What is the condition of the market in Las Vegas? That will probably change during the time it takes me to write this report! Actually, I see a whole lot of frustration out there. This is nothing new from the traditional seller’s point of view - this has been going on for quite some time. I see no change on that front for 12 - 18 months (give or take).
What is new, however, is massive frustration on the buyer’s side of things. A lot of you are saying, “It’s a huge buyer’s market! How can there be frustration on the buyer’s side, they can write their own ticket - can’t they?” If you are currently a buyer and you are trying to get a bank owned property, you know exactly what I’m talking about.

Let me set up a typical current scenario. Bill, the buyer, sees the opportunity to buy housing in Las Vegas as way too tempting. He sees housing prices $150 - $200K under what he would have paid a year ago. He can now afford to buy that 2500 - 2800 sq ft house for roughly $250K (I have a client that is going after a 4 year old, 1977 sq ft beautiful home listed for ..$159,900!). Bill is all excited, he is confident that the Las Vegas market will return to previous pricing at some point in the not-too-distant future where he will have great equity built up in his home. All the while he and his family will be living very comfortably in their newer, larger home. Bill then does the wise thing and contacts a Realtor (not too wise in this example because it isn’t me!) to begin the buying process. He tells his agent what he wants so the agent can start looking for him. The number one criteria Bill wants, however, is a deal. The agent starts sending Bill properties - of course the agent is sending the lowest price per square foot he can find on the MLS. Bill starts seeing all of these and his reality begins to get skewed.
Bill still has the mindset of a traditional buyer. Bill believes that, as has been the case for several years, he will get any of these homes that he makes an offer on. Bill also believes that because it’s a buyer’s market that nothing is going for full list and that the seller is going to automatically cover closing costs for him. Bill is heading into a meat grinder. Bill’s agent has not prepared him to be successful in today’s market. Bill is in for a roller coaster ride. I digress, on with our story.
Bill chooses the four homes that he is most interested in. Of course there is one that REALLY has his attention (I’ll get back to this later). Bill is a little confused because three of the four only have one picture on the listing. One has full pictures and looks to be in perfect shape. So Bill contacts his Realtor and schedules to go tour these homes (of course they are all bank owned, foreclosure properties). Bill can’t fit the time in for a couple of days, so they go out later in the week. The day has come and they go see the four homes. Two of the homes were destroyed on the inside and because there were no pictures on the listing he had no way of knowing beforehand. The one that looked great in the pictures had an odor that almost knocked you over when you opened the front door. The fourth one was in good shape, but wasn’t EXACTLY what Bill wanted. Bill decided to put in an offer anyway on the fourth house. It was listed for $225K, it sold at the peak (9/06) for $360K, and Bill put in a bid for $215K and wanted his closing costs covered. That’s a strong offer in this amazing buyer’s market, right? A week goes by and they hear nothing from the bank. Bill notices the status of the house change on the MLS; he’s been watching it every day because he’s excited - even though at first it wasn’t exactly what he wanted. Bill calls his agent to see if it was their bid the bank accepted. If the bank didn’t notify you first, it isn’t your bid that got accepted. Bill is bummed and frustrated.

They start the process over. They see one that is flawless, priced right and has only been on the market for a week! This time they write an offer for full list (seller to contribute closing costs, of course). Three days go by and they see the dreaded on-line status change again. Bill is bummed, and frustrated. They come to find out that 37 offers went to the bank before theirs. With 37 offers on the table, what are the chance this went for over full list with no seller contribution for closing costs - about 100%!

They start the process over. Another great one shows up, it has only been listed for three days. Day after tomorrow, they go see it and write an offer on the spot. It pains Bill, but they offer 3% over list with 3% seller contribution (essentially full list). The agent submits the offer (house has now been listed for five days) and finds out that the bank has already countered another offer. They were never in the game. Bill is bummed and frustrated.

They start the process over .AGAIN! Don’t worry, Bill eventually got his house (13 offers later) after a brutal, emotional street education. Remember the home that REALLY had Bill’s attention at the onset? There are some tricks for getting that house, but you’ll have to call me to see how they could have handled that one differently. You are already starting ahead of Bill, because you’ve read this.

There is a lot of frustration on the side of the buyer out there, believe me. The example I just told you is happening. You may not believe it if you are not shopping, but this is the norm not the exception. It is more important than ever to have a full time agent working for you. A full time agent is in touch (hopefully) with what is going on and how to navigate these constantly changing waters. You CAN buy foreclosure properties and they are amazing values right now, but you cannot just walk in at your own pace and say, “I want that one!” You need someone that knows how the game is played, how the bank’s work and what they are looking for - as well as having a few tricks up the sleeve - helping you out. I’d be happy to be that person.

Please feel free to call me at 702/496-4710. My email address is scottmeservey@702properties.com, or you can find me on YouTube to see a monthly market conditions report video that I give to the Real Estate Insider investment club every month. Thanks and talk to you soon!