Sunday, July 20, 2008

Weather, Golf, and House

Today, the high was 87 degrees, and I just had to take advantage of the "cool" weather by playing a round of golf. The forecast called for thunderstorms and flash floods, but I figured I would chance it. I played at Desert Willow, the executive course in Henderson that I play at most often. After 10am, it's $25, and there were very few people on the course. It was blustery, and my ball was left up to the discretion of the wind. It rained for a few holes, and otherwise there were sprinkles here and there. But there were no flash floods, and the temperature was 78 degrees when I finished, so I enjoyed the cool July day despite my horrible score.

I'm starting to get a little nervous about my house, and this Las Vegas Review Journal article didn't do anything to calm my anxiety. The house I'm buying is a short sale, which means that it is owned by an individual who wants to sell it for less than is owed on the house. The bank must approve the sale, and this can be a very long process. I had been avoiding short sales when house hunting, but the listing agent said that this price was already approved by the bank and the paperwork had been expedited, whatever that means. Everything is moving along as planned, but we're waiting on the bank to give final approval of the sale price. I'm not necessarily worried about this, especially because the appraisal came in pretty close to the sales price, but I'm just concerned about timing. Earlier this week, I locked in a 40-day loan at 5.5%, which is a phenomenal rate. But, if we don't close in 40 days, I lose that loan and must secure another. No matter how on the ball my real estate agent and mortgage broker are, they can't do anything to make the process with the bank any faster. I can go month-to-month at my current place, so that's not a problem, but I just don't want to lose my loan and risk paying a much higher fee for my great interest rate.

Yesterday, my real estate agent was kind enough to take me by my house to take another look at it and to take pictures. When I saw it the first time, I literally flew through the house because I wanted to get the paperwork prepared right away. It was so much fun to visit it, and I still love it. I especially liked that we went on a Saturday afternoon and the neighborhood was silent. There were no kids screaming in the street, dogs barking, or cars speeding though, as would be typical in my current neighborhood.

Here's a picture of the front of the house:

Saturday, July 12, 2008

House Hunting, Part II

The hunt is over...I got a house!!!

I’ve been drooling over this floorplan since February when I first looked at the model home. This house just came on the market on Tuesday, and it is completely filled with upgrades and is more beautiful than the model. I saw it on Thursday, and as soon as I walked through the front door, I was ready to make an offer. After scurrying through the house to make sure there were no surprises (only good ones!), my realtor and I rushed back to his office to put together the offer. It's a short sale that is already approved by the bank at that price, so we offered the asking price, which was an incredible price for that house (they are still building in the neighborhood, and if I were to build the house brand new, it would be at least $150,000 more!). The listing agent said that she was expecting another offer that night, but by Friday morning it hadn't come in, so she was just going to present my offer to the seller. Later that day, I found out that the other offer had come in, and while we were offering the same price, the other offer gave more as an earnest deposit and was putting considerably more down. I figured at that point I wouldn't get the house because on paper the other offer looked better, plus, if the other people had more to put down, they were probably in a better position if we got into a bidding war. My realtor already had a relationship established with the listing agent, which worked in my favor. He had my mortgage broker call her and explain that my credit is great and I would have no problem qualifying for the loan. Somehow, between the two of them, they were able to convince her that I was the stronger offer, and the seller signed the paperwork to accept my offer on Saturday!

I am so thrilled with this house. It is in a guard-gated community with a pool, gym, and tennis courts. It's at Sahara and the 215, so it is convenient to the highway, shopping, hiking, and golfing. It is 2 bedrooms with an office and a bonus room and has incredible details throughout. The best thing about this house is that it is an amazing investment. It’s going to retain its value much more than the other places I was looking at, and as I mentioned, I should have quick equity on the house because it is really under priced as compared to the new homes in the community. It's a short sale, so the escrow period will likely take longer, and I'll probably close in September. I'm so happy that I don't have to look at houses any more!

Tuesday, July 8, 2008

House Hunting, Part I

With the Las Vegas housing market tanking, I decided to take a look at buying a house out here. The process started with Brad and me drooling over the new developments near him in Summerlin. A little research on showed me that I could get a resale of the same homes that they are currently building for as much as $100,000 cheaper! Thus, the house hunt began.

My realtor is Brad's business partner, and it is so nice to have someone that Brad knows and trusts to be leading the way. Our first day out wasn't very successful, as I found that the foreclosures on the market aren't in the pristine condition of the model homes I had seen. The second day had some better finds, which leads me to...

House #1

I had already seen a couple of homes with the same floor plan that I liked very much - an upside down house with the kitchen, living room, master, and office upstairs, and the guest quarters downstairs. But, as soon as I walked onto the balcony of this house, my heart skipped a beat. This house had an incredible 180-degree panoramic view of the Las Vegas valley, including an unobstructed view of the Strip. Additionally, it had a huge pool-sized yard and no neighbors on any side. My realtor and I got really excited and sat down to look at the comps in the neighborhood to decide what to offer, and that's when the bad news arrived...this house was priced at $359,000 but would not appraise for over $300,000 based on the comps. It turns out that the house had been purchased at auction a few weeks earlier for less than $200,000 by a company that specializes in flipping properties. They put in new carpet and appliances, painted the walls, and put the house on the market for a $160,000 profit! My realtor tried to get in touch with the listing agent to negotiate the price, but she refused to return his calls. I learned my first lesson on the Las Vegas real estate market:

Even though the market has tanked, some people are still trying to get the money they would have gotten a year or two ago.

I loved the view of that house, but there are plenty of houses on the market. And I couldn't feel bad about not getting a house when my hands are tied - even though I could qualify for a $360,000 loan, I couldn't get a loan of that size on that house because the house must appraise for the amount of the loan. So, we moved on to the next round of houses, and along came...

House #2

This home was 1-story with a huge great room-kitchen area and an absolute oasis backyard. It had large trees for privacy, an in-ground hot tub, and a tranquil waterfall that flowed into a pond. The floor plan was perfect, not too big and not too small. Unfortunately, as with the 1st house, it was priced way over the probable appraisal value. It was listed at $334,000, but based on the comps, we figured it wouldn't appraise for more than $300,000. The owners had just moved into a new house, so we knew they would be anxious to sell. And, we knew that they paid around $150,000 for it in 2000, so we went ahead and made an offer at $300,000. As expected, they countered the offer, but we weren't going to budge because we didn't want to offer more than it would appraise for. Again, I was disappointed, but it was impossible (and would be a waste of money) to go any higher. Last week, the listing agent of the house called to say that they had lowered their price to $324,900. My realtor told her that the new price still wasn't low enough but that they should consider our offer of $300k on the table whenever they want to take it. Yesterday, the house changed to contingent, so I guess they got an offer at near their asking price. Unless that person is paying cash, I can't imagine them getting it appraised for anything over $300k because the identical house without the spa backyard just went into contingency at $260k. So, with this house, I learned my second lesson of the Las Vegas real estate market:

It completely sucks that someone can come into this market having sold their house for an exorbitant amount and pay cash for a house that is priced too high for financing, thinking that this house is steal compared to the market they came from (e.g., California).

Again, there were plenty of other houses on the market, so I moved on. Sure enough, on our next outing, I found the house that completely crushed my spirits...

House #3

Ahh, this house was just amazing. It was a foreclosure, so it needed a little bit of work (some appliances, a good cleaning, some touch up paint), but it was actually in very good condition. It had great curb appeal and everything was upgraded inside. It had the perfect office for me at the top of the stairs with double French doors with small vertical windows on either side and a nook that was just begging for built-in cabinets. The beautifully tiled shower had two shower heads. And the yard was to die for - although the was no landscaping, it had an in-ground pool overlooking a greenway (no neighbors behind) with a spectacular view of Red Rock. Best yet, the price was incredible: $291,900. I absolutely had to have this house. My realtor and I started on the paperwork, and when he called the listing agent to ask a question, he was told that there were multiple offers, so we had to make our highest offer. Ugh! My mortgage broker said that the house would likely appraise between $295,000 and $310,000. I didn't want to offer too little and lose the house, but I didn't want to offer too much and not get it appraised at that price. We decided the best bet was to offer $295,000, which was more than it was listed at and was a safe bet for appraisal. My realtor called the listing agent to find out if the offer was competitive, and to our shock we were told that there were multiple offers over that price. At that moment, I learned my third, and tearful, lesson about the Las Vegas real estate market:

Banks are putting foreclosures on the market at a price that seems too good to be true, which leads to competitive bidding that drives up the price of the house.

This house took me some time to get over it. Ask anyone who spoke to me that day, I was not a pleasant person to be around. I felt like I was on the dating scene, having head-over-heels first dates, just to have some bombshell dropped on me during the second date and getting my heart broken. After a few days of ignoring the house hunt all together, I got back on the horse that threw me with a refreshed attitude and a harder shell. Which led to...

House #4

This house was very well-kept inside, with a nice floor plan, and a killer backyard with a pool, spa, waterfall, and big trees for privacy. My realtor had the forethought to call the listing agent before I got my hopes crushed by another house. She told him that they had a few offers but none were acceptable because the owners needed to sell near the asking price ($289,999) or they'd have to do a short sell (they're already paying some out of pocket to cover the mortgage at that price). We were fine with that news because the house is in perfect condition and has a beautiful backyard. But, when we ran the numbers, the comps came in at around $250k. And so I was introduced to lesson number four about the Las Vegas real estate market:

Even when a house is listed at a seemingly good price, banks may be selling foreclosures in the area at rock bottom prices, driving the values down, but homeowners may owe more than that and cannot lower their own prices.

At this point, I've seen more than 60 houses. I'm not kidding. When I started out, my goal was to be moved into a new place in August before my lease runs out so that I don't have to sign a new year-long lease. Fortunately, my property manager said that I can go month-to-month in my current house (that I hate!) for $100 extra per month. So, now I don't have the time constraints on my search. Another good thing is that after looking at that many houses, I know what I like and what I don't like. I really, really, really want a pool. I don't want to put $50k out of my pocket into the house only to get about $10k back when I sell.

I found this
MSNBC article that describes the bidding wars that have erupted over these cheap foreclosures. This is obviously a very frustrating market right now. Everyone says that the Las Vegas market is suffering and that now is the time to buy (or in the next year). But, from what I've seen, the good properties are going at a high price and the crappy properties are just sitting on the market. So, much to my realtor's chagrin, the process continues.

I just don't understand - I watch people all the time on HGTV look at three houses, make an offer, and move into their new house within 30 minutes. Why can't that be me? :)

Tuesday, July 1, 2008

Puppy Playdate

Leigh brought Maddie over to play with Ajax and Bo. I wouldn't say Ajax and Bo are "bad" with other dogs, but their play tends to be quite aggressive. And Maddie is a passive dog.
They chased her all around, and she held her own. But she much preferred to be in Leigh's lap.
After a night of being chased around by two wild Jacks, poor Maddie was pretty rough looking.
I don't know about Maddie, but Ajax and Bo passed out as soon as she left. It was a successful first date!