There are two major sellers in Las Vegas. Banks and flippers. Both are loathe to give the buyer a Sellers Real Property Disclosure. Both usually require a notarized waiver of that form along with all buyer rights under Nevada Revised Statutes (NRS) 113. Nor do they know or care about utility costs, so the Nevada Energy Form must usually be waived as well. Also, in preparing the home to sell, they tend to literally paper, paint and caulk over structural problems and code violations that might bite the buyer later on. This makes your home inspector a very important part of the team.
I mention this because, in the ten deals I have closed or have ready to close so far in 2011, three buyers previously passed on houses that we had gotten into contract because major problems with the house were subsequently discovered by our home inspectors. That is 30% and that is a substantial number.
One house involved a poor roof design that left unvented chambers under the roof. These held moisture even in Las Vegas' low humidity and had caused the roof to sag and leak.
The other two involved unpermitted shoddy construction that could later create problems with a city government looking for fees wherever it can find them. Both of these also included water damage because the construction code had not been followed. We passed on the houses but somebody out there bought them!
Stay alert ... and good hunting.
Friday, July 8, 2011
Wednesday, May 18, 2011
Blood in the Bellagio Fountains ...so to speak
Now that's a visual image of Las Vegas real estate with blood in the water!
In the Las Vegas valley, the new construction homes being sold are smaller and cost less, Buck Wargo of the Las Vegas Sun has just reported. “The price per square foot (new construction - gh) fell to a new low of $91.17, which is 12.4 percent below the $104.05 square foot price in April 2010,” he says. 313 permits were issued in April, “34 percent fewer than April 2010. For the year, 1,141 permits have been issued, which puts the region on track to fall below the 3,776 issued in 2010.”
Read Buck Wargo’s entire article at http://www.vegasinc.com/news/2011/may/16/las-vegas-existing-home-sales-brisk-prices-continu/ (used with permission). It has some great data that MLS doesn’t capture.
Bottom line, Mr. Wargo concludes prices have fallen by about 14% since this time a year ago, MLS listings fell by 9% between March and April this year, and the median price of resale homes is currently about $107,000 and $70 and change/sq ft. The double dip we feared seems to have occurred. Question is, has it stopped dipping?
Emails from new home builders continue to tout very high realtor commissions – 6% at some builders recently. As I have mentioned before, when the market is strong, some builders almost quit paying commissions because they feel they don’t need the Realtors. But lately, as they did back when the crash unfolded, they are offering the moon.
On the street, some lenders don’t want to lend. I have had a recent transaction with conventional loan, fall out because, weeks into the work, and after losing the first house to problems discovered by our home inspector (as he should) and after the second house in contract had passed inspection, the lender cut the amount they had promised to lend and destroyed the deal, thank you. They handed us the ball, let us run with it, and then tackled us. At least I didn’t pick’em. Nationwide may be on your side, but the banking industry is a separate question.
If you need an ethical lender, I can recommend someone.
So, prices are very low, and could still go lower. Sales volume is huge. Listings are down, and if you exclude short sales as I recommend, inventory is tight! Over half of LV offers are cash. If you are not aggressive with your highest and best offer, don’t bother. This is Vegas. The world is shopping here right now. If you hedge on your offer with sale numbers so high, somebody else with cash probably wants it more than you. The fountains dance about every 20 minutes.
Good hunting.
In the Las Vegas valley, the new construction homes being sold are smaller and cost less, Buck Wargo of the Las Vegas Sun has just reported. “The price per square foot (new construction - gh) fell to a new low of $91.17, which is 12.4 percent below the $104.05 square foot price in April 2010,” he says. 313 permits were issued in April, “34 percent fewer than April 2010. For the year, 1,141 permits have been issued, which puts the region on track to fall below the 3,776 issued in 2010.”
Read Buck Wargo’s entire article at http://www.vegasinc.com/news/2011/may/16/las-vegas-existing-home-sales-brisk-prices-continu/ (used with permission). It has some great data that MLS doesn’t capture.
Bottom line, Mr. Wargo concludes prices have fallen by about 14% since this time a year ago, MLS listings fell by 9% between March and April this year, and the median price of resale homes is currently about $107,000 and $70 and change/sq ft. The double dip we feared seems to have occurred. Question is, has it stopped dipping?
Emails from new home builders continue to tout very high realtor commissions – 6% at some builders recently. As I have mentioned before, when the market is strong, some builders almost quit paying commissions because they feel they don’t need the Realtors. But lately, as they did back when the crash unfolded, they are offering the moon.
On the street, some lenders don’t want to lend. I have had a recent transaction with conventional loan, fall out because, weeks into the work, and after losing the first house to problems discovered by our home inspector (as he should) and after the second house in contract had passed inspection, the lender cut the amount they had promised to lend and destroyed the deal, thank you. They handed us the ball, let us run with it, and then tackled us. At least I didn’t pick’em. Nationwide may be on your side, but the banking industry is a separate question.
If you need an ethical lender, I can recommend someone.
So, prices are very low, and could still go lower. Sales volume is huge. Listings are down, and if you exclude short sales as I recommend, inventory is tight! Over half of LV offers are cash. If you are not aggressive with your highest and best offer, don’t bother. This is Vegas. The world is shopping here right now. If you hedge on your offer with sale numbers so high, somebody else with cash probably wants it more than you. The fountains dance about every 20 minutes.
Good hunting.
Saturday, May 7, 2011
Health Dept recommends Short Sale Innoculations
In the past thirty days, April 7 to Kentucky Derby Day of 2011, Las Vegas has closed 3074 single family homes. Of those, 744 or 24% were short sales. As a result some will say short sales are becoming a more significant portion of the market.
Yes, I admit that is true, if wearing two dead albatrosses around your neck is twice as much fun as wearing one.
The important facts for Realtors are that of 12,370 short sales during the time period 6754 were in escrow and only 5616 were available for sale. That gives you a closing ratio (744 out of 6754) of 11%, meaning only one in ten short sales in escrow in any given month actually close and MORE THAN half (6754 of 12370) of all short sales are perpetually in escrow. The descriptive word here also describes drinking soda though a straw.
For real transactions – bank-owned, flips and traditional – the same closing ratio is 78%. Of 9947 non-short sale single family homes on MLS in the same period, 6017 were available for sale and only 3930 were in escrow because they close!
Why is the short sale record so bad?
First of all, the banks have your best interests at heart. Second, of those few that closed, my experience suggests that most short sales have run through more than one buyer, perhaps several more. Ever hear of an agent who, once his client has a back up plan (short sale in contract) with a contingency (bank approval) that will NOT be removed for months, goes out and gets a real transaction?
What about Education … and Lawyers:
Well, haven’t they been offering SS classes ever since the crash? Haven’t attorneys chased the SS ambulance right into REALTOR® sales meetings? And haven’t the short sale stats tremendously improved since 2009 as a result? (no) Can results from the short sale training and results achieved by SS attorneys be confused with what comes out of the south end of a northbound bull? (yes)
Conclusion:
Save your money. Save your time. Short sales as they currently exist should be illegal.
Best wishes.
Yes, I admit that is true, if wearing two dead albatrosses around your neck is twice as much fun as wearing one.
The important facts for Realtors are that of 12,370 short sales during the time period 6754 were in escrow and only 5616 were available for sale. That gives you a closing ratio (744 out of 6754) of 11%, meaning only one in ten short sales in escrow in any given month actually close and MORE THAN half (6754 of 12370) of all short sales are perpetually in escrow. The descriptive word here also describes drinking soda though a straw.
For real transactions – bank-owned, flips and traditional – the same closing ratio is 78%. Of 9947 non-short sale single family homes on MLS in the same period, 6017 were available for sale and only 3930 were in escrow because they close!
Why is the short sale record so bad?
First of all, the banks have your best interests at heart. Second, of those few that closed, my experience suggests that most short sales have run through more than one buyer, perhaps several more. Ever hear of an agent who, once his client has a back up plan (short sale in contract) with a contingency (bank approval) that will NOT be removed for months, goes out and gets a real transaction?
What about Education … and Lawyers:
Well, haven’t they been offering SS classes ever since the crash? Haven’t attorneys chased the SS ambulance right into REALTOR® sales meetings? And haven’t the short sale stats tremendously improved since 2009 as a result? (no) Can results from the short sale training and results achieved by SS attorneys be confused with what comes out of the south end of a northbound bull? (yes)
Conclusion:
Save your money. Save your time. Short sales as they currently exist should be illegal.
Best wishes.
Wednesday, March 2, 2011
Market Hot for Low Priced Houses
I had clients make a cash offer on a nice bank owned house in the $120K range, 1700 sq ft, priced at $68/ft today.
They offered a couple thousand below list. $68/sq ft equals the minimum comparable sale in past few months.
Average sale price is $74. Max sale is $80/sq ft. The property is in the 502 ML area - West central part of the valley.
Here is the response from the listing agent today.
"Grant,
The sellers will not entertain any offers below list at this time. We currently have 12 offers on this property,
6 of which are cash, and all of which are above list.
Please reply with your best offer by 7 am tomorrow morning.
Thank you!
Alan " (with Realty Execs)
My clients response was, "that is crazy." They are correct, and that is Las Vegas.
If you are looking at the lowest priced listings you can find and they already match the lowest comparable sales,
then if you still want to offer less money, you may be delusional. First ask yourself why your offer will be successful and win out over every other buyer in Las Vegas. If you don't come up with a real good reason, you need to make a higher offer.
Good Hunting!
Grant
They offered a couple thousand below list. $68/sq ft equals the minimum comparable sale in past few months.
Average sale price is $74. Max sale is $80/sq ft. The property is in the 502 ML area - West central part of the valley.
Here is the response from the listing agent today.
"Grant,
The sellers will not entertain any offers below list at this time. We currently have 12 offers on this property,
6 of which are cash, and all of which are above list.
Please reply with your best offer by 7 am tomorrow morning.
Thank you!
Alan " (with Realty Execs)
My clients response was, "that is crazy." They are correct, and that is Las Vegas.
If you are looking at the lowest priced listings you can find and they already match the lowest comparable sales,
then if you still want to offer less money, you may be delusional. First ask yourself why your offer will be successful and win out over every other buyer in Las Vegas. If you don't come up with a real good reason, you need to make a higher offer.
Good Hunting!
Grant
Friday, February 25, 2011
Tuesday, February 22, 2011
Short Sales a Loser for Bargain Hunters
In an email from Kristy Black at Fidelity National Title, under the heading, “SHORT SALES MAY BE A FORCE OF CHANGE IN THE EXISTING HOME MARKET” Steve Bottled and Larry Murphy suggest, “ Of the 3,785 existing home sales in January, short sales accounted for just 20%. But, short sales commanded the highest prices -- even more than non-distressed property. Given that approximately 70% of Las Vegas home mortgages are “under water,” this may be a signal that there could be a significantly higher proportion of short sales in the future. Such an action would be an impetus to pushing prices higher.”
I think they are WRONG. The few short sales that actually close are higher because, when the bank stepped in and raised the contract sale price to current median market value and also demanded cash from the seller, only 750 out of 12000 anteed up for reasons of their own.
The rest, having sufficient oxygen to their brain, wisely walked away.
Right now in the Las Vegas MLS, there are 12705 short sales either available or pending at this writing (ER, P or C status). So, short sales are 56.7% of all transactions. And 49% of all short sales, 6271, are in escrow – half of all short sales, more or less are ALWAYS in escrow, but, according to Bottled and Murphy, only 756 short sales closed in January – that is less than 6% of the total short sales out there and only 12% of the number of short sales actually in escrow.
Only 9688 properties in the same status (ER,P,C) are NOT short sales and of these 3638 (about 37.5%) are in escrow. Among non short sales, 2574 closed in the past thirty days. That is equal to 26% of the total and 70% of the number in escrow.
Bottom line, short sales don’t close and they aren’t the bargain everybody dreams they are. Lose-lose. Why? Because the banks only approve sales at a price well within the comparable sales regardless of the contract the buyer thinks they made with the short sale owner. When the bank steps in, the party is over and the bargain hunter leaves empty handed.
But never fear. Some of those short sales that went on to foreclosure a couple months ago are back on the market as REO’s and they can obviously be closed cheaper than they could as short sales! And, they close 70% of the time. Win–win.
The mantra is: Short sales bad. Non-short sales good. Repeat until calm ensues.
Good hunting.
I think they are WRONG. The few short sales that actually close are higher because, when the bank stepped in and raised the contract sale price to current median market value and also demanded cash from the seller, only 750 out of 12000 anteed up for reasons of their own.
The rest, having sufficient oxygen to their brain, wisely walked away.
Right now in the Las Vegas MLS, there are 12705 short sales either available or pending at this writing (ER, P or C status). So, short sales are 56.7% of all transactions. And 49% of all short sales, 6271, are in escrow – half of all short sales, more or less are ALWAYS in escrow, but, according to Bottled and Murphy, only 756 short sales closed in January – that is less than 6% of the total short sales out there and only 12% of the number of short sales actually in escrow.
Only 9688 properties in the same status (ER,P,C) are NOT short sales and of these 3638 (about 37.5%) are in escrow. Among non short sales, 2574 closed in the past thirty days. That is equal to 26% of the total and 70% of the number in escrow.
Bottom line, short sales don’t close and they aren’t the bargain everybody dreams they are. Lose-lose. Why? Because the banks only approve sales at a price well within the comparable sales regardless of the contract the buyer thinks they made with the short sale owner. When the bank steps in, the party is over and the bargain hunter leaves empty handed.
But never fear. Some of those short sales that went on to foreclosure a couple months ago are back on the market as REO’s and they can obviously be closed cheaper than they could as short sales! And, they close 70% of the time. Win–win.
The mantra is: Short sales bad. Non-short sales good. Repeat until calm ensues.
Good hunting.
Sunday, February 6, 2011
What's All This?
From Mirasol in Mountain's Edge, I got an email saying they are "able to do new builds on the Santiago and Cordoba floor plans, and we have fully furnished models available as well. For your buyers we have a $20,000 incentive which they can apply to our standing inventory, fully furnished models, and new builds; in order to upgrade, use towards closing costs, and bring down the price! .... For the agents we have a $5,000 bonus (on top of a 3% commission) for any home that we go to contract with before the end of Feb. 2011!"
From Lennar "Register for Lennar's VIP AGENT CLUB to EARN A 5% BROKER CO-OP!*"
From a flipper, "5% Commission on these Great Deals!"
In the old days, I would be happy at the prospect. These days I wonder, what do they know that they think we don't know? As I have mentioned before in this Blog, when sellers offered big Co-op commissions and incentives, it was a bad omen.
My question is how bad and how soon?
If you plan to sell, sell now, or plan to hold.
If you plan to buy, buy for keeps and don't over extend.
What do you think?
Good Hunting.
From Lennar "Register for Lennar's VIP AGENT CLUB to EARN A 5% BROKER CO-OP!*"
From a flipper, "5% Commission on these Great Deals!"
In the old days, I would be happy at the prospect. These days I wonder, what do they know that they think we don't know? As I have mentioned before in this Blog, when sellers offered big Co-op commissions and incentives, it was a bad omen.
My question is how bad and how soon?
If you plan to sell, sell now, or plan to hold.
If you plan to buy, buy for keeps and don't over extend.
What do you think?
Good Hunting.
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