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

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.

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!

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.

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!

Differences Between Short Sales and Bank REOs or Repos

As you know, it is a great time to be a "buyer" in our Las Vegas real estate market. Pricing on homes is almost back to the 2005 level, with many of them reduced to be "moved" by the banks. REOs and short sales currently make up almost 40% of the Las Vegas homes for sale.

Bank repos, also known as REOs (real estate owned), are properties that have already been foreclosed upon by the bank. They may be in pretty rough condition, and it is very common for the landscaping to be completely dead and have to be replaced. They are sold "as is, where is" with no warranties. But in some cases you can make your offer contingent upon an inspection to see if any major repair work may be required. (Some banks won't allow the due diligence period for an inspection, so you may have to have one done prior to making an offer.)

Having said all that, you can get a "good deal" with a bank owned property as long as you allow for these extra costs and buy the home for the right price to begin with. Just because it is a foreclosure, it may or may not be a great deal.

Short sales are a different creature. The homeowner is behind on their payments, and, in most cases, is hoping that the lender(s) involved will let them sell "short" of what is owed. This means the bank(s) has to approve the sale. Again, in some cases, the house will be listed at an extremely low price designed to entice offers. These offers are brought to the lender (s) for approval and if there is more than one offer, the bank(s) will negotiate the prices up, if possible, to reduce their losses. Some banks may take 30-45 days to even respond to an offer, perhaps hoping to get more than one. And the bank usually does not sign off on the offer until just prior to closing, which means they may also accept a new offer up to that point. So even though you have verbal acceptance, until it is actually signed, a short sale can be revoked at any time.

Don't overlook regular owner occupied "turn-key" homes in this market either. Lately, most homes are priced to compete with the foreclosures: they come with home warranties and they don't need out-of-pocket cash dropped into them like most of the Las Vegas foreclosures do.

If you think you are interested in a foreclosure or short sale, send us the general parameters of what you are looking for: price range, number of bedrooms, pool, location etc. We will be happy to place you on our automatic email update system that will immediately send you any new listing that comes on the market with your foreclosure criteria. (The best ones go fast, so be prepared to act quickly!) Or call us at 702-985-7654 to discuss doing a customized search for you. See more at the Las Vegas Real Estate Agent blog site.

Amazing Deals on Units Available Pre Closing at the Palms

Even at the Palms Place, where most buyers were the young and the wealthy with cash to burn, there were some buyers that knew a good investment when they saw it. They took the plunge and plunked down a 20% deposit on one of the elegant Palms Place condo hotel units hoping to make a bundle by the time the property was built.

Unfortunately in the meantime the national economy stalled and the Las Vegas real estate market dropped. Now, almost four years later, many of these same buyers are unable to obtain financing in the aftermath of the subprime market debacle. They are desperate to find a buyer just to recoup part of their deposit.

The units below are all available on the pre closing market. The original purchasers of these units want to assign thier contracts prior to closing with the Palms, and these prices are far lower than the units that have closed and are already listed for resale! Check out the one bedroom unit for only $700k! Now THAT is MOTIVATED!!

1 Bed
Strip
1.199,000

1 Bed
Mountain
1.088,000

1 Bed
Mountain
1.088,000

Studio
Strip
651,900

Studio
Strip
615,000

Studio
Mountain
537,000

Studio
Mountain
525,000

Studio
Strip
548,000
1 Bedroom - Strip View - $700,000 - Deal of the Day!

* All units are fully furnished
* Closing March 2008
* Studio (approx) 620 Sq. ft.
* 1 Bedroom (approx) 1,220 Sq. ft.
**Please note, the units are all on the upper level floors. Residential units start on the 8th floor. Floors 13, 14 and all of the 40's have been skipped due to superstition.

If you would like to find out the details on the assignments, please give me a call at 702-985-7654 right away!

If you can't quite afford the Palms Place but really want to buy Las Vegas high rise condos, there are also some GREAT deals to be had in the Residences at MGM starting in the high $300s.

http://www.prweb.com/releases/2008/03/prweb791764.htm

Las Vegas Foreclosures and Auctions – Free Seminars on Buying a Dream Home, Not a Nightmare!

Everyone in the housing market these days is looking for a “steal.” But around the country purchasers are finding that buying a property through foreclosure or at auction is not an easy process. There is no standardized format for purchasing, and banks and auction houses are selling these properties “as is, where is.” So “buyer beware” is certainly applicable.

Currently the number of Las Vegas foreclosures is among the highest in the nation, and foreclosed inventory on the market has driven down prices in the Valley substantially from the all time highs of 2005. Investors are returning to the city to pick up great deals and benefit from the strong local rental market, while first time buyers are taking advantage of affordable housing. Lower priced Las Vegas homes under $250k are even receiving multiple offers, lending strength to the belief that the Las Vegas price decline may have bottomed out.

For those desiring to take advantage of the lowest prices in the past three years, but leery of buying a “lemon,” a series of FREE 45 minute seminars on foreclosures and Las Vegas auctions is being sponsored by the Tonnesen Team of Prudential Americana Group Realtors. Speakers will be acknowledged specialists in the foreclosure and auction process. Participants will receive printed information on the “how to’s” of purchasing along with detailed property listings, and there will be an open question and answer period. Each foreclosure seminar will cover a different area of the Las Vegas Valley, and each auction seminar will cover a specific upcoming auction event.

The next free auction seminar covering the details on the upcoming Hudson and Marshall Auction will be held on Tuesday April 1st at 6pm at 871 Coronado Center Drive, Suite 100, Henderson, NV. This auction will cover 100’s of properties around Las Vegas, Henderson and North Las Vegas, with starting bids beginning in the $50k range but also covering high end luxury properties as well. (Exact dates and place for the auction are yet to be announced, but it will take place sometime in mid April.) This seminar will include: getting pre-registered to bid at the auction, a catalogue of the properties to be auctioned, how to do your due diligence prior to the auction, how the auction process works, what to take with you to the auction, and a preferred lender on hand to pre-qualify you to bid.

The next free foreclosure seminar will be held on Sunday April 13th at 2pm at 871 Coronado Center Drive, Suite 100, Henderson, NV. Foreclosures in the areas of Anthem, Seven Hills, Green Valley and Lake Las Vegas will be covered. Included at the seminar will be our “Top Foreclosure Picks” followed by an optional private tour of properties. This seminar will include information on: the differences between foreclosures and shortsales and how it affects you as a buyer, what to expect when bidding on a foreclosure – what the bank will and will not do, doing due diligence on foreclosure properties, a complete list of foreclosed properties in the day’s featured area, agents on hand to do a custom search of foreclosure properties that meet your budget and a preferred lender on hand to pre-qualify you to put an offer in on a foreclosure (required on all bank owned properties)

Call 702-958-7654 to register now, or register online at: www.greatlasvegashomes.com/las_vegas_real_estate_investments.htm to participate in upcoming seminars.

In addition, every client who purchases a foreclosure or auction property from the Tonnesen Team will receive discount coupons for their home inspection plus the preferred lender will contribute a new washer and dryer!**

**Purchaser must use the preferred lender for their mortgage and close escrow to receive a free washer and dryer.