss on their investment, so don’t expect them to go out of their way to approve the short sale.  If and when the investors sign off, you just may have your approval.

Once we have the approval, the seller could still be held responsible for the balance but this is another topic we will discuss in our next series, Las Vegas Short Sales: Consequences to the Seller.

If you are a homeowner in Las Vegas and have questions about selling your home as a short sale, feel free to give us a call for a free consultation at 702.376.0088.

Because there may be serious tax and/or legal consequences to the seller in a short sale transaction, we recommend you contact an Attorney and/or a CPA for legal and tax advice.  We do not provide legal or tax advice!

Credit Reports: Why they are important and how to improve them.

Your credit reports are a key factor in determining whether or not you can get a mortgage. There are three different bureaus that collect and report information regarding your overall credit situation. They are Equifax, Experian and Transunion. They all rate you by using a scoring system called F.I.C.O, which stands for Fair Issac Credit Organization. Your F.I.C.O score can range anywhere from 400 to 850 (a higher score is more desirable). Only F.I.C.O employees know exactly how they calculate their scoring system, but recent external pressure has forced them to reveal some of their secrets. I will pass what information I have learned on to you latter in this Blog.

When you are ready to buy a house, you need to shop for a mortgage first. After you have found a lender, they will pull your credit reports. They are looking for three basic things. First, they will look at your F.I.C.O scores from each of the three bureaus (if you are applying for a conventional mortgage). They usually take an average of the three scores or your mid F.I.C.O score. Most conventional mortgages have a F.I.C.O score minimum requirement, if you don’t make it up to that number, you don’t get that particular mortgage. There is generally no room for negotiation on this point. Second, they are looking for any derogatory credit. Derogatory credit are things like late payments, car repos, foreclosures, bankruptcies, tax liens, back child support, bounced checks, collection accounts, etc. Any one of these can be a deal breaker or the lender might accept a letter of explanation as to what caused the derogatory credit to occur. Third, they are looking at all your debt (as reported on your credit reports) and calculating your debt to income ratio. The amount of money you spend on bills vs. the amount of money to take in as income. They have various percentages (based on different loan products) that they deem to be acceptable. If you exceed these ratios, they may be willing to negotiate a little if you are strong in other areas (ie. if you have been at your job for a long time or if your F.I.C.O scores are high).

If you find information on your credit reports that is inaccurate, you can request that it be corrected. You need to send a letter to each credit bureau (that has incorrect information reported) and ask that it be corrected. Write one letter identifying yourself and the information you think needs to be corrected. Make sure you send any evidence you have that supports you request. Photo copy the letter/evidence and sign your original signature to each copy. The bureaus usually have 30 days to investigate your claim. If they can’t verify the information they have reported, they have to delete it from your file. This process also works well if you want something added to your credit. If you have limited credit, send in information that shows you pay your bills on time. For example, if you have a department store charge card and it doesn’t show on your credit reports (ask that it be added to your file).

Here are three other tips that may improve your F.I.C.O scores. One, don’t close open credit card accounts/liens of credit just because you paid off the balance. The fact that you have access to (but are not using) credit/money shows you have some reserves if you need them in a pinch. Two, if you do carry balances on your credit cards/liens, try to pay them down below 50% of your available credit line. There is no set reason as to why this works, it is just one of F.I.C.O’s quirky methodologies. Third, avoid allowing to many companies to pull your credit. In general, each time you have your credit pulled your F.I.C.O score drops. The logic being that a company that pulls your credit MAY extend credit to you and you could run up your debt (before it actually shows on your credit report). The exception to this rule is having companies that are designated mortgage companies pulling your credit. In a 30 day period, mortgage designated companies can pull your credit and your F.I.C.O hit will only be from the first mortgage company.

My name is Greg Hoffman. I have live in Las Vegas since 1990 and I have been a Realtor here since 1999. I also have worked in forward and Reverse Mortgages with major national banks.

Should I Sell My Las Vegas Home or Rent it?

I have received many emails and phone calls lately with this question. “In your opinion, should I sell my Las Vegas Home or rent it out?” As much as I want to help and give my opinion, my opinion really doesn’t matter.  What matters is that I provide you with all the facts and information that will help you make a decision for what’s best for you and your family. Only you know your true financial situation.

What we do with our clients that have questions like this is break down the Las Vegas Rental Market and the Las Vegas Real Estate Market.

Las Vegas Rental Market:

  • Increase supply of properties for rent
  • Rental Prices have fallen
  • More Tenants have credit issues due to foreclosures
  • If you purchased your home between 2004 – 2007 with 80% to 100% financing, the rent you collect will not cover your mortgage payment.

We are seeing an increased amount of rental inventory which has caused rental prices to drop a bit.  We are also seeing an increased amount of potential tenants with foreclosures on their credit history.  With Las Vegas being an epicenter in the foreclosure market, you can expect many of these previous homeowners entering the rental market.

Las Vegas Real Estate Market

  • Buyer’s Market
  • Most homes on the market for sale are either a REO (Bank owned home) or a short sale.
  • Chances are you owe more on your Las Vegas Home than it is worth if you purchased your Las Vegas home between 2004 – 2007.

Las Vegas Home prices have fallen significantly over the last year and a half due to the amount of foreclosures.  Banks and Lenders have placed these foreclosed homes back on the market and priced them well below market value which has driven down home prices.

Chances are you owe more on your home than it is worth, but you can still sell your Las Vegas Home.  This is called a short sale. A short sale is where the Lender/Bank agrees to take less than you what you owe.

If you would like to keep your Las Vegas Home but can’t afford to keep making the payment, you can always try to get a Loan Modification.  A loan modification is where the Lender agrees to modify your existing terms of your mortgage agreement.  However, before you go and contact your Lender/Bank to look into this option, remember the person you are speaking with is an employee of the Lender/Bank.   Their job is to get the best deal possible for the Lender/Bank, not you.  That’s why we recommend having an Attorney represent you on a Las Vegas Loan Modification.

If you have any questions, please call us at 702.376.7379 or fill out our contact form.

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.

Should Judges Be Allowed to Dictate Mortgage Terms?

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.

Las Vegas Loan Modification

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: Disturbing Trend of Low Ball Listings in Vegas

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.  

  3. 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.

How Do I Know if a Las Vegas Short Sale Is Right for Me?

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.

Sellers, Please Choose a Las Vegas Real Estate Agent With Experience in Short Sales

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.

Why Buying a Home in Las Vegas Makes Sense

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.

Snow Day in Las Vegas?

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