Category Archive : Real Estate

Nevada’s U.S. Attorney Daniel Bogden announced today the federal grand jury in Las Vegas indicted five people on mortgage fraud charges.  All five individuals were charged with conspiracy to commit bank fraud, mail fraud, wire fraud, (6) counts of bank fraud and criminal forfeiture.  Suzanne McAllister, an assistant escrow officer and notary at Lawyers Title, was one of the five indicted.

According to the Las Vegas Sun, The indictment lists 28 real property sales transactions involving 21 homes sold in Las Vegas between Aug. 25, 2005, and April 18, 2007. Seven of the homes were “flipped” or sold twice within short periods of time. A majority of the homes sold for more than $700,000, and the total value of the mortgages for the 28 transactions was $18.9 million.

If convicted, the defendants could face up to 30 years in prison and a $1 million fine on each count, and may be required to forfeit up to about $4.2 million.

The Southern Nevada Mortgage Fraud Task Force and U.S. Postal Investigation Service is handling the investigation.

Simply checking online for today’s posted rate may not lead to your expected outcome due to the many factors that can cause each individual rate and closing cost scenario to fluctuate.

We can preach communication, service and education all day long, but it’s our ultimate goal to earn your trust so that you can be confident in our ability to successfully lead you through this complex mortgage process.

While mortgage rates can change several times a day, the following questions will help you qualify whether or your lender truly knows what to look for so that they can provide you with the best rate once you’re in a position of locking in your loan:

Who determines mortgage rates, and what are they tied to?

Mortgage interest rates are determined by the pricing of Mortgage Backed Securities or Mortgage Bonds. The media often implies mortgage rates are based off the 10-year Treasury Note, which is incorrect.

While the 10-year Treasury Note has been known to trend in the same direction as Mortgage Bonds, it is not unusual to see them move in completely opposite directions.

How often do mortgage rates change?

Mortgage rates may change throughout the day, however they only change on days when the Bond markets are trading securities since mortgage rates are based on Mortgage Bond prices.

Think of a Mortgage Bond’s sales price similar to that of a Stock that trades up and down during the course of a day.

For example, the FNMA 30-Year 4.50% coupon is selling for $100.50. The price is 50 basis points lower from the previous day’s closing price of $101.00. In simple terms, the borrower would have to pay an additional .50% of their loan amount to have the same rate today that they could have locked in the previous day. Alternatively, the borrower would also have the option of increasing their rate by an average of .125%.

What causes mortgage rates to change?

Mortgage Bonds are largely effected by various market forces that influence the changing demand for bonds within the market. Some of the key economic factors that have the greatest impact are unemployment percentages, inflationary fears, economic strength and the overall movement of money in and out of the markets.

Like stocks, most fluctuation is caused by consumer and investor emotions.

What do you use to monitor mortgage rates?

There are several great subscription based services available to monitor Mortgage Bond pricing.

The key is to make sure the lender is aware they should be monitoring Mortgage Bond pricing, such as the Fannie Mae 30-Year 4.50% coupon, and not the 10-Year Treasury Note or the news media.

When the Fed changes rates, why do mortgage rates move in the opposite direction?

It is a common misconception that when the Federal Reserve implements a rate cut it is immediately correlated to a reduction in mortgage rates.

The Federal Reserve policy influences short term rates known as the Fed Funds Rate (“FFR”). Lowering the FFR helps to stimulate the economy and increasing the FFR helps to slow the economy down. Effectively, cutting interest rates (FFR specifically) will cause the stock market to rally, driving money out of bonds and creating potential for inflation.

Mortgage Bond holders need to obtain a higher rate of return on their money if inflation is increasing, thus driving up mortgage rates. With the Federal Reserve Board meeting every six weeks, this is an important question to ask. If your lender does not have a firm understanding of this relationship, they may leave your rate unprotected costing you thousands of dollars over the life of your mortgage.

Do different programs have different interest rates?

Conventional, FHA and VA loans can all carry different rates on a 30-Year fixed mortgage. FHA and VA loans are insured by the Federal Government in the event of defaults. Conventional mortgages are insured by private mortgage insurance companies, if insurance is required.

Typically, FHA and VA loans carry a lower rate because the investor views the government backing as less of a risk. While rates are usually different for each program, it may be more important to compare the monthly and overall cost during the life of the loan to determine which program best suits your needs.

Why is an Adjustable Rate Mortgage (ARM) rate lower than a fixed rate mortgage?

An Adjustable Rate Mortgage (ARM) is usually fixed for a specific period of time. The period is typically 6 months, 1 year, 3 years, 5 years or 7 years. The shorter time period the rate is fixed, the lower the interest rate tends to be initially.

This is due to the borrower taking the future risk of increasing interest rates. The only instance where this would not be true is when there is an inverted yield curve where short-term rates are higher than long-term rates.

Why are rates higher for different property residence types?

Mortgage interest rates are based on risk-based pricing. Risk-based pricing allows adjustments to par pricing for risk factors such as; FICO scores, loan-to-value percentages, property type (SFR, Condo, 2-4 Units), occupancy (Primary, Vacation or Investment) and mortgage type (Interest Only, Adjustable Rate etc).

This allows the investors who lend their money for mortgages to receive additional compensation for taking additional risk. An example is if the borrower encounters a financial hardship, are they more likely to make the payment on the home they live in or the one they rent?

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A pre-planned multi-builder development with recreation, public services, commercial sites and residential housing in a self contained community. This is part two of a multiple part series looking at various master planned projects throughout Southern Nevada. I will be focusing on Southern Highlands in this article.

Southern Highlands is located in the Southwest part of the Las Vegas Valley. Secluded up against the mountains the community is still convenient to the Las Vegas strip, the Airport (without being in the flight path) and easy access to I-15/California. The 2300 acre community has more than 50 acres of parks, walking trails and community sports facilities.

Southern Highlands is home to the Southern Highlands Golf Club. A private golf  course designed by Robert Trent Jones which is consistently ranked one of the top 30 golf courses in America. There is also a 42,000 square foot clubhouse and spa with dining and private party facilities.

There are two public elementary schools (Aldeane Comito Ries, Charles & Phyllis Frias) and a public middle school (Lois & Jerry Tarkanian). There is also a private school for grades k-8 (Southern Highlands Preparatory School). Visit the link for more information http://www.ccsd.net/.

Currently there are approximately 213 resale homes for sale in Southern Highlands ranging in price from $106,000 to $10,000,000. In addition there are 12 builders currently selling new homes with prices similar to the resale range. Since this is a master planned community there are association fees to consider when buying a home here. Monthly association fees run  from as low as $39 up to$600 a month. Another cost to consider is called a SID (Special Improvement District), basically a bond that is repaid by homeowners over a period of years. The SID was initiated to pay for the initial installation of infrastructure (roads, sewers, sidewalks, streetlights etc.). The SID’s payments range from $260 to $4800 a year and not every house has a SID balance. They are transferable from old owners to new owners and sometimes you can find a house where they have been paid off.

Needless to say, I am a big fan of master planned communities and Southern Highlands is one of the standouts in Southern Nevada. Feel free to contact me if you have any real estate questions regarding Southern Nevada. I have lived here for 20 years and I have been a Realtor here since 2001.

Why is now a great time to buy the golf course home of your dreams? 

In the Las Vegas area there are over  50 golf courses with homes surrounding most of them.   Currently Las Vegas has over 800 properties listed in golf communities that range in price from a condo at Lake Las Vegas for $39,000 (no, that’s not a typo) to an estate in McDonald Ranch for $15,900,000.  There is literally something for everyone in every price range.  Selecting a home within a golf course community can be a very personal experience.   A community that meets your needs can include a view of the fabulous Las Vegas Strip,  private golf club,  recreational facilities with community rooms, pools, spas, walking paths,  exercise facilities, media rooms, massage,  on-site dining,  hotels and even a Casino, many have scheduled events, entertainment venues and much, much more.

Living in the Las Vegas area is truly an experience with great shopping, restaurants, freeways and beltways that can get you just about anywhere in the valley in less than 20 minutes – however, many find that life away from the “Strip” is much the same as anywhere else they’ve ever lived, a real community.   Many locals will tell you that they rarely go to the Strip except when company comes, but thankfully — it’s your choice.   In the coming weeks, I’ll give you insight into the various areas that are often overlooked.

GOLF IN HENDERSON

The very first Master Planned Community in the Vegas Valley was Green Valley in Henderson.  It was built in the 1970’s surrounding what is now the Wildhorse Golf Club, www.golfwildhorse.com.  Wild Horse  was built in 1959 and at one time owned by Hank Greenspun of the Las Vegas Sun and later by Howard Hughes.   Previously on the PGA Tour as the Sahara Invitational, it is now a public course owned by the City of Henderson. (If you google this course, you’ll find it labeled as Paradise Valley Country Club.)   This course was just re-designed  to provide recent xeriscaping to both beautify the property and conserve water. Wildhorse offers an enjoyable round of golf at a reasonable price and is definitely a local’s favorite!

If you have interest in this golf community, there are only 91 properties that surround the course itself and possibly 5 vacant estate lots still available.    While many of the homes are older, a many have undergone extensive makeovers. Interested?  There are only a few properties available that have golf course frontage.

If you are interested in a Golf Course Home in Las Vegas, feel free to give us a call at 702.376.7379 or fill out the contact form to the right.

Mountain’s Edge was the top selling master planned community in the country for 2008. An impressive feat considering the tumultuous real estate market in Southern Nevada as of late.

Mountain’s Edge sits on 3500 acres of land in the Southwest part of the Las Vegas Valley. 550 acres have been set aside for parks and future community amenities. Six schools are planned for the community, with two elementary schools already up and running. There are more than a dozen builders offering 76 different models for sale. On top of that there are roughly 272 resale homes currently for sale in the community.

Like any community there are pros and cons to living in Mountain’s Edge. Some features can be both a positive and a negative at the same time. For example Mountain’s Edge maintains strict zoning and property standards. As well as generous and well maintained common areas. These features tend to help maintain property values into the foreseeable future. The down side to this is that there is (usually) more than one association fee. One for the sub-division and one for the master planned community. In Mountain’s Edge there is also a SID (Special Improvement District). A SID is basically a bond taken out to raise money for infrastructure (roads, sidewalks, utilities, etc.). All homeowners agree to pay back the SID over a specified period of time until it is paid off or they sell the house. SID balances are transferable to the new owners when the home is sold.

Mountain’s Edge is well named as it sits tucked up against the mountains in the Southwest corner of the valley. Some would say it is a little isolated with limited shopping and minimal road access. Both factors which will be addressed over time with increased local shopping options and the extension of Rainbow Boulevard (a major north-south Boulevard in Las Vegas).

This blog was intended to give the reader a brief overview of Mountain’s Edge. In future blogs, I will address in more detail, other relevant facts and features about the community.

My name is Greg Hoffman and I have lived in Las Vegas for the past 19 years. I have been a Realtor here for the past 10 years. I welcome your comments and questions. 702-683-6913.

After much speculation within the industry, news out of Washington D.C. this week confirmed that Senate is moving forward on extending the $8,000 first time home buyer tax credit. The Senate still has to approve the measure; however, it appears to have bi-partisan support amongst Republicans and Democrats. Read More

Earnest money deposit (EMD) is the amount of money the seller has REQUESTED as a deposit to agree to sell you their house. Consider it a sign of good faith that you, the buyer, will go through with the purchase once you initiate the offer. Remember, by agreeing to your offer the seller has severely limited their ability to market their house for sale during the time you requested to close the transaction.

The EMD REQUESTED is always listed on the Multiple Listing Sheet (ask your realtor to see it). I capitalized requested to highlight the fact that EMD amounts are not set in stone. Almost everything is negotiable in this transaction and EMD is no exception. Offering to small an EMD can paint you as an insincere buyer. It also may cause you to lose the purchase to a competing offer with a higher EMD. Conversely, I always advise my clients not to offer any more of an EMD then is requested from the seller. Why risk a penny more of your money then you have to? If you ever have to default (breach the contract without an acceptable reason) you could lose your EMD.

Always make sure you have the money in the bank before you submit a check with your offer. The EMD will be turned over to the title company (usually within one day of acceptance of your offer) and they will cash it shortly thereafter. They place the money in a trust account until it comes time to close the transaction or until it is requested by either the buyer/seller.  An interesting side note, even veterans (doing a dollar down VA loan) have to put down an EMD. The same rules mentioned above apply to veterans as well (though they have slightly greater protections in regards to potentially losing their EMD).

The down payment is the amount of money the LENDER requires that the buyer put into the purchase of the property. For example, on an FHA backed mortgage the lender requires that the buyer put down 3.5% of the purchase price. In return, the lender agrees to finance 96.5% of the purchase price for the buyer. The seller DOES NOT dictate what  the down payment requirement is.

If the EMD is more then the required down payment, then the extra money can be used for other things. It can be used to pay for closing costs (including buying down the interest rate) or it can be partially refunded at close of escrow. Another important difference between EMD and down payment is the time in which the two types of funds most be committed. EMD most be submitted with the offer and down payment is usually required at close of escrow (at the end of the transaction).

Always check with your local professionals as laws and procedures vary from state to state. My name is Greg Hoffman. I have lived in Las Vegas for 19 years and I have been a Realtor here for 10 years.

Many homeowners who purchased their Las Vegas Home between 2004 and 2007 are most likely upside down, unless they put a substantial amount down of at least 40%.  With home values dropping from a high of $315K in June 2006 to today’s average price of $140K can make selling your home very difficult and most likely will require you to sell it as a short sale.  Unfortunately, just because you want to sell your home does not mean the Bank/Lender is going to agree to take a loss without some type of hardship such as job relocation, job loss, divorce or death.  So depending on your financial situation, renting your home for the next 3-5 years could be an option to selling.

Giving the state of the economy, the Las Vegas Rental Market is doing well.  Many former homeowners are now becoming renters as they have lossed their home to foreclosure or sold it as a short sale.  For those that lost their home due to foreclosure will be unable to purchase a home for 5 years, making them an ideal long term renter.  Knowing that there is still a market for rentals, the next step is determining what your home could rent for based on what other homes have rented for in the area.  The rental price could be the determining factor on whether you can afford to rent your home out or if the negative cash flow is going to force you to sell your home.  The last thing you want to do is rent your home out knowing full well you are going to let it go in foreclosure as this is very unethical and could cause a hardship for the tenants when they are forced to vacate the property.

If you are in a position that is forcing you to sell or rent your Las Vegas Home, it is important to contact the right real estate agent.  Chances are, if you are going to sell your home, you will need a real estate agent that specializes in short sales and remember there could be legal and tax implications.  If you are going to rent your home, I would recommend having a Las Vegas Property Management Company handle the management of your property.

If you have any questions about the short sale process, feel free to contact Paul Rowe at 702.376.0088.  If you are thinking about renting your Las Vegas Home and are in need of Property Management Services, feel free to contact Tony Sena at 702.376.7379.

Las Vegas Real Estate sales of single-family homes, condos and town homes hit a record of 4,702 in June, beating the previous record of 4,414 set in June 2004 according to the information released by the Greater Las Vegas Association of Realtors.  The main reason for the increase in home sales is the average sales price of $140,000 which is considerably less than the average sales price of $242,000 in June 2004.  The drastic drop in home prices has made it affordable for first time home buyers once again and lucrative for real estate investors.

Majority of the Las Vegas Properties that sold in June were single family bank owned homes and short sales.  Condo and town homes also saw an increase in sales compared to June 2008.  This can also be attributed to the drop in the average sales price which is bringing real estate investors to the Las Vegas Real Estate Market. Many real estate investors are buying condos with cash and then placing them on the market for rent with a Las Vegas Property Management Company.

Now that Banks and Lenders have lifted the moratorium, we should see a rise in bank owned homes hitting the market over the next 5 to 7 months.  This should fuel homes sales even more as many real estate agents are receiving multiple offers on their bank owned home and even short sale listings.  The bad news is the increase in bank owned homes for sale could drive down the average sales price even further as Banks and Lenders price the properties below market value for a quick sale.  Either way, don’t expect Las Vegas Home prices to increase any time soon.

We are a team of professionals that can assist you in all aspects of real estate in Las Vegas, from condos to multi-million dollar estates.  We pride ourselves on providing top-tier service for all our clients, but we do recognize that there is a big difference between residential homes and luxury real estate.  It is not just another property, it is a home that defines a lifestyle.

Las Vegas Luxury Homes and Estates require considerable time as well as a specially designed marketing program in order to attract the right buyers. We have the resources to attract those qualified buyers and match them with your prestigious home.

Any Las Vegas Real Estate Agent would be privileged to list and sell a multi-million dollar property, however; not every agent has the experience combined with the techniques to do so successfully.  We offer a customized marketing plan designed to get your luxury home sold in less time and with less stress.

We start by focusing on your customized marketing plan.  This involves defining and describing your property accurately and creatively, professionally photographing your home, setting up a virtual tour, and maximizing your homes internet exposure.  We specifically target buyers searching for luxury real estate by ranking our website on all the top search engines.  In turn, your luxury home will be one of the most viewed world-wide.  It is essential that luxury homes and estates are clearly defined. Marketing a home as distinctive as yours requires uncommon knowledge and creativity. High-end Las Vegas Homes and Estates are unique because of their quality, historic significance or eminent location.

We have the resources to generate the greatest number of prospective buyers for your Las Vegas Luxury Home.  We use a wide variety of methods to market your home; display advertising in national and international editions, placements in premier home magazines, customized press releases, and direct mail are only a few of these techniques. We continually prove that we can market homes to the maximum number of qualified buyers worldwide, as well as handle every inquiry with discretion, efficiency and sophistication.  Our website provides potential buyers access to virtual tours, expanded listing information, and a property search. Considering that over 80% of all buyers search the internet for available properties, a top ranked website like ours is always beneficial.

We are dedicated to helping you sell your Las Vegas Luxury Home and providing you with the type of service you deserve.   We appreciate the opportunity for an interview, so please contact us when you are ready.  We have the experience, knowledge, and ability to properly market your luxury home.

For a confidential interview, please contact Tony Sena at (702) 376-7379 or complete the contact form to the right.

With only a 3.5% minimum down payment requirement, FHA Mortgage programs are being used by more Las Vegas First-Time Home Buyers.

Some people easily get down payment and equity confused, especially in a market like Las Vegas which has a significant number of undervalued bank owned and foreclosure deals.

However, on a purchase transaction, the FHA clearly defines that the minimum down payment needs to be 3.5% of the lesser of the appraised value or the sales price.

Keep in mind that the down payment does not include borrower-paid closing costs, pre-paid taxes, insurance, title, appraisal, and home inspection fees.

To be approved for an FHA loan, all sources of funds have to be properly documented and verified by an underwriter who will be looking to see if there were any undocumented debts incurred by the borrower to obtain the FHA down payment cash investment.

Acceptable sources of borrower funds include the following:

• Earnest Money Deposit
• Savings and Checking Accounts
• Cash saved at home
• Private savings club
• Savings Bonds
• IRAs
• 401 (k) and Keogh Accounts
• Stocks and Bonds
• Thrift Savings Plans
• Gift Funds
• Sales Proceeds
• Sale of personal property
• Commissions from sale
• Trade Equity
• Rent Credit
• Sweat Equity
• Collateralized Loans
• Disaster Relief Grants and Loans
• Employer’s Guarantee Plans
• Employer Assistance Plans

Questions About Sourcing FHA Down Payment Funds:

Q: How is the Earnest Money Deposit verified?

The EMD is the initial deposit submitted with an accepted purchase contract offer which is held in an escrow account. These funds count towards the borrower’s down payment and/or closing costs.

The EMD is verified by a cancelled check, certification from the deposit-holder acknowledging receipt of funds, or separate evidence of the source of funds.

*If the EMD exceeds 2% of the sales price or appears to be excessive based on the borrower’s history of savings, there may be more documentation required to source and document the money trail.

Q: How are Savings and Checking Accounts verified?

A verification of deposit (VOD), along with the most recent bank statement is one way a lender may request to verify these funds. If there is a significant increase in an account, or the account was recently opened, a written letter of explanation may be required as well.

Q: What if I have been saving money in a jar or under the mattress?

The borrower will need to provide a written letter of explanation and evidence of the ability to accumulate the cash. This can include analyzing a borrower’s income stream, the time period which the funds were saved, spending habits, documented expenses, and a history of using financial institutions.

Q: How is a down payment documented from a 401 (k) or IRA?

While liquidation of the account is not required, underwriters will only use up to 60% of the value of the assets, unless the borrower can prove that a higher percentage an be withdrawn after subtracting any Federal income tax and penalties.

Q: Do I have to show liquidation of funds from Stocks or Bonds?

No, you may not have to show actual liquidation of funds from a Stock or Bond, but the accounts will be verified by providing monthly or quarterly statements.

Q: Who can give a Gift Fund?

A gift fund can be considered as an acceptable source of down payment as long as there is no expected of implied terms of repayment to the donor by the borrower.

Gift funds can be given by the following:

• A relative
• Borrower’s employer or labor union
• A charitable organization
• A government agency or public entity that has a home ownership program
• A close friend with a clearly defined and documented interest in the borrower

As a general rule, the FHA is not concerned with how the donor obtained the Gift Funds, as long as the funds are not associated with the sales transaction.

Q: Can real estate agents use their commissions as part of the down payment?

Yes, a family member who is a licensed real estate agent may also donate their commission.

There are many more down payment options that can be considered by an FHA underwriter as acceptable funds to close.

It is important to be completely transparent with your loan officer at the time of the initial application and financial strategy session so that we can put a game plan together for your individual scenario and goals.

After reading the title, I know you are probably thinking, yeah right, but just hear me out for a second. 

Could the Las Vegas Real Estate Market be undervalued?  I think without a doubt the answer to that question is yes.  Below I have listed some key points to why I believe the Las Vegas Real Estate Market is undervalued.

1. Homes priced below $150K are selling above list price.  (The average median home price in Las Vegas is $141K.  A significant drop from the high in June 2006 of $315K)
2. Homes that are priced below $150K are receiving multiple offers.
3. Homes priced below $150K are receiving offers within hours of being placed on the market for sale.
4. Standing inventory has steadily decreased over the last year even though we are seeing an increase of bank owned properties hitting the market.
5. 13 Consecutive months Las Vegas home sales have increased compared to the same month from the previous year.  Even though unemployment is over 10%.
6. There has been an increase in foreign investors purchasing homes in Las Vegas.

These are all signs to me that indicate the Las Vegas Real Estate Market is undervalued.  I know there other so called real estate experts that are predicting the 2nd wave of foreclosures, which could happen but I have been hearing that since mid 2008 and here we are, 13 consecutive months of increased home sales compared to the months from the previous year.  On the flip side to the 2nd wave of foreclosures, the Obama Administration has passed legislation that is helping Las Vegas Homeowners to modify their home loan allowing them to stay in their homes with a more affordable mortgage payment.

Nobody knows what’s going to happen over the next 6 – 18 months but I am confident the Las Vegas Real Estate Market will begin to see home prices stabilizing and standing inventory will still be on the decline.

After reading this and you still don’t think the Las Vegas Real Estate Market is on the road to a recovery, then check out this article by the New York Times indicating that Las Vegas is showings signs of rebounding.