BUYING
Serving Pahrump & Las Vegas areas
Frequently Asked Questions
Getting pre-approved for a mortgage is the first step of the home buying process. Getting a pre-approval letter from a lender will get the ball rolling in the right direction.
Here’s why:
First, you need to know how much you can borrow. Knowing how much home you can afford narrows down online home searching to suitable properties, thus no time is wasted considering homes that are not within your budget. (Pre-approvals also help prevent disappointment caused by falling in love with unaffordable homes.)
Second, the loan estimate from your lender will show how much money is required for down payment and closing costs. You may need more time to save up money, liquidate other assets or seek mortgage gift funds from family. In any case, you will have a clear picture of what is financially required.
Finally, being pre-approved for a mortgage demonstrates that you are a serious buyer to both your real estate agent and the person selling their home. Real estate agents will require a pre-approval letter or Proof of Funds before showing homes.
From start (contracting with buyer’s agent) to finish (closing escrow), buying a home takes about 10 to 12 weeks. Once a home is selected and the offer is accepted, the average time to complete the escrow period on a home purchase is 30 to 45 days (under normal market conditions). Though, well-prepared home buyers who pay cash have been known to purchase properties in a shorter time frame.
Market conditions are a major factor in how fast homes are sold. In hot markets with a lot of sales activity, buying a home may take a little longer than normal. This is because parties involved in the transaction get behind when business suddenly picks up. For example, a spike in home sales increases the demand for property appraisals and home inspections, yet there is generally no increase in the number of appraisers and inspectors available to do the work. Lender turn-around times for loan underwriting can also slow down. If each party involved in a deal takes a day or two longer to get their work done, the entire process gets extended.
In sellers’ markets, increasing demand for homes drives up prices. Here are some of the drivers of demand:
- Economic factors – the local labor market heats up, bringing an inflow of new residents and pushing up home prices before more inventory can be built.
- Interest rates trending downward – improves home affordability, creating more buyer interest, particularly for first time home buyers who can afford bigger homes as the cost of money goes lower.
- A short-term spike in interest rates – may compel “on the fence” buyers to make a purchase if they believe the upward trend will continue. Buyers want to make a move before their purchasing power (the amount they can borrow) gets eroded.
- Low inventory – fewer homes on the market because of a lack of new construction. Prices for existing homes may go up because there are fewer units available.
A buyer’s market is characterized by declining home prices and reduced demand. Several factors may affect long-term and short-term buyer demand, like: Economic disruption – a big employer shuts down operations, laying off their workforce.
- Interest rates trending higher – the amount of money the people can borrow to buy a home is reduced because the cost of money is higher, thus reducing the total number of potential buyers in the market. Home prices drop to meet the level of demand and buyers find better deals.
- Short-term drop in interest rates – can give borrowers a temporary edge with more purchasing power before home prices can react to the recent interest rate changes.
- High inventory – a new subdivision and can create downward pressure on prices of older homes nearby, particularly if they lack highly desirable features (modern appliances, etc.)
- Natural disasters – a recent earthquake or flooding can tank property values in the neighborhood where those disruptions occurred
A stratified market happens where supply and demand characteristics differ by price point, in the same area (typically by city). For example, home sales for properties above $1.5M may be brisk (seller’s market) while homes under $750k may be sluggish (buyer’s market). This scenario comes along every so often in West Coast cities where international investors – looking to park their money in the United States – buy expensive real estate. At the same time, home sales activity in mid-priced homes could be entirely different.
The buyer(s) and buyer’s agent must negotiate commission at the outset of their buying relationship, using a Buyer Brokerage Representation Agreement (BBRA), prior to looking at properties together. The buyer(s) can authorize the buyer’s agent to request commission from the seller(s) using the Residential Purchase Agreement (RPA). However, the buyer(s) is/are still responsible for paying the commission amount not completely covered by the seller(s). Lisa Bond Real Estate LLC hereby reserves the right to reduce the negotiated commission at the exclusive discretion of the broker to protect the best interest of the transaction. In summary, the buyer(s) is/are ultimately responsible for paying the buyer’s agent, pursuant to the Buyer Brokerage Representation Agreement (BBRA).
Most loan programs require a FICO score of 620 or better. Borrowers with higher credit scores represent less risk to the lender, often resulting in a lower down payment requirement and better interest rate. Conversely, home shoppers with lower credit scores may need to bring more money to the table (or accept a higher interest rate) to offset the lender’s risk.
There are many online mortgage calculators that can assist you with determining your mortgage payment.
Here is one that can help you calculate your payment
https://www.mortgagecalculator.org/
NOTE: Final calculations and amounts will be determined by a professional mortgage lending institution.
You need to gather your financial documents and apply with a lender who will review your information and provide a pre-approval letter. Your agent can provide referrals.
Lenders typically require the following documents:
• Recent tax returns
• W-2 forms or pay stubs
• Bank statements
• Proof of any additional income
• Identification documents
• Credit history reports
• Statements of existing debts or loans
Yes, individuals with commission-based or irregular income can qualify for a loan. However, lenders will typically require a more extensive documentation process, including several years of tax returns and proof of consistent income. It is advisable to work with a lender experienced in handling such cases.
Yes, a person relying solely on social security can qualify for a loan. Lenders will consider the consistency and amount of social security income, as well as other financial factors such as credit score and existing debts. It’s important to work with a lender who understands the nuances of social security income.
Look for an agent with experience in the local Nevada market, a strong track record of successful transactions, and good reviews from past clients. It’s also essential that you feel comfortable communicating with them.
Closing costs typically range from 2% to 5% of the purchase price of the home. These costs can include loan origination fees, appraisal fee, title insurance, escrow fees, and more.
Nevada offers diverse landscapes, a favorable tax environment, and a variety of recreational activities. The state has no income tax, which can be a significant benefit for residents.
Your real estate agent will help you draft a purchase agreement based on comparable properties and market conditions. Once submitted, the seller can accept, reject, or counter your offer.
Escrow is a neutral third party that holds funds and documents until both the buyer and seller meet all the conditions of the sale. They will perform a title search to ensure the title is clear and the property is sellable. The escrow officer will facilitate the transaction, ensuring both parties fulfill their obligations.
Yes, the price of a property is typically negotiable. Your real estate agent will assist you in making a competitive offer and negotiating terms that are favorable to you.
The closing process usually takes about 30 to 45 days from the time an offer is accepted. However, this timeline can vary depending on various factors such as property type, financing, inspections, and negotiations.
On closing day, you will sign all the necessary paperwork to transfer ownership of the property. You will also wire any remaining closing costs to escrow and receive the keys to your new home or take possession of your vacant lot.
Possession occurs immediately after the escrow closing process is completed, funds have been transferred to the seller, and the property has recorded. In some cases, there may be a pre-determined date agreed upon in the purchase agreement.
Movers can deliver your personal possessions as soon as your property has recorded and you have taken possession of your new home. It is advisable to coordinate with your moving company to ensure that the delivery aligns with your possession date.
Getting a lender pre-approval is crucial because it gives you a clear idea of how much you can afford to spend on a property. This helps you avoid wasting time looking at properties that are above or below your means and strengthens your position when making an offer, as sellers see you as a serious and qualified buyer.
Feel free to contact your real estate agent at any time. They are there to guide you through the process and address any concerns you might have.
The NAR post-settlement agreement refers to changes and transparency improvements in the real estate commission structures and practices, ensuring buyers are more informed about how commissions are handled. This means as a buyer, you will have clearer information on what your agent is being paid and by whom. Additionally, the NAR settlement agreement requires all buyers to negotiate and sign a Buyers Brokerage Representation Agreement (BBRA) prior to viewing properties.
Nevada has relatively low property taxes compared to other states. The property tax rate can vary by county & town, but as of 9/16/2024, it is 3.4092%.
Yes, non-US citizens can purchase property in Nevada. However, it is advisable to consult with a real estate agent and a legal expert to understand any specific requirements or restrictions that may apply.
Yes, Nevada offers several programs for first-time home buyers, including down payment assistance and favorable loan terms. The Nevada Housing Division and other local agencies can provide more information on available programs.
Down payment assistance programs provide buyers with funds to cover part or all of the down payment required by their mortgage lender. This assistance can come in the form of grants, zero-interest loans, or deferred payment loans.
Eligibility for down payment assistance programs can vary, but common criteria include being a first-time home buyer, meeting income limits, and purchasing a home within certain price ranges. Some programs may also require buyers to complete a homebuyer education course.
To apply for down payment assistance, start by contacting your mortgage lender or a local housing agency. They can provide information on available programs and guide you through the application process. Your real estate agent can provide guidance.
When real estate transactions “record” or “close,” it means the final step of a real estate transaction has been completed. This involves the successful administrative transfer of ownership from the seller(s) to the buyer(s), the signing and recording of all necessary documents, and the disbursement of funds. Now you “the buyer(s)” own the property.
While the broad down payment average is 11%, first time home buyers usually only put down 3 to 5% on a home. That’s because several first-time home buyer programs don’t require big down payments. A longtime favorite, the FHA loan, requires 3.5% down. What’s more, some programs allow down payment contributions from family members in the form of a gift.
Some programs require even less, VA loans and USDA loans can be made with zero down. However, these programs are more restrictive. VA loans are only made to former or current military service members. USDA loans are only available to low to-middle income buyers in USDA-eligible rural areas.
For many years, conventional loans required a 20% down payment. These types of loans were typically taken out by repeat buyers who could use equity from their existing home as a source of down payment funds. However, some newer conventional loan programs are available with 3% down if the borrower carries private mortgage insurance (PMI).
If the built-up equity in your current home will be applied to the down payment on the new home, naturally the former will need to be sold first.
Some home buyers decide to turn their current home into an investment property, renting it out. In that case, the current home will not need to be sold. However, your loan advisor will still need to evaluate your risk profile and credit history to determine whether making a loan on a new home is feasible while retaining title to the old home.
That’s up to you! For sure, home shopping is easier today than ever before. The ability to search for homes online and see pictures, even before setting a foot outside the comfort of your living room, has completely changed the home buying game. Convenience is at an all-time high. But, nothing beats viewing a home to see how it looks and ‘feels’ in person.
When you make an offer on a home, your agent will ask for a check to accompany it (checks are the same as cash, and the deposit is typically 1% to 2% of the purchase price). Earnest money is made in good faith to demonstrate – to the seller – that the buyer’s offer is genuine. The Ernest money is deposited with an escrow holder upon an accepted offer.
Important: if the terms of a deal are agreed upon by both parties, then the buyer backs out, the earnest money may not be returned to the buyer. Ask your agent about your earnest money deposit and the ways to protect it – such as offer contingencies.
Written offers should stipulate the timeframe in which the seller should respond. Giving them twenty-four hours should be sufficient.
Sellers may accept or reject an initial offer. But there is a third path that is quite common, sellers can initiate a counteroffer. Remember this: a deal isn’t dead until it’s dead. So, if a counteroffer is offered by the seller, you are still in the game. You and your agent need to review the counteroffer to determine whether it is acceptable. If so, then approving it closes the deal immediately. Keep in mind, offers and counteroffers can go back-and-forth many times; this is not unusual and negotiations are a part of what Realtors do as a matter of routine. Each revision should bring both parties closer together on the terms of the deal.
Yes! Home inspections are highly recommended because they can reveal defects in the home that are not easily detected. Home inspections bring peace of mind to one of the biggest investments of a lifetime.
Final walk-throughs give buyers a chance to make sure nothing had changed since their first visit. If repairs were requested as part of the offer, a follow-up visit ensures that everything is complete, as expected, per the terms of the contract.
Repayment terms for down payment assistance vary by program. Some grants do not require repayment, while zero-interest and deferred payment loans typically need to be repaid when you sell the home, refinance, or pay off your mortgage. Consult with local lenders for the current guidelines.
A first-time home buyer is typically someone who has not owned a home in the past three years. This definition can vary by program, but it generally includes those who are purchasing their first home or have not had homeownership interest in a primary residence within the specified period. Consult with local lenders for the current guidelines.
Yes, you can qualify as a first-time home buyer if you have not owned a home within the last three years. Some programs may have specific criteria, so it’s essential to verify the requirements of the program you are interested in. Consult with local lenders for the current guidelines.
Yes, first-time home buyers often have access to special programs, including down payment assistance, lower interest rates, and grants. These benefits are designed to make homeownership more accessible and affordable. Consult with local lenders for the current guidelines.
A Buyer Brokerage Representation Agreement is a contract between a home buyer and a real estate brokerage that outlines the services the brokerage will provide and the terms of compensation. This agreement formalizes the relationship and ensures that the buyer’s interests are represented.
This agreement provides clarity on the duties and responsibilities of the real estate agent and ensures that the agent is legally bound to act in the buyer’s best interests. It also outlines how the agent will be compensated, which can help avoid misunderstandings later in the process. Additionally, in accordance with the National Association of Realtors (NAR) Settlement Agreement, effective 8/17/2024, all Realtors are required to have the agreement signed by the buyer(s) before showing a buyer any properties.
The agreement should include the scope of services provided by the agent, the duration of the agreement, the terms of compensation, and any exclusivity clauses and special arrangements between buyer(s) and agent. It should also outline the duties of both the buyer and the agent, including confidentiality and loyalty requirements.
Yes. Cancellation is possible by buyer (s) or buyer’s agent with proper written notice. It’s essential to review the terms carefully before signing.
Yes, you can ask the seller for concessions towards your buyer’s agent commission, down payment, closing costs, or other expenses as part of your offer. These concessions can help reduce your out-of-pocket expenses and make the purchase more affordable.
Your real estate agent will help you draft an offer that includes a request for seller concessions. This request should be clearly stated in the purchase agreement and specify the amount or percentage of the purchase price you are asking the seller to contribute.
Seller concessions are relatively common in Nevada, especially in a buyer’s market where sellers may be more willing to negotiate to close the sale. However, the willingness of a seller to provide concessions can vary based on market conditions and the specifics of the transaction.
Yes, it is possible to get a loan on vacant land. These loans, often referred to as land loans or lot loans, typically have different terms and requirements compared to traditional home mortgages. Lenders may require a larger down payment and charge higher interest rates due to the increased risk associated with financing undeveloped property.
Several factors determine if vacant land is buildable, including:
• Zoning regulations: Ensure the land is zoned for residential use.
• Utilities: Access to water, electricity, sewage, and other utilities is crucial.
• Topography: The land should be relatively flat and stable to support construction.
• Environmental restrictions: Check for any environmental protections or hazards.
• Permits and approvals: Ensure you can obtain the necessary building permits and approvals from local authorities.
Before purchasing vacant land, consider the following:
• What is my intent/plan for use
• Land use and zoning regulations
• Access to utilities and infrastructure
• Soil quality and topography
• Environmental assessments and restrictions
• Future development plans in the area
• Cost of land preparation and improvements
Common inspections include a general home inspection, private well, water analysis, septic, pest/termite inspection, and potentially specialty inspections for issues like mold or structural problems. These inspections help you understand the property’s condition before finalizing the purchase.
Inspections during the due diligence period are crucial for several reasons:
• Identify potential issues: Inspections can reveal hidden problems in the property, such as structural damage, pest infestations, or plumbing issues, which might not be visible during a regular showing.
• Secondary inspections: This is your opportunity to have a specialized service provider/inspector take a close look at the issue(s) called out by your certified home inspector.
• Negotiate repairs: If inspections uncover problems, you can negotiate with the seller to fix these issues or adjust the purchase price accordingly.
• Peace of mind: Knowing the property’s condition helps you make an informed decision and avoid unexpected expenses after the purchase.
• Investment protection: Inspections ensure that your investment is sound and that you’re not buying a property with significant, undisclosed issues.
Typical property inspections include:
• General home inspection: Assesses the overall condition of the property, including the structure, roof, plumbing, electrical systems, and HVAC systems.
• Termite inspection: Checks for signs of termite infestation or damage.
• Mold inspection: Identifies any areas with mold growth, which can affect health and structural integrity.
• Radon inspection: Measures radon levels in the home, as elevated levels can be hazardous to health.
• Specialty inspections: Depending on the property, additional inspections such as a pool inspection, spa, septic system inspection, or chimney inspection might be necessary.
The due diligence period is a set timeframe after the buyer’s offer has been accepted, during which the buyer can conduct inspections, appraisals, and other evaluations of the property. This period allows the buyer to confirm that the property is in satisfactory condition and meets their expectations before finalizing the purchase. If significant issues are found, the buyer has the option to renegotiate terms or withdraw from the transaction without penalty.
An appraisal contingency is a clause in a real estate contract that allows the buyer to back out of the deal or renegotiate the purchase price if the property’s appraised value comes in lower than the agreed-upon purchase price. This contingency protects the buyer from overpaying for a property and ensures that the lender will not issue a loan for more than the property’s appraised value.
If the property does not appraise at the sales price, you have several options:
• Renegotiate the price: You can ask the seller to lower the sales price to match the appraised value.
• Increase your down payment: If you still want to buy the property at the agreed price, you can make up the difference by increasing your down payment.
• Split the difference: Buyer and seller can renegotiate to meet at a mid-point between the original sale price and the appraised value.
• Walk away: If you have an appraisal contingency, you can cancel the transaction without penalty if the property does not appraise at the agreed-upon price.
If the property is in a 100-year flood zone (aka AO), flood Insurance will be required if you have a federally backed mortgage. Local insurance companies can provide estimates.
• The builders may need to elevate the structures and/or foundation and have that fact and measurements documented on elevation drawings.
• Sellers must inform you if the property is in a flood zone.
Technically yes, with broker approval, a Nevada real estate agent can represent both the buyer(s) and the seller(s), a practice known as multiple agency. However, this arrangement is frowned upon by the National Association of Realtors (NAR) and State and local entities because it can present serious conflicts of interest. LBRE allows this practice on vacant land only. Full disclosure and consent in writing from both parties are required.
Yes, real estate buyer(s) can ask the seller(s) to pay the commission for their buyer’s agent. This practice is not uncommon and can be included in the purchase agreement. Real estate commissions are negotiable, and it’s possible for the buyer(s) to request the seller(s) to cover this cost as part of the overall transaction. However, whether the seller(s) agrees to this request may depend on various factors, including the market conditions, the negotiation skills of the parties involved, and the terms of the offer. It is always advisable to consult with Lisa Bond Real Estate LLC to understand the implications and to ensure the terms are clearly outlined in the contract.