Monday, April 2, 2018 / by Geoffrey Zahler
We are getting a lot of questions on the home buying process and how things are in the Las Vegas Market in 2018, so I figured a quick blog would be a great idea. As always, this is a stream of consciousness, and should be used as a good starting point. If you have further questions, you can reach us at: GSZ@ZahlerProperties.com or 702-903-2735.
The Las Vegas Market - A 2018 Outlook for Buyers
The market here in Las Vegas is one of the hottest markets in the country. Depending on the source, or the article, we are ranked anywhere from #1 to the #5 top markets to expect in 2018, but that doesn't mean you've missed your opportunity to purchase. It just means there should be a little more preparation before you jump head first into the market.
If you're going to get a mortgage, and most people do, prepare to see a rate a little higher than you have been hearing on the news, or from Friends. Interest Rates have been steadily increasing for the last year or so, but are still relatively low, and still very much affordable. Are we in the 3-4% range anymore? No, but 5% or so is still a good, low interest rate on money over a 30 year mortgage. Just know, each lender you speak with will quote you a slightly different rate, but most should be in the same "ballpark." Also, it really depends on the type of program. A VA or FHA loan will generally have a lower rate than a conventional loan, but those loans also have an amount of mortgage insurance that will need to be paid as well. Going conventional but putting less than 20% down? Those too will incur a portion of your payment to Private Mortgage Insurance (PMI) that will be an additional payment on your monthly mortgage. Mortgage Rates, like the stock market, fluctuate on a daily basis, so speaking with a Mortgage Professional is a GREAT way to start the process, after meeting with us of course. Let us put you in touch with a great mortgage professional, who will help put the right plan and product to work for you!
Inventory levels of homes in the Las Vegas area are currently below 2 months. This means that if no homes were to hit the market as new inventory, our entire list of available homes will be sold in under 2 months! This is very low. A "balanced" market usually has inventory levels of about 6 months, so anything less than 6 months is considered a strong Seller's market. However, keep in mind, that combined with relatively low interest rates, and an increasing market, it is still a good time to PURCHASE! You may just need to be prepared to act quickly and be aggressive if the right home comes up.
Just as I mentioned above, there are simply MORE buyer's than seller's right now, and each home generally speaking, has more than one interested buyer. We are seeing most of our inventory receive MULTIPLE offers in a matter of days. How do you compete? Well, if it's a home that you like, and you think it's priced right, this is NOT the market to try and low ball an offer, or even try and make a "deal." Homes are selling fast, at or above asking price. Just last week, we had a client write an offer on a home for just a small amount below asking price on the first day the home was available for sale. By the next day, the seller had received 10 offers, and we were the ONLY offer that was below asking price!
Please note, I am not saying offer anything crazy, because if you're getting a loan, the home still has to appraise at the contracted price, or the property will need to be renegotiated, which almost always will end up costing the buyer some more money out of pocket or lose the home. Some of our buyer's have this ability, others do not. Our job as professionals is to provide opinion of value, but then represent your best offering.
The other way to combat a tough market is to write a "clean" offer. Don't ask for expenses you can live without. If you are okay paying for a home warranty, make sure you state that in the offer and don't ask the seller to do so. Don't NEED the help with closing costs but would like it? Sometimes that could be the difference between your offer being considered or rejected.
In this market, especially in the homes priced under $350,000 - we are often seeing a situation that many sellers are not even submitting counter offers to buyers. So, if you have an interest, you may only have ONE chance at submitting an offer, so make sure it's the strongest offer you are comfortable with. I've heard a few times lately, even with this suggestion, that our buyer's "would love to submit another offer." Often, it's already too late!
We are seeing more and more sellers these days NOT agree to make any repairs on a home. If it's a cosmetic item, and the home is a resale, we have to remember that homes are lived in, and are not perfect. However, we are also seeing Seller's not agree to fix Roof issues, or AC units, or appliances, etc. So, going into a home, it's imperative you have in your mind, what you're willing to negotiate, and what you're willing to fix yourself if need be. A good professional should hopefully be able to help negotiate through this, but remember that ultimately, you may be buying a home that a seller isn't willing to fix. If the items are extremely significant, you can always cancel a contract and have your deposit money returned.
Owner Occupying Home after Close:
We are also seeing an increase in Seller's requesting to stay in the home AFTER the close of the sale for a few days/weeks. While this is not REQUIRED, it is often part of the early negotiations, so keep that in mind. What this means is that a seller will close the sale, you will be the new owner, but not have access to the property until they vacate. This could be because they are completing a home purchase, or looking for a property, etc. You technically would become a landlord for a short duration of time, and we do have documents to help make this "official" but it's something to think about and something to discuss with a professional if this is a situation that does arise on a home you're looking to purchase!
There are some other options, but I realize the tone of this Blog is very negative, which it shouldn't be. It's simply a strong market, and this should help you PREPARE to make a purchase if you're looking to do so. These are things we navigate every day with our clients and would love to answer any specific questions you have moving forward.
Buying a home should be a fun situation, and knowing how to handle the items above will help take some of the stress out of the process. This is our profession, and we look forward to helping however we can!
Thanks for reading!