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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
As of March 4, 2014 there are 1.943 homes are for
sale in the Las Vegas
Just over 28% of all sales, over the last 30 days, as of Feburary 10, 2014, were either foreclosures or short sales.
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.
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 - Judicial foreclosures are not done in Nevada. Instead the trustee holds an auction and transfer ownership by means of a trustee's deed. The "beneficiary" (lender or lenders) bid on the property along with any interested parties. If no one is willing to bid over the amount of the beneficiaries bid, the bank/lender (beneficiary) takes the property back. The downside of this for the average buyer includes the following. The bids, other than those of the beneficiary, have to be made in cash or cashier's checks. Most properties revert to the lender. Those individuals that do bid on properties are usually 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. There are many potential pitfalls here. There may be leans on the property that will have to be satisfied. Usually no way to know the condition of the property. Nightmare scenarios include having all the copper wiring ripped out of the home or for someone to have put cement down into the plumbing. Individuals that participate in this local "cottage industry" normally bid against each other.
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.