Very Vintage Vegas

The Las Vegas Real Estate Market - Random Musings And Stories From Jack LeVine

February 25th, 2008 Categories: Las Vegas Real Estate News, Mortgage

TURN OFF THE TV!

Some days, I think it’s just me against the entire media machine. Schizophrenia best describes what you hear on TV and in the newspaper.

Interest rates are down, no wait, they’re up, no wait, they’re down……. Buy NOW! no WAIT a little longer…  This one says it’s a great time, that one says it’s not.

We’re in a recession. No, we avoided it. No, it’s still coming. No it isn’t. 40,000 new jobs in the next 2 years as new hotels and condos on the strip come on line. Builders aren’t pulling new permits for next year. There’s going to be a housing SHORTAGE next year. Not there won’t. Yes there will. No there won’t. Yes there will.

The Great Las Vegas Real Estate Lottery

Everyone seems to want to be the winner of the big lottery. What’s the “GRAND PRIZE”, you ask? Being the absolute last person in America to buy a home during the down cycle, and the VERY FIRST person to buy a home on the new up cycle. THERE CAN BE ONLY ONE!

Everyone who buys now get a ticket, but it doesn’t matter whether you’re the grand prize winner or not. 

Instead of going crazy, turn off the news, and if you don’t own a home, buy one. But STOP thinking of homes as a tradable commodity, and an instant wealth machine. Stop thinking you can “time the market”. That’s what stocks and crap tables and video poker is for. Real estate as a get rich quick scheme is what caused all of the problems we have in the housing market in the first place. NAR is right. Over the LONG haul, real estate is the best way to build financial wealth and security for you and your family. But it’s NOT a get rich fast scheme.  

Uncle Jack Talks to 50 and Meets With 17 Buyers in 10 Days

I’ve been real busy! I spoke to about 50 people on the phone. Some were sign calls. Some were suburbanites and out of towners who found VVV thru a google search. Some were regular readers who contacted me for the first time. Every one of them “loves” Vintage Vegas for one reason or another.

Some of the 17 that I actually met with, I just just showed them one listing or another in order to meet them in person. I got to interview them, and they got to interview me for the job of being their realtor. Deciding to work together is a mutual decision. I can’t and won’t spend 2 days in the car with someone who’s not committed to picking the right property and making an offer. But…

I’ll meet with anyone (including you) to start the process. We can set up a computer search, get them to a lender, advise them on their options or whatever. But the “showing/picking/writing/negotiating” process means you’re my client, and I’m totally devoted to making it happen for you. If we’re going to actually “shop” for a home, they have to be totally committed that they’re going to make it happen, and they’ve decided that my 18 years of experience, and my passion for classic homes and historic neighborhoods will be a benefit to them.

I wrote offers for 5 of those buyers. 4 of the properties are bank owned or short sales, where the existing mortgage holder is going to have to agree to take less than what they’re owed. It sounds like a good way to score a deal. The thing is, they’re REALLY CRAPPY houses. I looked at about 70 bank owned or short sale properties in the last 10 days. EVERY one of them was a beat up, abused, vandalized (sometimes by the people who lost their home), or generally ugly. Yes, the list prices were amazingly low. But we’re going to have to wait about 30 days to even find out if we get the deal. About half of the properties we looked at already had multiple offers on them. We don’t know what the other offers were. Are we the best one? the worst one? Good, but not good enough? 

Most bank owned properties are not eligible for FHA loans

Most of the bank owned/short sale properties CAN NOT be financed by a regular homebuyer looking to get a new mortgage (especially an FHA mortgage) to buy a home. The banks and sellers who are in foreclosure won’t fill up the pool. They won’t patch the holes in the walls. They won’t put in appliances. They won’t turn on the utilities so we can even find out if the heat/ac works. Most loan programs require that that the home be “livable”. Ugly and filthy are ok, but everything has to be working, and there can’t be broken windows, empty pools, missing toilets/sinks/water heaters/cabinets/counters/torn carpet etc etc. That’s a pretty good description of most of the bank owned properties.

Terrific Classic Homes In Historic Neighborhoods Are Being Ignored 

That doesn’t make sense. There are normal, real sellers out there that have loved and taken care of their homes. The homes are clean, the landscape is alive. Everything is working. Many have upgraded windows, plumbing, electric, heat and ac. Some have authentic original kitchens and baths, and some have brand new ones. The seller is available to make a decision. Most of them have acknowledged that they’re not going to get the price they would have gotten 2 years ago. When you get to the negotiation, you’ll most likely be the only one they’re negotiating with.

Granted, a similar sized bank owned property can be bought for considerably less. Then you get to clean it for a week or two. 57 trips to Lowes/Home Depot later, you’ve bought all the lights, and drywall repair stuff, and paint and carpet and appliances, and new plants, and sod and all the other stuff. You’ve contracted for the new roof and the new AC and the new windows. You’ve found out that the ugly wallpaper was put on with liquid nails or super glue. Was it really a “bargain”?

Somewhere along the way, you’ll realize that you might have been better off with the “nice” house down the street.

This entry was posted on Monday, February 25th, 2008 at 11:11 am and is filed under Las Vegas Real Estate News, Mortgage. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.

1. Johan said at February 25th, 2008 at 10:00 pm

   Hi Jack This is a great article. I am from South Africa and we have different real estate problems. But your advice is sound in any case. Keep on writing and keep on selling the good homes in Vegas to good people who should trust you because you share it all. Johan

2. Worst MLS Photo Of The Day - A Typical Bank Owned Pool Property said at February 26th, 2008 at 1:00 am

   […] is from one of the homes I showed the other day. I mentioned the REALLY CRAPPY bank owned properties in the previous post. Does the pump work? What’s on the bottom? Does It need replastering? […]

3. Mo said at February 26th, 2008 at 8:42 pm

   Jack,
   Excellent post. I feel exactly the same way! When I hear the news, I can’t help but think the media is causing mass hysteria. As you pointed out these bank owned homes, are in horrible shape. Why not buy something that has been taken care of and loved by the owner, and personalize it for yourself.
   While I while acknowledge there is a problem with foreclosures and bad loans though I find it hard to believe all these Americans were duped into bad loans. The public is being duped again if they think that a repo is a bargain,remember you get what you pay for!
   Mo

4. what television is rated the best said at June 7th, 2008 at 4:24 am

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