Measure to help bring stability to home values and accelerate sale of vacant properties

In an effort to stabilize home values and improve conditions in communities where foreclosure activity is high, HUD Secretary Shaun Donovan today announced a temporary policy that will expand access to FHA mortgage insurance and allow for the quick resale of foreclosed properties. The announcement is part of the Obama administration commitment to addressing foreclosure. Just yesterday, Secretary Donovan announced $2 billion in Neighborhood Stabilization Program grants to local communities and nonprofit housing developers to combat the effects of vacant and abandoned homes.

“As a result of the tightened credit market, FHA-insured mortgage financing is often the only means of financing available to potential homebuyers,” said Donovan. “FHA has an unprecedented opportunity to fulfill its mission by helping many homebuyers find affordable housing while contributing to neighborhood stabilization.”

With certain exceptions, FHA currently prohibits insuring a mortgage on a home owned by the seller for less than 90 days. This temporary waiver will give FHA borrowers access to a broader array of recently foreclosed properties.

“This change in policy is temporary and will have very strict conditions and guidelines to assure that predatory practices are not allowed,” Donovan said.

In today’s market, FHA research finds that acquiring, rehabilitating and the reselling these properties to prospective homeowners often takes less than 90 days. Prohibiting the use of FHA mortgage insurance for a subsequent resale within 90 days of acquisition adversely impacts the willingness of sellers to allow contracts from potential FHA buyers because they must consider holding costs and the risk of vandalism associated with allowing a property to sit vacant over a 90-day period of time.

The policy change will permit buyers to use FHA-insured financing to purchase HUD-owned properties, bank-owned properties, or properties resold through private sales. This will allow homes to resell as quickly as possible, helping to stabilize real estate prices and to revitalize neighborhoods and communities.

“FHA borrowers, because of the restrictions we are now lifting, have often been shut out from buying affordable properties,” said FHA Commissioner David H. Stevens. “This action will enable our borrowers, especially first-time buyers, to take advantage of this opportunity.”

The waiver will take effect on February 1, 2010 and is effective for one year, unless otherwise extended or withdrawn by the FHA Commissioner. To protect FHA borrowers against predatory practices of “flipping” where properties are quickly resold at inflated prices to unsuspecting borrowers, this waiver is limited to those sales meeting the following general conditions:

• All transactions must be arms-length, with no identity of interest between the buyer and seller or other parties participating in the sales transaction.
• In cases in which the sales price of the property is 20 percent or more above the seller’s acquisition cost, the waiver will only apply if the lender meets specific conditions.
• The waiver is limited to forward mortgages, and does not apply to the Home Equity Conversion Mortgage (HECM) for purchase program.

Specific conditions and other details of this new temporary policy are in the text of the waiver, available on HUD’s website.

1. Mortgage insurance premium (MIP) will be increased to build up capital reserves and bring back private lending
   • The first step will be to raise the up-front MIP by 50 bps to 2.25% and request legislative authority to increase the maximum annual MIP that the FHA can charge.
   • If this authority is granted, then the second step will be to shift some of the premium increase from the up-front MIP to the annual MIP.
   • This shift will allow for the capital reserves to increase with less impact to the consumer, because the annual MIP is paid over the life of the loan instead of at the time of closing
   • The initial up-front increase is included in a Mortgagee Letter to be released tomorrow, January 21st, and will go into effect in the spring.
2. Update the combination of FICO scores and down payments for new borrowers.
   • New borrowers will now be required to have a minimum FICO score of 580 to qualify for FHA’s 3.5% down payment program. New borrowers with less than a 580 FICO score will be required to put down at least 10%.
   • This allows the FHA to better balance its risk and continue to provide access for those borrowers who have historically performed well.
   • This change will be posted in the Federal Register in February and, after a notice and comment period, would go into effect in the early summer.
3. Reduce allowable seller concessions from 6% to 3%
   • The current level exposes the FHA to excess risk by creating incentives to inflate appraised value. This change will bring FHA into conformity with industry standards on seller concessions.
   • This change will be posted in the Federal Register in February, and after a notice and comment period, would go into effect in the early summer.
4. Increase enforcement on FHA lenders
   • Publicly report lender performance rankings to complement currently available Neighborhood Watch data – Will be available on the HUD website on February 1.
     • This is an operational change to make information more user-friendly and hold lenders more accountable; it does not require new regulatory action as Neighborhood Watch data is currently publicly available.
   • Enhance monitoring of lender performance and compliance with FHA guidelines and standards.
     • Implement Credit Watch termination through lender underwriting ID in addition to originating ID.
     • This change is included in a Mortgagee Letter to be released tomorrow, January 21st, and is effective immediately.
   • Implement statutory authority through regulation of section 256 of the National Housing Act to enforce indemnification provisions for lenders using delegated insuring process
     • Specifications of this change will be posted in March, and after a notice and comment period, would go into effect in early summer.
   • HUD is pursuing legislative authority to increase enforcement on FHA lenders. Specific authority includes:
     • Amendment of section 256 of the National Housing Act to apply indemnification provisions to all Direct Endorsement lenders. This would require all approved mortgagees to assume liability for all of the loans that they originate and underwrite
     • Legislative authority permitting HUD maximum flexibility to establish separate “areas” for purposes of review and termination under the Credit Watch initiative. This would provide authority to withdraw originating and underwriting approval for a lender nationwide on the basis of the performance of its regional branches

In addition to the changes proposed today, the FHA is continuing to review its overall response to housing market conditions, and continuing to evaluate its mortgage insurance underwriting standards and its measures to help distressed and underwater borrowers through FHA/HAMP and other FHA initiatives going forward.

Senators Agree To Extend Homebuyer Tax Credit

STEPHEN OHLEMACHER, Associated Press Writer

WASHINGTON — Senators have agreed to extend a popular tax credit for first-time homebuyers and to offer a reduced credit to some repeat buyers.

The tax credit provides up to $8,000 to first-time homebuyers but is set to expire at the end of November. A spokeswoman for Senate Majority Leader Harry Reid said senators agreed Wednesday to extend the existing tax credit for first-time homebuyers while offering a reduced credit of up to $6,500 to repeat buyers who have owned their current homes for at least five years.

A congressional aide said the tax credits would be available to homebuyers who sign sales agreements by the end of April. They would have until the end of June to close on their new homes. The aide, who spoke on condition of anonymity, was not authorized to publicly discuss the deal.

That Credit has been agreed upon by the Senators, it will be submitted to the House of Representatives for approval and on to the President to rubber stamp!

How to know if yours is match made in heaven

 By Dian Hymer – Assembling the right team of professionals to assist you during a home purchase orsale is imperative, particularly in today’s challenging home-sale market. Selecting the right real estate agent can be critical to your ultimate success.

As in any business, there are good agents and agents who aren’t so good. Don’t confuse years in the business or number of homes sold with quality service. Some top performing agents provide their clients with excellent service. Agents who do a lot of business have a wealth of experience to draw from that can be helpful when problems arise.

However, some agents are more interested in making a commission than they are in satisfying their clients.  They might sign up the listing promising to sell your home quickly for the best price possible. After that, you may see or hear little from that agent. Rather, you’ll interact with assistants who may or may not have the experience needed to adequately take care of your needs.

Make certain before you list your home for sale or select an agent to represent you as a buyer that you fully understand what your agent will and will not do for you.

Find out if you’ll be working one-on-one with your agent or if others will be involved.  There are some facets of your home purchase or sale that don’t require an agent’s expertise, like managing paperwork or copying house keys. An assistant can take care of these sorts of things. However, your agent shouldoversee the marketing if you’re a seller and the house hunting if you’re a buyer. Your agent should review all disclosures and reports, negotiate the purchase contract and do whatever is required to facilitate a successful closing.

Your real estate agent owes you a duty to put your best interest ahead of anyone else’s in the transaction, even above the agent’s own interest in collecting a commission. This means advising you against accepting or making an offer if it’s unwise.

It’s easy to be won over by an agent’s enthusiasm about your home. You want to work with an agent who feels positively about your home and who believes it can be sold in the current market if properly priced and prepared for sale. However, you’ll be disappointed if the agent’s interview demeanor disappears after you commit to working together.

If you don’t already have an agent who you’d like to work with again, ask for references from friends whose opinions you trust. You may want to interview several agents until you find one that you feel will do a good job and with whom you have a good rapport.

HOUSE HUNTING TIP: Don’t underestimate the importance of good rapport and mutual trust. You’ll be working with your agent for some time. Invariably problems crop up during a transaction. Working through the tough spots is far easier if you hire an agent that you respect, trust and with whom you communicate well.

Have agents you interview provide references of people they have represented recently. Call or e-mail these people and ask them what they liked most and least about working with the agent, and if they would work with the agent again. The qualities you’re looking for in an agent include: good communication skills, diligence, determination, promptness, trustworthiness, persistence and responsiveness.

Some agents take on too much work, leaving them unable to return calls promptly. In one instance, a buyer’s agent had an offer to present on a listing. After calling the listing agent three times, leaving messages each time, she resorted to calling the office manager to arrange for her offer to be presented.

THE CLOSING: Don’t let this happen to you. Trust your instincts

Housing affordability remained near an 18-year high during the second quarter, according to the latest National Association of Home Builders/Wells Fargo Housing Opportunity Index (HOI) released this month.

The index, which measures the share of new and resale homes affordable to families earning the national median income of $64,000, showed that the housing affordability was up from 55 percent during the second quarter of 2008 to 72.3 second quarter percent this year, and down slightly from 72.5 percent in first-quarter 2009.

The increase in affordability — along with the $8,000 federal tax credit for homebuyers — is stimulating demand, particularly among young, first-time buyers, said NAHB Chairman Joe Robson in a statement. He encouraged an extension and expansion of the program to stimulate activity in the trade-up market.

Nationally, according to the NAHB report, Indianapolis ranked as the most affordable housing market in the nation during the second quarter, with an estimated 95 percent of all new and existing homes sold in that quarter affordable to families earning the area’s median income of $68,100 — it is the 16th consecutive quarter that Indianapolis has topped this list.

Among the other housing markets with high affordability rankings: Youngstown-Warren-Boardman, Ohio-Pa.; Detroit-Livonia-Dearborn, Mich.; Dayton, Ohio; and Grand Rapids-Wyoming, Mich.

The California Building Industry Association noted that homes became less affordable in 16 of California’s 28 metro areas included in the NAHB report, with 62.7 percent of homes affordable to median-income families in that state. That is down from 64.4 percent in first-quarter 2009.

The San Francisco-San Mateo-Marin metro area was ranked as the least-affordable metro in the nation, with 26.9 percent of the homes sold affordable to a median-income family, down from 32.1 percent in first-quarter 2009.

Madera County was ranked as the most affordable area in the state, with 84.4 percent affordability compared with 80.4 percent in first-quarter 2009.

And a separate report by the California Association of Realtors, the First-Time Buyer Housing Affordability Index, found that 67 percent of households could afford to purchase an entry-level home in California in the second quarter, compared with 69 percent in the first quarter and 49 percent in second-quarter 2008.

InmanNews

By Jeff Bater – WASHINGTON –

New-home sales soared in June from the previous month, the third increase in a row and supplying fresh evidence the housing market is beginning to recover from its long crisis.

Sales of single-family homes increased by 11.0% to a seasonally adjusted annual rate of 384,000 compared to the prior month, the Commerce Department said Monday. Though, year-over-year, new-home sales were 21.3% lower than the level in June 2008.

The median price for a new home was $206,200 in June, down 12.0% from $234,300 in June 2008. On a monthly basis, the price fell from May 2009′s $219,000. 

Economists surveyed by Dow Jones Newswires expected June sales to climb just 2.3% to 350,000.

The increase was the fourth in six months, as buyers take advantage of falling prices. It appears newhome sales reached a bottom in January, at a level of 329,000, and that the market is beginning to recover slowly. The level of 384,000 in June was the highest since 390,000 last November.

Home construction unexpectedly rose in June, the government said July 17. Housing starts increased 3.6% to a seasonally adjusted 582,000 annual rate compared to the prior month. The starts data also showed building permits surged, and single-family starts made their biggest climb in four years.

May new-home sales rose 2.4% to an annual rate to 346,000, Monday’s data showed. Originally, the government said May sales fell, sliding 0.6% to 342,000. April sales climbed 1.8%.

A recovery of the housing market will be slow. New homes are in competition with used homes, which are cheaper these days because of foreclosures.

Prices are down because of too much supply. The ratio of houses for sale to houses sold in June was 8.8. But inventories are shrinking. The ratio was 10.2 in May. At the end of June, there were an estimated 281,000 homes for sale. That’s below 293,000 for sale at the end of May.

Cheaper prices and historically low mortgage rates are offsetting tight credit and a high unemployment rate. Another lure, for first-time buyers, is a government tax credit.

Regionally last month, new-home sales rose 29.2% in the Northeast, 43.1% in the Midwest, and 22.6% in the West. Sales in the South were down 5.3%.

An estimated 36,000 homes were actually sold in June, up from 33,000 in May, based on figures not seasonally adjusted.

By Hubble Smith -

Sales of single-family homes, condos and townhomes reached a record 4,702 in June, topping the previous record of 4,414 set in June 2004, the Greater Las Vegas Association of Realtors reported Wednesday. 

The record was announced the same day a new survey showed more than half of potential homebuyers nationally say they’re still not prepared to jump into the market. 

Locally, Realtors sold 3,785 single-family homes during the month, up 16.3 percent from May and up 70 percent from June 2008.  Condo and townhome sales more than tripled from a year ago to 917. 

Inventory of homes for sale in Las Vegas shrank to 20,613, a decrease of 11.9 percent from a year ago.  Condo listings are down 2.2 percent to 5,416. 

“I think it’s significant that we sold a record number of homes last month,” Realtors association president Sue Naumann said. “We’ve been closing in on this mark for a few months now.” 

Median prices held steady at $140,000 for singlefamily homes, unchanged from the previous month and down 37.8 percent from a year ago. The median price for an existing home was $242,000 in June 2004. Condo prices meanwhile inched up 1.5 percent from May to $66,000. It was the second consecutive month of condo price increases. 

“We’ve been looking at prices declining for so long now, it’s refreshing to see them stabilize and some go back up,” Naumann said. “Inventory is down, so that’s a good thing. ”

The numbers for June are quite impressive, broker David Brownell of Keller Williams Realty in Las Vegas said. Closings are up 82.5 percent from a year ago, pending sales are up 82 percent and inventory — taking out pending sales — is down 40 percent. 

His numbers are for the greater Las Vegas area, not including Pahrump, Mesquite, Boulder City and other outlying areas covered by GLVAR. 

He said sales numbers would have been higher if banks had not placed a voluntary moratorium on foreclosures last year. The market should welcome the backlog of bank-owned homes that are expected to be coming soon, Brownell said.

“The reason I say that is in 90 percent of scenarios, we’re in multiple offer situations,” he said. “I had a client on Monday looking to buy a home and found one she wanted. It was on the market for less than 24 hours and we would have been the 19th offer.”

Brownell said there were six cash offers on the bank-owned home and just as many conventional loans. The bank will consider those offers before his client’s FHA financing, he said. 

“When the market price is $230,000 and you have 19 offers and six are cash, I’m going to say the market is undersupplied,” he said. 

Brownell showed 3,460 closings of real estateowned, or bank-owned, homes in June, more that double the number from the same month a year.  Meanwhile, REO inventory has dropped 42 percent to 2,771, leaving less than one month’s supply.  Another 5,340 REO closings are pending. 

Naumann said she’s seeing strong demand from both investors and first-time buyers taking advantage of the $8,000 tax credit.

“They’re hearing rumors of interest rate increases and they could very well be priced out of a home if they don’t act now,” she said. “Plus, we’re seeing where parents want to help their children with gifts for down payments to get them out of apartments.”

Housing analyst Dennis Smith of Las Vegas-based Home Builders Research said the upward trend in home resales will continue for two to three years because of the affordability factor and also because new home builders can’t compete on prices.

“That’s the problem. As long as prices continue to go down, we can’t say the market is at the bottom,” Smith said. “We can say it’s getting closer.”

In the Realtor.com survey, to be released today, nearly 53 percent of consumers who said they were planning to buy a home in the future cautioned they’re not ready to take such a large financial step right now.

Nearly a third of potential homebuyers surveyed cited concern about their jobs as the main reason they would shy away from the housing market. Worries about selling their current home are stopping 16 percent of the prospective buyers surveyed, while just under 8 percent said they fear home prices will keep falling.

Americans recognize there are great deals to be had in the housing market, but many are in too much of a financial pinch at the moment to even think about buying.

Among those consumers who are interested in buying, the survey found, some believe that prices aren’t going to fall further and others are looking to take advantage of government incentives designed to kick-start sales.

Nearly one in five potential buyers said they were interested in a deeply discounted foreclosed home, while nearly 15 percent said they want to receive a new $8,000 tax credit for first-time buyers or other state incentives. More than 15 percent said they don’t expect prices to drop lower, but many are still taking their time.

GLVAR statistics are based on data collected from the Multiple Listing Service and does not necessarily account for new homes sold by builders, sales by owner and other transactions not involving a Realtor.

By Hubble Smith – How low can it go?

Some real-estate market watchers predict Las Vegas will reach bottom when home prices match those in Detroit, one of the nation’s hardest-hit cities for foreclosures and unemployment.  Homes are reportedly selling for just a few thousand dollars there.  Las Vegas is getting close. The Greater Las Vegas Association of Realtors reports that the cheapest single-family detached house for sale on the Multiple Listing Service is $10,000.  It’s an 1,160-square-foot, single-story home with three bedrooms and a bath, built in 1957, at 1389 Lawry Ave., near Martin Luther King and Lake Mead boulevards.  The bank-owned home lacks amenities such as a pool and spa, built-in backyard barbecue and custom landscaping, and needs repairs.  However, it features decorative wrought-iron bars over the windows and reinforced-steel dead bolts on the doors.

What do you expect for $8 a square foot?

There are 10 homes listed for sale in Las Vegas for less than $25,000. Most are fixer-uppers in older parts of town, Realtor Robin Camacho of top10realestatevalues.com said.

Interested in a condominium?

She found 12 units on the Multiple Listing Service between $11,000 and $20,000, again not in the most desirable areas. At the bottom is a 776-square-foot, two-bedroom unit at 1720 W. Bonanza Road for $11,500.  Her best deals are found primarily in the east and north areas of Las Vegas. They’ve been built since 2000 and are priced from $55,000 to $100,000.  Some need work and some are ready for movein, like the 1,400-square-foot, two-story home near Sam Boyd Stadium that’s listed for $62,000. All it needs is a fresh coat of paint — maybe just wash the walls — and the carpets cleaned and it could be rented tomorrow, Camacho said.  The home sold new for $217,000 in 2007 and will probably get bid up to $85,000, she said.

Tim Sullivan of San Diego-based Sullivan Group Real Estate Advisors said some home prices may fall even more.  “I think you will find that a few poorly located homes may see further price drops,” he said.  “But the best stuff may be leveling soon.”  The key to price stability in Las Vegas is jobs and foreclosures, he said. Camacho uses about 70 different factors to determine her top 10 deals, including price, home. Homes rotate in and out of her Web site almost hourly as new homes come on the market, she said.  “We’re looking to show houses that are the best value for our client’s money,” Camacho said, “not just the best price.”  Investors are snapping up some of the deals for rentals, looking to beat any possible price turnaround, she said. The median price of existing single-family homes in California turned up 4.2 percent in May to $267,570.

The median price in Las Vegas was $130,000 in May, unchanged from the previous month, Home Builders Research reported. It’s down 43.5 percent, or $100,000, from a year ago and has returned to the same level of December 2000.  Home Builders Research President Dennis Smith said he’s hearing from Realtors that real estate-owned assignments from the banks are increasing dramatically. Some of those are tentatively going to be listed at $40,000 to $50,000, he said.

How long it takes the marketplace to absorb these homes will help signal when we can expect to see the bottom of the resale housing segment, Smith said.  “The reason prices, especially resales, continue to go down is because that’s all that’s selling,” he said. “Why is that? Because the lending environment has changed to where it’s difficult to obtain a new loan on anything but (Federal Housing Administration) FHA and (Veterans Affairs) VA.”

An excess supply of homes on the market — many of them vacant and in foreclosure — continues to put downward pressure on prices, economist Keith Schwer of the Center for Business and Economic Research said. Nevada has been identified as one of fourhousing bubble states and has experienced the highest rate of foreclosures in the nation.  The Case-Shiller Home Price Index followed a tight trend line for Southern Nevada from 1987 to 2002, followed by a modest increase in 2003.

From 2004 to 2006, the index took off vertically, peaking in 2006, then descending steeply into March. It’s now dipped below the trend line, signaling a return to housing affordability in Las Vegas. Sellers have slowly and reluctantly lowered home prices, but not enough to soak up excess inventory, Schwer said. “We have seen housing price declines over time,” he said. “Housing markets invariably adjust slowly to an excess supply, but rapidly to excess demand.”

Housing analyst Smith doubts that median prices in Las Vegas will ever go as low as Detroit. “Detroit is home to GM,” he said. “How many people are moving from Detroit to Las Vegas and how many people are moving from Las Vegas to Detroit? I don’t know any.”

YES! you read correctly.

The Obama administration is giving $8,000 of tax credit for first time home buyers.

Property prices in the Las Vegas area are at an all time low.  We haven’t seen these prices since the late 1990′s.  Furthermore, interest rates are at their lowest.  Most of these properties are FHA funded and will only require a 3.5% of the purchase price as down-payment.

If you haven’t purchased a home in three (3) years and over; you can qualify for this program.

Like any deal, there is a catch.  This offer expires December 1st.  Meaning the deal has to close on or before that date for you to be eligible for the $8,000 tax credit.

The good news is, we still have beautiful homes in dire need of a loving and caring owner.

As of today; there are over 1600 homes priced at or below $100,000 in our Valley.

Feel free to contact me should you have any questions.

My question to you is:  who do you know that would like to buy Real Estate in Las Vegas in the next month or two?

Call me on my cell 702-595-6196 or you can email me rania@raniahabchi.com or fill out the online form.

Thank you

Rania

Step #1:

Get “pre-approved” with a lender. We need to make sure you are comfortable with the payment, and that your finances are “in order”. The lender will review what your payments will be based on the price you qualify for taking, into consideration any down payment amount. As we locate properties in which you are interested, we will run these payment numbers again with the accurate tax amounts, any HOA dues, SIDS, LIDS, assessments, figured in before we make an offer. We will need to have $1,000-$3,000 available for an Earnest Money Deposit to submit with any offer. This can be in the form of a personal check to present with the offer, but may need to be in certified funds once an offer is accepted and we are opening escrow. The Earnest Money Deposit check does apply towards the purchase of your home. You may need reserves (like in savings, or a 401K, or stocks, etc) in place to cover a certain number of monthly payments; you may need to have funds available to cover closing costs.  The different types of financing will be reviewed and we will find a loan program that will suit your budget. You will also eventually need to have a check for the appraisal, which is usually $400-$450, which will be ordered after we have acceptance of the offer.

Step #2:

We will discuss your wants and needs; this can be done face to face or via e-mail.  I will look into the available inventory and see what we can find that suits your needs.

Step #3:

We will go out looking at homes when it is convenient for you. Please do not talk to any other agents (for example, the listing agent whose name is on the sign in the yard), I am working for you, and I want what is best for you.  There is the rare occasion that I will represent a seller and a buyer for the same property (I am the listing agent and the buyer isn’t working with an agent and wants to buy my listing).  In this case, I am working for you as a buyer’s agent, and you don’t need to call the listing agent on the sign! That being said; if there is a listing in my inventory I think will work for you, I will definitely show it to you. This is because I am skilled in dual representation, which is representing both buyer and seller (whose wants and needs are opposite from each other). When it all boils down, in the end, the buyer wants the best deal possible, and the seller wants the same thing. If the seller feels like they are being taken advantage of, they will walk away from the deal, and if the buyer feels that they are being taken advantage of, they will walk away. The happy medium is to find the place where both sides are comfortable. This requires skill and loyalty to each side on the part of an agent, not “tipping the hand” so to speak. Not all agents have the ability to keep things separate and ethically and peacefully negotiate the fine line of agreement between a buyer and a seller. In most cases, the listing agents only want what is best for their clients (the sellers).  The same is true for new home tracts, the agents are very helpful, and knowledgeable about their product, but they represent the builder, not you as a buyer. So, even though it is very tempting to go looking at new homes, please don’t go without me!  They won’t allow me to represent you if you go there first without me.

Step #4:

Once we locate a home you want to make an offer on, we will sit down and write the offer. I am enclosing a copy of the contract, for you to review.  I will explain it when we meet.  I am also enclosing the other forms we will complete when we put in an offer on a property. Most of the properties we will be looking at are foreclosures or are in pre-foreclosure. Most of the pre-foreclosure homes are “short sales” which means that the owners are trying to sell them for less than (short of) their mortgage balance. This is a time-consuming process that sometimes works out and sometimes doesn’t, as the banks holding these mortgages are overwhelmed with this practice and the numbers of already foreclosed homes. The process is difficult also because of the many different departments of the bank. These departments don’t seem to communicate with each other, and we have seen a home for sale as a short sale that is under contract and almost made it through the escrow process, days away from belonging to the buyer and the foreclosure department hasn’t stopped the process and the house goes to the foreclosure auction and everyone loses out. The buyer doesn’t get the house (they do get their Earnest Money Deposit back though and have to start over), the bank now owns a home they really don’t want to own, and the seller now has a foreclosure on their record.  We use a short sale disclosure form reviewing all of the risks (although sometimes the risks payoff) and I am including a copy of it in this package. We will definitely get a counter offer on any bank-owned property. If we are putting in an offer on a home that is not bank-owned or a short sale, we may still get a counter-offer from the sellers. We will sit down, review any and all counter offers and look at the terms to make sure we can perform to the contract’s “new” terms and then decide whether or not to accept it.

There is the chance the offer will be rejected. If so, we go out and look again, or revise our offer on the first property.

Once we get an accepted contract from the sellers and/or bank you agree with as well, then I will open escrow with the title company and give them the check for the Earnest Money Deposit.  We will give the appraisal check to your lender and they will order it.

Step #5:

We will need to complete our due diligence (the steps we take to investigate the property to determine if it is suitable for purchase), such as a certified home inspection (I can send you information from a couple of different home inspectors I have worked with), and any other inspections (roof, mold, termite, structural) and the appraisal. Home Inspections cost between $295-$350 depending on the size of the property, there is an additional charge for out-buildings, pools, spas. The purchase agreement dictates how these things are paid for (generally you as a buyer pay for them).  They are paid up front to the inspector(s) at the time of the inspection(s). On a bank owned property, the time frame for completion of all inspections is usually 5 days, but never more than 10 days.

Step #6:

Once we get the results of the inspections, on a sale not owned by a bank or in a short sale situation, we will (if necessary) write up an inspection addendum requesting repairs or compensation (this is negotiable). Upon agreement between the seller and you, we will forward this to title so that it is put together with the original contract. If the property is bank-owned, there are no repair negotiations, the property is being sold “as-is” and the inspection is really for you to learn the property’s condition since there is no one to tell you anything about it. The bank has never seen the property and knows nothing about it. You will be required to sign and notarize a waiver of Nevada Revised Statutes #113 (I have included this form too).  The only rights you are not waiving are the rights for you to cancel the contract based on the results of your certified home inspection. Based on the certified home inspection there is always the option for you to back out of the contract and rescind the purchase agreement. This must be done in writing and within the 5 day due diligence period.

Step #7:

If there is a Home Owners’ Association, it is required by Nevada Law that you review and approve (or disapprove) of the Home Owners’ Association “Re-sale package”, including the Rules & Regulations, CCR’s, budgets, reserve studies, etc. There is a charge for this package, usually $200 or less per association (yes, some homes fall under more than 1 association, although it is common only in master-planned communities). On bank owned properties, you will be bearing the cost of this package, in most cases it is paid up front in order to obtain the package. Some banks agree to reimburse you for this, but not many. There is also a fee to transfer the account to you as the new owner of the property. This is usually no more than $200 per association as well and is paid at closing, not in advance. If there is no HOA, then this step is not applicable.

Step #8:

Now we wait for your lender to get the loan completely approved (through the underwriting department).  They will contact us should they need anything from you in order to process the loan paperwork. As soon as it is through underwriting, the lender will send the loan documents to the title company and we will set an appointment to sign them at the title office.  We will also find out how much money you will need to bring with you for closing costs to the title company (if applicable).  This will need to be in a form of a cashier’s check.

Step #9:

At this time (as we are preparing to go to the title company to sign your buyers’ documents) you will need to make arrangements for the utilities to be placed into your name (we should have a very good idea of what the closing date will be).  I will give you all of the utility company information to make this a little easier. Be aware there may be deposits required by the utility departments.  You will also have to shop for Home Owner Insurance.   The cost will vary depending on the size of the property and its location, the insurance Co, the coverage you want and the area in which the property is located.  The cost can be paid upfront or factored in with your mortgage payment.

Step #10:

The lender will receive the paperwork back from the title company and will review it (anywhere from 1-2 days).  Upon final review and all conditions cleared, they will send the funds to title. If it is a bank-owned property, there is also a 24-72 hour review period for the bank that owns the property to review their settlement statement and approve it (all the bank’s expenses for all costs associated up to the day of closing; property taxes, any liens against the property, HOA dues, any closing costs they are paying on your behalf, their own closing costs, etc). When title receives all funds, if it is before 2pm, they will send the paperwork to the County offices for it to be recorded.  This can now be done electronically with most title companies. Please keep in mind that this may be as long as 5 (maybe even up to 10-14 days on bank-owned property) after you originally signed your paperwork before the property records in your name(s).

Step #11:

As soon as the recording happens; I give you the keys and the place is yours!