I just looked at KB Homes yesterday (all day long) and would admit they had some nice layouts in the NW region of Vegas, but their incentives royally sucked. Sure, you can get a 1800 SQ Ft home at $189K with 3-4 Beds, but it's a base model and you'd have to upgrade another $25-30K just to get it to compete with other homes in the area. Also, those "Master Plan" communities also have SID fees for 10 years in the range of $80 per month, as well as monthly HOA fees of $80 per month -- tack that on to your mortgage, insurance, etc, and suddenly what was a promising $1200-1300 monthly payment just turned into a $1500-$1600 monthly payment. That extra money per month can be a killer too.
I was also looking at Richmond homes, where the square footage was smaller -- but the incentives were pretty great. Right now they are offering $25K in free upgrades with the purchase of a new home, priced around $180K for a 1600 SQ ft, 3 bed home. The layouts weren't as nice as KB, but they were still nice. The problem was the location of these properties and lots. Many of the lots they had open contained eyesores from nearby commercial properties, noisy freeways and backyard odors that crept every so often with the smell of Pig Manure (from the farm.)
With the market the way it is, I think I will wait patiently. I will not force myself to buy into the whole idea of "You have to buy now to get a great deal." The market is over saturated with REO's now -- and many buyers are standing at the sidelines making the same offers I am, which is actually making the REO home prices go above what they were asking for due to multiple offers. Eventually, however, the buyers will settle down and disappear. I don't believe there will be lots more buyers this summer and I suspect there will be better deals towards November, as I do not see things "picking up" for the market -- but more so a "delayed" reaction as to what the "real inventory" is out there. Many banks haven't foreclosed yet because they are just so busy -- I should know because my dad is unfortunately a prime example, and he even contacted them to tell them to foreclose, and that was 3 months ago (totaling nearly 7 months thus far), but they still haven't foreclosed yet. It's still in pre-foreclosure status. They call practically everyday trying to work something out. Short sales won't work either because he has a second mortgage lien on the property, which isn't worth it to any buyer.
Sooner or later, there will be lots more REO homes on the market with fewer buyers, and Newer Homes will likely be offering all kinds of great incentives if they want to stay in the game. This is when I will likely get the home I need. For now, I will continue to look -- but I am very doubtful I will get what I "Need" right now. There is just too much competition in my price range. Lucky for me I can wait. I can also live anywhere I want since I work from home and own several online businesses. I am also looking in Indianapolis, Arizona and Ohio regions. I love Las Vegas because of the 24/7 atmosphere and excitement, but I certainly don't need it... I just need a good home. - Fri May 9 2008, 14:23
Hi Roberta...
Thanks for the explanation. I keep hearing "You have to act quickly" -- but in all honesty, from my experience, acting quickly doesn't matter that much in REO properties, because they wait anyway just to see what other offers might come in. I say this because I submitted two offers already where NO ONE had submitted an offer -- I was the first and both were done on the first day it came out in the MLS. The home was listed at $159K, so I offered $180K (with the 6% the seller would cover.) Of course, we didn't hear back from them for TWO WEEKS, and my agent called them everyday and sent emails. When they finally did contact me, they suddenly gave me a notice saying there were now multiple offers and if I wish to raise my offer, I could. But I couldn't, as I was maxed out. Needless to say, I didn't get it.
The second property I made an offer on I didn't even see it. I just saw the photos and rolled the dice. But the same thing happened. No offers were made when my agent called... I submitted the offer that day, about $20K above listing, and another two weeks later -- guess what happened? My agent tells me they want to know if I wish to raise my offer as there are multiple offers.
Getting in on it early is not helping for good properties -- it's the HIGHEST offer. My agent told me that the banks are not really setup to handle so many REO foreclosed properties, especially now... so there is a large delay for getting back to people -- which results in more offers appearing on the table during that time. She said the only true way to win is to either get lucky, know someone who can push your offer faster through the chain of command, or else make higher offers that other people just compete with. Obviously, I just seem to win.
It is very discouraging to me as well. I am exhausted physically and mentally, my agent is exhausted too and has told me to perhaps lower my 4 bedroom count to 3 bedrooms and sacrifice the Square footage. I will play ball, but it's hard to play with others who have more money. The diamonds in the rough belong to the investors because they have the cash flow to scoop up a great deal and out bid most others. The MLS had something like 20K listings last month I believe, yet that number has dropped to around 16K this month (so I have been told)... so the supply has gone down.
Oh well, I will continue to press on I suppose. I will continue to view properties, submit offers and wait. Hopefully, sooner or later, something will eventually come my way. Thanks for your response. :-) - Tue May 6 2008, 02:53
Thanks guys. Damon, you said "The closest to that would be KB in the northwest 1812 sf for $179k, but you'll pay extra for the 4th br option."
Do you think the new home developers are more willing to cut deals now? It just doesn't seem that way to me -- perhaps it's because I am naive about the new home market, but from what I have seen thus far, I haven't really seen too many price cuts, just free upgrades and homes with furnishing deals, etc. These are great incentives no doubt, but still, I think the majority of people looking for homes are in the same price range I am in, which is the $180K range and not quite the $200K range... or at least it seems that way to me with all the foreclosures having multiple offers with the homes in that range. - Mon May 5 2008, 17:26
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