Las Vegas Real Estate News

The One-Minute Guide to Your Credit Score

Your credit score is a record of the credit that you've used and how well you used it.

The number ranges from 300 to 850.

It can take up to six months for your credit score to show up after you've started some type of credit-based transaction.

The most common ways to start your credit life is with credit cards and student loans.

wallet with clamp

You improve your credit score by:

  • Paying your bills on time
  • Not using all of your credit; use only 20% of your total available credit
  • Keep your credit for a long time
  • Get away from high interest credit cards as soon as you can
  • Don't close old credit cards
  • Keep your credit applications under control; every ping on your credit hurts
  • Monitor your credit report for errors
  • Buying a home is one of the best things you can do for your credit long-term

If you run into trouble, you should go to www.credit.org. This is Consumer Credit Counseling Service. They will do a free consultation and set you up with a budget and payment plan. Do not go anywhere else. Most similar services are for-profit and are not as respected or qualified.

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The Home Sales Market for 2019

At the end of last year, mortgages were higher than they've been in nearly a decade, house prices were stagnating, and buyers were starting to take charge of the market.

We started the year with low mortgages rates, ballooning home prices, and a seller's market where inventory was near historic lows.

So what will 2019 hold for residential real estate market?

Higher mortgage rates: There is no reason to think that the Federal Reserve is going to stop raising interest rates as long as the economy stays hot. The Fed is looking to rein in inflation. The only way to do that is increase the rate that banks borrow money, which of course affects the price you borrow money at. The increases will be slow and incremental, but they will have a noticeable effect on home sales.

Home sales will drop: The bottom isn't going to fall out, but the combination of expensive houses and expensive money will make it a little harder for buyers to convince themselves to enter the market.

Millennials will keep buying houses; Boomers won't be selling yet: The two largest generations since World War II are colliding in the housing market.

The Baby Boomers are living in their homes, which means that they're not releasing their homes into inventory.

The Millennials, many of them the late children of the Boomers, are starting to enter the market en masse. There's not a lot of inventory to go around.

Home builders are still nervous from the crash of 2008 when so many of them took a bath with empty houses that they thought they'd be able to sell.

market analysis

Inventory will grow, a little: 2018 was a terrible year if you were looking for a home you could afford in some areas. 2019 looks like it will have a bit more inventory. This is caused mostly by the fact that some potential buyers will be pushed out of the market by higher interest rates that will increase their mortgages to unsustainable levels.

Homebuyers will have less power: Homebuyers will lose some of their home buying power. Interest will suck up a higher percentage of the monthly payment they've budgeted for. This means they will need to look for a less expensive house. This will probably start driving prices down slightly as sellers look to meet the buyers in the middle.

2019 looks like it will be a pretty good year for real estate. Not breathtaking, but also nothing really horrible appears to be in store.

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Making These Landscaping Mistakes Can Hurt

You finally have your own yard! Yeah! Now's your chance to turn it into the Gardens at Versailles. But, do you know what you're doing?

Let's look at some of the biggest mistakes people make when they landscape their yard.

  • Too much gravel - Gravel looks great in drought zones, but like all stones, gravel reflects a lot of heat and stores a lot of heat. During the day, you're roasting the tops of your plants and at night, you're baking the roots. Break up gravel with other ground coverings.
  • Invasive species - Do you know how most invasive species of plants ended up in North America? People brought them here and put them on their lawn. Bamboo is awesome, but it's a big, tough weed. Be careful what type of plant you put in the ground, no matter how pretty.
  • Artificial problems - Artificial grass is great. These days it's really convincing, but you can't just put it down over the dirt. Be sure that you put the right underlay on the ground. Otherwise, you might have a huge mess on your hands later.

desert landscaping

  • Bad plans - If your yard is not planned well, you might find yourself with intermittent ponds, dead plants, and difficult places to mow. Plan carefully for low points and big hills.
  • Too much mulch - Mulch around trees is great, but some people put way too much around the base of the tree. This makes the roots really hot, the tree is suffocates, and it locks in moisture that can causing rotting.
  • Watch for trees - If you build near trees, you might find yourself, after 20 years, with a cracked foundation or an unstable property wall. Trees are stronger than concrete. One little palm tree can take down a wall given enough time. Plan for trees around any building you put up or buy.

There is plenty of information in the world to make it easy to landscape your yard well. If you're not sure, get some help. You can also hire a landscape designer to tell you what to do.

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How Millennials Are Changing The Housing Market

Millennials, people born between 1980 and 2000, are the largest generation since the Baby Boomers. They are very different from their parents in some interesting ways.

Here's how Millennials will change the housing market and how sellers can benefit from these changes:

1. They are really smart - Unlike their parents at the same age, Millennials have the entire world of knowledge in their pocket, literally. Smart phones can tell them everything they want to know about a home for sale, the market in general, mortgages, and more. For sellers, there are a few things they can do to take advantage of this. Set up a website for the home. Something simple will do, but it will make it easier for buyers to find the house when they search. Be open about everything. They'll find out anyway and they tend to shun people who mislead them. Respect them. They might not be you, but they are a force to be reckoned with.

2. They'll work for it - If your home needs some work, sell it as is and let Millennials fix it up. Gen Xers, usually older siblings or parents, were different. They tended to stay in their lane and pay someone else to do the work. Millennials can access videos and instructions for anything they want to know about how to fix up a house. They can and will do the work themselves to save money.

3. They're fighting for the homes of their parents - Millennials and Baby Boomers are competing for houses. Both generations are large and want homes. Interestingly, the Boomers are starting to look for smaller homes to move their empty nests to at the same time the Millennials are looking for small homes to start building their nest in. This has caused a couple years of inventory crunches and that won't get a lot better soon.

4. Interest rates will change their plans - Low interest rates have been great for the new home buyers that are looking to get a lot of house with a low mortgage. That's about to change as interest rates continue to rise. They will be looking at not buying right away or for less expensive houses. Sellers will lose their power as many buyers leave the market and there is less competition for every house that goes on the market.

taking photo of house

The takeaways for the sellers are these:

  • Plan on getting less for your house than you might have a year ago.
  • Plan on using the internet and social media to sell your home.
  • It's okay to leave some cosmetic stuff undone. The Millennials will do it to save money.
  • Don't assume that the people in front of you are naive or lazy. They have the world in their hands in a way you might only be able to dream of.
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FHA, VA, or Conventional - Understanding Loan Options

There are a lot of options out there for mortgages. The three that you hear most about are FHA, VA, and conventional mortgages. This brief guide will tell you a bit about each and how they compare.

Conventional Mortgage - A conventional mortgage is the one the bank gives you. While the bank has credit rating restrictions, etc, there are no restrictions as to the quality of the house, the value of the house to the loan, and so on. The bank is free to choose what restrictions they want to apply, but there are no outside rules. These are the majority of all home loans. They're easy to get almost anywhere if you have a decent down payment and good credit.

Of course, there are rules about the health of the house and dangers that are governed by local and state laws.

calculator

FHA - The Federal Housing Administration insures loans for people who might not be able to afford a conventional loan, have low credit scores, or need a low down payment to be able to get into a home. The home must meet certain criteria including the health and value of the house.

An FHA loan is much less expensive to get into. Their loans have a 1.75% premium that is paid at closing. There is also a monthly premium that pays for the mortgage insurance on the loan.

This a great loan for someone with a low down payment and/or low credit score. The premium can be expensive, but it helps you get the loan. When you're ready, you may be able to refinance to lose the premium.

VA - The Veterans Administration offers loans to those that have served in the US military and their spouses.

These loans have a funding fee that ranges from 1.25% to 3.3% of the loan amount. The VA doesn't always finance the whole loan, so there may be other fees from the bank. The VA guarantee amount varies by county, so it's worth checking so you know how much house they might cover in your county.

Read our previous blog about closing costs for VA loans: Closing Costs for VA Loans

Choosing the right loan for your needs is a matter of knowing how much money you have to put down, how much you can afford each month, and your credit rating. A mortgage broker can help guide you to the right loan.

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Equity for Retirement - The Truth About Home Ownership

According to a report from the Federal Reserve, folks who own homes have 48x more net worth than those who rent!

The median net worth of a homeowner over the age of 65 was $231,400, whereas the net worth of a renter at the same age was just $5,200, and that's a decrease from 2013 when their net worth was $5,500.

Each month renters pay money to a landlord, acquiring no equity. In fact, every rent check increases the net worth of the landlord and does nothing for the renter.

Homeowners, on the other hand, pay a mortgage each month and every check increases their net worth. In the beginning the majority of the check is interest, but over time, the interest to principal ratio flips until the homeowners actually owns their entire house.

As rental rates have continued to rise, the percentage of a renters' incomes going to rent has also increased. Social Security and wages haven't come even close to keeping pace with inflation. Livelong renters struggle to keep hold of money simply because there is no equity location to deposit funds.

alarm clock

Of course, buying a house now is a great way to grow your value over time. Not only are you paying off your purchase price, but the constant, long-term growth in the value of real estate increases one's net worth.

If you're planning for retirement, especially in your 30's, consider buying a home. It's the single best way to ensure that you have several hundred thousand dollars available into retirement.

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Extended Warranties - Worth the Money?

Every time you buy anything, you're asked if you want an extended warranty on it. That's great, but how do you know if it's worth it?

Here's our list some of the common household products that might have an extended warranty and if you should purchase one.

making a purchase

  • Appliances - No - Appliances are expected to last for a certain time. Often, the repairs on a stove or refrigerator will cost less than the warranty. Also, many appliances will run great for years beyond the warranty and you've wasted money.
  • Roofing and siding - No - If your shingle roof has a 20-year warranty on it, it's not really worth buying an extension. First of all, statistically you won't be in that home in 20 years. Second, if your roof is likely to fail, it's likely to go while you're still in the 20 year lifespan. Don't waste the money. You'll make more putting it in a savings account and gaining interest for 20 years.
  • Pest control - Maybe - If you have a pest problem, your exterminator might offer an extended warranty. If the past problem was just a couple of ants, no big deal. If you have a major termite problem, they are far more likely to come back. A warranty will have the exterminator coming back throughout the year and doing maintenance. Even a few termites can do a lot of damage. It will be cheaper to pay the exterminator.
  • Home security systems - Lots of security systems now are do-it-yourself. Those will often have warranties on the equipment, especially if you buy it at a big box store that has its own extended warranty program. As a rule of thumb, if it's going to cost you more than 30% of the purchase price of the item, keep your money and save up if you need to replace it.
  • Furnace - This is a slightly different situation. There are lots of companies now that offer to sign you up on an annual basis to maintain and repair your furnace. Since a furnace can costs thousands, it can be great to have someone watching over it, cleaning it, and maintaining it.

Extended warranties are popular, but not everything should have one. Consider the replacement cost, the length of service that the device should have, and the length of both the original warranty and the extended warranty. There are no set rules, but consider the value you might receive from your purchase of an extended warranty.

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6 Signs That Your Home Will Have A Good Resale Value

Every homeowner wonders if their house will have a good resale value versus other homes in the neighborhood. There are a few ways to know if your home is going to stand out or it's going to be a struggle to get your money back.

stack of coins

  • A good neighborhood - If your neighborhood is on the rise, there's a great chance that it will bring your home with it. A good neighborhood is one where there are new families moving, people working on older houses, and a general improvement of the area. One important part of this is that your street needs to be quiet. The perfect house is about one or two blocks from the trendy area that has cafes, restaurants, and classy bars. It's easy to get to the fun and easy to stay away from it.
  • Good schools - Even if the prospective homebuyers don't have children, good schools mean decent kids. Good schools indicate that the community takes care of its young ones. Those neighborhoods are family-oriented are more likely to retain their value over time.
  • Good light - Dark homes are off-putting. A bright and airy home is a great place for living. If your house has a lot of light, it's going to command a higher price than if it's like walking into a cave. A warm sun in a room is welcoming and inviting.
  • Good bones - A house with good bones is a great thing. In fact, it's about more than the just the bones. It's also about the systems, like the heating and air conditioning. Look at things like the foundation, the roof, and more. People want to know that they can buy a house and not have to replace major systems or do high priced repairs in the first five or ten years.
  • Good floor plan - A floor plan that is conducive to families will sell really quickly. One with bedrooms in the right places, not a lot of stairs to fall down on. Mostly, parents love to have a way to get the kids outside easily with a sliding glass door, etc.
  • Exclusivity - Even though a lot of people dislike homeowners' associations, we all love the peace of mind they give us. A community where the residents are active make it a lot easier to keep control over the neighborhood.

There are no guarantees, but on most buyers' lists are these things. If you have these things, or can put them into your home, you can rest easy that your house will sell for pretty good money.

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I Wish I Knew That Before I Bought a House

Every major endeavor in one's life has its own learning curve. Buying a home is one of the biggest events in any life.

Most homebuyers talk about things they wish they knew before they bought their first home. We've gathered a number of these things and put them here so that you don't regret not knowing some things.

Every home has problems

No matter how perfect the house looks, it has its own issues and quirks. This applies whether the house is 100 years old or brand new.

Have a complete home inspection done. Be ready for problems. Do not sign the final paperwork until you've gone through every inch of the home inspection. If there is anything that will take time or money, negotiate it off the price.

Be on-time

Every home buying process has its own deadlines. From the time to finish inspections to the day you're going to deliver a piece of paperwork, be on-time. If you're not, the seller can use it as an excuse to cancel the sale and sell to someone who might offer them more money.

Keep a calendar of dates and times. Use it to guide everything you do. Be sure that things like email addresses, phone numbers, mailing address and more are handy. That way, you're not hunting down the email address of the mortgage broker at 4:58 pm when you need to get a document to them.

Get out in the world

These days people spend a lot of time surfing and look at homes online. That's fine, but you need to get out and look at houses to know what you really like.

Nothing on a computer screen, even the latest technology, can give you a sense of what a home feels like. Are the floors solid? Does the house smell funny? Do you like the texture of the walls? All of that can't be had from a video.

person thinking

Stay cool

You are likely to lose a house that you really wanted. In fact, it's likely to happen over and over again. Remember that as long as you're trying for a home, you have chance of getting it. There's a decent chance that there's another contract out there somewhere and you'll be competing with it.

Like your lender

You're going to be spending a lot of time with your lender. In fact, you might be attached to them for 30 years. Make sure that you like your mortgage broker and that your loan company is a group of people who at least seem to care.

If you get a bad vibe from a lender, online or in person, walk away. It will save you a lot of pain to follow your instincts.

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The "Don't Do This" List for Home Sellers

There are lots of lists of things that you should do in order to sell your house. That’s great, but you don't usually hear about the stuff that you shouldn’t do.

Here’s a short list of things not to do when selling your house.

  • Don’t hang around when the house is being shown - Lots of sellers hang around while their home is being shown and talk to buyers. Don’t. Let the professionals sell your house. You might find yourself talking a buyer out of purchasing your home.
  • Don’t over-decorate - Sometimes people will put up all kinds of decorations for the holidays or just to make the house look great. In fact, the goal is to leave room in the house for their stuff. Make it so that they can see what their stuff would look like in your house.

stop sign

  • Take it easy on the improvements - Very often, please will start doing lots of improvements. They will spend a lot of money on buying lots of new appliances and stuff. Don’t. There’s a really good chance you won’t get the money back when you sell.
  • It’s not personal - Our house is our identity. When someone comes into your house and they don't like it, it’s not about you. Your house is just a building. It’s really about the house fitting their needs.
  • Be patient - Your house might not sell the first time it’s shown or the tenth or the fiftieth. The more expensive or unusual it is, the harder it might be to sell. Keep your patience and the right buyer will come along.

Taking care of the house is important and we have a few blogs that will give you some ideas on what you need to do. Nonetheless, there are still some things that you shouldn’t do.

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