How To Buy A Home In Las Vegas
How To Buy A Home In Las Vegas:
The Las Vegas home buying process starts with a complimentary telephone consultation followed by a sit-down meeting at my office that includes a complete overview of expectations (both mine and yours).
The meeting doesn't take place unless the prospective buyer(s) provides a current statement of their proof of funds and brings with them an up-to-date pre-qualification letter from one of my mortgage bankers or brokers if you're going to finance your home.
Our lenders are able to prequalify you in minutes and provide a prequalification letter for our files and yours.
Mortgage lenders are scrutinizing the borrowers' ability to repay their loans, and sellers are leery of bids that are contingent on getting financing. Potential buyers are more attractive when they have been pre-approved for a loan. That means providing pay stubs, bank and brokerage statements and, for those who are self-employed, tax returns. Generally, you will need a credit score of at least 640 to get a mortgage — and it will need to be higher if you want the best rates. You won't be able to lock in your interest rate until you have a contract. Given that rates have been climbing, ask for a rate that can be locked in for 30 to 45 days at no additional cost.
Potential home buyers interested to buy a home in Las Vegas are required to get pre-approved with one of our preferred lenders prior to going to see all the available Las Vegas homes for sale that fit you and your families needs, wants and comfortable house budget. We have access to every brokers listings throughout Nevada!
What to expect at our initial meeting. We ask probing questions: How often will you be touring homes? Are you only available to view properties on the weekends, or strictly after 5 pm Monday through Friday? How long have you been looking? Are you working with any other salespeople? In other cities, or just here? Why are you buying? If we identify the right property, are you ready to make a decision today?
Our solution to identifying a good prospect includes asking these questions and many more. We expect the buyer(s) to openly discuss every answer to every question together. Many couples have "no idea" that their spouse or significant other wants an acre back-yard, low maintenance desert landscaped homes with pools and spas or a single story vs. a two story or a 5 bedroom instead of a four bedroom home.
We Communicate Frequently. Think of it this way, a serious buyer is going to be as invested in their Las Vegas home search and purchase as I am in locating their home. A home purchase is nerve-wracking, whether it's my client's first time or 23rd. It's emotional! There's always something new to learn -- not to mention the fact that the process and paperwork are in constant states of change.
Questions You Should Ask Before Buying A House, Condo, Town Home or Luxury Hi Rise Condominium in Las Vegas, Nevada
Many first-time buyers are unprepared for the financial burdens of home ownership. Lenders tell them the maximum they can afford based on their incomes. You’re told the all-important PITI (Principal, Interest, Taxes & Insurance). But, because you won’t know exactly what the other costs will be until you actually move into your new place, they are rarely mentioned. Borrowers who mortgage themselves to the hilt will find themselves “house poor.” They own a home, all right, but they can’t afford anything else. Sometimes not even the heat or hot water.
First time home buyers transitioning from an apartment are usually better prepared, whereas those leaving the friendly confines of Mom and Dad’s house for the first time probably have never had to dig into their pockets for food, let alone electricity.
As owners, you will be responsible for electricity and/or gas, water and sewer and trash removal. Then there’s the phone bill if you want a land line, and cable if you expect to watch television. Utilities are a big add-on. According to the U.S. Department of Energy, the typical family spends $1,900 a year — $158 a month — on home utilities.
Another frequently overlooked expense is association dues. Four of five housing starts in metropolitan areas are part of “common interest” subdivisions or condominiums. Residents living within these communities not only own their homes or apartments but also a share of the community’s public areas — the streets, parking lots and walkways — with all the other owners. Some 60 million people nationwide live in 305,000 homeowner and condo association-governed communities, all of which collect fees usually monthly or quarterly, according to the Community Associations Institute (CAI). Even if you don’t use the pool or golf course, you will have to pay your share. Whatever the amount — it shouldn’t be overlooked. The tax benefits of ownership — annual mortgage interest and property tax write-offs — are offset by association dues. HOA dues are not deductible for owner occupants, they “add a significant amount” to the monthly outlay.
Another significant expense all buyers, not just first-timers, tend to forget is what they’ll spend for furnishings, appliances and property alterations. A 2007 study by the Harvard’s Joint Center for Housing Studies shows that consumers spent an average of $14,206 on home improvements during their first two years of ownership. Most of the extra spending — 60% — occurs within the first three months after taking occupancy.
If you’re buying a previously occupied house, there’s also the cost of upkeep. Whether you are moving into a new or old home, you need to be aware of the ongoing maintenance every home requires. Buyers should figure on spending 1% of the home’s value per year for maintenance.
Buying a condominium unit can be more involved than buying a single family home. This is because you have to worry about both the unit itself and the condominium project as a whole. Not all condominiums are created equally. Some condominiums are very well run; some are quite poorly run and underfunded. Buyers interested in purchasing a condominium unit must do their homework: not only about the condition of the individual unit they are interested in purchasing, but on the financial health and governance of the condominium as a whole. Remember, you are buying into the entire project as much as you are the unit, and your decision will impact your daily living and your ability to re-sell.
10 Questions Buyers Should Ask When Deciding To Purchase A Condominium Unit:
- What is the monthly condominium fee and what does it pay for? The monthly condominium fee can range quite dramatically from condominium to condominium. The fee is a by-product of the number of units, the annual expenses to maintain the common area, whether the condo is professionally managed or self-managed, the age and condition of the project, and other variables such as litigation. For budgeting and financing you need to know the monthly fee and exactly what you are getting for it.
- What are the condominium rules & regulations? Condominium rules can prohibit pets, your ability to rent out the unit, and perform renovations. Make sure you carefully review the rules and regulations. Needless to say, the buyer's should review and approve all condominium documents, including the master deed, declaration of trust/by-laws, covenants, unit deed and floor plans to ensure compliance with state condominium laws as well as Fannie Mae and FHA guidelines, as necessary. Ask your Realtor for these documents required for your review.
- How much money is in the capital reserve account and how much is funded annually? The capital reserve fund is like an insurance policy for the inevitable capital repairs every building requires. As a general rule, the fund should contain at least 10% of the annual revenue budget, and in the case of older projects, even more. If the capital reserve account is poorly funded, there is a higher risk of a special assessment. Review the last 2 years budget, the current reserve account funding level and any capital reserve study.
- Are there any contemplated or pending special assessments? Special assessments are one time fees for capital improvements payable by every unit owner. Some special assessments can run in the thousands. You need to be aware if you are buying a special assessment along with your unit. It's a good idea to ask for the last 2 years of condominium meeting minutes to check what's been going on with the condominium.
- Is there a professional management company or is the association self-managed? A professional management company, while an added cost, can add great value to a condominium with well run governance and management of common areas.
- Is the condominium involved in any pending legal actions? Legal disputes between owners, with developers or with the association can signal trouble and a poorly run organization. Legal action equals attorneys’ fees which are payable out of the condominium budget and could result in a special assessment. Ask your Realtor to run a search of the condominium association in the court database to check if they've been involved in recent lawsuits.
- How many units are owner occupied? A large percentage of renters can create unwanted noise and neighbor issues. It can also raise re-sale and financing issues with the new Fannie Mae and FHA condominium regulations which limit owner-occupancy rates. If your buyer is using conventional financing, check if it is a approved condo for financing. If FHA financing, this link provides immediate access to the FHA Condo Lists and the VA Condominium Portal. For those condominiums not appearing on the list, the link provides you access to a FREE pre-screening service that will give you reasonable certainty that the condo complex can be approved for either FHA or VA. This free service is provided under an agreement with Condo Approvals, LLC.
- What is the condominium fee delinquency rate? Again, a signal of financial trouble, and Fannie Mae and FHA want to see the rate at 15% or less.
- Do unit owners have exclusive easements or right to use certain common areas such as porches, decks, storage spaces and parking spaces? Condominiums differ as to how they structure the “ownership” of certain amenities such as roof decks, porches, storage spaces and parking spaces. Sometimes, they are truly “deeded” with the unit, so the unit owner has sole responsibility for maintenance and repairs. Sometimes, they are common areas in which the unit owner has the exclusive right to use, but the maintenance and repair is left with the association. Review the Master Deed and Unit Deed on this one.
- What Does The Master Insurance Policy Cover? The condominium should have up to $1M or more in coverage under their master condominium policy. For buyer's own protection, they should always buy an individual policy covering the interior and contents of the unit, because the master policy and condo by-laws may not cover all damage to their personal possessions and interior damage in case of a roof leak, water pipe burst or other problem arising from a common area element. Ask for a copy of the master insurance policy and don't forget to check the fine print of the by-laws. Sometimes, there's language that would hurt a unit owner in case of a common area casualty. Condominiums over 20 units should also have fidelity insurance to protect against embezzlement.
Contingency clauses within the purchase contract enables you to review the CCR's and make sure satisfactory answers are received.
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Las Vegas Realtor, Linda Strasberg, Las Vegas Real Estate Home Sales & Marketing Specialist
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