Finding your foreclosed home in Las Vegas
Las Vegas is ripe with foreclosures, and there are many different caveats to be aware of. The steps you will need to take are, briefly, finding a foreclosure, finding a real estate agent, and finally, bidding on the property. It can be a hairy process, full of potholes to avoid, and things to consider. Buying a foreclosed home is not an easy process, and should be undertaken with caution, after all it is one of the biggest financial decisions you will make.
Find your foreclosed home in Las Vegas at Home-Fish, a free foreclosure listing site devoted to helping home buyers find properties.
Las Vegas and the housing recession
”… people are convinced that the best investment decision one can make in today’s recession is to stay away from the real estate market. Only a few people are financially intelligent enough to actually see the opportunity in this housing crash to make money and become wealthy.” – Rich Dad Wisdom - How to Profit from This Housing Crash
It’s amazing how the housing landscape can change in just a few short years. Las Vegas used to be a cornerstone of the housing boom, with new home constructions happening on a massive scale, and old home values skyrocketing. Now, it is an absolute wasteland of foreclosures. What happened? Are we at the bottom? Is it safe to invest?
Obviously these are all questions you must ask yourself, but our opinion at home-fish is, roughly yes. While it may take much longer to come back from this housing recession due to (inevitable) raised interest rates, the end of the $8000 tax credit, and the large amount of foreclosure inventory, and the ARM resets of 2010/2011, purchasing a foreclosed property can be a financial boon. At the very least, you can live in a nice home for pennies on the dollar of what it would have cost in 2006.
As a word of warning, be comfortable for buying and living in your foreclosed home for at least 2 years. Overnight flips raking in tens of thousands of dollars are a thing of the past, maybe the future, but definitely not the present.
How to find your foreclosed home
”… terms such as Real Estate Owned, Auction and Short Sale. These terms are used by many Realtors more for marketing purposes because people associate those particular words with good value. However, this is not always the case. Home evaluation should be done on a case by case basis.” – Types of Foreclosures
Your first step to find a foreclosed home in Las Vegas is to determine how much home you can afford. A good rule of thumb for this is to buy a home that is less than three times your yearly gross income.
This means that if you earn $45,000 yearly salary, you shouldn’t buy a home that is more than $135,000. Doing so may be possible with good credit, but it doesn’t mean that you should. Option ARMs, and other forms of interest only loans are the reason we are in this housing crisis. Obviously, different situations call for different measures, and different loan types will have different monthly payments. Consult a mortgage calculator, factor in PMI, HOA fees, and insurance. Talk with a financial planner to ensure you aren’t getting in over your head.
Finding a foreclosed home is your second step. Free foreclosure listings are available at Home-Fish for REO properties. Auctions and Short Sales are much tougher to get right, and you should consult a realtor if you would like to look into purchasing one of these properties.
Finding a Real Estate Agent
“Real Estate agents can be a huge help in locating good investment properties. Knowing who to look for will save an investor time and money.” – Using an Agent to Buy Foreclosed Properties
When you choose a Real Estate Agent, you are hiring a contractor to work for you. Almost all realtors will claim to be familiar with the real estate purchase process, but finding one who actually is familiar with purchasing a foreclosure is tough. Interview your potential Real Estate Agent like you would a new hire for your company, or a doctor for open heart surgery.
Here are a few questions you can ask the Agent:
-
Have you facilitated the sale of a Foreclosed Home in Las Vegas?
An answer of no means nexting on the candidate. Ask this over email, or phone as this is the prescreening process.
-
Which banks / government agencies have you worked with?
HUD, FannieMae, and each bank all have separate processes - this can be a frustrating long experience, and there are tons of cautionary tales. Having someone who is familiar with the process means everything. Relevant Articles: Purchasing a HUD Owned Foreclosure
-
What loan types could you recommend for me and my financial situation?
FHA loans are available on HUD properties, other loan types are available on other foreclosures. Your realtor should at least know what type of loans are out there, although a broker or lending agent will help you secure the loan.
Of course, this is just the tip of the iceburg. Finding the right Real Estate Agent can mean the difference between making a large profit on a foreclosure, and buying a depreciating property that will haunt your finances for years.
Foreclosure Dangers
“Be very careful about what liens you are taking on when you buy a condo - Banks are not very good about paying HOA fees once they take possession of a house or condo.” – Housing Collapse in Las Vegas
HOA fees, and secondary liens on foreclosed properties can destroy any potential savings. Make sure that when you purchase a bank owned property, you have all of the information about that property. This means checking financial records, vacancy rates in the neighborhood, past purchase prices, similar foreclosed property prices, crime rates, etc. All of these will effect the long term value of your foreclosed home in Las Vegas.
A great free resource for finding your foreclosed home can be found here. Check with your real estate agent regarding each property, double check the HOA fees, and never fly blind. You will need a real estate agent well versed in foreclosures.
Article by Mikkel Garcia
