Las Vegas Real Estate News

Welcome to America - The First-Time Homebuyers’ Guide for Immigrants

Welcome to America, we’re glad you’re here. It’s part of the American identity to own your own home. And it’s not hard to do, but there are some things that you’ll need to do before you can move in. There are a few extra steps that you’ll need to take that US-born citizens don’t have.

  • Identity - You will need to make sure that you have all of your identity papers in order, including your Individual Taxpayer Identification Number. You don’t have to be a citizen, but you will need to have this number. You’ll also need a passport and at least two other current forms of photo identification. You will want to understand your visa and how long you can stay if you’re not naturalized or don’t have a green card.
  • Mortgage - You can borrow the money you need to buy a house, but there are requirements that the lender will have. These usually include having a US bank account and credit cards so you have a credit history. You will also need to supply them with your tax returns to show that you make enough money to pay them back.
  • CIPS - Look for a Realtor who is a Certified International Property Specialist. They are real estate professionals that are trained to help you negotiate the ins and outs of purchasing a house in the US as a foreigner.

welcome sign

  • Relax - Americans are very casual about buying and selling real estate. In fact, it's expected that everyone will do it as some point in their lives. This is different from much of the world where it’s rare and a huge deal. Don’t worry that everyone seems very laid back about it all.
  • Plan your money - Make sure that you plan for your expenses, like the mortgage, but also property taxes, maintenance, home insurance, and more. Having this plan calculated ahead of time will make it easier for you know how much home you can afford.
  • Familiar help - Look for a real estate agent, home inspector, mortgage broker, and more that speak your language. Working with people in your own language will make this big step a lot less stressful. If your command of English is great, it won’t matter, but very often you’ll find it helpful to have people you can speak to in your own tongue.
  • Mind the measurements - In the US, everyone thinks in inches, pounds, dollars, etc. The rest of the world is on the metric system. There’s a huge difference between one Euro versus one dollar or one yard versus one meter. Make sure that you’re making those conversions so that you aren’t surprised later.

Again, thanks for being here in the US. We love that you’re here. Enjoy your new home and congratulations on being a homeowner.

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The Sellers Checklist - 7 Things To Do Before You List Your House

There are lots of sellers’ lists in the world telling you what you can or should do before you list your house.

Many times these ideas are expensive and a lot of work.

Here’s our list of easy things you can do that cost little or nothing.

cleaning the floor

  • Paint the front door - Cost: $20-$120 - A freshly painted front door stands out. It’s shiny and clean. It will take you about an hour. Look for a color that matches the house, but stands out when looking from the street.
  • Declutter - Cost: Free - Declutter your house. The more of your home that looks organized and clean, the easier it is for the potential buyers to see their stuff in your home.
  • Clean the lawn - Cost: Free - You don’t need to go crazy, but cut and rake the lawn. Try to take down dead branches, etc. The lawn is the first impression shoppers get, so make it a good one.
  • Wash the windows - Cost: Free - Clean windows sparkle in the sunshine. Cleaning them is a fast way to make everything look new and fresh. It also looks brighter when someone is inside.
  • Light bulbs, door handles, etc. - Cost: Less than $100 - You can buy an indoor door handle for about $6. Light bulbs are $2. These are tiny details that make the house feel cared for and prompt fewer questions from buyers.
  • Dust your house - Cost: $20 for supplies - A good dusting is all that many houses need to look great. Enlist help from the kids or bring in some friends. Ask them to help you give the house a deep cleaning, especially up high.
  • Fresh eyes - Cost: Free - Look at your home with fresh eyes. Even better, invite someone who hasn’t been in your house before or not in a long time. Ask them to act like a buyer or your mom. Ask them to tell you about smells, cleanliness, and damaged parts of the house you should fix.

There might be a lot more that you can do to sell your house, but these basics will get it close without a lot of effort. You can probably do this entire list in one weekend.

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The Seller’s Real Property Disclosure: Nothing to Fear

Many sellers dread the Seller’s Real Property Disclosure (SRPD). It can seem like you're just opening a can of worms on yourself. The reality is that this is your chance to make sure that the buyer knows everything about the house that you do and that you’ve told them in an official way.

Seller’s disclosures are mandated by either the state or the federal government. This little document helps you avoid massive lawsuits later when there is an issue that you didn’t disclose.

The types of things that you’ll be asked about on the Seller’s Disclosure include:

  • The presence of lead paint
  • Radon in the house
  • Water damage
  • Fire damage
  • Who occupies the house now?
  • Is it on a landfill?
  • Is it in a flood place?
  • Any settling or earth movement?
  • Encroachments on the land
  • Past or current pests
  • Age
  • Structural problems

And so on. It’s a document that allows you to tell the buyer everything you can about the house. Even if you’ve put this information in the real estate listing, it needs to go on the SRPD.

reading and signing a disclosure

Most importantly, be truthful. If you lie, and the buyer can prove that you knew or reasonably would have known, you might get sued. At best, you’ll be made to take the house back. At worst, you can lose a lot of money in a lawsuit.

If you don’t know, you can mark don’t know and you don’t need to perform tests on any of these items, like lead paint or radon.

If there was past damage, like fire or smoke damage, you might be asked to prove that it was repaired, so inspections that were done after the repairs were completed will be handy to have.

If there’s anything that has been left unreported, you can make sure that the buyer acknowledges it. You might need to discount the offer to get the repairs covered, but it’s better than staying or being sued.

Many people look at the seller’s disclosure as a deal-killer. In reality, it should make the deal better. It sets the buyer’s mind at ease that they are getting a great home and will smooth the way for the deal to go through.

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What Will My House Closing Be Like?

The closing is the day everything is signed by both seller and buyer, and is sent to the county Recorder's Office. Often times a seller will sign the documents prior to the closing day itself. Buyers most often sign their documents the day of closing.

signing documents

Getting ready for the closing

The first thing to look for is the closing disclosure. It details the terms of your loan, all the closing costs, and any charges or fees that need to be paid.

You should get this at least three days before closing. The lender needs to send it to you with enough time to review the documents and object if you need to. After signing the disclosure documents, there is a three-day waiting period before you can sign the final mortgage documents. This cooling-off period gives the buyer time to be sure that this is what they want and that they can really afford it.

You can also read all the closing documents ahead of time. Some people choose to and those are available in advance so that you know exactly what you're signing the day of. Most of the time, there's a clause that allows you to do a walk-through inspection one day before closing.

If there are concerns, you can stop the process and allow time for the seller to make repairs.

This is also the time to arrange to have the utilities switched over so that there's no interruption of service.

Closing day: What will happen

First, you will sign legal documents. There are the documents between you and the lender and those between you and the seller transferring ownership. Never sign any documents with blank lines or places that someone says they will fill in later.

Next, you'll pay closing costs and fees. You will need to make sure that you have the money and that it's in an acceptable form. This might mean checks, debit cards, or whatever else the lender requires. You will also need identification papers, like a driver's license or a passport.

The escrow officer runs the show, guiding the process. They will also make sure that all the documents are signed, and that everyone has a copy of everything they need.

It can seem scary, but in reality, these professionals do this every day. They will guide the process and your agent will make sure that you have everything you need. After you sign all the paperwork, the escrow officer will send the documentation to the Recorder's Office. As a buyer, you cannot get your keys to the property legally until the Recorder’s Office records it. As a seller, it is still your property until that moment.

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FHA Loans - The Better Way To Buy A House

Lots of homebuyers are confused by all the terminology and different types of mortgages that are out there. Jumbo loans, Fannie Mae, FHA, VA loans, adjustable and fixed-rate loans. It all seem very overwhelming.

In this brief article, we're going to look at FHA loans and how they can help almost anyone to purchase a home.

The Federal Housing Administration (FHA) was created in 1934. It sets standards for housing construction and guarantees loans that are handled by private lenders.

An FHA loan is generally a lower interest rate, lower down payment, and a better home than conventional home loans.

To qualify, you need a credit rating over 500 with a 10% down payment or over 580 to put down 3.0% on a home.

There is a premium added to the loan. For an FHA loan, it's 1.75% of the loan upfront and 0.45% to 1.05%. The interest rate on an FHA loan is fixed whereas a conventional loan can be either fixed or variable.

counting change

One of the strengths of an FHA loan is that house needs to be inspected by a certified FHA inspector. This ensures that the home is as valuable as the documents say it is and that it doesn't have any fatal flaws. The house must meet HUD guidelines which are very strict.

FHA loans are available to those who have filed for bankruptcy or even had a foreclosure. You will need to rebuild your credit and there is a specific period of time, but it can be done.

In short, an FHA loan is designed to make it easier for homebuyers to get a quality home with an affordable loan.

Many lenders offer FHA loans or you can start at the FHA's website to find national mortgage brokers that can help.

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Understanding A Home Inspection

Ah, the dreaded home inspection. The seller hates it because it might reveal deal-breaker flaws in the home. The buyer hates it because it seems like an unnecessary expense or, at least, an inconvenience that the seller should take care of.

A home inspection protects everyone

During a home inspection, the inspector looks for things that might create potential issues, now or down the road. As a buyer, you don't want to find out that the house has termites after six months. As a seller, nothing will ruin your day more than a lawsuit to get you to pay for a mold contamination which was there before you left.

State law governs the details of home inspections, but here are a few of things it will likely cover:

  • Pest infestations
  • Roof leaks
  • Damaged foundations
  • Mold

Buyers can also ask for a radon test so they know what the radon level in the house is.

The inspector will find the problems, suggest remedies, and estimate how much it will cost to fix the issues.

She or he will create a report that includes photos and details any issues the property has.

home inspector

What a home inspector doesn't look at

Although there might be lots of places on the property, the home inspector doesn't check them all. You will need a specialist for many of the things around your home that aren't on the home inspection.

  • Fireplaces and chimneys - An HVAC expert or chimney company will help you there
  • Septic systems and well - You need a plumber or specialist in these items
  • Structural engineering issues - An architect or engineer can examine the house for structural issues
  • Swimming pools - You'll need a pool company

They also rarely look at out-buildings like a detached garage or a shed.

Don't fear a home inspection - Embrace it. It's your guarantee that there aren't a bunch problems that will sneak up on you.

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Millennials Aren't Buying Homes Like Previous Generations

The millennial generation is huge and unique, very different from their parents and grandparents. One trend is making real estate professionals scratch their heads and worry a little: millennials aren't buying houses as fast as their parents did at their age.

The leading edge of the millennials, born between 1980 and 1984, are not buying homes at the rate that their parents did.

According to the Stanford Center on Longevity, homeowners for millennials is 12.5% lower than baby boomers.

Why aren't millennials not buying homes?

There are major differences between millennials and their parents.

Student loan debt - Unlike their parents, millennials are strapped with massive student loan debt. The debt carried by millennials is about 3 times than baby boomers at the same age. Combine that with the idea that the median income is actually $10,000 lower when adjusted for inflation.

A person with no degree in 1989 would have an income of $49,224, while a millennial with a degree averages only $50,272.

Every other factor, from gas prices to drug prices, are several times higher than their parents were paying with a lower income.

What does all of this mean?

Millennials are likely to not buy a home in their thirties. In fact, it seems that a larger percentage will never buy one.

looking at smartwatch

For the real estate market, this might mean a long-term weakness in sales. If, for example, that 12% that hasn't bought a home continues that trend, that will mean 7 million fewer home buyers.

That will also mean 7 million fewer people with the value of their home into retirement. This might impact the Social Security and Medicare systems, assuming they still exist in 20 or 40 years.

The biggest question is how should the market respond? Millennials are buying their dream home immediately rather than growing into larger houses later. It will make sense for builders to create homes that are modern, but inexpensive. This generation will also have the highest number of online workers, people who don't commute. Building "connected communities" that offer free internet throughout the development, especially in inexpensive rural areas, will allow these folks to buy great homes that cost a lot less.

There is much that political leaders can do, such as forgive student loan debt, reduce the cost of healthcare, and make homeownership less expensive with more first-time homebuyers programs. All of this is achievable politically if there is the will.

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Are We Normal Yet (In Real Estate)?

The housing market is still affected by the crash of 2007. In the eleven years since then, the world of real estate has changed. Lenders are more cautious. Builders aren't willing to put up hundreds of houses without buyers. Consumers, particularly the Millennial Generation, are well aware of what it means to lose a home, even if they didn't lose a house themselves.

What is the new normal?

In September, Realtor.com revealed that home inventories were flat for the first time in years. For a long time, inventory hasn't kept up with demand. There were many more buyers on the market than homes for sale. In September, the difference was tiny, just 0.2%. That means that for the first time in a long time, there were as many homes put on the market as there were buyers to purchase them.

Part of the new normal is reasonable loan requirements and somewhat cautious lenders. It's not like it was right after the housing bubble burst, where almost no one could get a loan. Now, with good credit, you can get a mortgage at a reasonable rate.

Builders are putting homes on the market. They aren't building like they did in 2005 and 2006 when there was a glut of homes for sale. We will see builders still being cautious about how much they build so as not to be stuck with a ton of inventory if the markets softens.

Home prices are leveling off. There will always be a change for inflation, but the prices aren't climbing as fast as they have been over the last few years.

Interest rates on loans are likely to increase more, but only a bit. If the housing market cools off, the Federal Reserve will probably keep interest rates where they are.

The unknowns

The first real unknown in this market is Millennials. This is the largest generation since the Baby Boomers and they are savvy and skeptical. They watched the entire country drop to its knees because the housing and banking industries had gone insane. They see a mortgage, not as a door to liberation, but as a necessary step to survival.

discussing the housing market

The next unknown is the response of lenders to the new employment numbers. We have record employment and a solid housing market, but there is not the rush to buy homes there was after World War II when we saw this level of employment. Everyone, not just Millennials, are still holding on to see how this all turns out.

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Coming Over the Top: The Housing Inventory Change

The housing crunch has turned a corner in the last few months. In September 2018, Realtor.com reported that inventories for homes are leveling out.

For last few years, demand has significantly outstripped inventories. This meant that home prices have been consistently rising and selling a home was extremely easy. In September, Realtor.com reported that inventory declined just 0.2 percent with an 8% growth in new listings.

Buyers have been hoping for a large selection of homes and for more control over home prices, and this change in inventory to amounts may signal the beginning of a buyer's market. September showed a year-over-year increase of 7%, but this contrasts with a 10% year-over-year increase from the year before.

calculating housing market growth

Single-family homes declined just 1% in September, but condominium and townhouse inventories rose by 3 percent. The forty-five largest markets showed a 5.6 percent increase over last year.

What it all means

For buyers and sellers, this can all have a huge effect.

Sellers may find that selling their home in the next few months will become increasingly difficult. More inventory means more choices for buyers. It will also mean that prices are at or near peak for the foreseeable future. Now is the time to list and sell a house. The seller's market appears to have peaked.

Buyers might find it useful to wait a few months. Prices may level off or even drop and there should be a marked increase in inventories. More choices make it easier to find the perfect house and save money.

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The Truth About Home Down Payments

There is a myth in the world of homebuyers that you have to have 15% to 20% down payments to purchase a house. In 2017, the National Association of Realtors discovered that 40% of respondents felt that they would be required to pay at least a 15% down payment.

In truth, the median down payment is more like 6% for first time homebuyers and 14% for repeat homebuyers.

office desk

This idea of massive down payment can be a deterrent to first-time homebuyers even considering they can buy a house. If they think that they need to save up $30,000 to $60,000 to even begin looking at homes, they will simply not even start. Low income folks, as well as young women, perceive homeownership as being beyond their reach.

Many first time buyer loans only require 3% with an additional 3% in closing cost, etc. On a $200,000 house, that's $12,000 versus $40,000 and more.

People believe in home ownership, but they see the price of entry as too high. Most people feel that they have to save up for decades to be able to afford the down payment. This causes many young people, especially women, to simply not even consider the idea until they're in their thirties or forties.

The truth is that buying a home, especially for first-time buyers, is much easier than one might think. Working with a mortgage broker can help people who are unsure to find the right loan and better understand the affordable home-buying options that exist.

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