Category Archive : Real Estate

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

Acceptable sources of borrower funds include the following:

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

Questions About Sourcing FHA Down Payment Funds:

Q: How is the Earnest Money Deposit verified?

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

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

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

Q: How are Savings and Checking Accounts verified?

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

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

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

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

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

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

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

Q: Who can give a Gift Fund?

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

Gift funds can be given by the following:

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

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

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

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

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

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

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

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

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

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

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

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

The premier residential and resort destination in Southern Nevada is Lake Las Vegas, which is located in Henderson, Nevada.  Lake Las Vegas is situated on a privately owned 320-acre lake.  Nestled away from the hustle and bustle of Las Vegas, it’s still conveniently located only 20 minutes away from the famous Las Vegas Strip and McCarran International Airport.

Not sure if you want to make Lake Las Vegas your permanent home or a 2nd home?  Why not stay at the resort destination as Lake Las Vegas features world-class resorts including the AAA Four Diamond-rated The Ritz-Carlton, the AAA Four Diamond-rated Loews Lake Las Vegas Resort, and the 40,000 square foot MonteLago Village Resort.  This is an ideal opportunity to see first hand if Lake Las Vegas is a place you could call home.

Lake Las Vegas offers its Residents and guests’ two championship golf courses, spas, full-service marinas, sailing, kayaking, fishing, swimming, walking, hiking and biking.  There are 19 distinct neighborhoods that are sure to meet the needs and desires of any savvy buyer.  Whether you are looking for a custom home, waterfront or courtyard villas, Lake Las Vegas is sure to amaze you!

If you would like to take a private tour of residential homes for sale in Lake Las Vegas, please contact us at 702.376.0088 or complete our contact form.

There is a bankruptcy bill that is being pushed by Democrats that would give Judges the power to dictate mortgage terms.

If this bill were to pass, a homeowner could file bankruptcy and the Judge could change the terms of his primary residence mortgage to make it more affordable for the homeowner so one they can afford their monthly mortgage payment and two to bring the mortgage down to market value.

The Mortgage Bankers Association, American Bankers Association and the U.S. Chamber of Commerce oppose this bill and have spent millions to try and prevent it from being passed.  According to the chief lobbyist for the Mortgage Bankers Association, Steve O’Connor, said “new homebuyers would end up paying higher interest and bigger down payments if lenders are saddled with the risk that a judge could change mortgage terms.”  Why would homebuyers end up paying a higher down payment and interest rate?  The lending guidelines are very stringent now and you can’t buy a home anymore without at least 3.5% down so I would imagine that the default rate on these new home loans would be very small?  So the risk for Lenders and Banks have dropped considerably compared to loans they gave out back in 2003-2006.

I can see why the Mortgage Bankers Association and American Bankers Association would want to prevent this bill from passing because it certainly would harm the bottom line for lenders and investors holding mortgages or would it?  How much harm would it really cause Lenders and Banks with the Government bailout?  Bank of America just received a 2nd bailout of $20 billion dollars!  Banks appear to be using their bailout money to acquire other banks so I am not too concerned with them complaining that they would lose money if this bill passes.  What I am concerned with is Lenders and Banks requiring homebuyers to come in with a higher down payment and increases in interest rates.

We need a solution to the foreclosure mess since Banks and Lenders can’t get short sales or loan modifications approved in a timely manner.  The passing of this bill would help streamline the process and allow homeowners to keep their homes by bring their mortgage down to market value and giving them a payment they can afford.  This will prevent more homes from going into foreclosure which helps keep inventory levels from increasing and should help prices begin to level out.  When there is confidence again in the real estate market, it will begin to spill over to other industries which will help lead us out of the recession our Country is facing.

What is a Loan Modification and does it fit the needs of homeowners who cannot afford their mortgage payment and who owe  more on their mortgage than the home is valued?

“A Loan Modification is a permanent change in one or more of the terms of a mortgagor’s loan, allows the loan to be reinstated, and results in a payment the mortgagor can afford.”

In the State of Nevada, an Attorney should negotiate on the behalf of a homeowner to get a loan modification approved.  There are those that aren’t Attorneys that attempt to help homeowners, which is fine,  but it’s against the law for them to charge you any up front fees.

A Las Vegas Homeowner does not have to be late on a payment in order to be approved for a loan modification.  However; I have seen some Lenders deny a Loan Modification because the homeowners weren’t late on their mortgage, so it does come down to who your lender is.

We work with several reputable Attorney’s in Las Vegas they we can recommend to you if you are in need of a Loan Modification for your Las Vegas Home Loan.  We can be reached at 702.838.7522 or complete our contact form and one of our representatives will contact you for a private consultation.

Buyers Beware! The disturbing trend of low ball listings in Las Vegas!

A disturbing practice I am seeing more and more of lately is the low ball listing of Las Vegas short sale/foreclosed properties. A low ball listing is a listing that is priced, by the Listing Agent, SUBSTANCIALLY below what a common sense comparative market analysis says the property is really worth.

I have spoke to many Las Vegas Listing Agents and asked them why they priced their listings so artificially low. They tell me they were not getting any offers at a higher (more realistic) price. OK, I understand that logic but are they really helping to sell the listing any faster with an unrealistic price.

I would argue that low balling the listing doesn’t help sell the property any quicker and in fact hurts the chances of a sale for the following reasons:

1. Buyer expectations – The Buyer sees the artificially low price and thinks they can get the house for that amount. Even after it is explained that the Seller’s Bank has the final say on what they will or will not accept, this is a difficult psychological hurdle to latter overcome.

 

2. Wasted Time – So the low offer is in and the waiting begins. Banks are not known for quick decisions and several weeks could go by before they respond to the offer. During this time the Listing Agent is required to place the property as Contingent in the Multiple Listing Service (MLS). This could lessen the chance of the property being shown since other potential Buyers could see the property as possibly being sold already. It is also against Nevada law for the Listing Agent to submit other offers while the first offer is pending review by the Bank. Many times the offer will come back from the bank 10% or more higher than what the Listing Agent had it listed for. This tends to anger the Buyer and often causes a complete breakdown of negotiations.

The best way to mitigate against this practice is to educate the Buyer in advance. Las Vegas Buyer’s Agents need to prepare their clients for the possibility of a counter offer above the listing price. If the comparative market analysis shows that the property is worth more than the asking price, share this with your client, it might be what saves the deal in the end.

I don’t mean to rant but Las Vegas Real Estate Agents that have no experience in listing short sales make it difficult to get the short sale approved.  In this market, short sales are very prevalent and require an agent that has experience handling short sales.  Not all short sales will close but an agent experienced in short sales will start the short sale process just as soon as they list the home which increases the chances of getting the home sold and sold much quicker.

I currently have several deals with listing agents that do not know what they are doing and it’s going to cause my buyer’s to walk away from the transaction.  Out of all the short sale deals that I have done this year, there was only 1 listing agent that was on top of everything and it was one of the reasons why our short sale transaction closed within 45 days.

When we take a short sale listing, we go through the whole process with our client so they know exactly what to expect during the short sale process.  We submit our short sale package to the bank/lender within 48 hours of taking the listing.  We continuously contact the bank/lender to get our paperwork processed as quickly as possible to ensure we can move quickly as soon as we get an offer.

If you are thinking of selling your Las Vegas Home, make sure you contact Sena & Associates for a free consultation at 702.376.0088.

If you read the newspaper or watch the news, it makes you wonder why you would want to buy a home in this real estate market.  All the media has been reporting is that home prices in the Las Vegas Real Estate market are dropping and more homes are being foreclosed on every month.  I won’t deny that’s true but there’s other information that is not being reported that might give you a different perspective on the Las Vegas Real Estate Market.

Las Vegas sales of existing homes and condos are up from the same time over the previous two years. For November, Las Vegas’ existing home sales were 120% higher than the same month in 2007.  The increase in home sales has reduced the standing inventory even with all the new foreclosed homes that are entering the Las Vegas Real Estate Market every month. Available inventory of homes for sale sits at 10.4 months compared to a 24 month supply at the end of 2007.  Homes that are priced below $200K are receiving multiple offers and are selling above list price.

If you are interested in buying a home in Las Vegas, make sure you act now as housing inventory continues to decrease, you can expect prices to stabilize and even begin to rise.

If you have any questions about the Las Vegas Real Estate Market or would like us to send you properties for sale in the Las Vegas Valley, contact us at 702.376.0088.