Long-time readers know that I am generally speaking not a fan of “creative” and “alternative” ways to afford a real estate purchase. I dislike down-payment assistance programs, and have only been involved in one transaction that involved one, ever. As much as I like helping clients buy a new home, I do not want to help people buy something they can’t afford, something that will cause financial heartache later. 

Nevertheless, I present Forbes Magazine’s Creative New Ways to Buy a Home. Some of them are neither creative nor new:  borrow money from a family member; FHA loans (becoming very popular locally, consult your mortgage officer). Don’t forget to watch the slideshow. 

FHA loans are really a deal to consider now. As long as you are planning on living in the home, and are planning on purchasing modestly priced home (look up the limits for your area here),  the FHA has less stringent credit and downpayment requirements. Get all the official information right here. One caveat, the FHA does have rules about the condition of the home to be purchased. Keep that in mind when you are touring properties.

And don’t forget, if you complete your purchase by the end of August and have not owned a home in the last 3 years — this includes first time home buyers — you are eligible for a tax credit over and above the mortgage interest deduction.

I can put you in touch with a mortgage officer who is trained and up-to-date on the most current FHA proceedures, licensed to do business in Nevada or in your state. I can also help you find a home eligible for FHA financing. To learn more, click the Contact Me link in the sidebar, or call me today.

Maybe it’s happened to somebody you know, maybe it’s happened to you. A prospective buyer makes plenty of offers, but doesn’t get any offers accepted! HGTV’s Frontdoor has some tips for you. Not only do they discuss market value, but they discuss how to deal with, not offend, and negotiate with a private seller. 

I do have a few little things I would like to add to their very good advice. First, in markets like we have right now in Las Vegas, you will not be just dealing with a private seller most of the time. Roughly a third of available inventory is bank owned (“REO”), and another 30% is short sale (there is a private seller, but the mortgage company still has to approve the sale because they will be “short” money at the end). The strategy for dealing with banks in these two situations is different.

In an REO sale, there are no feelings to be bruised, and you are unlikely to ever have any interaction with the owner whatsoever. However, don’t take this as an excuse to “low-ball”. Although that used to be a perfectly valid strategy for buying REO property, it just doesn’t work anymore 99% of the time. The bank has already lost money on the property, and has probably gotten multiple estimates of its value: Market Analysis (“CMA”); Broker’s Price Opinion (“BPO”); perhaps even an appraisal. Odds are they think the listed price is fair, so they are unlikely to take a big discount. 

By contrast, in the short sale, you have two parties to deal with.  First, you have the owner.  Since the owner is not going to get any money out of the deal, they don’t care what the offer is as long as it gets them out of the property.  On the other hand, the mortgage holder would like to limit their losses. They will insist on multiple estimates of the property’s value before agreeing to the sale (this is the listing agent’s responsibility, not yours). There is no sale unless both agree. You are less likely to get lucky with a low-ball offer than with bank-owned homes.

One final thing, don’t be afraid to walk away. Right now we have 17,133 single family houses, 3305 condos, and 1342 townhomes available in the GLVAR MLS — subject to change any minute. There are plenty of homes available, and no reason to pay more than you think something is worth. It’s one thing to get into a multiple offer situation and pay a couple grand over list. It’s another thing to pay tens of thousands more.

I know I have said this before, but it bears repeating: 

My advice on making offers is to a) know your budget; b) ask your Realtor to run some “comps” in the area; and c) find out if any comparable homes have sold in the last 6 months and for how much (don’t forget to compare that to the asking price).  This advice should still be good no matter what happens to the housing market in the future.

For professional assistance finding and placing a successful purchase offer on your next home, condo, or investment property, please click the “Contact Me!” link in the sidebar, or call me at the number at the top of the page.  Thank you for reading!

I wish I had a dime for every time I have heard someone mistake a Zillow “Zestimate” for market value.

Zestimates are interesting and fun, but often do not reflect actual market value. They are not appraisals.  They are not a CMA — Competitive Market Analysis.  They are not a BPO — Broker’s Price Opinion. They aren’t necessarily based on much of anything that would determine how much a willing, ready, and able buyer would pay — and that’s what market value is.

I’ve seen it happen over and over, and the nice people at Rain City Guide see it too. An estimate on a recently foreclosed home, for example, probably is nothing more than the balance of the owed mortgage. Imagine the shock of thinking your neighbor’s house just sold for 10% less than prevailing neighborhood prices, when the “buyer” was just the mortgage holder. Alternatively, home owners may think to themselves that they have “insider information” that makes their home substantially more valuable than Zillow said:  ”they don’t know about my latest remodeling,” etc..

If you want a back-of-napkin idea of what homes in your neighborhood are worth, spend 10 minutes poking around Realtor.com and seeing what’s available. Depending where you live, you might be able to figure out actual sale prices using data from your County’s Recorder or Assessor. County data will be very accurate, as long as you remember that values do change over time and condition does matter. This sort of information is probably sufficient for anybody who does not need to sell their real estate. However, if you want current, accurate data, that you can use to set a fair price that will be met in a reasonable period of time, call your local Realtor.

I am available for CMA presentations and a limited number of sales listings. I would rather do relatively few listings well than dozens badly! Yes, I do short sales too. For more information or to set up an appointment, please click the “Contact Me!” link in the sidebar, or call the number at the top of this page.

This morning, we have news that the Fontainebleau Las Vegas has adequate funding to keep building, and is still on track for opening this coming fall. More:

The Las Vegas resort promises 28 restaurants and lounges including a 5,000-square-foot “chocolate experience,” award-winning chefs including Alfred Portale and Scott Conant, Michelin-rated Cantonese cuisine, a noodle shop and a gelato bar. Fontainebleau also will feature a 60,000-square-foot spa with 33-foot-high ceilings above plunge pools, “hypnotic columns of light” and “varying intensities of rain showers.” At least four outdoor pools will offer various settings, including a “whimsical topiary garden,” a bar with an open kitchen and Champagne and caviar service poolside.

The Las Vegas resort had planned to sell as many as 1,000 condo-hotel units, which banks have largely sworn off as risky investments.

Some analysts say Fontainebleau might end up renting the condo-hotel units as regular hotel rooms if they don’t sell.

This is great news for the local economy. Historically, a Vegas hotel room creates 2 jobs working in the resort, and more jobs within the community for a total of 7 jobs per hotel room. This facility will have 3,815 rooms, not counting any condos that will become suites. Between jobs at the hotel, jobs at the 28 restaurants, jobs at the spa, it’s easy to see the 2 jobs. It’s a little more difficult to measure the jobs in the community as cashiers, accountants, teachers, lawyers, and others. So this project will create a bare minimum of 7,600 jobs, and perhaps as many as 26,700 jobs across the Valley!

Of course, all these people are going to need places to live. Fortunately, we have roughly 17,000 single family homes, 1,300 townhomes, and 3,200 condos available right now, with a median price of $175,000, down 44% from the peak. 

If you need a place to live in Vegas, please click the “Contact Me!” link in the sidebar, or call the number at the top of the page now! I can help you find everthing from affordable housing to dream homes in gated communities, saving your valuable time.

Forbes noticed that the Las Vegas real estate market has turned:

Something funny’s happening in Las Vegas. Home sale prices from last year are down 28%, but home sales are up 15%.

The reason? Motivated sellers–those in distress or foreclosure–or banks with too many homes on the books are slashing asking prices in order to unload their properties. Motivated sellers in Las Vegas accounted for 64% of sales in October, the highest rate in the country according to Radar Logic, a New York-based derivatives firm that provided the data for this story.

That means buyers are getting deals and hastening Las Vegas’ recovery. In fact, buyers are eating up inventory fast enough that the discounts offered by motivated sellers are tightening as supply contracts. The difference between what motivated sellers have to offer and what non-motivated sellers can command has held steady for three months at a 17% discount, versus the 33% national average. So while it’s still a buyers’ market, prices have dropped to a level that’s stimulated demand.

“There’s a pretty active housing market, it’s simply at a lower-priced inventory,” says Michael Feder, chief executive of Radar Logic. “And there are now bidding wars taking place over homes in foreclosure.”

Prices in general have sunk to 2004 levels.  In some neighborhoods, homes are selling for about what they cost in 2002.  This is a level where it makes sense to buy, particularly if you can take advantage of the tax credit for first time buyers. Remember, you have to buy before the end of June to get it!  You’ll also have to act fast if you want to take advantage of the record low mortgage rates available;  we’re talking under 5%. 

The rest of Forbes’s list of real estate bargain zones is right here, but remember, our median home price is only $211,600 — less than just about anyplace in California. According to my mortgage calculator, you could be buying a median priced home for less than $1200 per month. 

For help finding your ideal Vegas home, call the phone number at the top of the page, or click the “Contact Me!” link in the sidebar.

The other day, I was visiting with the loan officer at a nearby bank branch. He had an interesting flier on his desk. “The joy of working for a Fortune 500 company is that they send all kinds of marketing materials, but this is all I need,” he told me. This flier had a little chart showing how over the course of years, your rent checks add up.  Even a modest sum like $600 per month adds up to $72,000 over only ten years, and $216,000 over thirty years! Boost that to $1000 per month, and you have paid $120,000 in ten years and $360,000 in thirty years.

Now make no mistake: renting is still the best option for a lot of people.  For example, if you only expect to be in an area for a year or two, renting is the way to go.  There are also people whose credit or money situation dictates that they must rent. I have nothing against renting, renters, or apartments.

However, we have a situation here in Vegas where renting is turning out to not be cost effective for many people.  Almost 2 weeks ago, I wrote about the 800 condos currently available for less than $100,000. Today, I ran the numbers on single family homes.

Despite the fact that Vegas home sales were up substantially in 2008 compared to 2007, we still have roughly 17,300 single family homes available today. Of those, 1,930 are priced at $100,000 or less. Only one was in an age restricted community. A total of 1869 are actually in the Las Vegas Valley;  the remainder are in outlying areas such as Pahrump, Mt. Charleston, or Boulder City. 

When I talked about condos, I eliminated the ones that were under $50,000 from consideration: they almost certainly need a lot of work to be habitable, and they almost universally won’t qualify for FHA financing. When we do that to our pool of single family houses here in the Valley, we find 1,664 homes priced between $50,000 and $100,000.

I wanted to know more specific information about these houses, so I narrowed the search to homes in the Northwest part of town for the sake of simplicity. There were almost 60 of them. It turns out that these houses ranged from roughly 900-1800 square feet, and sat on lots that measured roughly 1700-8000 square feet — a huge range. The vast majority were 2, 3, or 4 bedroom homes, but there was one 5 bedroom home. All had 2-3 bathrooms. Most had garages. There were even 2 that had swimming pools. Sure, it’s a safe bet that they need paint and carpet and maybe some repairs. 

Interest rates are still pretty close to what they were at the first of the year. We are still talking about being in an $80,000 mortgage for less than $500 per month, with perhaps less than $3000 in out-of-pocket closing costs — which can even be a gift from a family member — and a nice juicy tax credit for first time buyers. If we look at a $150,000 mortgage, the principal and interest is still roughly $850, well within the budget of someone currently spending $1000 per month in rent.

If you are planning on staying in the Valley a few years, and you are spending more than $600 per month on rent, you owe it to yourself to see if one of these homes might be right for you. If you are an investor, you have a great chance to either “fix and flip” or put together a portfolio of rental properties. 

That knocking sound you hear? It’s opportunity. 

To learn more about these homes, evaluate your housing needs, or discuss a purchase, please contact Bridget Magnus. Click the “Contact Me!” link or just call the number at the top of this page today.

In today’s market, Realtors are reminding sellers that they have tough competition in the market from bank-owned properties. Lani Rosales of AgentGenius found this little video that give you 10 easy things you can do to make your home easier to sell, with a little humor too.

Don’t get me wrong, in Vegas an Elvis Shrine might be a desirable feature. But for the rest of us, it’s nothing more than a funny way to remember that home. 

There’s a lot that goes into staging —  making your home look like it could become somebody else’s home.  Here are some more tips with pictures from HGTV, a whole gallery of terrific before-and-after pictures from StagedHomes, and About.com’s article on staging.

While staging doesn’t have to be expensive, it can help your home sell more quickly and for a lot more money!

I am available for personalized advice on staging and selling your home in the Las Vegas Area. Please contact me for details.