If you want to buy a house in Las Vegas, be prepared to be patient.
Short sales, which can take up to a year or longer to close, have soared to record levels in the valley. They now account for almost half of all home sales and show no signs of slowing.
In a short sale, lenders agree to sell a house for less than what’s owed on the mortgage. Buying one typically involves mountains of paperwork, repeated phone calls with bankers, back-and-forth letters with sellers and other seemingly endless frustrations.
The rising short-sale comes amid plunging sales of foreclosed homes, which once were a big source of local inventory. But just because short sales now dominate the market, it doesn’t mean they’ve become any faster to process.
It still can take six months to a year — if not longer — to complete a deal.
Despite the headaches, many buyers don't shy away from short sales. Almost all of the homes listed for sale in Las Vegas get multiple offers.
Cash investors are behind most of the deals. They look for cheap homes to pick up in bulk to rent out for profit.
“With inventory as low as it is, people are getting whatever they can,” said Kelley, the Greater Las Vegas Association of Realtors’ president last year.
Short sales accounted for a record 46 percent of all home sales in the valley last month, up from about 27 percent a year earlier. The previous record was 44.8 percent in September, according to the association.
Because the valley is filled with so many underwater borrowers, whose debt exceeds their homes’ value, the trend is expected to continue.
About 63 percent of valley homeowners with mortgages wereunderwater in the third quarter of last year, according toZillow. Las Vegas had the highest rate of underwater borrowers in the country during that period.
Meanwhile, foreclosures made up just 9.5 percent of all sales in the valley last month, down from more than 50 percent a few years ago. The drop is due largely to Nevada’s “robosigning” law, which took effect in October 2011 and forces banks to provide more paperwork before seizing a house. Violations can lead to criminal or civil penalties.
Bankers want to unclog the massive pipeline of homes awaiting foreclosure and are discussing how to tweak the law in the coming months, when the Nevada Legislature is in session. But until changes are made, banks will continue to pursue short sales instead of foreclosures, real estate agents said.
Under government pressure, banks have been forced to improve their processing, but it’s still a frustrating system for buyers, sellers and real estate agents to navigate. Each major bank has its own requirements for short sales, and there is no uniform set of paperwork.
Article brought to you by Las Vegas INC.
The Amanda Brown Team
Nevada Realty Solutions
Amanda Brown
702-496-7416
brownnvrs@gmail.com
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