MGM City Center Provides Financing for Las Vegas Condos

The following excerpts were taken from this week’s MGM City Center press release announcing that City Center will be providing mortgages for condos and condo hotel units in its 67 acre mega development on the Las Vegas Strip. This is great news for Las Vegas condo purchasers who wrote checks for 20 to 30% down payments five years ago but have been unable to secure outside financing since the Las Vegas real estate crash. Along with City Center’s recent price reductions to meet current market conditions, MGM Mirage seems to be doing everything possible to ensure that the MGM City Center development is a huge success.

LAS VEGAS (December 8, 2009) – CityCenter Holdings, LLC today announced that it has selected Private National Mortgage Acceptance Company, LLC (“PennyMac”) to serve as a lending resource for buyers of condominiums and condo-hotel units at CityCenter. PennyMac will assist buyers in arranging financing for their residential purchases. CityCenter, a joint venture of MGM MIRAGE (NYSE: MGM) and Infinity World Development Corp, a subsidiary of Dubai World, also announced that it intends to provide a seller financing program to well-qualified buyers, which will also be administered by PennyMac.

“PennyMac will be a resource to help our customers to assess their financing options and assist them with the closing of their purchase,” said Bobby Baldwin, President and Chief Executive Officer of CityCenter. “We are pleased to provide qualified buyers an additional option through a competitive seller financing program.”

PennyMac, through its subsidiaries, will coordinate loan origination, servicing, and secondary market activities. PennyMac has partnered with EvoFi One, a leading lender headquartered in Nevada, as an origination provider for this development.The seller financing program will include both a fixed rate and a variable rate option. With the assistance of PennyMac, CityCenter has developed a comprehensive program which takes both the buyer’s financial standing and their purchase into consideration when determining loan terms.

CityCenter also recently announced a 30 percent price reduction to buyers who consummate existing purchase contracts and who execute an addendum to their existing purchase and sale agreement. “We have spoken to the majority of our buyers since the price adjustment announcement, and it is clear that our efforts has been well received,” said Tony Dennis, Executive Vice President, CityCenter Residential Division. “By adding PennyMac as a lending resource, we now provide our buyers with a Las Vegas mortgage option to assist with their closing needs.”

CityCenter closings are scheduled to begin in January 2010 with buyers of The Residences at Mandarin Oriental, Las Vegas. Veer Towers closings are projected to begin in February 2010 and Vdara Condo Hotel closings in March 2010.

It is hoped by local residents that the more than 12,000 jobs created by the massive City Center project will boost the economy and spur Las Vegas homes sales this spring. Banks have been holding their inventories of Las Vegas foreclosure homes off the market in hopes that prices would rise in the first part of next year allowing them to recoup some of their losses.

Can Las Vegas Foreclosure Listing Agents Avoid Disclosure

Can Las Vegas Foreclosure Listing Agents Avoid Disclosure.

Las Vegas Foreclosures and the New Deed for Lease Program

For Las Vegas home owners who have been unable to qualify for a loan modification and are facing foreclosure, a new Fannie Mae program would at least allow them to stay in their homes for up to a year if they are willing to sign over their homes to the bank on a deed in lieu of foreclosure. The bank would then lease the house back to the borrower at current market rate for up to a year. After the initial lease period expires, there’s the possibility that the bank would extend the lease on a month to month basis.

The program, called Deed for Lease, is designed to help stabilize neighborhoods and reduce the amount of foreclosures on the market. Foreclosures in Las Vegas have been among the highest in the country. Many neighborhoods built during the boom period were bought out by investors and currently stand half vacant. According to Dean Baker, co-director of the Center for Economic and Policy Research, “Families that like their home, their neighborhood, or the schools for their children will have the opportunity to stay in their house even after foreclosure. This is also good policy for neighborhoods that have been hard-hit by foreclosures. The Deed for Lease Program will keep the homes occupied rather than being an eyesore and a potential safety hazard.”

To qualify for the deed for lease program, the home must be the borrower’s primary place of residence. A borrower-turned-tenant must be able to prove that the market rental payment is no more than 31% of his gross income. Any subordinate lien holders (second trust deeds, judgments, etc.) must agree to release those liens in full. For most homeowners, the rental payment will be far lower than the mortgage payments they were making.

The Las Vegas real estate market would seem ideally positioned for this new program. There are even rumors that in the future Fannie Mae would seek to sell the homes back to owner/tenants. Current short sale guidelines prohibit more affluent friends or family members from purchasing a borrower’s home in the hopes that one day they would be able to buy them back. Banks could gain from potential appreciation over the next few years, rather than going through the expense of the foreclosure process and low prices now.

Existing Homeowners Happy about Extended Tax Credits!

Las Vegas real estate agents and homeowners alike are celebrating the news! It looks like the first time home buyer tax credit will be extended through April 30th of 2010, and more buyers than ever before are now eligible to take advantage of the new credit guidelines. Income caps have been raised from $75,000 to $125,000 for individuals, and from $150,000 to $225,000 for couples. In addition, move up homeowners are going to get a piece of the pie as well. Any homeowner who has owned his home longer than five years can get up to a $6500 credit on the purchase of a new principal residence. (The credit is available for the purchase of principal homes costing less $800,000, and vacation homes do not qualify for the credit.)

So what does that mean for the local market? The inventory of Las Vegas homes for sale has already dwindled dramatically in the third quarter of 2009, with less than 8,500 single family homes on the market at the end of October, down from a high of over 25,000 in October of 2007. Price decreases of more than 50% in the market lured investors back into circulation during 2009, and first time homebuyers, squeezed out during the boom, took advantage of affordable pricing. Competition for Las Vegas foreclosures has been fierce, with multiple offers submitted on properties under $250,000. (One property received a record 75 offers in less than three days on the market!)

One of the most frustrating aspects of the market during the past year, for both buyers and agents, has been trying to get an offer accepted. With more than 80% of the properties for sale being either bank owned foreclosures or short sales, the process has been arduous to say the least. Many buyers on short sales have waited over 6 months waiting for bank approval only to have the short sale package denied or to find out that the bank had foreclosed on it, even though there was a valid contract in escrow. And in some cases the sellers have “disappeared” prior to closing since they are getting no money out of the sale. Most buyers have had to put in more than a dozen offers on properties before finally getting one accepted. Plus the banks are writing all the rules. Negotiators are requiring full preapprovals from Las Vegas mortgage lenders before they will even consider an offer. And buyers are taking homes in “as is, where is” condition with no repairs made and no warranties or recourse against the sellers.

With any luck the new tax credit for move up buyers will stimulate “real sellers” to put their existing homes on the market. They will be pleasantly surprised to find that they are able to command more money for their homes than the bank repos and short sales, as frustrated agents and buyers will be zeroing in quickly to claim a “normal” transaction without all the headaches and hoops of the repos and short sales. Higher sales prices for homes should stabilize the market as well, and may even lead to increases by the time spring buying season rolls around. So break out the champagne and the paint brushes!

Las Vegas Real Estate More Affordable

Uplifting quarter in home market

National price index shows ‘impressive’ 2.4 percent increase

By HUBBLE SMITH
LAS VEGAS REVIEW-JOURNAL

Housing in Southern Nevada

The worst may be over for the U.S. real estate market, a report issued Tuesday suggests. Nationally, prices in the second quarter posted their first quarterly increase in three years, up 2.4 percent, according to the Standard & Poor’s/Case-Shiller’s U.S. National Home Price Index. “This is an impressive turnaround,” Robert Shiller, creator of the index, said on CNBC. But he warned that the continuing wave of foreclosures could depress prices again. The monthly index of 20 major cities also rose 1.4 percent from May to June, with Dallas and Denver clocking their fourth straight increase.

Only Detroit and Las Vegas saw prices fall in June. Las Vegas’ index reading fell to 107.31 in June from 109.49 in May. Detroit’s fell to 69.49 from 70.05. Las Vegas has now dipped below the Case-Shiller basis line. But that is a good thing, said Dennis Smith, president of Las Vegas-based Home Builders Research. It means homes are undervalued here.”That’s why we’re selling (homes). Affordable housing was always one of the descriptions of Las Vegas before 2002 and 2003. When houses were no longer affordable, that’s when the market took a dump,” Smith said.

The Las Vegas real estate market is due to rise in the Case-Shiller index, but Smith wouldn’t predict when. Unemployment, running at 13.1 percent in Las Vegas, is a key factor. Some local economists are predicting it will be 2012 before things turn around, he said. The Case-Shiller data reflects changes from May to June. But new, local data seem to corroborate the trend. SalesTraq, another Las Vegas market research firm, reported a 0.7 percent increase in July resale median prices to $124,900 from $124,000 in June. The price has been hovering around $125,000 since May. New home prices edged up $1,000 to $210,000.

Home Builders Research reported Las Vegas, with the nation’s highest foreclosure rate, saw a slight increase in median new home prices in July to $206,549, up $1,059 from the previous month. Median resale prices stayed the same at $125,000. “The sharp free fall in prices is over,” said Michelle Meyer, an economist at Barclays Capital Inc. in New York. Jeff Canarelli, vice president of sales for Las Vegas-based home builder American West, said the Case-Shiller report is “very positive.” Canarelli is seeing more sales to first-time Las Vegas new home buyers at subdivisions such as Lexington at Highlands Ranch. “We’ve known we’re near the bottom,” he said. “I think Las Vegas gets an A-plus for affordability. People want a good home as opposed to a foreclosure, as long as it fits in their affordability range.”

Smith said he is getting a feel from talking to industry insiders that the Las Vegas homes for sale market has stabilized but will probably bounce up and down from month to month. One analyst offers a warning. Anyone expecting a rebound in home prices and consumer sales or a sharp V-shaped recovery is in “fantasyland,” said Mike Shedlock, investment adviser for SitkaPacific Capital Management.

Nevada has $149 billion in mortgage debt, and 65.6 percent of the properties have negative equity, according to a report from Core Logic First American. Nationwide, there is $10.1 trillion in mortgage debt, 32.2 percent of the properties have negative equity and another 5.4 percent are nearly “underwater.” Steve Hawks of Platinum Real Estate Professionals in Henderson said Case-Shiller is an accurate barometer for home prices nationwide, but the index rose only because of a shortage of Las Vegas foreclosures that should be on the market. “At least it’s good news,” he said. “People don’t mind overbidding, because the payment’s not that much different with interest rates so low. Once you go above $250,000, sales get slower.”

The Case-Shiller 20-city index tracks repeat sales on the same properties over time, but it closely tracks only 20 cities, not the whole country. The national index tracks more regions, but not every metropolitan area.

The Associated Press, Bloomberg News and McClatchy News Service contributed to this report.

Ethics in Real Estate – Yes, They Exist!

For all the agents out there – so many times we hear horror stories about others in the real estate industry, especially in hard times like the Las Vegas real estate market has just struggled through. Agents taking advantage of clients or stabbing each other in the back to make a living, lenders charging exorbitant fees to uninformed but credit worthy borrowers, appraisers doing a “favor” to get an appraisal up to the purchase price, etc. Actually this type of behavior happens in all industries, but the real estate market in particular is spotlighted because of the high dollar amounts involved.

Well, I wanted to share the “good” side of the industry for a change. There are a lot of great agents and lenders out there who really watch out for their clients and each other, but we rarely hear praise when it is well deserved.

Recently one of our agents, Maxine, had an international client that was coming into town to look at Las Vegas homes for a vacation retreat. Before the client got to town Maxine sent him hundreds of properties to review, gave him articles about various neighborhoods to read, and went over long lists of questions about everything from taxes to motor vehicle registration. She even went out and found an extended stay hotel and made a reservation for the client, picked him up at the airport and helped him with his rental car. All this before they even went to look at a single property.

The next few days were spent learning the town and refining where the clients wanted to live. The clients finally settled on Lake Las Vegas, and Maxine made sure they had all the latest information on the litigation and HOAs before deciding on a couple of Las Vegas condo units they were interested in. Both of the condos were bank foreclosures or REOs, and the clients made an offer on one. After days of waiting around for an answer and no word from the listing agent, the clients were frustrated and angry. When they finally received an answer, it was that the property had been sold to someone else.

In the meantime the clients had been reading in our local newspaper about how the REO agents were “playing games” with the offers they received, trying to sell their own listings in-house. Even though these clients adored Maxine and appreciated all she had done for them, they insisted on going straight to the listing agent for their next offer, even though Maxine had shown them the property several times.

And here’s the good part of the story – the listing agents happened to be Leslie and John Carver of Prudential Americana (and also in our office) who handle a large volume of Las Vegas foreclosures. In order to avoid any conflict of interest, Leslie never handles the buyers on her own listings. She refers them out to a “buyer’s agent” to write a contract and represent them. But these clients called her several times and flatly insisted on meeting with her. Finally Leslie agreed to meet them, figuring that once they got into the office she would still turn them over to a buyer’s agent.

When the clients got to the office, they again insisted that Leslie write up the offer even though she explained repeatedly that she would have a buyer’s agent handle it for them and that everything would be fine. But they buyers refused, and finally said to Leslie, “If we wanted to use a buyer’s agent we would use Maxine Sutton of the Tonnesen Team. She’s an excellent agent and she has done everything for us, but we don’t want to miss out on this property. We read what is happening in the newspaper and we will only deal direct with the listing agent.”

Now Leslie knew that these buyers were actually Maxine’s clients. But she also realized that they were not going to be satisfied with anything less than her writing the purchase contract for them. And in the best interests of the seller, the offer needed to be written. So Leslie wrote the offer, but IMMEDIATELY contacted Maxine to let her know what was happening and assure her that if these buyers were successful in securing the property, Maxine would be paid.

Would Maxine ever have known that these buyers went around her to get this property? Probably not. Could Leslie have kept this transaction to herself? Probably yes. But Leslie has such high standards that even if the buyers had not loved Maxine, she would have made sure that Maxine was taken care of.

This story has an even happier ending. The buyers got their property, Maxine was rewarded for all her hard work, and Leslie had the immense satisfaction of knowing she acted to the benefit of all parties in the transaction. Everyone did their job, always keeping the client’s best interests at heart. And that’s why I love working at Prudential Americana. Leslie Carver is a true gem, and the other agents in the company share the same high standards. That’s the way we roll with real estate.

Las Vegas Real Estate Market Sees Multiple Offers Return

Dear Readers,

Below is a letter that I sent last night to an Australian agent who has clients that want to buy Las Vegas real estate. I had sent her some “best buy” Las Vegas MLS listings two weeks prior and her clients were supposed to respond immediately. But they procrastinated and lost out on the home they wanted. I realized as I was writing my response, that it was a great lesson in timeliness and patience for any buyer that is looking to purchase in this crazy market.

Hey Jo,

Where you been, girl?! The property your clients chose already has a contract on it – actually they had multiple offers. It sold for cash above the most recent list price, and is due to close this Friday.

We are experiencing a HUGE surge in buying. You know the frustrating experiences you already had trying to put in offers? Well just in the past couple of weeks our market has gone officially insane. Everything decent under $150k is now getting multiple offers within a couple of days and averaging 3% above list price. By the end of March we had 80% more sales than last year at this time!

The listing agents won’t even present an offer now unless it is accompanied by either proof of funds for cash buyers (in the form of a current bank statement) or full loan approval for buyers getting Las Vegas mortgages. The banks don’t even care if the buyers are cash or getting loans – they are only looking at the bottom line since the mortgage buyers are fully approved anyway.

And just to make it even tougher, some of the REO listing agents are playing games with the offers and trying to sell them “in house.” Not what you wanted to hear, I know.

But we have so much pent up demand from first time home buyers: prices are affordable for the first time in years and our federal government passed a tremendous first time homebuyer tax credit. Plus the news is starting to report Las Vegas as one of the most undervalued markets again, so here come the investors once more!

I am right on the spot, and in order to get two properties in escrow for myself this week I had my offers out to the listing agents within hours of the properties going on the market, sight unseen. We actually bid on five Las Vegas homes to get two. They are both short sales, so I still have to wait for the banks to approve the shorts on the loans. (Oh, yes, I am definitely in buying mode myself. I really think we have hit bottom and will start to see a rise again by year’s end. Personal opinion, of course, but it feels right to me based on what I am seeing in the market.) One of the properties I bid on got THIRTY offers!

Anyway, long story short (too late!), first of all your buyers would have to send us their proof of funds in advance, and second they have to be ready to pounce immediately. Literally: we send you the homes, they pick at least two or three to put offers on within just a few hours and then email us back right away so we can prepare contracts. (ALL the banks have counter offer addendums, so the clients won’t ever have to worry about being on the hook for more than one property. If we got lucky enough to get a positive response from more than one, we would just pick the one we liked the best and reject the counter on the other.)

We email back the contracts along with the comparable sales info on the properties they have chosen so that your clients can feel totally confident that they are paying a reasonable price. They sign the contracts and send them back, and then we “present and pray.” We will already be working with a time zone challenge, and really only have perhaps 72 hours between the property going on the market (or having a significant price reduction to below market value) to offer presentation to be effective. And that’s because we truly are sending you the BEST listings.

The buyers should also be prepared to wire funds within one business day to the escrow company to cover the earnest deposit if they get an accepted offer. Very few properties will be completely turn-key – some handy work will probably be required, though there are enough that just require basic cosmetics. (Touch up paint, landscape maintenance, carpet cleaning, etc.) Remember, the lowest priced properties are all Las Vegas foreclosures (bank owned) or Las Vegas short sales – the banks are not making any repairs and are selling “as is, where is.” And most of the original owners were not all that happy about moving out.

If your buyers are truly serious about proceeding, we should get their current proof of funds first off. Then they need to commit to responding with a couple of properties they are willing to purchase within a short (few hours) time frame so that we can prepare contracts. And they need to know that they are probably going to have to bid over list price unless the comparable sales data indicates otherwise. Low balling worked when prices were higher and no one was buying. Now everyone is back in the game again.

Deep breath!! Did I put you to sleep with this novella? I don’t want to discourage your buyers, but unless they are prepared to be really aggressive it’s going to be hard to get them something good.

Cheers and looking forward to hearing back from you – quickly!
Diann

PS When I speak of Las Vegas real estate, that also includes Henderson real estate. It is a small valley and they run right into each other. Also, if your clients do want to go higher in pricing, there are some dynamite deals in some of our gorgeous Las Vegas golf course homes too!

Las Vegas Foreclosures and Short Sales

We get this question all the time – what is the difference between a foreclosure and a short sale? And which is the better deal?

A foreclosure or REO (which stands for Real Estate Owned) is a property that the bank has already taken back through the foreclosure process. The owner has moved out and the bank holds legal title to the property. In some states the previous owner still has a “redemption period” to get the home back from the bank. But Las Vegas foreclosures are final and the bank can turn around and sell them right away. An offer on a foreclosure property can take anywhere from one day to two weeks to be accepted by the bank and usually 30 to 45 days from acceptance to close.

A short sale or pre-foreclosure, on the other hand, is where the owner owes more money on the property than it is worth and is trying to sell it for less than the amount owed. An offer to purchase may be approved by the owner (who is not going to walk out with any cash anyway), but the contract is still subject to final approval by the bank (or banks if there is more than one mortgage on the property). The bank has to agree to take less than what they are owed. Once a bona fide offer is received, the seller is required to write a hardship letter stating why they should be eligible to do a short sale. They must also provide bank statements, paycheck stubs, and a financial statement to show that they cannot make the payments. In addition, the seller’s Las Vegas real estate agent must provide a market analysis of the most recent comparable sales to justify the selling price. The bank will also send out their own appraiser some time during the process to get an independent analysis done.

Just the approval on a short sale can take anywhere from 60 to 120 days, and sometimes even longer. Until the bank approves the sale, the buyer is in limbo, not knowing whether they will actually be able to buy the home. There is, unfortunately, no way to speed up the process. The banks won’t even talk to the real estate agents or sellers in the meantime to let them know what the status of the approval is. Often the property goes to foreclosure sale before an approval can be generated.

In either case, don’t expect to have repairs made or receive a lot in buyer concessions (closing costs paid by the seller). Most short sales and foreclosures are sold “as is, where is.” Banks will only be willing to do the minimum repairs to a property that will allow it to be financed. (Missing flooring, missing stove or A/C, etc.) On a short sale the seller does not have the money to make repairs at all.

In the past six months we have seen many short sales on Las Vegas homes and condos that have been foreclosed upon even though there was a good offer on the table. The kicker is, after the foreclosure is complete the bank often turns around and lists the property for LESS than the offer that was tendered!

Though this doesn’t seem to make any sense, there is actually a good rationale behind the bank’s actions. If a bank approves a short sale, they cannot write off the loss (the difference between the mortgage owed and the actual sales price). With a drop of more than 30% in the Las Vegas real estate market over the past two years, a home that was worth $300k might now only be worth $200k. If the buyer got in with no money down originally, the bank is facing a principal loss of $100k plus expenses and past due interest payments.

But if the bank forecloses on the property, they can write off 100% of the loss. Now they can afford to sell that $200k home for $170k and still come out ahead of the short sale scenario by taking the $100k+ write off on their taxes.

Generally speaking, we can get our clients better deals on Las Vegas condos and homes by targeting foreclosure listings. Foreclosure buyers need to keep in mind that EVERYONE is looking for those deals right now. Sales volume in Las Vegas in August and July was back up to 2005 levels, and most well priced foreclosures have multiple offers submitted. Most foreclosures are actually selling above the listed price, not below.

Buyers need to keep in mind that these foreclosures are steals to begin with. Then they need to have a savvy agent that can provide comparables to judge a home’s true worth. It’s not how much you can “get off” the sales price that counts – it is how much the winning bid is in relation to the home’s value. Buyers need to be patient and realize it might take anywhere from two to six offers to acquire the home of their dreams at the price they want to pay. But IT CAN BE DONE!

Financing Canadians for Las Vegas Real Estate

We have discovered a great lender for Canadians wanting to buy Las Vegas homes or condos, either as a second home or as an investment! This lender charges no loan discount points or origination fees, and the rates are the same as what a US citizen can obtain.

Lately all our blog posts have been about finding Las Vegas mortgages for our clients. With the high rate of national foreclosures, many traditional venues and programs have been discontinued, leaving buyers, even those with substantial down payments, in limbo. It has truly been a challenge for us to find mortgage lenders with reasonable down payment and rate structures.

In our never ending quest for foreign national financing for Las Vegas real estate purchases, we have literally stumbled across a lender who is able to loan money at competitive rates to Canadian citizens. This lender is able to use Canadian credit scores and income to provide mortgage loans for the thousands who are trying to flee a harsh winter climate for a few months each year.

General program guidelines for this lender are as follows:

The program is available for both second homes and Las Vegas investment properties. The minimum down payment is 20%, although the best financing on investment properties would be with a 25% down payment.

The programs that are offered are full qualifying loans. Available are the 3/1, 5/1, 7/1, and 10/1 Adjustable Rate Mortgages. Each is a 30 year loan with a 30 year amortization locking in the loan rate for the short term of the loan. For example, if you got a 3/1 ARM, your start rate would be locked in for three years. (Rates are typically lower for shorter loan locks.)

The typical documentation list is as follows. Based on your own individual circumstances, more documentation may be required:

2 years personal tax returns including all pages and schedules
2 years T4s
2 years corporate tax returns including all pages and schedules (if self employed)
Most recent 2 months bank statements reflecting name, account number, and 2 month transaction history
Most recent 1 month retirement / investment account statement reflecting name, account number, and current balance.
Mortgage statement on any property owned in borrowers personal name reflecting name, property address, current balance, current interest rate, and current payment.
Line of credit statement on any property owned in the borrowers personal name reflecting: name, property address, current balance, current interest rate, current payment, and available balance.
Lease agreement for any rental properties.
Clear copy of passport to include the signature page and picture page.
Two unique benefits of this lender are their rate renegotiation prior to closing and their loan modification process.

The rate renegotiation is available to a client in the event that they lock their rate in but before closing rates drop. The borrower has the ability to renegotiate the rate to that day’s pricing with a modest premium paid.

The loan modification process would come in to play should rates drop after the borrower has closed the loan. There is a one time modification available to the borrower. It allows them to simply lower the rate with no documentation, appraisals or closing fees that a refinance would incur. It is one page that the client signs and it gets recorded behind the deed of trust. Again, a modest fee is paid for this privilege should the borrower elect to take advantage of it.

Like all loan programs, there is no guarantee on how long this one will last. So if you are a Canadian citizen who has been thinking about purchasing property in the States, call us right away so we can put you in touch with this lender. 702-985-7654 Once your financing is in place, we can find you a phenomenal STEAL on Las Vegas foreclosures! Las Vegas Nevada real estate hasn’t been priced this low in almost ten years.

Financing for Foreign Nationals Discontinued – Easy Come, Easy Go

Once again the mortgage lending guidelines have changed with the wind. For a brief period there was a window for foreign nationals to obtain mortgage financing on investment and second homes in the United States with down payments as low as 25%, but now that window has been slammed shut along with a host of other “make sense” loan programs. (Don’t even get me started on condo hotels that can’t be financed by anyone with even 50% down!) 

Many of the foreign nationals who contacted us in recent weeks were willing to put down as much as 30% to 40% or even 50% on Las Vegas foreclosures. With the current housing market crunch, what are the big banks thinking? Here are people with real money, good credit and big down payments that would love to take advantage of lower prices and they can’t get financed?!!! Some of these investors were already under contract on projects in development, and they may have to walk away from substantial deposits unless alternative financing is brought online. (Just as a side note, permanent resident aliens are still able to obtain financing on the same terms as US citizens. If you are a permanent resident alien and need a Las Vegas mortgage, please contact us at 702-985-7654 so we can put you in touch with the right lender.) 

On top of all this, with the stock market dives globally, even those foreign investors who didn’t need financing and were planning on paying all cash are now stepping back as they watch the value of their portfolios diminish. The Euro is back down to 2005 levels and the British pound has plummeted even below that level. 

Canadians, who saw their dollar rise to all an all time high against US currency at $1.10, have watched it tumble in just the past few days to 79 cents versus the US dollar. Literally thousands of Canadians were looking for winter getaways in the US, but have had to put their plans on hold. Again, many of these were all cash buyers looking for modest Las Vegas condos under $100k, but with the devaluation of their dollar they have once again been priced out of the market without financing. 

And even US citizens are being crunched/punished in the mortgage marketplace. The latest is that anyone who has three or more properties with any kind of mortgage on them cannot get financing for a fourth property. Again, even if they are willing to put 50% down and have low loan to value ratios on their existing properties and excellent credit and income, they still can’t get a fourth loan. Not even if you’re Donald Trump. 

With all the resale Las Vegas homes and condos for sale, not to mention the hundreds of thousands nationwide, and all the opportunities to pick up great deals on foreclosures, our banks are not willing to lend to these impeccable buyers who want to buy and have money. Certainly I am not suggesting we should go back to no or low money down programs with no income or asset verifications. But why not create some solid loan programs to entice these good buyers, whether or not they are citizens of the US? The banks would be able to lower their inventories of properties substantially, which would in turn stimulate the economy and gradually raise prices again in a controlled manner.  

All I know is that in the months to come, those with cash who are willing to take a chance on the market now are probably going to come up looking like geniuses in couple of years. My other prediction is that while Las Vegas real estate was one of the first to fall, it will also be one of the first to recover, and I am personally putting my money where my mouth is.