LAS VEGAS, NV – While the nation is keeping their eyes on the ever-evolving and expanding housing market of Las Vegas, Nevada, a directly-related market that often gets overlooked – the rental market – is also experiencing a massive period of growth. Much like homesteads in the region, rental units, such as apartments and condominiums, are in big demand, short on supply, and growing in price.
Las Vegas rental prices are increasing at one of the fastest rates in the United States, according to reports, while vacancy is at an all-time low; essentially, this means that there aren’t enough rentals to go around, and that’s driving prices up to significant levels. Developers are in the midst of efforts to create more apartment buildings and condos to satisfy demand, but at the moment they’re falling short of necessary construction goals.
Currently, the typical Las-Vegas-based apartment in the third quarter of 2018 is pulling in an average rent of $1,020, which represents a jump of 5.8 percent from the same period in 2017. While this amount is far below the average price of an apartment in other, more expensive regions of the county – which lies in the $1,300+ range, currently – it still is an increase of 5.8 percent from one year ago, which means that prices in Vegas, while still more affordable than the national average, are still going up at record speed. The availability of rental units in Vegas is a large contributor to the rental hikes as of late, reports show- currently, the vacancy rate for apartments and condos in Southern Nevada stands at 3.6 percent.
However, homes rentals are also feeling the squeeze, with prices increasing at similar rates as they are for apartments; as of press time, rent for a single-family home in Vegas for June has jumped 5.7 percent over the same period in 2017, and while it has been surpassed in recent months by other cities, in early 2018 Vegas had the fastest-climbing rental rates in the United States. Southern Nevada boasts a large number of rental homes on the market, due to the fact that investors bought numerous houses on the cheap during the recession and have since retained the majority of them (as opposed to selling) rental properties.
As the region’s economy recovered and bounced back after the recession ended, the influx of new businesses and jobs greatly increased, along with the number of newly-transplanted residents; as a result, housing demand grew…along with rental prices. As mentioned before, developers are struggling with producing new housing options for residents hungry for shelter, but until they catch up, demand – and, correspondingly, prices – is sure to continue its upward ascent.
If you are considering investing in or around the Las Vegas area give us a call at 702.376.7379 so we can answer any questions you may have.
LAS VEGAS, NV – Since the end of the recession and the recovery of the Las Vegas housing market after the the mid-2000’s housing bubble, real estate – and prices – have been steadily climbing, fuelled by intense demand as money and businesses continue to flow into the Southern Nevada region to take advantage of the opportunity that lies within.
With demand currently far outstripping demand, Las Vegas is threatened with eventually losing its attractive status as a city with a very affordable standard of living when compared to much of the United States these days. At the moment – and for the foreseeable future – property prices in Las Vegas are among the fastest-rising in the country, and developers have seen rapid and massive profits as available homes have been snapped up in record time.
In order to combat these concerns, local builders have been attempting to ramp up construction in an attempt to increase the available number of homes and apartments on the market; it is hoped that such efforts will stabilise the rapidly climbing costs of real estate in Vegas as of late. And in order address those concerns specifically, builders have begun to place a greater emphasis on lower-cost housing options when it comes to their construction plans, according to reports.
Of the communities that have been completed and opened in 2018, approximately 25 percent of them have advertised base asking prices below $300,000, which represents an increase of 12 percent in projects with such price points over the same period one year ago; the median sale price of a home as of the end of this past May was $369,990 – an 8 percent jump from 2017 – so it’s easy to see that any home that starts under $300,000 can be seen as a boon to new families attempting to get a fresh start in the Las Vegas region.
Part of the business plans that have resulted in these cheaper home prices center around less expensive land prices as areas that had been previously overlooked by developers toughing it out during the recession are being snapped up for bargains today. In addition, greater numbers of apartments and condominiums in circulation – increasing completion for the dollars of those looking for a new place to live – are also helping to stabilise new home prices.
Las Vegas’ skyrocketing economy and real estate market are a large part of what’s putting it back on the map after over a decade of dormancy during the recession; experts are starting to worry that its sudden and rapid growth and expansion may be a case of too much, too soon, so the fact that local developers and builders are taking note of this fact and – adjusting their output accordingly in order to curb this trend and help retain the affordability that Las Vegas has come to be known for – ensures that the region’s upward financial climb will only continue unabated.
If you are considering relocating in or around the Las Vegas area, which clearly is experiencing huge growth and a booming job market, give us a call at 702.376.7379 so we can answer any real estate and home relocation questions you may have.
LAS VEGAS, NV – In an effort to address the ongoing housing crisis in Las Vegas, builders have been attempting to ramp up their efforts in erecting new homes and apartment complexes to meet the ever-growing demands in Southern Nevada as the local economy improves. The situation is ushering in new investors, companies, tourism, and – most importantly – newly-transplanted residents keen to take advantage of Vegas’ thriving job market, and as a result living options are scarce and prices are skyrocketing.
Builders are seeing progress in their efforts to balance local real estate scales, as four towns in Las Vegas are ranked in the two 20 in the United States in terms of builder sales for 2018, according to reports.
The numbers for local builders are also impressive, and clearly speak for themselves; as of the end of June, sales in Summerlinwere ranked as the third highest in the nation among master-planned communities at 772 homes sold, representing a jump of 64 percent over a one year prior. Inspirada – a master-planned community located within Henderson – comes in eighth in the U.S. with a 21 percent increase from 2017, boasting 475 homes purchased. Another Henderson-based community, Cadence, ranks 12th with 334 homes sold, an increase of 45 percent. Finally, coming in at 17th in the nation is Skye Canyon with 284 homes purchased; currently, it is not known home much of an increase this is over the previous year’s sales for this community, which is located in the northwest Las Vegas valley.
Due to a the current lack of housing options on the market, most available homes and apartments are being snapped up, and landlords and sellers in the region are taking advantage of demand by charging – and receiving – premium prices. Initially, builders appeared ill-equipped to handle the production of additional housing units to appease demand, in-part contributing to the cutthroat sales environment holding Vegas in its grasp. However, these new sales figures suggest that builders are finally hitting their stride and will hopefully continue to deliver adequate amounts of new residences to the point that prices begin to stabilize and eventually subside to a degree.
But in the meantime, housing in Las Vegas will still be on a first-come, first-served basis for the foreseeable future, and buyers will find themselves paying through the nose more often than not…bearing in mind that housing prices in Las Vegas – as well as the overall cost of living – still remain below the national average, especially when compared to neighbouring markets such as California, where the cost of living is driving more and more residents out-of-state and into more affordable regions, such as Nevada.
If you are considering relocating in or around the Las Vegas area, which clearly is experiencing huge growth and a booming job market, give us a call at 702.376.7379 so we can answer any real estate and home relocation questions you may have.
LAS VEGAS, NV – With demand outstripping the current supply on the housing market in Las Vegas following a decade of dormancy due to the recession, Clark County is mulling over the possibility of opening approximately 39,000 acres of public land to private development which could be used for real estate and industrial development. An additional 370,000 acres are also being proposed for conservational use, reports say.
The land in question – situated mostly along Interstate 15 south of the valley, among other areas – could be used for development of housing to help alleviate the shortage of homes in the Vegas area, spurred on by the recent economic boom experienced in the region as more and more businesses move in and, subsequently, more people looking for jobs and a more affordable cost of living as well. In addition, the allotted public land could also be used to construct manufacturing centers and distribution hubs, which are also sorely needed in Southern Nevada.
However, due to public outcry by environmentalists, Clark County has also proposed setting aside an additional 370,000 acres of land to help aid wilderness and wildlife conservation; in particular, an emphasis will be placed upon protecting the region’s desert tortoise population, as well as other protected and endangers species. Nonetheless, some environmental groups are expressing concern over what they view as rapid expansion of Vegas’ outer lying areas for construction, instead advocating for a more density in currently-populated areas before the decision is made by officials to expand outward. However, builders argue that doing so would result in higher costs than simply developing on undeveloped land would entail.
Experts and Clark County officials note that offering additional property in the Las Vegas region for developers to utilize would help offset the ever-growing costs of home ownership currently affecting the area, as scarcity has caused new arrivals to scramble for any property they can get their hands on while paying top dollar to do so. In addition, experts say that opening up new areas of Southern Nevada to development will not only help to prepare the region for increased population, but also help to continue to attract new businesses and companies in order to maintain the steady economic growth that Las Vegas has been enjoying the past several years; not striking while the iron is hot, some claim, could ultimately undercut the economic boom that Vegas has been experiencing in the long-term.
Any city undergoing the rapid period of growth – in terms of both economy and population – is due to experience growing pains as a result, and concessions need to be made to ensure that the needs of residents are met and to promote the sustained and continued economic growth of the region, while also ensuring that the environment and endangered animal species are protected at the same time. It can be a tricky tightrope to traverse, but if done with care and intelligence behind it, it would benefit all involved.
If you are considering relocating in or around the Las Vegas area, which clearly is experiencing huge growth and a booming job market, give us a call at 702.376.7379 so we can answer any real estate and home relocation questions you may have.
LAS VEGAS, NV – Las Vegas real estate has continued to astound the nation, with demand – and prices – still climbing ever since Southern Nevada spectacularly rebounded from the devastating recession of the mid-2000’s. Properties that were previously vacant and unwanted are now being snatched up at a record pace, and according to experts those prices will soon reach levels the region has not seen in over a decade, with no signs of slowing down.
2018 could very well see Las Vegas home prices, which have been rising steadily due to ever-increasing demand, reach their pre-recession peak; media house prices hit their zenith in 2006, coming in at $315,000, but after the housing bubble burst in 2012, that price dropped drastically- all the way down to $118,000.
The Vegas market is currently zeroing in on those pre-recession numbers. For instance, May of 2018 saw the median sales price of single family homes coming in at $295,000, which represents an increase of 2.1 percent from April and a jump of 18 percent from the same period one year prior.
The median sales price of previously owned single-family homes was $295,000 last month, up 2.1 percent from April and 18 percent from May 2017, according to the Greater Las Vegas Association of Realtors (GLVAR). In addition, the number of homes sold increased from April to May – 3,140, up 9.1 percent. This showcases the rapid and continuing growth of the Vegas real estate market, although the increasing scarcity of inventory in 2018 is resulting in a slightly lower number of sales when compared to April of 2017, which saw an additional 10.7 percent in sales over this past April.
However, the amount of homes on the market has been steadily increasing as construction has been working overtime to meet the wants of new transplants to Nevada seeking job opportunities and an affordable lifestyle, in addition to more investors putting their properties up for sale. At the end of May 2018, 4,118 homes were for sale without offers, an increase of 7.9 percent from the month before; however, that number is still down 17.2 percent from May of 2017, showing that inventory is still not quite matching demand yet.
The ever-increasing home prices in Las Vegas are functioning as a double-edged sword; property owners and investors are accumulating a great deal of money as homes sell, but with the increasing number of new residents in the region looking for homes, a question of affordability will soon figure into the equation. Experts, however, don’t foresee any price decline in the Vegas real estate market over the course of the next several years, although some are hoping for price growth to at least slow down to a degree that goes more in line with the income level of local residents. Achieving that slower price growth will be possible, experts say, when local Vegas construction projects introduces more housing units upon the market – slightly curbing demand and giving buyers more options – anticipated to happen in 2019.
If you are considering relocating in or around the Las Vegas area, which clearly is experiencing huge growth and a booming job market, give us a call at 702.376.7379 so we can answer any real estate and home relocation questions you may have.
With housing so affordable in the Las Vegas area due to the real estate meltdown, some parents of UNLV students are also choosing to invest in the local Las Vegas real estate market at the same time. Many students at UNLV live off campus. Due to its central location in the Las Vegas Valley, most residential areas are located no more than a 20 minutes’ drive from campus.
The median price of a single family home in Las Vegas currently stands at around $105,000 and condos are at around $50,000. Prices have not been at these levels since 1990 which is about 13 years before the first signs of a housing bubble in Las Vegas. This means there is essentially a market over correction in prices of about 13 years if you buy at today’s prices.
Investors are now here in droves, many of them cash buyers. Rental prices for homes and condos have certainly not declined at all so investors are able to purchase homes that create positive cash flow immediately on their investment.
For parents looking to also make a real estate investment, it makes good sense to consider purchasing. Not only are the current market conditions extremely favorable, but you have a ready tenant in the student whose not a risk like your average tenant would be.
For a traditional investor, there is a large pool of renters, not only students, but also many of the displaced homeowners who have lost their homes but not left the area. Many people are also needing to rent while their financial and credit profile recovers.
Purchasing a home here in Las Vegas, especially if you live out of town can be a challenge, but still be accomplished after having done your research and getting the best assistance possible when you’re ready to buy. Your REALTOR® should have a lot of experience with foreclosures and short sales. The real estate practices related to these two categories are constantly changing.
Once you have made your purchase you may also need good property management, especially if your tenant is not your own son or daughter! Effectively managing properties by staying on top of tenants, dealing with homeowners’ associations, managing repair issues, collecting repair bids and effective accounting are issues many companies lack. You don’t want a “rent collector” you want a MANAGER who will fight to preserve your property’s value.
For any questions related to purchasing real estate or property management in the Las Vegas, Henderson, North Las Vegas markets contact Shelter Realty at 702-376-7379.
If you’re a first-time homebuyer, or you’re selling your current home but don’t have a lot of equity built up, saving 10 or 20% (or even 5%) of the value of your next home can seem like a tall order. Fortunately, you may have another option.
Federal Housing Administration (FHA) to the rescue
FHA-backed mortgages still feature a 96.5% loan-to-value option, meaning that you can borrow as much as 96.5% of the value of the home you’re buying. And, your 3.5% down payment can come from a family member or your employer (“gifted” down payments are typically not allowed by conventional lenders).
They’re called “FHA-backed mortgages” because the FHA doesn’t actually lend the money; instead, the loan is underwritten by an FHA-approved lender and insured by the FHA (so that if the borrower defaults, the FHA pays the lender). It’s all done through what’s called the 203(b) Mortgage Insurance program. Some key notes about it:
You’ll pay a mortgage insurance premium, part of which is required up front and part of which you’ll pay annually. You can finance the upfront mortgage insurance premium into the mortgage.
You have to meet standard FHA credit qualifications, though they’re often more relaxed than conventional mortgage qualifications. Qualifications include not having a bankruptcy or foreclosure on your record within the last three years.
The state of Nevada also has several options that may help you purchase your Las Vegas home. The bottom line is that you might not need to squirrel away 5, 10, 15, or 20% of your next home’s value in cash. With an FHA-backed mortgage, you can buy a home with 3.5% down – and with the help from a professional agent, you can be in your new Las Vegas home sooner than you think.
To learn about your Las Vegas down payment options, please give Shelter Realty a call at (702) 376-7379 or to view our many affordable Las Vegas homes for sale, visit www.shelterrealty.com.
Do you really love your Las Vegas home, yet are finding it harder and harder to make your mortgage payments? A home loan modification may help you keep your homeby lowering your mortgage payment.
Getting your mortgage payment lowered could mean the difference between staying in your home and having to move. If you can’t make your mortgage payments and don’t get a loan modification, you’ll either have to short sale your home or the lender will foreclose. If that happens, you’ll probably have to rent for at least a few years (both a short sale and a foreclosure will negatively impact your credit score).
So if your money is getting tight and fear that you may not be able to pay your mortgage (or if you’ve already missed mortgage payments), then you should at least consider a loan modification. Loan modifications are changes made to the terms of your mortgage such that your monthly payments are lower.
Here are three home loan modification options:
Option #1: MHAP (Making Home Affordable Program). Thisis afederal program designed to help American homeowners keep their homes, by making changes to qualifying mortgages (the MHAP programs come with restrictions and you must qualify in order to participate). Under MHAP, there are five programs that you may qualify for:
HAMP (Home Affordable Modification Program) can lower your payments so that they are no more than 31% percent of your pre-tax income.
HARP (Home Affordable Refinance Program) can lower your interest rate (although refinancing fees do apply).
2MP (Second Lien Modification Program) can lower the principal balance on your second mortgage (if you modify your first mortgage through HAMP).
HAFA (Home Affordable Foreclosure Alternatives Program) allows you to get out of your mortgage without fear of a deficiency judgment (which is when the lender comes after you for the difference between your mortgage balance and what the market value of your home). Participating lenders only have to consider you for HAFA but are not compelled to approve your short sale under this program. A successful short sale can still be negotiated outside of HAFA.
HHF (Housing Finance Agency Innovation Fund for the Hardest Hit Housing Markets) can help you avoid foreclosure (especially if you’re under or unemployed).
Option #2: Interest rate reduction. Even a relatively small change in your interest rate can lower your monthly payments dramatically, often by several hundred dollars a month (depending on your loan balance and interest rate of course). That can really add up over a year, and certainly over the life of your Las Vegas home mortgage.
Option #3: Loan balance reduction. Unfortunately, loan balance reductions (also called loan forgiveness) – when the lender actually reduces the amount you owe on your mortgage – are rare. If you can negotiate a loan balance reduction, though, it can have the same effect on your monthly mortgage payments as an interest rate reduction (reduce them) and also help you get back to positive equity.
If you’re having trouble affording your monthly mortgage payments, and a loan modification doesn’t work, another option is a Las Vegas short sale. At Shelter Realty you can get cost-free advice regarding possible foreclosure alternatives. If you decide to do a short sale, we have the expert help you’ll need. Call us right now at (702)376-7379 or visit www.shelterrealty.com.
Las Vegas is the #1 real estate market to invest in rental property, according to a report published Monday by HomeVestors of America, Inc. (known as the “We Buy Ugly Houses®” company) and Local Market Monitor (a leading forecaster of real estate markets). Here are the 5 reasons why (and why you should consider investing in a Las Vegas rental property):
#1: The Las Vegas real estate market offers the best three-year potential. The HomeVestors ranking is calculated based on “three-year forecasts of home prices (reflecting underlying home-price appreciation potential) and gross rents (as a proxy for potential investor cash flow).” On those measures, the Las Vegas real estate market tops the 99 other U.S. markets rated in the report.
#2: Las Vegas is a housing jackpot. Sales of relatively low-priced Las Vegas homes hit a 5-year high in May. There is still a good supply of affordable homes that can relatively easily be turned into rental properties, but that supply is rapidly shrinking as savvy investors are buying up prime rental properties.
#3: Las Vegas homes are relatively affordable. Las Vegas home prices have dropped more than 50% since peaking in 2006, so the real estate market offers some great investment values. In the spring of 2011, 4 out of 10 homes sold for under $100,000 (Wall Street Journal), with investors buying 20% of all homes sold in April (MarketWatch).
#4: There is a high demand for rental property in Las Vegas. The homeownership rate in Las Vegas is a relatively low 55 percent. Demand for rental property here is higher than in many other markets for two reasons: First, with the casino and tourism industry, Las Vegas has a high proportion of lower-wage workers, meaning a larger-than-typical number of people who can’t afford to buy a home. Second, the Las Vegas real estate market has a relatively high rate of foreclosures – but people who have lost their home to foreclosure still need a place to live, and many prefer a house over an apartment.
Clearly the Las Vegas real estate investment market is hot. If you’re looking to get in on the action, Shelter Realty can help. Give us a call at 702-376-7379 or contact us here.
In 2010, the government rolled out a supplemental program to Home Affordable Modification Program called HAFA. HAFA stands for Home Affordable Foreclosure Alternatives. This program was specifically designed to facilitate short sales and “Deed-in-lieu” of foreclosures. From the very beginning there was strong skepticism from real estate professionals who specialized in selling distressed properties about the ability of this program to deliver. Housingwire.com reported that between April and December of 2010, only 661 deals had closed under the HAFA program nationwide.
Over-Promised, Under-Delivered
HAFA has many fatal flaws. First, it was born of another complete failure, the HAMP program. Secondly, the program was supposed to fast-track short sales and deed-in-lieu’s but in doing so, participating banks were not incentivize, and in fact, lost many of their recourse options. For example, 2nd lien holders had to accept meager payoffs and waive any deficiency balances on their losses. Thirdly, this program was completely voluntary on the banks’ behalf. They only had to consider borrowers for approval, not approve them!
2nd Lien Holders say no thanks!
Junior lien holders if they chose to participate in HAFA had to accept a maximum payoff of $6,000 or 6% of the loan balance, whichever was less. You can see the problem. A 2nd lien with a $50,000 balance would have to accept a $3,000 payoff and waive any right to pursue the borrower? Not likely. This rule meant that unless your 2nd lien was the same bank as your first, you had zero chance of an approval. I recently just obtained a HAFA approval for one of my short sale listings here in Las Vegas. The home had two loans but they were with the same lender.
This week the Treasury Department announced:
HAFA eliminated loan servicers from having to verify borrower’s finances
HAFA also relieved loan servicers from verifying whether a borrower’s monthly payment exceeds 31% of their gross monthly income
2nd lien holders may receive a max payoff of $6,000, even if the payoff exceeds the 6% of the unpaid loan balance. This should help small 2nd liens under $50,000
Once approved for HAFA, loan servicers have 30 days to approve an offer. The previous requirement was 10 days which was unrealistic
In the end these measures may allow more short sales and deed-in-lieu’s to proceed but it will never approach the demand represented by millions of homeowners. When you’re trying to top 661, anything will look like a victory, I guess.
If you need to move and cannot sell your property for the amount you own on the mortgage, a Short Sale is an alternative to simply walking away from your mortgage obligation. File photo: Andy Dean Photography, Shutter Stock, licensed.
Short Sale, Loan Modification, Foreclosure, Deed-in-Lieu, Deficiency Judgements…
There are so many possible scenarios and options to consider if you are in a position where your mortgage balance is higher than your property’s current value, and you need to sell or workout a plan for a more affordable monthly mortgage payment.
As the real estate laws, government regulations and failed housing stimulus plans continue to change on a regular basis, many homeowners are left in a paralyzed state of confusion about what the best course of action to take is.
The following list of Frequently Asked Questions are a few of many that will come up as you search for the right answer that applies to your unique scenario.
Please feel free to contact our Short Sale department today for a personal consultation, or fill out the quick form to the right for an email response.
How much time do I have before I get foreclosed upon once I am in default?
It depends on the individual banks involved, as well as State your property is located.
Here in Nevada, you have three months and twenty days once a Notice of Default (the official filing a lender makes with the County Recorder) has been filed. After this time period, a Trustee Sale is often scheduled within 30 days.
Your bank usually will get your property at the Trustee’s Sale. Technically, you are in default one day after you miss a payment, but it usually takes a couple of months before a Notice of Default is filed.
The more time we have as real estate agents, to conduct a short sale, the better chance you have, just make certain you have exhausted other options prior to attempting the short sale
Why should I consider a Short Sale?
If you need to move and cannot sell your property for the amount you own on the mortgage, a Short Sale is an alternative to simply walking away from your mortgage obligation and giving your property back to the lender through foreclosure.
In a Short Sale, the borrower (seller) and mortgage lender(s) negotiate on the terms of selling a property for less than the amount that is owed on the mortgage.
In addition to avoiding potential deficiency judgement, a Short Sale does not have as negative of an impact on credit scores as a foreclosure does.
Should I try other foreclosure prevention options PRIOR to listing my home as a short sale?
A short sale is considered by banks as a foreclosure prevention option.
However, in most instances, a bank would prefer a loan modification or similar loan workout option that didn’t involve a sale and major write down on the loan.
Once you start a short sale and try another workout option, the bank will suspend the short sale in favor of the other option, leaving the listing agent, buyers with offers on the property and anyone else involved in a transaction, in a lurch.
It will take at least 30 days to get an answer on a loan mod. By that time, all the data and offers on a short sale will be obsolete.
The bank will request all new paperwork to re-initiate the short sale. Bottom line is you can only do on workout option at a time.
Who else should I speak with before attempting a short sale?
A respected real estate attorney, as well as a Certified Public Accountant, since there are tax ramifications and potential deficiencies that may result from a short sale.
REALTORs cannot give professional advice in these areas.
Do I have to be behind on my payments to do a short sale?
Unfortunately, most banks will require a borrower to be behind on their mortgage payments, or at least show that default is imminent.
While it is beneficial for future borrowing goals to keep up with your mortgage payments, it is obviously easier to prove a hardship if a borrower is behind.
Should I continue to pay my mortgage while attempting a short sale?
As a REALTOR, I cannot advise someone not to pay their mortgage. That is up to you. My job is to get the listing under contract, negotiate with your lien holders to approve a short payoff, and get the property successfully closed.
Will banks let anyone who is behind on their mortgage payments do a short sale?
Not necessarily. A bank usually requires a hardship, which include; job loss, pay cuts and underemployment, adjusted mortgage payments, job transfer, an increase of the monthly obligations of the borrower (such as having additional dependents to support).
How would filing bankruptcy affect the ability for me to sell my home on a short sale?
Filing for bankruptcy during your short sale will only delay the sale.
You will need to seek court approval to sell the home. In some cases, it could take 3 or more months to get a court date and may jeopardize the short sale.
How long can I stay in my home once I’ve decided to do a short sale?
You probably should begin to prepare to leave and not plan on trying to time it perfectly so you can stay right up until foreclosure. For one, most homes are more difficult to sell with owners or tenants present.
They usually limit the showing times, do not keep the property in prime show condition, and frequently intimidate buyers who “feel guilty” about the sellers situation preventing them to focus on the real task of evaluating the home for themselves. Your REALTOR is able to guide you on the State statutes governing foreclosures.
They should also be in contact with your lender and should know when a foreclosure is imminent.
I am going to vacate the property. Do I have to maintain the property?
The best looking homes normally sell the quickest. If you can afford to maintain basic utilities that will generally aid your agent’s ability to sell the home.
What is a deficiency?
The deficiency amount is equal to the unpaid mortgage balance less the amount received at foreclosure or the date the short sale closes.
The goal of the short sale negotiations, in addition to the approval, is to obtain a full release from the bank in that they will not pursue a deficiency.
Shelter Realty has been very successfully getting a full release of liability for our sellers.
However, if you have recently refinanced and pulled out equity, you may be vulnerable for a bank to pursue a deficiency judgement.
There is a difference between the debt to purchase or improve a property, and the debt pulled out and simply spent.
The latter form is often treated just like credit card debt and a bank may consider obtaining a judgment for that debt. It is critical you consult an attorney as well as a tax professional familiar with short sales if this situation applies to you.
How long do banks have to pursue me after a short sale if they don’t waive the deficiency?
For loans generated after October 1, 2009, banks do not have any recourse rights on occupied primary residences. Other loans that are generated before that date banks have 6 months to initiate a lawsuit against you.
If we have obtained a waiver of deficiency, you’ll be fine. On 2nd liens closed as a short sale after June 10, 2011, banks will also only have 6 months to file a lawsuit.
This is a big change from the 6 years they used to have!
Why not just let my home go into foreclosure if I am going to still have potential liabilities?
Several reasons: first, an approved short sale, properly negotiated and reviewed by an attorney, usually means that the debt is satisfied. Banks will generally report that the debt was paid short of what was owed, but it will show as paid.
Second, it is preferable to avoid a foreclosure on your record. Fannie Mae has indicated that it will be possible to obtain a loan from them after two years while a foreclosure is five years.
Your goal is to satisfy your debt obligations even though you are facing a financial hardship. Doing nothing is usually more destructive.
What if the buyer wants me to contribute to their closing costs?::
Your REALTOR will write in the contract that any seller concessions are subject to the approval of the lien holding bank.
If they approve the closing costs, you’re set. If the don’t approve and more money is needed, you will either have to get the buyer lower their demand for costs or you might want to contribute out of pocket if you can afford it.
Remember, that you will be walking away from a very large debt and if kicking in some money to make the deal happen, you may want to consider it.
How is the REALTOR paid and what are the costs to do a short sale?
REALTORS are paid from the proceeds of the sale by the seller’s bank. All costs such as taxes, commissions, escrow fees etc. are taken off the top.
The selling bank will cap the fees. If the sale price is insufficient to cover the fees and still net the bank what it feels the property is worth, it will not approve the sale. Sometimes banks want a seller to contribute money or some other form of consideration (usually in the form of a promissory note).
If you have equity in another property, they may look to have you access that equity if they determine they need more money to approve the sale. You will have to determine on your own whether or not it makes sense. In any event, you will not know what they will require until you are in negotiations with your bank.
What does my REALTOR need to know in order to help me with my short sale?
They will need to know all of the liens against a property. Most important will be the number of banks involved. You should inform your REALTOR if you have been paying your home owner association dues.
Other liens might include property taxes, IRS tax liens, mechanic’s liens, child support judgments, SID/LID assessments, sewer, water, trash bills, etc. Avoid unnecessary liens such as inexpensive HOA (home owner association) dues. Keep paying them if possible. In Nevada, HOA’s are in a first lien position which means they get paid even before the banks do!
The more liens that are filed against a property, the more difficult it is to successfully close a short sale. A lien holding bank allows only so much of the proceeds of the sale to pay off closing costs, liens etc. If the costs are too high, the bank will tell the REALTOR to find more money.
That may mean, getting a buyer to pay a higher purchase price. If the buyer in this situation is unwilling, the deal will die, which is bad news for the seller.
Other items your REALTOR will need to know.
The names and number of banks on your mortgage; the amount of your monthly payment; how much you owe on the property.
I hear that 2nd mortgages can really disrupt a short sale.
In our current real estate market in Nevada, where homeowners are so far under water, most 2nd mortgage holders have little hope to recover much of the money the lent. We rarely see 2nd mortgage initiate foreclosure proceedings as they will probably receive no money from the foreclosure.
Negotiations are crucial with them in order to have them cooperate, even though they have little financial incentive.
Do I have to include my spouse on all the paperwork if they are not on the loan?
Generally not, unless advised differently by your attorney. In Nevada however, if your spouse is on legal title to the property, they will be included on the listing paperwork.
Can I sign the paperwork myself if there are others on title with me?
No, all persons who are on title must sign listing paperwork here in the State of Nevada.
I have tenants, how does this affect them?
You should be honest with them, and depending on their lease, they may have to move out early to accommodate a buyer who wants to occupy right away or most certainly, if the home is foreclosed.
A lease would have to be honored by the new buyer, but that buyer might simply choose not to move forward with making an offer if there is a tenant. You need a buyer more than you need a tenant, so find an equitable solution!
