Las Vegas foreclosures, short sales and bank owned properties

There are opportunities in the Las Vegas marketplace right now for the prudent buyer in the area of foreclosures, bank owned properties and homes that are offered for sale in a "short sale" situation. Below I will discuss each of these options in some detail. Feel free to contact me if you have questions.

Las Vegas foreclosures - bank owned home search
The above link will take you to an advanced search page. In the right hand column you can check yes or no to Repo/Reo. By checking yes, you will limit your search results to bank owned properties only. Just below Repo/Reo you can search short sales the same way. You can use any of the other advanced search criteria in conjunction with a Repo/Reo or a short sale search.

As of February 8, 2010 there are 5,962 homes for sale in the Las Vegas
Valley that are listed as either bank owned or as short sales.

 Just over 80% of all sales, over the last 30 days, as of February 8, 2010, are either foreclosures or short sales with the great majority being bank owned properties.

Additional Las Vegas Short Sale information

Bank Owned Properties - In this situation the bank has taken the property back. Normally this is either through the foreclosure process or through some negotiated agreement between the homeowner and the bank. This can be an excellent opportunity in that the bank is only interested in recovering as much as they can and will sell the home for whatever the market allows. They do not have the "emotional investment" many homeowners have in their homes. They are strictly business. There may also be some advantages in financing through the bank that presently owns the property. There are, at the present time, many bank owned properties in the Las Vegas area. These present some of the best current opportunities. Keep in mind, however, that getting an offer accepted with a bank could take up to a few weeks or more.

Short Sales - A short sale is where a lender accepts a discount on a mortgage to avoid a possible foreclosure. Lenders are willing, in some cases, to take such a discount to avoid  foreclosure for several reasons. First of all banks do not like excess inventory and bad loans on their books and if they see a chance for the property to be sold without a huge loss they will often do it. Secondly, they know that they could lose more money if the property goes to auction, given the delays and the many fees involved in that process. Purchasing a home that is listed in this way could take much more time than a conventional sale. Warning!! Most short sale listings are taken without the following having been done: One, the seller has not yet qualified. The lender will need to know that the seller is not in a position to continue making payments and the seller will usually have to document that. Secondly, the lender will do their own due diligence as to what the value of the property, irrespective of what price the property has listed at. I did my own analysis of 185 short sale properties that actually went into escrow. Only around 28% closed, with the rest failing. The success rate is actually even worse than it may appear with may listing agents not even willing to open an escrow without some affirmative response from the lender. The most common question I get is how do the listing agent and seller come up with a price? That is a very, very difficult question to answer. One thing I do know is that the bank will be the final decider as they will be the entity that takes a reduction on what they are owed.

Government insured loans - HUD, VA, Fannie Mae and Freddie Mac are all government entities, or entities substantially controlled by the government, that insure loans. When a homeowner defaults, then the insurer takes the property back. There are usually a number of properties listed for sale where this has occurred. These are typically sold through a bid/auction process.

Home Auctions - Some banks have put foreclosed homes up for auction. This could be a good opportunity, however there are some drawbacks. In most cases, if you are the high bidder, the bank is not obligated to sell the home at the price you bid. They still have to approve the price. They may do this or they may counter the price. I can't see this as being a better opportunity than making an offer on a bank owned home listed for sale. With listed homes you have more selection as well as more opportunity to consider your options, outside the frenzied environment of an auction. Much media exposure to these auctions as of late. Understand that when you see a "minimum bid" price advertised that does not reflect the lowest price the property will be sold at. For example at property may show at a minimum bid price of $200,000. It may also show a comparable value at $400,000. The "reserve price" is the price that the owner will actually take for the property and that will usually be some price between those two figures.

Foreclosures - Here I am addressing a "court house steps" auction. Opportunities here occur only when bids are made in the amount that can pay off the lender including costs of the action. If no one is willing to bid over and above this amount, the bank/lender typically takes the property back. The downside of this for the average buyer includes the following. Few properties foreclosed on at the present are worth more than what is owed the bank. When there are opportunities where the value is there, it is still difficult. Many of the individuals that bid on properties are very experienced. They have been through this process many times, are aware of the true costs of rehabilitating these properties and have a very good idea as to what to bid. Individuals that participate in this local "cottage industry" normally bid against each other. Presently few properties are sold this way. Most properties foreclosed on in this market, due to market conditions are taken back by the bank.

If you have any questions, please feel free to email me or call me. I can also send you property reports for homes currently listed for sale in any or all of the above categories.

Millie Fine
CENTURY 21 Aadvantage Gold
Toll free 1-888-449-3463
Home Office 1-702-363-5599
E-Mail Millie!
millie@milliefine.com 

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