We have discovered a great lender for Canadians wanting to buy Las Vegas homes, either as a second home or as an investment! This lender charges no loan discount points or origination fees, and the rates are the same as what a US citizen can obtain.
Lately all our blog posts have been about finding Las Vegas mortgages for our clients. With the high rate of national foreclosures, many traditional venues and programs have been discontinued, leaving buyers, even those with substantial down payments, in limbo. It has truly been a challenge for us to find mortgage lenders with reasonable down payment and rate structures.
In our never ending quest for foreign national financing for Las Vegas real estate purchases, we have literally stumbled across a lender who is able to loan money at competitive rates to Canadian citizens. This lender is able to use Canadian credit scores and income to provide mortgage loans for the thousands who are trying to flee a harsh winter climate for a few months each year.
General program guidelines for this lender are as follows:
The program is available for both second homes and Las Vegas investment properties. The minimum down payment is 20%, although the best financing on investment properties would be with a 25% down payment.The programs that are offered are full qualifying loans. Available are the 3/1, 5/1, 7/1, and 10/1 Adjustable Rate Mortgages. Each is a 30 year loan with a 30 year amortization locking in the loan rate for the short term of the loan. For example, if you got a 3/1 ARM, your start rate would be locked in for three years. (Rates are typically lower for shorter loan locks.)
The typical documentation list is as follows. Based on your own individual circumstances, more documentation may be required:
2 years personal tax returns including all pages and schedules
2 years T4s2 years corporate tax returns including all pages and schedules (if self employed)Most recent 2 months bank statements reflecting name, account number, and 2 month transaction history
Most recent 1 month retirement/investment account statement reflecting name, account number, and current balance.
Mortgage statement on any property owned in borrowers personal name reflecting name, property address, current balance, current interest rate, and current payment.
Line of credit statement on any property owned in the borrowers personal name reflecting: name, property address, current balance, current interest rate, current payment, and available balance.
Lease agreement for any rental properties.Clear copy of passport to include the signature page and picture page.
Two unique benefits of this lender are their rate renegotiation prior to closing and their loan modification process.The rate renegotiation is available to a client in the event that they lock their rate in but before closing rates drop. The borrower has the ability to renegotiate the rate to that day’s pricing with a modest premium paid.The loan modification process would come in to play should rates drop after the borrower has closed the loan.
There is a one time modification available to the borrower. It allows them to simply lower the rate with no documentation, appraisals or closing fees that a refinance would incur. It is one page that the client signs and it gets recorded behind the deed of trust. Again, a modest fee is paid for this privilege should the borrower elect to take advantage of it.Like all loan programs, there is no guarantee on how long this one will last.
So if you are a Canadian citizen who has been thinking about purchasing property in the States, call us right away so we can put you in touch with this lender. 702-985-7654 Once your financing is in place, we can find you a phenomenal STEAL on Las Vegas foreclosures! There are some incredible deals to be had in the Las Vegas high rise condo market.
Saturday, November 8, 2008
Friday, October 24, 2008
Las Vegas Condos and Condo Hotels – Where are the Deals?
Like the rest of the housing market nationwide, Las Vegas high rise condos and condo hotels have taken a “hit” in value the past couple of years. But while residential high rise condos are still moving along, albeit at reduced prices, condo hotels owners are faced with a serious dilemma.
Back in 2004 and 2005 every major lender had financing in place for condo hotel purchasers, requiring anywhere from 20% to 30% down payments. Since most developers got at least a 20% deposit on their contracts for projects under construction, borrowers thought they had all the cash they would need when the time came to close three of four years down the road.
But with the current economic conditions and tightened mortgage lending guidelines, currently there are NO lenders willing to finance condo hotels, even with a 50% or 60% down payment, verifiable income and perfect credit.
In Las Vegas, Palms Place and Trump Tower, both condo hotel projects that completed construction in 2008, the developers have not been able to close escrow on many of their units that were under contract. Would be buyers are trying to find partners with cash, someone to take over their contract, or simply walking away from their investments. Many buyers are being forced to give up over $150k in deposit money and would be delighted to get back even a fraction of that amount.
While the situation is dire for these buyers caught up in the mortgage meltdown, this is the perfect opportunity for anyone with cold hard cash to pick up prime Las Vegas real estate for less than 2004 prices! Owners at Palms Place (those who closed before the condo hotel loan programs were discontinued) report being VERY happy with the income generated on their units from the rental program. Palms Place, adjacent to the Palms Hotel, is a very “happening” resort destination. The Playboy Club, fashionable restaurants, entertainment venues and MMA sporting events keep the resort full and it has a very low vacancy rate.
Even at the MGM Residences, most of which closed before lending was shut down, there are numerous re-sales and foreclosures available at incredible prices. Since they can only sell to cash buyers, there are definitely steals to be found.
What of the MGM City Center and the Cosmopolitan, two condo hotel projects that are due to come online in late 2009 and early 2010? The Cosmopolitan, with what is unarguably the best location on Las Vegas Boulevard, was recently taken over by Deutsche Bank. And MGM City Center next door is owned in large part by Dubai World. Both these entities have “deep pockets” and their locations are superior. Word on the streets is that by the time these units are ready to close, the developers will have their own in-house financing in place. Also by that time the economy is expected to recover substantially.
But in the meantime, those with cash and aspirations to own a piece of Las Vegas are taking advantage of the times. Many are negotiating with the buyers under contract who cannot close to take over their contracts for a fraction of the original deposit. Assignments on these contracts are subject to the developer’s approval, but cash buyers are almost always approved.
Since these buyers have not yet closed, these properties are NOT in the Las Vegas MLS system. High rise agents around the city do have lists of potential assignments as well as foreclosures in the projects mentioned above. Eventually the condo hotel market will rebound, and those that are buying now, at the bottom, will make out well. To find out about some of these great Las Vegas condos, please call us at 702-985-7654 and we will put you in touch with a high rise specialist.
Back in 2004 and 2005 every major lender had financing in place for condo hotel purchasers, requiring anywhere from 20% to 30% down payments. Since most developers got at least a 20% deposit on their contracts for projects under construction, borrowers thought they had all the cash they would need when the time came to close three of four years down the road.
But with the current economic conditions and tightened mortgage lending guidelines, currently there are NO lenders willing to finance condo hotels, even with a 50% or 60% down payment, verifiable income and perfect credit.
In Las Vegas, Palms Place and Trump Tower, both condo hotel projects that completed construction in 2008, the developers have not been able to close escrow on many of their units that were under contract. Would be buyers are trying to find partners with cash, someone to take over their contract, or simply walking away from their investments. Many buyers are being forced to give up over $150k in deposit money and would be delighted to get back even a fraction of that amount.
While the situation is dire for these buyers caught up in the mortgage meltdown, this is the perfect opportunity for anyone with cold hard cash to pick up prime Las Vegas real estate for less than 2004 prices! Owners at Palms Place (those who closed before the condo hotel loan programs were discontinued) report being VERY happy with the income generated on their units from the rental program. Palms Place, adjacent to the Palms Hotel, is a very “happening” resort destination. The Playboy Club, fashionable restaurants, entertainment venues and MMA sporting events keep the resort full and it has a very low vacancy rate.
Even at the MGM Residences, most of which closed before lending was shut down, there are numerous re-sales and foreclosures available at incredible prices. Since they can only sell to cash buyers, there are definitely steals to be found.
What of the MGM City Center and the Cosmopolitan, two condo hotel projects that are due to come online in late 2009 and early 2010? The Cosmopolitan, with what is unarguably the best location on Las Vegas Boulevard, was recently taken over by Deutsche Bank. And MGM City Center next door is owned in large part by Dubai World. Both these entities have “deep pockets” and their locations are superior. Word on the streets is that by the time these units are ready to close, the developers will have their own in-house financing in place. Also by that time the economy is expected to recover substantially.
But in the meantime, those with cash and aspirations to own a piece of Las Vegas are taking advantage of the times. Many are negotiating with the buyers under contract who cannot close to take over their contracts for a fraction of the original deposit. Assignments on these contracts are subject to the developer’s approval, but cash buyers are almost always approved.
Since these buyers have not yet closed, these properties are NOT in the Las Vegas MLS system. High rise agents around the city do have lists of potential assignments as well as foreclosures in the projects mentioned above. Eventually the condo hotel market will rebound, and those that are buying now, at the bottom, will make out well. To find out about some of these great Las Vegas condos, please call us at 702-985-7654 and we will put you in touch with a high rise specialist.
Friday, October 3, 2008
Financing Foreign Investors for Las Vegas Mortgages
With the dollar expected to rise against foreign currencies later this year (that trend has already started), foreign investors are hurrying to purchase real estate in the US while their dollar goes further. Most of these investors are targeting the Las Vegas real estate market in particular, where the sharp decline in prices (due to the high amount of Las Vegas foreclosures) and the world class amenities have made it an attractive get-away destination. In particular, Canadian buyers are looking to Las Vegas homes as a vacation retreat from their harsh winter climate.
Most banks will not loan on real estate outside of their own country. With all the recent shifts in the credit markets, the qualifying criteria has changed for mortgage loans in the United States across the board, including those to foreign purchasers. Prior to this year, a foreign national could obtain financing from US banks as long as they had 35% to put down with no or limited documentation. Now US mortgage lenders are requiring full documentation of income and assets on all mortgage loans without exception, though the down payment requirements have dropped.
A citizen of a country other than the US can obtain a loan for property in the US based on what classification they fall under. A permanent resident alien is a foreign national who has been granted the right to work in the US permanently and who has been given a US social security number. A permanent resident alien can purchase property under the same guidelines as a US citizen. They can get a loan with as little as 5% down payment for a primary residence, either on a fixed rate or adjustable rate mortgage at the current interest rates available to US citizens.
All other foreign nationals, including those with temporary work visas, are required to put down a minimum of 25% for properties under $650,000 or 35% for properties over $650,000, whether the property is a primary residence or a rental property. Lenders will also require the equivalent of a US TRW rating as well as full documentation of their employment income and assets. In addition, the down payment money must be “seasoned” in a US bank for at least 60 days prior to the close of escrow.
These loans to foreign nationals are only currently available as adjustable rate mortgages or ARMS. The fixed rate terms can be for 3, 5, 7 or 10 years and interest rates are currently running between 7.5% and 8.5% with approximately 5 loan discount points prepaid for the amount of the loan (points can vary on a day to day basis just like interest rates). Each point is the equivalent of 1% of the loan amount, so on a $100,000 loan 5 points would be $5,000.
Another alternative is for the foreign national to obtain an equity credit line on their property in their home country and come to the US with cash in hand. Cash offers are very strong, and enable the buyer’s agent to negotiate the best possible price on behalf of their client.
For more information on getting qualified for a Las Vegas mortgage and to receive the latest listings on great deals in Las Vegas new homes, high rise condos or MLS listings, please contact our office at 702-985-7654 or email us at sold@greatlasvegashomes.com.
Most banks will not loan on real estate outside of their own country. With all the recent shifts in the credit markets, the qualifying criteria has changed for mortgage loans in the United States across the board, including those to foreign purchasers. Prior to this year, a foreign national could obtain financing from US banks as long as they had 35% to put down with no or limited documentation. Now US mortgage lenders are requiring full documentation of income and assets on all mortgage loans without exception, though the down payment requirements have dropped.
A citizen of a country other than the US can obtain a loan for property in the US based on what classification they fall under. A permanent resident alien is a foreign national who has been granted the right to work in the US permanently and who has been given a US social security number. A permanent resident alien can purchase property under the same guidelines as a US citizen. They can get a loan with as little as 5% down payment for a primary residence, either on a fixed rate or adjustable rate mortgage at the current interest rates available to US citizens.
All other foreign nationals, including those with temporary work visas, are required to put down a minimum of 25% for properties under $650,000 or 35% for properties over $650,000, whether the property is a primary residence or a rental property. Lenders will also require the equivalent of a US TRW rating as well as full documentation of their employment income and assets. In addition, the down payment money must be “seasoned” in a US bank for at least 60 days prior to the close of escrow.
These loans to foreign nationals are only currently available as adjustable rate mortgages or ARMS. The fixed rate terms can be for 3, 5, 7 or 10 years and interest rates are currently running between 7.5% and 8.5% with approximately 5 loan discount points prepaid for the amount of the loan (points can vary on a day to day basis just like interest rates). Each point is the equivalent of 1% of the loan amount, so on a $100,000 loan 5 points would be $5,000.
Another alternative is for the foreign national to obtain an equity credit line on their property in their home country and come to the US with cash in hand. Cash offers are very strong, and enable the buyer’s agent to negotiate the best possible price on behalf of their client.
For more information on getting qualified for a Las Vegas mortgage and to receive the latest listings on great deals in Las Vegas new homes, high rise condos or MLS listings, please contact our office at 702-985-7654 or email us at sold@greatlasvegashomes.com.
Sunday, September 28, 2008
Las Vegas Home Inspections
I really must begin by thanking Diann Tonnesen for offering to allow me to blog on her site. In case you’re not aware Diann is somewhat of an icon in the Las Vegas real estate community. To be offered to provide input for her web site is truly an honor. Thank you, Diann.
Diann told me that I could write about anything I wanted to write so I chose something that has been needling me for quite some time now; the way people shop for a Las Vegas home inspector. Do you realize how most people shop for a home inspector? They gain a list of inspectors, usually from their real estate agent, and call three or four inspectors asking what they charge for the inspection. They generally do this without knowing what they are buying. Especially with all the Las Vegas foreclosures on the market being sold "as is, where is" this truly boggles the mind.
Can you imagine people shopping for a car they same way they shop for a home inspector? It would look something like this:
Ring, ring. “Hello, Lamborghini, Mazarati, Rolls Royce, Bentley dealership, can I help you?”
“Yeah, hi. You guys sell cars, right?”
“Yes ma’am, we do.”
“What do you charge for them?”
“Excuse me?“
"Yeah, you know, how much do they cost?”
“Well are you aware of what kind of cars we sell?”
“Naw, I’m really not interested in hearing about that, I’m just calling around getting prices.”
“Well we have a beautifully reconditioned Bentley on sale this week that is valued at $35,000 that we are selling as a lost leader for $22,000."
“That’s great. Twenty-two thousand hunh? Okay, I may call you back. Thanks for your time.”
Ring, ring.
“Yeah, Arties Autos. What do you want?”
“Yeah, hi. You guys sell cars, right?”
“Why sure we do. What cha lookin for toots?”
“How much do you charge?”
“Well I can put you in this sweet little Yugo that was towed in, I mean, that came in last night for say… $15,000.”
“Fifteen thousand hunh? Okay. Sweet. I’ll take it.”
Sound absurd? Well sure it does. But many, many people who are about to make what is often the single largest purchase they’ll make in their entire life shop for their home inspector and their Las Vegas mortgage loans the same exact way.
So here is where I am coming from: I retired from the Navy in 1998 after spending nearly my entire adult life as an engineering inspector. I wasn’t just an “engineering inspector, I was an engineering inspector and instructor where I was one of eight members of an elite team that earned the distinction as the most successful engineering inspection team in the history of the United States Navy. The distinction still stands today where our success record has never been matched.
When I retired from the Navy I transitioned into the civilian world as a Las Vegas real estate agent. After several years as a modestly successful real estate agent I became very frustrated with the quality and depth of home inspections available for my clients. There simply weren’t any good inspections available. The inspectors were more interested in protecting their own liability through the use of complicated and legalistic inspection agreements than they were in protecting my clients. I couldn’t even find an inspector who would walk on a concrete tile roof. They mostly used binoculars to review the roofing.
I thought the public deserved better. I thought people wouldn’t mind paying a little more for a true quality inspection where the inspector spent hours really investigating the home rather than hiring an inspector that spent several minutes walking through the home filling out a worthless checklist that contained no actual useful information. I set out to create such a service.
Now, after nearly eleven years performing thousands of home inspections, continually refining our procedures, attending thousands of hours of training, holding hundreds of training seminars, and developing an organization that is truly unique and first class I can truly state that there is no better inspection service available in the entire Las Vegas Valley, regardless of the price. It is not an opinion; it is a fact. We have inspecting Las Vegas homes down to an art. We don’t do cheap inspections, and our service is nothing like the inspections that the cheap guys perform.
Nowadays, the most common comment I hear is that we don’t charge enough for our inspections (compared to what we provide). I once had a home buyer say that he didn’t think we charged half of what we should charge for our service. I promptly quipped, “That’s not a problem. You’re more than welcome to pay double.” To my astonishment he did exactly that.
It is a statistical fact that the average home inspector ends up in litigation an average of three times each year because of issues the inspector did not discover and disclose in the course of his inspection. In eleven years that my company has been in existence neither I nor any of the inspectors who work for me has ever been named in any litigation in conjunction with a home we inspected. We have never gone to arbitration; we have never gone to mediation; and we were recently named on the Honor Roll for the Better Business Bureau of Southern Nevada, once again, for maintaining a complaint-free status.
For the consumer who swallows the paradigm that all home inspections are pretty much the same and selects their home inspector based solely upon the price of the inspection, they often get exactly what they are looking for: a cheap inspection. But for the consumer who shops for their home inspector based upon the quality of the service provided and who is able to discount the paradigm that all home inspections are the same: these are people who draw outside the lines and when they stumble across our firm we reward them with a Picasso every time.
I can only hope that when it is time for you to get a home inspection you are able to discern the difference between “Art” and “Artie.” Have a great day!
Paul J. Donohue, RHI, RREI, CREI
President / Senior InspectorSpectrum Inspection Group Inc.
8345 Coyado StreetLas Vegas, NV 89123
Email: pdonohue@INSPECTLV.com
Web: http://www.inspectlv.com/
Scheduling: (702) 269-6716
Diann told me that I could write about anything I wanted to write so I chose something that has been needling me for quite some time now; the way people shop for a Las Vegas home inspector. Do you realize how most people shop for a home inspector? They gain a list of inspectors, usually from their real estate agent, and call three or four inspectors asking what they charge for the inspection. They generally do this without knowing what they are buying. Especially with all the Las Vegas foreclosures on the market being sold "as is, where is" this truly boggles the mind.
Can you imagine people shopping for a car they same way they shop for a home inspector? It would look something like this:
Ring, ring. “Hello, Lamborghini, Mazarati, Rolls Royce, Bentley dealership, can I help you?”
“Yeah, hi. You guys sell cars, right?”
“Yes ma’am, we do.”
“What do you charge for them?”
“Excuse me?“
"Yeah, you know, how much do they cost?”
“Well are you aware of what kind of cars we sell?”
“Naw, I’m really not interested in hearing about that, I’m just calling around getting prices.”
“Well we have a beautifully reconditioned Bentley on sale this week that is valued at $35,000 that we are selling as a lost leader for $22,000."
“That’s great. Twenty-two thousand hunh? Okay, I may call you back. Thanks for your time.”
Ring, ring.
“Yeah, Arties Autos. What do you want?”
“Yeah, hi. You guys sell cars, right?”
“Why sure we do. What cha lookin for toots?”
“How much do you charge?”
“Well I can put you in this sweet little Yugo that was towed in, I mean, that came in last night for say… $15,000.”
“Fifteen thousand hunh? Okay. Sweet. I’ll take it.”
Sound absurd? Well sure it does. But many, many people who are about to make what is often the single largest purchase they’ll make in their entire life shop for their home inspector and their Las Vegas mortgage loans the same exact way.
So here is where I am coming from: I retired from the Navy in 1998 after spending nearly my entire adult life as an engineering inspector. I wasn’t just an “engineering inspector, I was an engineering inspector and instructor where I was one of eight members of an elite team that earned the distinction as the most successful engineering inspection team in the history of the United States Navy. The distinction still stands today where our success record has never been matched.
When I retired from the Navy I transitioned into the civilian world as a Las Vegas real estate agent. After several years as a modestly successful real estate agent I became very frustrated with the quality and depth of home inspections available for my clients. There simply weren’t any good inspections available. The inspectors were more interested in protecting their own liability through the use of complicated and legalistic inspection agreements than they were in protecting my clients. I couldn’t even find an inspector who would walk on a concrete tile roof. They mostly used binoculars to review the roofing.
I thought the public deserved better. I thought people wouldn’t mind paying a little more for a true quality inspection where the inspector spent hours really investigating the home rather than hiring an inspector that spent several minutes walking through the home filling out a worthless checklist that contained no actual useful information. I set out to create such a service.
Now, after nearly eleven years performing thousands of home inspections, continually refining our procedures, attending thousands of hours of training, holding hundreds of training seminars, and developing an organization that is truly unique and first class I can truly state that there is no better inspection service available in the entire Las Vegas Valley, regardless of the price. It is not an opinion; it is a fact. We have inspecting Las Vegas homes down to an art. We don’t do cheap inspections, and our service is nothing like the inspections that the cheap guys perform.
Nowadays, the most common comment I hear is that we don’t charge enough for our inspections (compared to what we provide). I once had a home buyer say that he didn’t think we charged half of what we should charge for our service. I promptly quipped, “That’s not a problem. You’re more than welcome to pay double.” To my astonishment he did exactly that.
It is a statistical fact that the average home inspector ends up in litigation an average of three times each year because of issues the inspector did not discover and disclose in the course of his inspection. In eleven years that my company has been in existence neither I nor any of the inspectors who work for me has ever been named in any litigation in conjunction with a home we inspected. We have never gone to arbitration; we have never gone to mediation; and we were recently named on the Honor Roll for the Better Business Bureau of Southern Nevada, once again, for maintaining a complaint-free status.
For the consumer who swallows the paradigm that all home inspections are pretty much the same and selects their home inspector based solely upon the price of the inspection, they often get exactly what they are looking for: a cheap inspection. But for the consumer who shops for their home inspector based upon the quality of the service provided and who is able to discount the paradigm that all home inspections are the same: these are people who draw outside the lines and when they stumble across our firm we reward them with a Picasso every time.
I can only hope that when it is time for you to get a home inspection you are able to discern the difference between “Art” and “Artie.” Have a great day!
Paul J. Donohue, RHI, RREI, CREI
President / Senior InspectorSpectrum Inspection Group Inc.
8345 Coyado StreetLas Vegas, NV 89123
Email: pdonohue@INSPECTLV.com
Web: http://www.inspectlv.com/
Scheduling: (702) 269-6716
Sunday, September 7, 2008
In Las Vegas the Cosmopolitan Resort Keeps on Trucking!
To the right, the Las Vegas Cosmopolitan Condos and the
Bellagio Hotel and Casino, to the left the MGM CityCenter project.
Phot0 taken September 5th, 2008.
Bellagio Hotel and Casino, to the left the MGM CityCenter project.
Phot0 taken September 5th, 2008.
Many proposed high rise condo projects around the country have had the plug pulled in the past two years due to cost overruns and tightening credit. Since Deutsche Bank announced they were beginning foreclosure proceedings on the Las Vegas Cosmopolitan condo hotel project at the beginning of 2008 on their $760 million dollar loan, over 1800 contract owners have been holding their breath, wondering if the development would be completed. Or if they would get their money back in full if the development was canceled.
There were many "interested parties" making bids to purchase the project, but as of this week Deutsche Bank has taken over full ownership of the Cosmopolitan under an affiliate, Nevada Property I. Deutsche Bank was the high bidder, paying $1 billion at a recent foreclosure sale to acquire ownership of the project.
And Deutsche Bank isn't letting any grass grow under its feet to make sure the project goes forward. It has already inked contracts with Related Companies to take over as the resort's new developer. In addition Perini Corp. signed a new contract to complete construction work on the project. Perini has been working on the project from the beginning, and was being paid under an interim agreement since March when Deutsche Bank began foreclosing after the original developer, Bruce Eichner, failed to complete a deal to secure more financing. Increased construction costs helped drive the Cosmopolitan's construction budget from its original $2 billion price in early 2006 to its current $3.9 billion price, and Eichner was unable to find a new partner with enough capital to infuse into the project.
A letter has already been drafted to contract owners by the resort's new developer, Related Companies, letting them know of the management changes and informing them of progress to date. This letter will go out on Monday to almost 1825 contract holders, assuring them of the project's completion. To date over 50% of the Cosmopolitan's exterior construction has been completed, and it is anticipated that by December of 2008 owners will be celebrating the "topping off" of both towers, including the penthouse units. The new proposed completion date for the entire project is estimated for the second quarter of 2010.
Along with a rebounding resale housing market, this is great news for the local Las Vegas real estate market. For four months straight statistics have shown a significant rise in Las Vegas homes sales, with multiple offers on lower end properties, especially Las Vegas foreclosures. The buyers are back!
Saturday, June 14, 2008
Las Vegas Condos - High Rise Sales Slowing?
In early 2005 Las Vegas real estate agents couldn't answer the phones fast enough. The push toward towering condominium skyscrapers quickly became one of the hottest real estate trends in Las Vegas, with the hottest celebrity names including Pamela Anderson, Ivana Trump, Michael Jordan and George Clooney jumping into the market to invest in, build or brand major projects. Bruce Eichener's Cosmopolitan project logged an unprecedented 900 sales in the first 24 hours of opening. Buyers were clamoring to purchase multiple units and were angry when they were restricted to purchasing just two in many of the high profile developments.
The latest statistics from the Las Vegas MLS and new homes research company SalesTraq show about 820 resale units in the high rise condominium projects on the local market the first week in May. There were 20 closings on high rise condos in the month between March and April. At that rate, it will take approximately 3 1/2 years to sell off all the high rise units currently on the market. When you compare that to the 13 months of supply of preowned Las Vegas homes for sale or the two-month inventory of single family Las Vegas new homes and townhome units under construction in the Valley, the outlook for the high rise market could seem bleak.
"People who bought units on contract in 2005 are aware the market in 2008 is nothing like the market they bought in," said Larry Murphy of Salestraq. "But appraisals are coming in at whatever they agreed to pay on their contract three years ago. People are saying, 'We don't think that appraisal is right, and we don't want to close at that price.' A lot of people have been unwilling or unable to come to the closing table." Some are walking away entirely from over $100,000 in deposits, while others are closing and trying to "flip" their units.
The new mortgage lending restrictions haven't helped matters either. Even buyers with excellent credit, cash in the bank and 20 percent deposits already in escrow aren't having much luck negotiating normal market rates on regular residential high rises unless they are owner occupants. Condo hotel buyers are being hit with a minimum of 25% down payments and high interest rates, while foreign investors are looking at 35% down payments. These restrictions have served to shrink the available pool of high rise buyers. Combined with the glut of current inventory, even prospective buyers with cash in hand are apprehensive about jumping into the Las Vegas high rise condo market.
But multi billion dollar developers are still predicting that high rise condos will be the new suburbia once the credit crunch eases and the housing market starts rebounding. Units at projects such as CityCenter could close for $1,600 to $3,000 per square foot starting next year, when owners begin moving in. Currently prices at Sky Las Vegas, the only completed residential high-rise on the actual Las Vegas Strip, are ranging between $400 to $1,000 per square foot. Rising construction costs for steel, concrete, copper and even land mean bigger replacement values, and those construction costs will figure into future high rise prices.
And these developers are betting that their predictions come true - after multiple millions of dollars in marketing research, of course! MGM has already bought another 60 acres of land on the north end of the Strip for City Center II. Station Casinos has 60+ acres just off the Strip behind the Panorama for three more major casinos plus assorted high rise towers. And M is in the works on the south end of Las Vegas near Southern Highlands. They believe that rising oil prices and changing lifestyle patterns will make suburban living obsolete and that the convenience and amenities of high rise living in multiuse projects will appeal to both the retiring baby boom generation and the digital youth population which is just starting to make its presence felt in the marketplace.
So while the Las Vegas high rise market may be weak at the moment, don't count it out in the long haul - the big money is betting on it. And now, while there are Las Vegas foreclosures in the best buyer's market we have ever had, may just be the time to pick up something to hold for the next five years while anticipated high rise prices climb to New York levels.
The latest statistics from the Las Vegas MLS and new homes research company SalesTraq show about 820 resale units in the high rise condominium projects on the local market the first week in May. There were 20 closings on high rise condos in the month between March and April. At that rate, it will take approximately 3 1/2 years to sell off all the high rise units currently on the market. When you compare that to the 13 months of supply of preowned Las Vegas homes for sale or the two-month inventory of single family Las Vegas new homes and townhome units under construction in the Valley, the outlook for the high rise market could seem bleak.
"People who bought units on contract in 2005 are aware the market in 2008 is nothing like the market they bought in," said Larry Murphy of Salestraq. "But appraisals are coming in at whatever they agreed to pay on their contract three years ago. People are saying, 'We don't think that appraisal is right, and we don't want to close at that price.' A lot of people have been unwilling or unable to come to the closing table." Some are walking away entirely from over $100,000 in deposits, while others are closing and trying to "flip" their units.
The new mortgage lending restrictions haven't helped matters either. Even buyers with excellent credit, cash in the bank and 20 percent deposits already in escrow aren't having much luck negotiating normal market rates on regular residential high rises unless they are owner occupants. Condo hotel buyers are being hit with a minimum of 25% down payments and high interest rates, while foreign investors are looking at 35% down payments. These restrictions have served to shrink the available pool of high rise buyers. Combined with the glut of current inventory, even prospective buyers with cash in hand are apprehensive about jumping into the Las Vegas high rise condo market.
But multi billion dollar developers are still predicting that high rise condos will be the new suburbia once the credit crunch eases and the housing market starts rebounding. Units at projects such as CityCenter could close for $1,600 to $3,000 per square foot starting next year, when owners begin moving in. Currently prices at Sky Las Vegas, the only completed residential high-rise on the actual Las Vegas Strip, are ranging between $400 to $1,000 per square foot. Rising construction costs for steel, concrete, copper and even land mean bigger replacement values, and those construction costs will figure into future high rise prices.
And these developers are betting that their predictions come true - after multiple millions of dollars in marketing research, of course! MGM has already bought another 60 acres of land on the north end of the Strip for City Center II. Station Casinos has 60+ acres just off the Strip behind the Panorama for three more major casinos plus assorted high rise towers. And M is in the works on the south end of Las Vegas near Southern Highlands. They believe that rising oil prices and changing lifestyle patterns will make suburban living obsolete and that the convenience and amenities of high rise living in multiuse projects will appeal to both the retiring baby boom generation and the digital youth population which is just starting to make its presence felt in the marketplace.
So while the Las Vegas high rise market may be weak at the moment, don't count it out in the long haul - the big money is betting on it. And now, while there are Las Vegas foreclosures in the best buyer's market we have ever had, may just be the time to pick up something to hold for the next five years while anticipated high rise prices climb to New York levels.
Tuesday, April 1, 2008
Short Sales and Las Vegas High Rise Condos
Of all the types of distressed properties, shortsales are probably the hardest to close escrow on. Often the seller is still living in the property. He or she may have invested their life savings making a down payment that has disappeared with a declining market. They are upset that they are losing their home and fearful, as they will probably have little or no money to make a move with. Plus their credit is shot and there are few landlords that will even consider renting to them without a substantial deposit. Of course, if they had a substantial deposit, they could afford to make their monthly payment!
And even if the seller is cooperative, there is still the bank to contend with. In a market that is inundated with requests for short sale approval and where there is a large inventory of properties that have gone all the way through the foreclosure process, the bank's loss mitigation departments are backed up and understaffed. And often there is more than one bank to seek short sale approval from. (During the recent subprime lending years, buyers who had no down payments were able to borrow 100% of the purchase price on their home. Usually this was accomplished by putting both first and second Las Vegas mortgages on the property.) Very likely the second mortgage holder is going to be wiped out and has very little incentive to approve the sale.
Currently there are just over 5000 homes and condos for sale in Las Vegas that are in short sale status, and of those almost 4,000 are priced under $300,000. (By comparison, there are just over 2,000 Las Vegas foreclosures or REOs, bank owned properties.) It is taking anywhere from 30 to 60 days to get an approval from the bank on a short sale. And the listing agent must jump through hoops getting the proper documentation together so that the lender will consider an offer in the first place. A typical Las Vegas short sale package would include:
Seller’s Hardship Letter
Offer and Counter Offer on Subject Property
Estimated Net Sheet
Buyer’s Approval Letter
Seller’s Last Two Pay Check Stubs
Statement of Seller’s Monthly Expenses
Seller's Last Two Bank Statements
Seller's Most Recent Tax Return
Copy of MLS Listing
Listing History of Subject Property
County Tax Record for Subject Property
Recent Comparable Sales for Subject Property
The seller must be able to prove that they have insufficient income to pay the monthly payment and that they have no other assets. The seller must also be able to prove a true hardship like a lost job, interest rate adjustment or divorce. Just because the market has gone south and the seller wants to move doesn't constitute a short sale unless one of the previous reasons apply.
The listing agent must be able to show a concerted effort to market the home for the best possible price. And once the offer is approved, if the listing agent forgets to put an expense on the estimated net sheet, the bank will refuse to pay it as they feel they based their decision on flawed information. Oftentimes it is difficult for the listing agent to accurately assess the costs as they may include sewer bills, unpaid HOA assessments or unrecorded mechanics liens.
And once the bank does finally approve the short sale, if another higher and better offer is received, the bank can choose to un-approve the first offer. They are not the owner of record for the property and no negotiated approval is binding on them in a short sale.
So if you are thinking of purchasing a short sale property, you need to have lots of patience, a great Las Vegas real estate agent and a bit of luck!
And even if the seller is cooperative, there is still the bank to contend with. In a market that is inundated with requests for short sale approval and where there is a large inventory of properties that have gone all the way through the foreclosure process, the bank's loss mitigation departments are backed up and understaffed. And often there is more than one bank to seek short sale approval from. (During the recent subprime lending years, buyers who had no down payments were able to borrow 100% of the purchase price on their home. Usually this was accomplished by putting both first and second Las Vegas mortgages on the property.) Very likely the second mortgage holder is going to be wiped out and has very little incentive to approve the sale.
Currently there are just over 5000 homes and condos for sale in Las Vegas that are in short sale status, and of those almost 4,000 are priced under $300,000. (By comparison, there are just over 2,000 Las Vegas foreclosures or REOs, bank owned properties.) It is taking anywhere from 30 to 60 days to get an approval from the bank on a short sale. And the listing agent must jump through hoops getting the proper documentation together so that the lender will consider an offer in the first place. A typical Las Vegas short sale package would include:
Seller’s Hardship Letter
Offer and Counter Offer on Subject Property
Estimated Net Sheet
Buyer’s Approval Letter
Seller’s Last Two Pay Check Stubs
Statement of Seller’s Monthly Expenses
Seller's Last Two Bank Statements
Seller's Most Recent Tax Return
Copy of MLS Listing
Listing History of Subject Property
County Tax Record for Subject Property
Recent Comparable Sales for Subject Property
The seller must be able to prove that they have insufficient income to pay the monthly payment and that they have no other assets. The seller must also be able to prove a true hardship like a lost job, interest rate adjustment or divorce. Just because the market has gone south and the seller wants to move doesn't constitute a short sale unless one of the previous reasons apply.
The listing agent must be able to show a concerted effort to market the home for the best possible price. And once the offer is approved, if the listing agent forgets to put an expense on the estimated net sheet, the bank will refuse to pay it as they feel they based their decision on flawed information. Oftentimes it is difficult for the listing agent to accurately assess the costs as they may include sewer bills, unpaid HOA assessments or unrecorded mechanics liens.
And once the bank does finally approve the short sale, if another higher and better offer is received, the bank can choose to un-approve the first offer. They are not the owner of record for the property and no negotiated approval is binding on them in a short sale.
So if you are thinking of purchasing a short sale property, you need to have lots of patience, a great Las Vegas real estate agent and a bit of luck!
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