Where's Wellington?

So You Want to Buy a Las Vegas Short Sale?

A “Short Sale“ is a type of seller.  More specifically, it is a sellercontingency.

Short Sale means that the property or home is worth less than what is owed on it.  The Seller is asking the bank to forgive part of the debt or for an unsecured promissory note for the difference in what is owed.  The home may or may not be in default (going through the foreclosure process.)    It is highly likely that a Las Vegas Short Sale is in some part of theprocess of foreclosure.

Short Sales are currently (Jan 2012) the majority of the active inventory (47%) – yet they are the least closed transaction type in the Las Vegas Valley (27%)!

The Number 1 rule for a Short Sale buyer is to NOT FALL IN LOVE with the home until it is closed!

How are Short Sale homes priced?

Short sale homes are priced just as traditional sales are priced – the seller sets pricing.  Once the servicer(s)/investor(s) receive an offer they order something called a “Broker Price Opinion” (BPO) to determine selling price.  Many order multiple BPO’s and the process is usually started when the home defaults.

What are the steps for buying a Short Sale home?

The first step if you are financed is to get pre-approved from a lender to buy the home so you are looking in the appropriate price range.  If you are an all cash buyer, the real estate agent will need Proof of Funds (POF),  Verification of Funds (VOF) or Verification of Deposit (VOD) to present to the list agent with your offer.  Please be aware that “all cash” offers will NOT expedite the process of a short sale.

The next step is to work with a real estate agent so we assist you on analyzing your housing needs.  What Area?  What Price Range?  What Size?  How Many Bedrooms?  You get the picture!  We will set you up on an MLS search AND direct you to some phenomenal IDX sites.

You found the home of your dreams!  YAY!  Now we get to do the fun stuff (the above was just the easy stuff!)  We get to write a contract!  Your real estate agent should do an abundance of work behind the scenes to find out if there are multiple offers on the property and pull comparables.

There are several reasons for comparables – you don’t want to pay too much for the property (of course!)  You also want to know if the home may or may not appraise where the lender needs it to appraise at!  If there are multiple offers on the property your real estate agent also needs to analyze the numbers to present a price to you that will raise your odds for getting bank acceptance and beating out all others vying for the same home that you want!  It is essential to work with a real estate agent who understands pricing structures in today’s market:  Owner Occupied Non-Distressed, REO and Short Sale prices are all different!  Remember – the bank has the option to REJECT your price & terms in a short sale!

Once we put your offer together, we submit it to the listing agent.  With your pre-approval letter (if financed) or POF (if all cash) and a copy of your earnest money deposit (EMD.)  The listing agent submits it to the seller and once it is accepted it gets sent to someone called an “Negotiator” with the bank.  The Negotiator then, in turn, helps with the decision of accepting, rejecting or countering your offer.  The time lines on this process vary widely from agent to agent, investor to investor, negotiator to negotiator.  The process be as little as a couple of weeks or as long as a couple of years.  Nevada does have a new law requiring an answer in less than 3 months.

Once the bank makes a decision on your offer, several things must happen.  First, the sellers have the option of accepting or rejecting the terms of the short sale approval – after all this is a seller contingency.  Short Sale Sellers have lingering consequences (tax, legal and financial) so sometimes the decision is tough for them and they must consult with CPAs and attorneys.  Once they accept the terms & conditions of the contract, the “short sale contingency” is removed.  It is now the buyer’s turn to accept or reject the price, terms & conditions in the short sale approval.

So both buyer and seller agree to price, terms & conditions.

Here is where the fun really starts:  Your Due Diligence period (as defined in a short sale addendum written with contract).  This is the period where you need to meet all of your contingencies in your contract such as inspections, appraisals, verifying the property is insurable, loan approval, etc.

Even though many short sale properties are “as-is”, you should still be encouraged by your real estate agent to put in a contingency get an inspection done.  You may want to know of any pending problems that may be looming right after close of escrow.  This will allow you to back out of the contract if the bank or seller is not willing to fix major defects (mold, structure, broken furnace:  you get the picture,) or you do not want to fix those problems yourself after close.  More than likely, no one on the selling side is going to want to fix this.

You will want to research several Home Warranty companies if we successfully negotiated a home warranty to be paid by the seller.  When you choose the company and the plan, simply let us know and we order it for you and send the information to title.

We are also communicating with your lender in regards to the loan approval and appraisal so everything can get done on time.  We also like to make sure that if there are any issues with lending that need to be taken care of, they will early on so we don’t have major delays to your closing time frame.

One other thing you will have to do is read your “Certificate of Resale Package” if you are purchasing a home located in an HOA.  By law, you have five days to read this material to make sure you can “live” within the bylaws of the HOA.

Common Problems during due diligence on an Short Sale property:

• Home Inspections:  There seems to be a lot of deferred maintenance (previous owner did not do preventative maintenance on the home) so there can be plenty of structural or mechanical problems associated with the deferred maintenance
• Appraisal:  Deferred maintenance issues may be flagged by an appraiser which, the  lender, in turn may REQUIRE repairs to be completed prior to funding of the loan.  Many times the seller in a Short Sale will not correct those defects.

!!!Final Walk Through Issues:

Since the home is (more than likely being conveyed as-is) you may have to waive the walk through inspection.  YOU SHOULD STILL WALK THROUGH to make sure the property is in the same condition the day you wrote the contract.

!!! Many times personal and real property disappear in a short sale.

Crazy things like door knobs and light switches……keep this in mind when you purchase the property as a condition in your contract may be that the property is conveyed AS-IS and there is no recourse to go back and request those items get taken care of or reimbursed at close!

Loan Docs arrive to title (FINALLY!) and you make an appointment to sign.  Loan funding conditions (if any) need to be met to get the loan funded.

The bank now needs to do their job – HUD sign off .  Sometimes it takes a while to get this done.  It can take anywhere from one day to several weeks.

Recording, File Disbursed, We Closed, We Made it – HIP HIP HOORAY – YOU GET KEYS!

If you are thinking about buying an REO (Foreclosure or Bank Owned) property in the  Las Vegas Area  Please Call:               702-966-2494       to speak to one of my Las Vegas home buyer’s specialists.

copyright 2006-2011 Renee Burrows, REALTOR®, The Force Realty  702-966-2494

Blog Disclaimer Important Notice

 

              

     

         

 

 

 

 

Selling Your House in Las Vegas:  OUCH Your Listing Expired!

I am putting a postcard campaign together for reaching out to Las Vegas sellers who attempted to sell their home but their listing expired!  I have found a lot of reasons why potential listings expired and am putting them right here in a nifty list for you:

Agent Related to Seller:  I was actually shocked about this one.  Almost 30% of our 1400 ish expired listings in the last three months were listings where the agent was related to the seller in some way.   Maybe if your Las Vegas listing expired and you had a relative list it, you may want to find a Las Vegas real estate agent that has no emotional ties to you or your property.

Price:  I was not shocked about this one.  Without running full blown CMAs on the property but just using my trained eye on the area and PPSF, it appears that about 60% of expired listings are overpriced.  Only about 20% of those listings were GROSSLY overpriced (by more than 10%.)  That isn’t too shabby.  Buyers are finicky in this market for bargains and even the slightest overpricing can turn your listing into an expired listing.

Photos in MLS:  OK folks, it only rains here like five days out of the year and snows MAYBE one day of the year.  People moving here from out of state are generally trying to escape some elements like snow and rain.  When I see photos with snow (which is rare) or rain or clouds, it’s like fingernails on a chaulkboard.  There are several other photo problems.  Another is holiday decorations.  There is no better way to age your listing by allowing your home to get photographed with holiday decorations.  The last and probably the worst way to stigmatize your Las Vegas house listing is to have very few photos.  Our MLS allows up to 25 photos.  There is no excuse – even in a 2 bedroom condo to not have more than 10 photos.  With that 2 bedroom condo there are probably community amenities available to add to the MLS.   There were less than 10% of expired listings that made use of ALL 25 photo spots!

MLS Data Incomplete:  Non-required (yet searchable) MLS data is empty and buyers may be missing out on the fact that you have granite countertops, walk-in closets, a balcony or a bedroom & bathroom downstairs – you get the picture.  When you list your home you should ask for MLS sheets – both REALTOR® & public views so you can see how your home is portrayed to the public and compare it with your competition!  I saw a LOT of white space with expired listings!  I would say close to 80% of expired listings could have used better descriptions and made better use of the non-required MLS fields.

Showing Instructions:  Homes that are difficult to show are difficult to sell.  Uncooperative tenants & appointment with listing agent just to name a few.  This was about 40% of expired listings.  Placing your home on an electronic keybox and making showings easier will help get more traffic in the door and increase your chances of receiving a good & acceptable offer.

Please note – my above findings are for “standard” or “traditional” listings only.  They DO NOT include short sale or REO listings that have expired in the last 3 months!

If you are looking for a complimentary, no appointment necessary consultation to sell your Las Vegas home, please click here and fill out this form!

copyright 2006-2011 Renee Burrows, REALTOR®, The Force Realty  702-966-2494

Blog Disclaimer Important Notice

 

              

     

         

 

 

 

 

Condos for Sale in Las Vegas Present Financing Challenges

Take a peek at prices of condos for sale in Las Vegas.  It is no wonder not a week goes by the last several years that I get multiple inquiries from buyers who see $20K, $30K, $40K condos for sale in Las Vegas online.  These buyers are first time buyers, owner occupied buyers, investor buyers, second home buyers, vacation home buyers etc.

A very large percentage of these potential Las Vegas condo buyers also want to leverage these incredible bargains via financing.  This is a problem here in our valley.  It doesn’t matter what your credit score or income is.  It doesn’t matter if these buyers are highly qualified to purchase a $500K condo home and only want to spend $40K.  What matters to the lender or underwriter is the condominium certification.

There are several items in that condominium certification that could upset the apple cart and blow up financing on a condominium home sale.

The lender is looking for certain things in the Condo Certification that will determine if they will lend money on that specific condo property:

• Lenders want to see low investor concentration (rentals)
• Low HOA delinquencies
• No construction defect or other litigation against HOA or community

Of course there are ways to work around this such as through private money financing or Fannie Mae HomePath® financing.  Of course not every buyer or condo fits the underwriting mold for those either.

The moral of the story is if you are eyeballing a condo for sale in Las Vegas, you may want to make sure the cash is in the bank.

Click Here to See the Newest>>>> Condos for Sale in Las Vegas

copyright 2006-2011 Renee Burrows, REALTOR®, The Force Realty  702-966-2494

Blog Disclaimer Important Notice

 

              

     

         

 

 

 

 

Selling Your House in Las Vegas:  Preparing Your Home For Sale

Selling a home with equity in a distressed real estate environment such as the Las Vegas valley is definitely a hard choice many sellers have to make.  Even if the home is inherited (as in part of an estate or probate,) they face tough pre-listing decisions:

• Should I sell or rent out the house? That is a decision that should be weighed along with costs of property management, vacancy and leaving some wiggle room for a declining rental market.
• Should I stage my house? Probably not.  Most Las Vegas Homes for Sale (your competition) are vacant & unfurnished.  Recommended practices would be to simply save your money and keep your home clean and clutter free.  This means if the home is occupied to start boxing stuff up and put it in the garage or in storage.
• Should I put upgrades in my house? I don’t recommend it.  Home sale price margins are tight in the Las Vegas market currently.  Highly upgraded homes in cookie cutter neighborhoods do not sell for that much of a higher price.
• Should I do repairs to my house? Only if they will assist with financing.  Wait for the home inspection to come with a buyer repair addendum.
• Should I hire a real estate agent? You may want to consider hiring a real estate agent not only for MLS/IDX & marketing experience, but also one that has experience with current market conditions & aggressive negotiating skills.
• How should my home be marketed to the public? You or your agent should come up with an aggressive marketing plan.  One that involves the internet where MANY buyers are looking for and choosing their homes.
• How should I price my home? DO NOT USE ONLINE INSTANT TOOLS!  I find those highly inaccurate.  Most real estate agents provide complimentary consultations on home pricing.  (Shameless plug – I provide mine without an appointment necessary – delivered to your email.)  You may also want to consider hiring an appraiser for an honest third party opinion.  Paying a couple hundred bucks up front could save you thousands of dollars in the end.  Holding costs from pricing too high can hurt you, selling too quickly at too low of a price can leave money on the table.
• What are the costs of selling my home? Real estate agent commission is not the only cost.  There are title, escrow, real property transfer taxes, HOA transfer fees and other fees involved.

I am finding sellers with equity are doing their due diligence prior to selling a las vegas home.  Some take MONTHS for the preparation which is mostly emotional.  One thing is for sure, we do not know where the market is heading.   We are still in decline even though our market is pressed for inventory.  Let me give you an example:  the gentleman I have been supplying pricing comparables for a year and a half now has lost half his value since I started working with him in June 2010.  Time is definitely money in our market.

It is a very difficult decision to sell a home in Las Vegas these days because of the losses that have occured over the last 4 years.  It is an emotionally charged decision.  I personally do not push anyone into selling a home because I am wasting time if the home does not sell because I pushed the sellers into selling.  If you are considering selling your Las Vegas home and would like acomplimentary, no obligation, no pressure, no appointment necessaryconsultation on pricing of your home, my marketing plan, costs to sell your home (which includes my costs & fees) pleaseclick here to fill out this form.

copyright 2006-2011 Renee Burrows, REALTOR®, The Force Realty  702-966-2494

Blog Disclaimer Important Notice

 

              

     

         

 

 

 

 

In Part 1 of the Las Vegas First Time Home Buyer Guide, I stressed the importance of shopping your financing options and getting approved for a loan.  Once buyers are qualified they are usually excited to go shopping but they need to make sure they are ready to buy before they waste any time looking around.

In Part 2, we explored when it would be a good time to go shopping for your first home.

In Part 3, we chatted a bit on how you should go about interviewing and hiring your Las Vegas Buyer’s Agent.

In Part 4, realistic time frames for purchasing a home in a distressed environment were set.

In Part 5,  we discussed the home search.

In Part 6, we wrote our offer.

In Part 7, we finally have an accepted offer!

Now we are going to discuss due diligence, contingencies & time frames for escrow.  I call this the “fun” (NOT!) part of the transaction.  If you had “fun” prior to this – just try to contain your excitement now!

In your offer your time frame for due diligence will (or at least “should”) be clearly defined.  Basically during this time frame for “due diligence” you should be fulfilling your contingencies.  This time frame is typically 10-14 CALENDAR (not business) days upon executed contract.  Note I said “typically”.  With short sales it is a tad different.  Again, it all depends on how your contract is written!  When I write a short sale contract for a buyer, I always state that due diligence begins when we are delivered written acceptance & fulfillment for the seller’s short sale contingency!

Now you need to get boogeying to get ALL the stuff done so you can remove your contingencies by the contracted date!  Here is a list of the common items a buyer must take care of during this time frame:

• Loan or Mortgage
• Appraisal
• Home Inspection(s) (Mechanical, Structural, Soils, Fungal, Pest, Septic, Roof, etc)
• CLUE Report (Insurability)
• HOA Document Acceptance
• Preliminary Title Report
• Subject to Interior Inspection (Usually Due to Uncooperative Tenant)

What happens if something is not right with any of the above items?  You can attempt to renegotiate the contract (typical with low appraisals or bad home inspections.)  Either the seller will accept, counter or reject.  It is typical for them to reject because the homes are typically priced “as-is” in this market.  It doesn’t hurt to try.

The thing is, even if you are buying your home “as-is” – you can still get a home inspection to make sure you are “OK” with the items it may have wrong with it!  If you cannot negotiate the items and cannot live with the problems at hand, you will “fall out of escrow” and if that happens during the due diligence period, you “should” get your earnest money deposit back.  Always check with a lawyer to make sure you are within the boundaries of your contract.

You cannot renegotiate the HOA documents.  You either can live with them or live without them.

Preliminary Title items must be cleared before close as a seller must convey clear title in the state of NV.  The biggest concern for a buyer may be if theHOA is in collections – gotta stay on title to make sure the HOA demand is ordered and paid early or that could cause severe delays in closing.

All in all, this time frame can be VERY bumpy especially with what I call “invisible sellers” (bank owned or short sale sellers) who really don’t care about making sure your documents are delivered on time.  Make sure you stay on top of things during this VERY stressful time.  When your lender says “JUMP” don’t stop and say “WHY?” but ask “HOW HIGH!”  I find that “WHY?” can trip things up and prolong things unnecessarily.  Just remember – it is what it is!

In the next part of the series we will go over the “walk through”.

copyright 2006-2011 Renee Burrows, REALTOR®, The Force Realty  702-966-2494

Blog Disclaimer Important Notice

 

              

     

         

 

 

 

 

This is part of an ongoing series about “Things That Can Make Your Las Vegas Financed Home Purchase *Blow Up* in the Middle of a Transaction.”

My ultimate goal in this series is to make Las Vegas Home Buyers aware of the challenges of a specific home’s eligibility for financing.

Congratulations!  Your lender just approved you to purchase a Las Vegas area home by looking at your check stubs, debt to income ratio and you are now approved to purchase a Las Vegas area home!

You go through the process of looking for a home, get a contract accepted and have your inspections and appraisal done.

AND THEN YOU GO OUT & buy a car or blow up your credit card buying furniture, appliances and Christmas gifts.

Houston – we have a problem!!  It doesn’t matter if you purchase these items with cash or credit.  You want to speak with your trusted mortgage professional who is working on your loan before you spend ANY money before a real estate transaction closes!

Here are the reasons:

• Reserves:  you are required to have a certain amount of reserves for your home purchase.  If you spend those verified reserves BEFORE you close, you may no longer qualify for your mortgage.
• Debt to Income Ratio:  If you purchase items with credit (car, appliances, furniture, an insane amount of Christmas gifts) you could hurt your debt to income ratio.  Again, you may no longer qualify for your mortgage.

The moral of the story is:  PLAY IT SAFE if you are purchasing a home during the holiday season and always speak to your lender before spending money!

copyright 2006-2011 Renee Burrows, REALTOR®, The Force Realty  702-966-2494

Blog Disclaimer Important Notice

 

              

     

         

 

 

 

 

What is an REO?

An REO property is also commonly referred to as “bank owned” or “foreclosure” property.

The process for buying an REO in the Las Vegas Area can be frustrating and time consuming if the buyer is not properly mentally and emotionally prepared. The emotional ups and downs occur from the time you set your foot in the first house you look at all the way until the keys are handed to you.  It is essential that you are working with a Lender, Real Estate Agent and Title company who understand communication is key so if something starts to go wrong,  the problem can be taken care of long before the closing deadline.

Interviewing your Real Estate Agent is ESSENTIAL.  It is imperative to work with one who has closed REO transactions and understands the process!  This is NOT a normal transaction!

Interviewing your Lender is ESSENTIAL.  Lending underwriting guidelines are constantly changing.  It is a good idea to work with a Las Vegas area lender who understands the underwriting guidelines in our area – Clark County.

The Number 1 rule for an REO buyer is to NOT FALL IN LOVE with the home until it is closed!

How are REO homes priced?

The noteholders order something called a “Broker Price Opinion” (BPO) to determine list price.  Many order multiple BPO’s and the process is usually started when the home defaults (prior to the foreclosure.)

What are the steps for buying an REO home?

The first step if you are financed is to get pre-approved from a lender to buy the home so you are looking in the appropriate price range.  If you are an all cash buyer, the real estate agent will need Proof of Funds (POF),  Verification of Funds (VOF) or Verification of Deposit (VOD) to present to the list agent with your offer.

The next step is to work with a real estate agent so we assist you on analyzing your housing needs.  What Area?  What Price Range?  What Size?  How Many Bedrooms?  You get the picture!  We will set you up on an MLS search AND direct you to some phenomenal IDX sites.

You found the home of your dreams!  YAY!  Now we get to do the fun stuff (the above was just the easy stuff!)  We get to write a contract!  Your real estate agent should do an abundance of work behind the scenes to find out if there are multiple offers on the property and pull comparables.

There are several reasons for comparables – you don’t want to pay too much for the property (of course!)  You also want to know if the home may or may not appraise where the lender needs it to appraise at!  If there are multiple offers on the property your real estate agent also needs to analyze the numbers to present a price to you that will raise your odds for getting bank acceptance and beating out all others vying for the same home that you want!  It is essential to work with a real estate agent who understands pricing structures in today’s market:  Owner Occupied Non-Distressed, REO andShort Sale prices are all different!

Sometimes the asset manager for the property will require you to get a pre-approval through their bank on their own letterhead.  We will help guide you through this step if it is necessary.

Once we put your offer together, we submit it to the listing agent.  With your pre-approval letter (if financed) or POF (if all cash) and a copy of yourearnest money deposit (EMD.)  The listing agent submits it to someone called an “Asset Manager”.  The Asset Manager then, in turn, helps with the decision of accepting, rejecting or countering your offer.  The time lines on this process vary widely from agent to agent, bank to bank, asset manager to asset manager.  I have had ACCEPTED offer responses in as little time as a couple of hours to as much time as three weeks!

Now that you have an accepted offer (PHEW!) the bank will have some more paperwork for you to sign.  They are corporate addendums which will reiterate the terms of the contract and a couple of extra terms from the bank.  This needs to be examined cautiously because they do change the terms on occasion without a ”counter offer.”  They also pick the title company even though buyers are entitled to pick the title company.  If you want to buy the property, this is usually non-negotiable.  When the bank signs off on the final addendum you have what is called a “ratified contract” or an “executory contract.”

Here is where the fun really starts:  Your Due Diligence period.  This is the period where you need to meet all the contingencies in your contract such as inspections, appraisals, verifying the property is insurable, loan approval, etc.

Even though many bank properties are as-is, you should still be encouraged by your real estate agent to still get an inspection done.  You may want to know of any pending problems that may be looming right after close of escrow.  This will allow you to back out of the contract if the bank is not willing to fix major defects (mold, structure, broken furnace:  you get the picture,) or you do not want to fix those problems yourself after close.

You will want to research several Home Warranty companies if we successfully negotiated a home warranty to be paid by the seller.  When you choose the company and the plan, simply let us know and we order it for you and send the information to title.

We are also communicating with your lender in regards to the loan approval and appraisal so everything can get done on time.  We also like to make sure that if there are any issues with lending that need to be taken care of, they will early on so we don’t have major delays to your closing timeframe.

The lender will order the appraisal and we cross our fingers!  Sometimes the appraiser will check items to see if they are functioning like the furnace, water heater, etc. as an addition to determining value for the lender.  They also may find a black substance that may resemble mold or an empty swimming pool and this can cause problems as the lender will require those repairs to be completed prior to funding the loan.  (BOO!)

I have found that some banks will fix those lender required repairs to get the properties closed and some won’t.   When this happens, have faith that we are working extremely hard in the background to negotiate with the list agent to negotiate with the Asset Manager so these can get approved and fixed in a timely manner.

One other thing you will have to do is read your “Certificate of Resale Package” if you are purchasing a home located in an HOA.  By law, you have five days to read this material to make sure you can “live” within the bylaws of the HOA.

Stolen items from property .  (HISS!)  Yes, this is something that happens more than we like to see.  We have even had a spa stolen from a property while it is in escrow.  The first thing to do is NOT PANIC.  Your real estate agent should do their best to work with the list agent to get market value credit for that property or a replacement.  Again, some banks will work with you on this, some won’t.  Market value is typically what the property would be worth if it had the stolen item intact.  In the example of the spa, the credit received was only $2000.  If you had to buy the same spa it would be $5000.  If you are reasonable with market value, and not replacement value, the banks we
have learned, in turn, will be fair.

Loan Docs arrive to title (FINALLY!) and you make an appointment to sign.  Loan funding conditions (if any) need to be met to get the loan funded.

The bank now needs to do their job – HUD sign off .  Sometimes it takes a while to get this done.  It can take anywhere from one day to several weeks.

Recording, File Disbursed, We Closed, We Made it – HIP HIP HOORAY!

If you are thinking about buying an REO (Foreclosure or Bank Owned) property in the  Las Vegas Area Please Call:  702-966-2494 to speak to one of my Las Vegas home buyer’s specialists.

copyright 2006-2011 Renee Burrows, REALTOR®, The Force Realty  702-966-2494

Blog Disclaimer Important Notice

 

              

     

         

 

 

 

 

Seems like the government bureaucrats who run HARP may be smoking a little HEMP.  Or they may just be trying to help their fund raising buddies – the banks – again.

On Monday the president visited “ground zero” of this housing crisis and announced revisions to the HARP (refinance your upside down house) program.  While it all sounds nice and sweet on the outside, it is pretty crunchy and stale on the inside.

Keep in mind I am not a lender.  After reading the new guidelines it appears that yes, it may assist some more homeowners than it did before.  Not everyone will qualify either.  Who does it appear that it will assist?  Perhaps the banks!  HELLO – it appears they are now encouraging homeowners to shorten the term of their mortgages through this program.  This means principal reductions paid for by the consumer and another safety net for the banks.

Don’t get me wrong – I am not an advocate for big government to reduce the principal of mortgages.  HOWEVER – part of the problem with what is going on right now is that strategic defaults are happening because many people don’t feel it is worth staying in a home that may not see equity in the next decade or two.

My opinion:  So the hemp smoking HARP bureaucrats can pat themselves on the back for creating a program that gives consumers equity and the banks won’t have to take much of a kick in the pants for.  Again.

Just who is the electorate?

Saving a couple hundred bucks a month will not prevent upside down & negative equity homeowners from strategic default.

copyright 2006-2011 Renee Burrows, REALTOR®, The Force Realty  702-966-2494

Blog Disclaimer Important Notice

 

              

     

         

 

 

 

 

While prices for Las Vegas homeowners are NOT NOT NOT!

Inventory continues to decline (still a seller’s market for 2+ years) YET Las Vegas property values CONTINUE to decline.

Congratulations Las Vegas – pat yourself on the back for defying all basic economic laws of supply and demand!

Here is the fuel that is feeding the fire:

• Unemployment rate near 15% in The Las Vegas Valley
• Extremely high amount of distressed inventory
• Extremely high amount o finvestor activity
• Continued strategic defaults (right, wrong or indifferent)

A while back I wrote about how rents are declining in the valley.  Last weekend I had three investors contact me asking me if this is going away.  The big answer is not until the employment situation improves in the valley, investor activity slows and distressed inventory declines.

I don’t expect Las Vegas property values and rental values go UP until the above picture gets a little bit more rosy.  Las Vegas rents are not declining rapidly, they are declining very slowly.  What I see (since I work Las Vegas area rentals,) is that new investor purchases are willing to UNDERCUT their competition when they go on the market.  No investor wants a vacant home.  Home insurance can drop them and vacant homes increase the possibility of theft and damage.  Might as well take a couple bucks less on the monthly rent than risk theft.

When will the picture for Las Vegas property improve?  Not until everything above does.  I don’t see it happening any time soon.  It isn’t the president or the government (Las Vegas was on the “out’s” before the election in 2008.)  No government program can stave off the natural cycle.  No government program can wash away the mindset of strategic default.  Las Vegas property values have deflated 8.6% year over year (Sept 2010/2011) so that pretty much shows that the $8K tax credit for first time buyers artificially inflated our prices for a while (ave home price in low $100K’s.)

It’s just the economy, stupid!  Let’s encourage small business to rise and find some jobs for the valley and the rest will take care of itself!

copyright 2006-2011 Renee Burrows, REALTOR®, The Force Realty  702-966-2494

Blog Disclaimer Important Notice

 

              

     

         

 

 

 

 

I did a presentation in front of my BNI group on banks and how they price these Las Vegas REO homes for sale.  I started out the presentation with a question for the group.  I wanted to know how the general public perceives bank pricing.  One response was “throw darts!”

It definitely could appear that darts are thrown in order to achieve a price but it isn’t that simple.

When a home goes in default (one or several payments are missed) is actually when the pricing process begins.  The banks (or servicers) begin to order pricing reports in the form of appraisals,BPOs (Broker Price Opinions) or AVMs (Automated Valuation Models).

The timeline of foreclosure in Nevada could be as expedient as 4-5 months and can drag on for several years (for whatever external reasons such as bankruptcy.)  During this timeline, the servicers, lienholders (or investors) are ordering these reports.

They look at several things when pricing a home:

• Condition of Property
• Comparable Homes Listed & Sold
• Declining, Stable or Appreciating Market
• Average Days on Market

Most of these reports will support one another over the foreclosure time frame.  How an asset manager for the servicer or bank will react to the reports is subjective.  Many reports will ask for pricing depending on marketing time & condition.  In fact, many reports want 4-6 different prices such as:

• 30 day distressed as is
• 30 day distressed repaired
• 90 day as is
• 90 day repaired
• 180 day as is
• 180 day repaired

Declining markets also cause a host of confusion.  If it is determined that a market is declining at 10% every 6 months and the asset manager wants it gone in 3, they may list it 5% lower than the 30 day distressed price.  This is in anticipation of further deteriorating markets and to get the asset off the books in the time frame they would like to.

If the home is determined to be ineligible for financing, they may pick an “all cash price” (as is value).

And so on and so forth……..

The important thing to understand when purchasing a Las Vegas REO home (or any other home for that matter!) is to remember list pricing is NOT a firm price.  Low list prices may be set to attract multiple buyers and cash offers and a home may go WELL over that list price.  High list prices may mean the bank has time to sit on their asset (haha).  It is important to work with a Las Vegas real estate agent who is familiar with the market and can pull comparables when it is time to write an offer.

As you can see the decision isn’t made by one person – the REO listing agent.  Or by the asset manager’s dart board.  It is a complicated process which causes confusion to buyers and even other real estate agents.  I guess I can call it “the is what it is” factor.

copyright 2006-2011 Renee Burrows, REALTOR®, The Force Realty  702-966-2494

Blog Disclaimer Important Notice