Las Vegas Real Estate News

Good Schools Factor Into Millennial Homebuying

There has been a change in home buying habits in recent years. Millennials, the next large generation of homebuyers, are buying their "dream homes" first. In past generations, folks bought a starter home and then grew into larger homes. This new generation is deciding exactly what they want as a final home and buying it right away.

One of the major factors in making a home buying decision for a young couple is the quality of the local schools.

good schools in las vegas

In the past, homebuyers went looking for things like garages, better kitchens, and more bedrooms as the deciding factors. Now, home buyers are looking for better schools for their children or their future children.

For buyers, this means that it's important to know how schools rate on the most important factors.

Note that the rating sites are not the only ways to discover the best school districts. It can be helpful to visit the schools. Sometimes, the graduation and test score rates are affected by economic factors at the student's homes or whether or not there is a language barrier.

Good schools are important for today's homebuyers. If you're a homebuyer, you can use any of the sites that offer the raw numbers. However, it's also important to look at the schools themselves.

As a home seller, if you live by a highly rated school, you should include this information in all of your advertising and mention it to young homebuyers when they visit.

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You first! The Right Agent For You

For many of us, we think as real estate agents as simply agents. They work for the buyer or the seller, whoever spoke to them first. While that is true, there are a few important notes.

real estate agent

  • Real estate agents that are members of the National Association of Realtors, are officially called Realtors, are bound not only by a code of ethics but also by many state laws to represent the person in front of them honestly and openly.
  • There are many real estate agents who are "buyer's agents". A buyer's agent only works with buyers. Of course, there are seller's agents that work exclusively with sellers. A buyer's agent doesn't list homes for sale. They are also very often experts in the home buying experience.
  • Looking for an expert in the neighborhood you're looking to move to is a huge advantage. Many real estate agents can help you find the perfect home, especially if it's in their neighborhood.
  • A buyer's agent is an excellent way to get the most from your home purchase. If you don't have buyer's agents in your area, simply find a real estate agent that you're comfortable with and talk to them about what they are able to do for you.
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Existing Home Sales Are Still Down

Any time you start talking to people about buying homes and current home sales trends one of the things that everyone notices is that existing home sales are down.

Why aren’t people selling existing homes?

The answer is a bit complex. The short answer is because there just aren’t as many as there have been in the past. After the massive overbuild of the housing boom that ended in 2007, the bursting of that bubble led to very little construction.

working on a house

Many people who were able to hang onto their homes through the mortgage crisis are settled in. Younger folks are still raising their children in their homes. Older folks are still paying off their mortgages, but they have a lot of equity that they don’t want to have to move around.

So, the combination of a large group of people who are settled and an extended period of slow construction has led to a shortage of existing homes.

Marry that to a slow restart of new home construction and a strong economy and you have a perfect storm for a housing shortage. It hasn’t reached crisis proportions and is unlikely to, but it is a small crisis. Currently, the market is ramping up construction on new residential housing, so we may start to see pressure released off of the existing home market.

In Conclusion

If you’re looking for an existing home, your best bet is to be patient. Home prices are rising, but slowly. Interest rates are increasing, as well, but very slowly. If you don’t want a new home, take your time and keep your eyes open. Demand might be high and you might need to pay more than the asking price, but you will get what you really want.

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The First Time Buyer and The Low Down Payment

There is a trend in first home purchases that hasn’t always been the case. Over 61% of first-time home buyers are purchasing their homes with a down payment of 6% or less.

The myth is that a 20% down payment is required, but there are a number of programs, both public and private, that allow homebuyers to put much smaller down payments on their new homes.

A large down payment is not always required to buy a house

Rents are on the rise and home prices are relatively stable. Interest rates are still very low and appear to be rising slowly. Many lenders are lending on homes without the insanity that existed in 2006.

There are a number of programs to help first-time homebuyers. Some, like FHA and VA, are from the federal government. Others are local or state programs designed to make it easy to afford your first home. The best way to find all the programs available to you is:
1. Contact a mortgage broker that represents multiple lenders (they can shop the best rates and terms for you).
2. Check out the Nevada Housing Division for more information about state programs.

It’s time for first-time homebuyers and renters to consider buying a home before the market or interest rates make significant shifts.

If you’re interested in buying a home, it’s worth talking to lenders to see how much of a down payment you’ll need. You’re likely to be surprised. Be sure to mention things like your veteran status or associations that you’re a member of. Many lenders have special programs for everyone.

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We Are Not In Another Housing Bubble

After 2007, the fear of another housing bubble and crash is palpable. Everyone is terrified that if they buy a house, there will be robo-signed foreclosures, massive losses in home values, and a huge economic slowdown.

interior view of house

We don’t believe that we’re in another housing bubble and here are the reasons why:

  • The price of houses are higher than they were in 2008, after the crash, but they aren’t even at the prices they should be if you account for inflation alone. Even though home prices are up, if you started with 2006 prices and only adjust for inflation, they are lagging behind by about 15%.
  • While the banks are slowly beginning to unclench their mortgage fists, they aren’t anywhere near as lenient as they were in 2006. Twelve years ago, you didn’t really even need an income to be able to get a mortgage. Today, it’s a lot tougher. You have to actually qualify for the loan. Things are definitely not as lax and dangerous as they were in 2006.
  • Homes are more affordable, as a percentage of income, than they were in the last housing boom. Since interest rates are low and seem to be staying that way, it’s likely that we’ll see mortgage prices stay low enough to be affordable. This doesn’t mean that every market is affordable for everyone, but overall, the housing market in the US is more affordable, as a percentage of income, than during the last housing bubble.
  • There are many, many less foreclosures each year than there were, even years before the bubble burst. When the last housing boom was going on, there were about 60% more foreclosures per year than there are now. Those houses were flooding the market creating too much supply and were being sold at huge discounts. All of this movement made the market weak and caused supply to outstrip demand. That’s not what’s happening now. Now we have a modest foreclosure rate and the supply is a little behind demand, which is where we want it to be for long-term stability.

The fear of another housing crash is legitimate, but there are no indications that it will happen again. Supply is low, but steady. Interest is staying low enough to keep homes affordable. And mortgage companies aren’t giving and taking away like they did in the early 2000’s. Be cautious, but for now, all sign point to a healthy housing market for the foreseeable future.

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Buyer’s Agents and Listing Agents

Once upon a time, there were just real estate agents. If they were members of the National Association of Realtors, they could call themselves Realtors. There were the bosses, brokers, who oversaw individual Realtors.

Today, there is a much clearer distinction in roles, listing agents and buyer’s agents.

Regardless of whom they work for, all real estate agents are bound by the laws of fiduciary duty. They must work for the client, always making decisions that are in the best interests of their client.


unlocking a door with a key


What Do Buyer’s Agents Do?

A buyer’s agent works to help find the perfect house for their client, the home buyer. They will see the perfect house, negotiate the best price, and help the buyer’s get settled into the process.

One thing that was nearly unheard of years ago is the “exclusive buyers’ agents”. There are some agents who prefer to work only with buyers and are therefore exclusive buyers’ agents.


What Do Listing Agents Do?

A listing agent’s job is to sell a house as quickly as possible for the highest price. They will typically do all the marketing and even help with staging of the house.

A listing agent makes their money based on commission. The commission is based on the sale price of the house. Often, the commission also includes the buyer’s agent’s half of the commission.

Listing agents typically work very hard trying to get the house in front of as many eyes as possible. This might include videos, photos, drone videos, websites, and virtual tours. In a tough market, with a lot of homes for sale and only a few buyers, the listing agents need to work overtime to make the sale.


Can the Listing Agent Represent Both the Buyer and Seller?

In some states, it is not legal to have the same agent represent both parties in the sale, due to a conflict of interest. However, in Nevada, this is possible. Both parties must be informed of the possibility and must give written consent to allow this. Your agent will have the appropriate forms available to allow for one agent to represent both the buyer and seller.

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Party Of Two – Buying A Duplex

A duplex is a building with two units, often side-by-side and are commonly rented out to generate income. In this case, we’ll look at the idea of buying a duplex and renting out the other side.

The Advantages to Buying a Duplex

  • Affordability - Duplexes are often only a little more than the cost of a house in any given area. You end up with two livable units for the price of one.
  • Help with the mortgage - You can rent the other side out and make some money to help pay the mortgage. This is a great way to build equity, particularly if you make sure that you’re paying the whole mortgage yourself every month. That way, your tenant’s payment helps to build your equity more quickly.
  • It’s a great place for mom and dad - If your parents are getting older, you can give them a place to live while still having your own space. This can make aging easier and might even give you a built-in babysitter.
  • You’re building equity - Even if you’re only paying yourself “rent”, you’re building equity, something that renters don’t do. Slowly, but surely, you are making yourself a better nest egg by gaining equity.

The Disadvantages to Buying a Duplex

  • Living with your tenants - You have to be careful about the relationship that you create. If they feel they can come by anytime or that you’re friends, they might take advantage of you. They might try to constantly have you rush to fix things or they might try to be late on the rent. The line between business and friendship can blur very quickly.
  • Rental income is never guaranteed - Depending on the rental market your area, it can take months to fill an apartment. This can have you floating the entire mortgage yourself.
  • You’re the one to call - As a renter, you can call your landlord when something is broken. Now you’re the person to call. That can get exhausting and expensive in a hurry.

Some Ways to Make a Duplex Pay

  • Inspect it well - Old appliances or insect problems will become your problem. It won’t just be you. You will have a tenant to answer to. Make sure you’re very clear on the issues your duplex might have.
  • Plan to pay the whole mortgage - Don’t count on rental income. It’s nice when you’re getting it, but you have to be able to pay for the whole thing yourself. If you have a hard time renting your apartment out, you don’t want to lose the whole thing, including your home.
  • Screen people very well - Really good renter screening can save a lot of hassle. Use a service to help you screen everyone very well. You don’t want to find out too late the person next to you is a drug dealer or has a history of walking away on rents.
  • Have savings for the big stuff - Have a savings account for appliances that go out or to fix the apartment if the tenant tears it up. You don’t want to have to eat ramen for a year because the refrigerator or water heater went out.
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For Sale By Owner - The High Cost Of Saving Money

For sale by owner sounds great.

“I can save the 6% commission.”

“I can control who comes in and out.”

“I can ask for any price I want.”

“I can negotiate better than anyone.”

In general, none of this is true. Even the most famous real estate moguls use agents to buy and sell properties for them. The reasons are simple: Your time is worth something and they are the experts.

The truth is that the average sales by owner are about $60,000-$90,000 less than when sold by a real estate agent. Since the fee is usually $7,500 to $15,000, you’re still making money.

Real estate agents have access to financial qualifications systems that you don’t. A real estate agent will often pre-qualify buyers before even starting to look for homes for them. The reason is simple: they don’t get paid if the buyer can’t complete the sale. It’s a waste of their time to show people around to houses they can’t afford.

There is a lot of technology that goes into modern home selling. Photos, videos, virtual tours, drones, and websites are all part of the mandatory arsenal of real estate agents. Most homeowners don’t have access to this type of equipment. It can seem like it’s okay to sell a house with a few photos, but today's tech-savvy home buyer wants more than that.

For sale by owner sounds great, but most owners leave money on the table.

Do you really want to spend your weekends hosting open houses? The real estate agent will take care of being there and watching over your house during an open house. You can take the day off instead, knowing your agent will be at your home and will take care of it during the open house.

You will still need a real estate agent or lawyer for the paperwork anyway. The truth is that you need a professional to review every contract to make sure that it’s legal and protects you. If you don’t, you might find yourself in a world of hurt after the sale.

The reality is that that 6% fee might seem really high, but it’s paying for a lot of work from both your agents and the buyer’s agent. All of that work is meant to make your home sell faster and easier. There are lots of places in life to save money, but like other places where you need a professional, like surgery and legal services, you need a professional to sell your house and to do it well. In all likelihood, they will pay for themselves in both cash and your time.

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9 Things You Can Do To Sell Your Home Faster

Selling your home quickly is something that every homeowner wants to do. It can seem that you have to contend with forces out of your control: interest rates, other homes on the market, the number of buyers on the market, the appeal of your (older) home to current tastes.

While there are factors you can’t control, there is one huge thing that you can - the look of your home for potential buyers.

Here is a list of things that you can do to help sell your home more quickly, most costing less than $150 to do:

  • Paint the front door – If your HOA allows it, paint it! Red is always popular, but you could try a blue or even yellow. Make it stand out in the minds of buyers as they arrive at your house.
  • Sod bare areas – Not a lot of homes here in the desert still have lawns, but if your home still has grass, buy a few square yards of sod and patch areas that are bare.
  • Plant flowers - A living yard is a welcome sight. Even if the new owners don’t plan to plant any flowers, it’s nice to see when you drive up.
  • New light fixtures - Replace old light domes and put in new light bulbs.
  • New outlet covers - These covers tend to get dirty over time and it’s a small, but noticeable, touch to replace them around the house.
  • Fresh paint - Put a coating of paint up in the living room, kitchen, and hallways are among the easiest ways to brighten the house.
  • Declutter - Remove some of the furniture from the living room and elsewhere. Often, our living rooms can get cluttered with furniture and it makes it hard for buyers to envision their stuff in the room.
  • Depersonalize - Take down family photos, etc. This can help to make your house look more like a show house. It also takes away some of the feelings that people have when they think about taking over someone else’s house.
  • Deep clean - Hire a cleaning service to deep clean the house for you. Dusting, shampooing carpets, and scrubbing everything very well will help to sell the house much faster.

Making your home look nice for buyers

Selling your home is often a tough decision, but it can be done well. With a little help from you, your real estate agent can move the home much faster. Cosmetic changes are just that, cosmetic, but they are great for helping buyers decide to choose your home over another one.

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Why Today Is Not 2006 In The Housing Market

Lots of people saw it coming, but no one wanted to admit it or even say something. The Real Estate Crash of 2007 was like the Titanic. In this case, everyone saw the iceberg, but was having so much fun, they didn’t say anything. More than that, the ones who did shout about the iceberg, the sound of the band was so loud that no one heard.

In 2006, house prices were massively over-inflated. There were all types of crazy "creative" financing going on. Buyers were getting half-million dollar houses with no money down. Everyone was getting their fees and collecting paychecks, but no one was really paying into the system.

When that Ponzi scheme crashed, it took the whole economy with it.

Reading real estate news in the newspaper

The 2018 housing market is not 2006.

Here is a list of reasons that things are different now:

  • In 2006, creative financing caused a run on home sales as people were able to get massive homes for very little down and very little proof that they could handle the mortgage. For the most part, those schemes are gone and everyone getting a mortgage today can handle the mortgage. You have to qualify for the loan and show you can afford it.
  • Home prices are rising today because there is a physical shortage of homes. Home builders are cautious and aren’t building hundreds of houses at once. They got stuck with a lot of expensive empty houses last time. That’s creating a true shortage instead of a free money buying frenzy.
  • Interest rates are still relatively low, so there is still demand. While those rates are expected to rise in the next year, they are still low enough that buyers are interested.
  • There is a lot of fear in the market of going through another 2007. That’s good. The entire problem in 2007 was that people were overly enthusiastic about something that couldn’t last. Today’s home sales look more like they should: real buyers and real homes.

With all of that, if you’re a seller, price your home reasonably and being willing to flex a bit. If you’re a buyer, don’t get a mortgage you can’t handle. If the economy takes a dive, you need to be able to pay the bills.

As far as homes are concerned, 2018 is not 2006 and if we’re smart, it won’t happen again.

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