Home Buying in Las Vegas>Question Details

Dan, Home Buyer in Washington

I'm planning to buy a property in vegas. In general, how much % of the sales price would be your first offer? 10, 20% below?

Asked by Dan, Washington Sat Jan 22, 2011

I've been obserbing the sale prices in the net for quite some time now and it looks like still declining. I'm planning to fly to Vegas to look for an investment property in a week or two. Any advice on how to negotiate? If my realtor says that the sales price is already a good price, shall I believe him/her?

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Answers

27
Some good advice and some very bad advice below.

To answer your specific questions:

You: "Any advice on how to negotiate?"

Answer: Know what the property really is worth. List price may have very little to do with it. Have your Realtor do a CMA to help determine the property's REAL value. Then pay no more. Probably pay less. But with an investment property, that's not the only part of the equation. The other part is: What will the property rent for? It doesn't help to get a good "bargain" if you're ending up with a significant negative cash flow. So, with an investment property, you need to look at both your expenses and your income.

Then, to address your question of how to negotiate, there are different strategies for different sellers. There's a different strategy if it's a short sale or a foreclosure. Different strategies if the owner owns the property free and clear, or if the owner is barely above water. Different strategies if you're planning on paying all cash or if you're planning on getting a mortgage. Depending on all those factors, your Realtor can help you develop a strategy that's most likely to succeed. One tip: Negotiate from strength. Be in a position where the seller is more motivated to sell than you are to buy.

You: "If my realtor says that the sales price is already a good price, shall I believe him/her?"

Answer: Of course not. Or as Ronald Reagan said: "Trust but verify." You must do your own due diligence. Make sure your Realtor shows you the comps for each property you're considering. And make sure your Realtor shows you not only sales prices, but also what those properties would rent for.

You: "how much % of the sales price would be your first offer? 10, 20% below?"

Answer: Pardon me for being dense, but what does sales price have to do with anything? As noted above, the sales price may be above, equal to, or less than the value of the property. And it's not likely (for your purposes) that the sales price takes into consideration the income that the property will generate as an investment. So the answer is: Ignore sales price. And thus forget any 10%, 15%, etc., below sales price. Let me give you an example. Suppose I came up to you on the street and offered you a box with something in it for $10. But you couldn't see in the box. You didn't know if it was a diamond ring or some used tissue paper. Would you offer 10% less--$9--and when I accepted you'd buy figuring you'd gotten a good deal? Same with investment property and real estate in general. You've got to do your due diligence.

As for some of the advice below:

Advice: "I make my absolute, lowest and best offer on the first offer sheet, and let the seller and the seller agent know I am making offers on a couple of other houses if no response by 8PM tonite. I do not let my offers even carry over 24 hours. "

Comment: That's definitely one strategy and it sometimes works. It puts a lot of pressure on the seller and prevents the seller or his agent from "shopping" your offer to other potential buyers. But obviously it won't work on short sales and foreclosures. And it won't work in many other instances. Besides, "my absolute, lowest and best." Ummm, lowest and best aren't the same. Nevertheless, that is the appropriate strategy in some cases.

Advice: "If your agent is YOUR agent, and not the listing agent on the property, I would trust that agent."

Comment: Yes and no. Yes--don't ever, ever trust the listing agent on the property. No--don't "trust" your agent either. You can assume he/she is giving you an informed opinion, but make him/her back it up with the comps.

Advice: " If the home has been on the market for at least 30 days and it hasn't received any offers, it's over priced, and would try at least 10% off of the asking price...maybe more."

Comment: Again, yes and no. Yes--on the market for 30 days with no offers suggest that it is overpriced. No--offer 10% off asking price. Again, it comes back to what the property really is worth. Besides: No offers in 30 days can suggest a bigger pricing problem than 10%.

Advice: "the listing price in most cases shouldn't even be taken into consideration. You may offer 5,10,25% below list price, OR 5,10.25% over list price...depends on what value the comparable sales indicate."

Comment: Absolutely. I agree 100%.

Advice: "Short sale listings are very misleading."

Comment: Absolutely. I agree 100%. Further, they can take a long time and be very frustrating, even if you make a fair offer. Understand all the risks of a short sale before getting involved in one.

Hope that helps.
2 votes Thank Flag Link Sat Jan 22, 2011
Don Tepper, Real Estate Pro in Burke, VA
MVP'08
Contact
"and it looks like still declining." Serious Investor? LET'S TALK
.......median sales price for homes in ZIP code 89031 in North Las Vegas
from Oct 10 to Dec 10 was $120,000 based on 939 sales.......... Compared to the same period one year ago,>>>>> the median sales price increased 4.3%, or $5,000,<<<<<< and the number of sales decreased 2.1%............
Average price per square foot for homes in 89031 was $180, an increase of 122.2% compared to the same period last year. There are currently 691 resale and new homes in ZIP code 89031 on Trulia, including 3,223 homes in the pre-foreclosure, auction, or bank-owned stages of the foreclosure process. The average listing price for homes for sale in 89031 was $122,673 for the week ending Jan 26, which represents an increase of 0.5%, or $652, compared to the prior week. Popular ZIP codes in North Las Vegas include 89031 and 89081, with average listing prices of $122,673 and $129,023.
1 vote Thank Flag Link Fri Feb 4, 2011
Hey, Don, I have 561 Bank Owned Foreclosures in today's report. There are 8 houses selling under $100,000
that are 3 bedroom. This is a private list that is NOT associasted with the MLS. Your email will get you our recommendations and our Buyer's agent Cathy Rojas can explain how we work with investors. No charge and No obligation

David Cooper +1-702-499-7037 Cathy Rojas +1-702-355-8807 REALTY ONE cvrojas12@yahoo.com
1 vote Thank Flag Link Thu Jan 27, 2011
"If prices still declining" Not in the neighborhoods I am putting my clients. Plus +9% for year to year Dec 2009 to Dec 2010. You might want to do some more research?


David Cooper +1-702-499-7037
Cathy Rojas Buyer's Agent Realty One +1-355-8807
1 vote Thank Flag Link Sun Jan 23, 2011
Hello Dan.....
A link for you....
http://activerain.com/blogsview/2044127/snap-shot-of-the-cur…

The FMV [Fair Market Value] is revealed in the SOLD COMPS

My business is focused on working with people to find their next property, negotiate a great price and see them successfully through the closing process.
Should you or your friends/family have any Las Vegas real estate needs or questions, please feel free to contact me at anytime....
Thanks and have a great day!

Julia St. Marie, ABR, RRG, RSPS
Realty ONE Group
Certified REO Specialist
Direct: 702-355-H-O-M-E (4663)
Office: 702-898-0101
Email: LVRealEstateLady1@yahoo.com
Web: http://www.LVRealEstateLady.com
Video Newsletter: http://realtytimes.com/REUv/LVrealEstateLady
1 vote Thank Flag Link Sat Jan 22, 2011
COMPI'S work all the time, I go with all the comp's in the area, the condition of the property and to tell you the truth my gut feeling... It works all the time, my buyers get the property and I get the deal. I work hard for all of my clients and I can tell you I have not had a unhappy buyer so far.. Who ever you pick as a realtor just make sure they are honest with you at all times... If you would like to talk to me you can call reach me on my web site rmarie@exitinfinty.com The market is still competative, I would not go 0 to 20% below the price...If you are ready to buy I would be happy to help you but remember Vegas has tons of Foreclosure property and the bank has not release all of them, but I am sure I can find you something you like. You can never tell when the time is right to buy as there is alot of inventory out here, just depends on what you are looking for at the time. Have a unbelievebale great day.. :)
1 vote Thank Flag Link Sat Jan 22, 2011
Hi Dan,

It depends on this information: what have other comparable properties sold for recently in the same area. Ask your agent to prepare a CMA (comparative market analysis), this will detail what the property you're interested in is worth relative to properties that have sold.

This is how professionals value property, the listing price in most cases shouldn't even be taken into consideration. You may offer 5,10,25% below list price, OR 5,10.25% over list price...depends on what value the comparable sales indicate.

Happy Hunting,
Akop
Web Reference: http://www.vchousehunt.com
1 vote Thank Flag Link Sat Jan 22, 2011
David I don't know if your declining comment was directed at me or not. Yes, some, in fact many pockets are declining again. It is imperative to have a human eyeball to examine the entire area & subdivision when putting in an offer to figure it out. That doesn't mean go and look at entire zip codes to get median pricing - it means go a little more local than that and observe the subdivision/area activity and absorption.
0 votes Thank Flag Link Wed Feb 9, 2011
Hello Dan....

"If my realtor says that the sales price is already a good price, shall I believe him/her?"

It is essentially not what your realtor "says." Your Realtor can give you "proof."
Simply stated your realtor may pull up the comparable SOLD COMPS within the subdivision and/or immediate area and reveal to you FMV. [Fair Market Value]

It has been through my experience that 10-20% offers [low ball offer] do not work and are a waste of time. If an investor wants to knock oneself out trying, I am sure they can find an inexperienced agent to facilitate out of the playing field offers.

"Any advice on how to negotiate?"
Your Realtor can successfully negotiate within the below link.....
http://activerain.com/blogsview/2044127/snap-shot-of-the-cur…

Should you or your friends/family have any Las Vegas real estate needs or questions, please feel free to contact me at anytime....
Thanks and have a great day!

Julia St. Marie, Prof. Corp. RRG, ABR, RSPS
A Trusted Buyer Agent for Las Vegas Real Estate
Certified REO Specialist
Realty ONE Group
702-355-H-O-M-E (4663) direct
LVRealEstateLady1@yahoo.com
http://www.LVRealEstateLady.com

No Costs-No Obligation.....
Be one of the first to know....."Instant Email Notification" of Foreclosed properties -- http://lvrealestatelady.com/Foreclosure_Notification.html
Look at MLS Inventory—Easy-- http://search.lvrealestatelady.las.mlxchange.com/
0 votes Thank Flag Link Fri Feb 4, 2011
A local agent can provide you all the data you need for your analysis (a referral is great to use). Perform a Cash Flow Analysis and remember appreciation will take awhile to get to 3-4%. Connect with a good, reliable property management company - ask them for the rental data and questions about the market. Typically to get a property that is 20% below market value there will be issues, with a great Licensed General Contractor, you can determine costs of repairs, be conservative. "YOU" have to do HOMEWORK, HOMEWORK, ANALYSIS with data, WORKING THE NUMBERS, and having a TEAM OF EXPERTS to help you is the best advice I can give you!!

To negotiate a great deal I highly recommend having great supporting documents. I have my investor clients get a general contractors' detailed quote of cost for repairs to accompany a lower bid offer, and reliable proof of funds, plus local comps. Make your offer a "yes" offer!

Find a Vegas Real Estate Investor Club and go to a meeting if possible while there, or at least get some good contacts of local investors doing the same thing, get referrals and pick their brain!! Start attending a RE Investor Club in your hometown - get educated first, know what you are getting into. Biggest piece of advice, have an Exit Strategy in place!!! Check out the link I am sharing with you - lots of valuable Investor Information

Happy Learning!!!
0 votes Thank Flag Link Wed Feb 2, 2011
Hi Dan, once you are ready to buy the property have your agent prepare a comparables on the property so you have an idea of whats been recently sold in the area. if is for investment renting then also compare the rentals in the area .Then make your offer based on that information. the % all depends how bad you want it. Best of luck..
0 votes Thank Flag Link Tue Feb 1, 2011
I have a great agent for you.

Georgine Turk she is very experienced and loves to help.

Georginesellslv@aol.com

Good luck. Stephanie
0 votes Thank Flag Link Tue Feb 1, 2011
I always have my buyers examine SALES prices along with rehab costs. It depends on the area if it is declining also.

The long short of it there is no GOOD answer for this one - experienced human eyeballs and brain need to pull comparables for each individual property interested. Along with rental comps since this is an investment. Our rental prices are declining and the cap rate needs to make sense
0 votes Thank Flag Link Sat Jan 29, 2011
David, I emailed couple days back but no answer till now :-) Anyway, I'll be in LV tomorrow looking for good deals. Email me at dan_niel@hotmail.com.

I actually don't have an agent yet. But I'm hoping to see open houses tomorrow and Sunday.

thanks you all for your responses.
0 votes Thank Flag Link Fri Jan 28, 2011
Wow, you've received quite a few answers already; are you still unsure about the response?

Request that your agent provides you with actual 1 year comps... and not just the final statistics, but an actual list of comps so you can personally see the trends.


--


Sincerely,

Mark D Fleysher, MBA, Broker, REALTOR
The Jack Conley Realty Group
C. 702-291-8186 F. 702-946-0843
http://www.trulia.com/profile/mfleysher/
http://www.linkedin.com/in/markfleysher
0 votes Thank Flag Link Mon Jan 24, 2011
"!! Yes listen to your realtor! You will not set the sale price if it's already 50% off." .

You can use TRULIA to get the SOLD price of home, and the asking PRICE of that same home from the time it went on the market. You can research and find d which house were Bank Owned REO's, some MLS listed, some NOT listed, and it's amazing how many homes that were listed by bank's for 50% off, say went back to the bank for 225,000 are listed for today's market value of $110,000 but have CLOSED SALE prices of $99,000.
Most real estate agents lack the understanding of the "Hidden Market" of Bank Owned Foreclosures.

I subscribe to a private listing service that reports all the Trustee's deeds for Bank Owned REO's I know exactly
what the bank paid for the house at the Auction, and have direct contact with asset managers who can make a
deal for the right qualified offer. I only use licensed Real EstateBuyer's agents to make the offer.

David Cooper's Buyer's Agent Cathy Rojas REALTY ONE +1-702-355-8807
0 votes Thank Flag Link Sun Jan 23, 2011
Dan Vegas is on SALE!! Yes listen to your realtor! You will not set the sale price if it's already 50% off. If it's overlisted by comps then go in at what the last sold was in the neighborhood $/sft.
Good luck..IF that realtor doesn't work out and your ready to listen to a realtor that knows his market call me.
Jacob Mitro
jmitro@remax.net
http://www.mitroteam.com
0 votes Thank Flag Link Sun Jan 23, 2011
Hello David.....

What exactly do you mean by:

"Wholesale" deals?
I thought an investor would have to buy bulk of about 100 properties from one institution for this???

Property Management and repair company at "dealer cost."
Does the Prop Manager and the repair contractors make any money since they are working for costs??

Sincerely, RichardCCCC001
0 votes Thank Flag Link Sun Jan 23, 2011
As the buyer the value of the propery is up to you. It's your money.

Regards,

Subrina Branch
Prominent Realty Group,LLC
Direct 702-521-8023
0 votes Thank Flag Link Sun Jan 23, 2011
Thanks David. I'm interested to know and verify the neighborhood that you put your clients on. Can you please email the list to me at dan_niel@hotmail.com. I'd appreciate it. I will be in Vegas this coming Saturday mainly to look for good deals.
0 votes Thank Flag Link Sun Jan 23, 2011
Thanks for all the information... very informative. If prices still declining, and if seller knew that, then I might be able to negotiate better. Do you think I can get a good rental property for up to $125K? I've seen a lot of properties under $125K but I don't know if I will get a positive cash flow if I put down 20%. Please advice.
0 votes Thank Flag Link Sun Jan 23, 2011
Dan,

Save your money...for a while longer. The Las Vegas Review Journal reported yesterday that Vegas home prices will continue to fall. Why? Nevada is the #1 foreclosure state. Nevada ranks #1 in unemployment. Additionally, in 2011 we will see the majority of ARM's reset (adjustable rate mortgages) which will result in additional foreclosures and additional investory. More ARM's will reset in 2011 than 2008, 2009 or 2010. This means more defaults and foreclosures.

Nevada has a big problem. We have an inventory surplus and not enough buyers. Additionally, banks are withholding thousands of foreclosed homes (not placing them on the market yet, for fear of flooding the market with additional inventory) and you have a mess.

I would love to help you find an investment home, however, I'd wait to buy in Vegas until this inventory surpluss works itself out. The trick is to buy low and sell later for a profit. If the market is still depreciating, as all experts predict, than my advice would be to wait. It's going to get much worse before it gets any better.
0 votes Thank Flag Link Sat Jan 22, 2011
Hi Dan. My name is Michael Bondi. I am a Las Vegas Realtor that specializes in Short Sales on the buyers side and on the listing side. For over 7 years now I have been a full time Realtor here in Las Vegas. To respond to your question depends on certain factors:

1) Your expectations for a ROI (Return on Investment)
2) Are your investment goals long term or short terms?
3) The type of property that you are look at: Traditional resale, Short Sale or REO

Those are some basic questions you should be dealing with your Realtor and telling that Realtor what your expectations are. As far as down payment goes if your an investor doing a conventional loan, you will need to put down 20% of the sales price.

Pulling comps for the area will help you and your Realtor find a good price and what the percentage would be for your offer. This is not the type of market that you think it is if you think you can low ball an offer.

Most banks want to see at least 88% of fair market value for the property, minus sellers concessions. I would only pull comps for the past 45 days and nothing longer than that since our pricing changes quickly.

As far as our bottom, in my opinion our bottom was reached in 2009. Last year most of my deals actually saw pricing go up during the transaction. I am still seeing that today. No one can tell you that 100% we are out of the woods with all the problems we have here in Nevada, but Real Estate is selling and there are plenty of renters to go around. It is cheaper and better to rent a home rather than an apartment here in town.


As far as believing your Realtor, if you have to ask the question, maybe you need to ask him or her for references from prior clients and or check with the Nevada Real Estate Division and see if there have been any complaints against that Realtor. You should also ask that agent for their training and education and what makes them different from all the other agents here in town.

Good luck with your search and have a good time when your out here!
0 votes Thank Flag Link Sat Jan 22, 2011
The replies are very interesting. I would agree to trust your REALTOR. You can ask for a brief market analysis of the area you want to buy. Short sale listings are very misleading. I make an offer to buy one and I offered list price. The bank(s) would not accept the offer even though the property owner did. The banks wanted more than the list price and would not agree to pay me a commission.

Enough of short sales. I just did not want you to see short sale listings and be misled.

Concentrate more on the sold properties. You can see a trend of what sold in the area that is similar vs. what has sold in the area that is similar in the last 30 – 60 days. That way you can make an intelligent decision and clearly see if the price is going up, down or stagnating in the area.

I mainly list properties and mostly REO (bank owned) most of my listings over the last 6 months have sold at or above list price. Several years ago the banks were listing at 105% of the market value. Lately they have been listing at or below market value, less estimated repairs.

If we can be of further service please call or email.

Dave Rubinger
Broker
D and R Realty
David@DandRRealtyLV.com
0 votes Thank Flag Link Sat Jan 22, 2011
"and it looks like still declining" NOT in the neighborhood where I put my investors. Year to year return of +9%,
median sale price $147,000. Houses sold new in 2006 for $320,000-$350,000.
.....I investigate the offering price of a house, and devide by sq ft to get price per sq ft. I then go to SOLD houses in the same neighborhhod with similar sq ft, and devide the SOLD price by the sq ft. This gives me a pretty good idea what kind of discount I am looking for.
....I make my absolute, lowest and best offer on the first offer sheet, and let the seller and the seller agent know I am making offers on a couple of other houses if no response by 8PM tonite. I do not let my offers even carry over 24 hours. Call me if you want to know why?

David Cooper +1-702-499-7037
Cathy Rojas BUYERS AGENT Realty One +1-702-355-8807
0 votes Thank Flag Link Sat Jan 22, 2011
Hello, I will be very glad if I can help.

There is not strait answer on your question, listing price on each property serves different purposes, if it is a short sale, the purpose is to attract Buyers and receive any offer, because on this stage the listing agent does not have clear picture what purchase price the lender will approve. With the REO homes, the listing price could be very low just to get multiple offers and get the buyers bid on the property. It depends how you will buy the property,cash( you will have a little advance), FHA or conventional financing. Also what are your purposes of buying,are you an investor or you will use the property as residence.Basically I would advice, pick up an full time agent, who has knowledge for the market, the values in different areas, and enough experience working with buyers , submitting offers and get acceptance on them.

Adriana
Prudential Americana Group
Cell: (702)275-6833
Email: asamardjieva@yahoo.com
0 votes Thank Flag Link Sat Jan 22, 2011
If your agent is YOUR agent, and not the listing agent on the property, I would trust that agent. The local agent knows the area, and should know the values of the properties in their local area. If the home has been on the market for at least 30 days and it hasn't received any offers, it's over priced, and would try at least 10% off of the asking price...maybe more.

Best of luck on your new investment.
0 votes Thank Flag Link Sat Jan 22, 2011
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