WILL A LOW DOWN PAYMENT OPTION BENEFIT LAS VEGAS BORROWERS
Last week brought an announcement that should get the attention of a large segment of would-be Las Vegas home buyers—particularly those who have been stymied by the difficulty of trying to build their credit scores by paying all the monthly bills on time while simultaneously saving up a pile of cash for a down payment. For too many Las Vegas nine-to-fivers, the two ambitions are achievable—just not at the same time. Although inflation hasn’t been horrendous, even a modest degree of rising prices causes a crunch for those whose incomes are flat. For many Americans, coming up with the down payment has been an immovable stumbling block. Into the breach came last week’s Bank of America announcement of a new mortgage product. Cutting to the chase, these home loans will be structured to allow qualified homeowners to make down payments of as little as 3%. Yes, 3%! If you don’t believe there’s ever any free lunch, you may be wondering why, if this makes sense to a bank, it hasn’t been offered until now. The answer has to do with the way the FHA regulates home loans. The Federal Housing Administration insures banks against defaults on FHA-backed mortgages (they allow down payments of as little as 3.5%) but sometimes holds the banks responsible when borrowers fail to repay. In fact, the FHA won billions in settlements in recent years when bank paperwork turned out to be inaccurate. The banks were not pleased: they said many of the errors were minor. They also decided to cut back on offering FHA loans. That had the effect of slowing the residential real estate market across the U.S.—and our Las Vegas was no exception. This new home loan structure is Bank of America’s solution for “families of modest means”—a group everyone agrees has been left out in the cold. It avoids FHA rules by avoiding the FHA altogether, instead relying on the backing of Freddie Mac and a nonprofit fund. Among the guidelines for the new low down payment product are requirements that borrowers have credit scores of at least 660 (FHA allows 580) and incomes that are lower than the Las Vegas’s median. Because there will be no requirement that borrowers pay for private mortgage insurance, the loans should be less expensive than corresponding FHA mortgages. Great deal! It remains to be seen how widely available such loans are going to be for Las Vegas borrowers. Bank of America will, at first, be capping the number of loans it issues while it tests the market. But it’s a sure thing that other national lenders will be watching what happens…and very likely rolling out their own low down payment products. It should be one answer for folks who have proved they are deserving and responsible—yet have found themselves closed out of the market. As the spring selling season heats up, many potential opportunities also open up for sharp-eyed prospective buyers. If you are one, I’m standing by to help!
LAS VEGAS HOMEOWNERS FACE HOME AUTOMATION FUTURE
Home automation is going mainstream. There: I said it. We all knew it would happen, but some of us hoped it would happen later. The prospect of our house being smarter than we are has been out there since as far back as when the first Terminator movie hit VHS (or was it Beta? Or Betamax?)… Anyway, the “Smart House” idea has always had such a science-fictiony patina, it allowed many Las Vegashomeowners the valiant hope that the whole thing might be delayed—at least until there was a flying car parked in every garage. Now it looks like our hopes are soon to be dashed. At least, that seemed to be the news coming out of Spain last week. According to reports from last week’s Mobile World Congress assembled in Barcelona, “the IoT was pervasive.” If you haven’t heard what “the IoT” is, maybe you’d better sit down— The IoT is short for “the Internet of Things.” It’s a logical development. For home automation to go mainstream, every smart part of it has to communicate, one way or another, with everything else. Home Wi-Fi plus the web opens many possibilities. “M2M” devices are ones that use a wireless network…well, you get the idea. When your Smart Refrigerator needs to tell you it is about to run out of 1% milk, it has to let your Smartphone know, right? Or else message your car’s digital console. Or else tell the Smart Grocery Store to send a drone over…Since all those are Things and the best way to transfer information is through the Internet…voila! The Internet of Things. More news from Barcelona will follow, but first I hasten to mention that there are lots of current useful innovations for Las Vegas homeowners; innovations that are smart—but not so smart that anyone needs to feel threatened. For instance, heating and cooling are perfect for IOT. The ability to control your energy-eating heating and cooling devices via your smartphone can already save a lot on utility bills. Older automated systems relied on painstaking day-by-day (and even hour-by-hour) programming, yet still didn’t account for changes in schedule. With a phone-triggered remote command system, you can work late at the office yet easily delay home heating or cooling until just before you get home. Web-enabled home security systems make possible inexpensive remote monitoring by professionals—or even clever innovations like the one that rings your phone when someone approaches the front door or lets you answer a doorbell ring from your phone. It can sound like you’re on the intercom inside the house. Would-be burglars hatethat one (even more than the automated Rottweiler barking setups) … But back to the news from Barcelona, with exhibitors’ demo devices embodying the latest ideas for what we will be needing when the IoT really gets going. Smart tape measures to beam measurements to your phone; wearable trackers that eavesdrop on your children (a “smart bracelet for children”); “Petit” for overweight dogs (it keeps track of your pet’s steps, but, unfortunately, is not water resistant yet); Samsung’s internet fridge (with a 21” screen that displays—well, a shopping list) … Actually, when you wade into the details, maybe the IoT isn’t quite ready to overwhelm our Las Vegas castles, at least not just yet. Home automation may still be limited to truly useful innovations for a while—those that are smart, but not too smart—the kind that adds clear value to a home when it’s time to sell. When that future occasion arises, I hope you (or the refrigerator) will remember to call me!
SELLING LAS VEGAS REAL ESTATE HAS A NEW ABC
Today, selling real estate in Las Vegas (or Kalamazoo, for that matter) has been transformed in important ways. In others, it’s remained pretty much as it was 50 years ago. Let’s start with the changes: • The buyers’ ability to identify properties has undergone a revolution. Fifty years ago, the process of hunting for and comparing available homes was constrained by the availability of information. Selling real estate in Las Vegas involved getting the word out, largely through printed media. Newspaper and magazine advertisements drove buyers’ awareness—or else the agent’s Xeroxed listing sheets. That was about it (in addition to driving around, looking for ‘For Sale’ signs). • Buyer’s ability to readily compare homes has likewise been vastly improved. ‘Vastly improved’ is an understatement: anyone selling Las Vegas real estate today knows that their listing will be instantly available online, including a wealth of detail formerly only available to interested buyers who obtained a copy of the listing sheet. Now it’s all there on their laptop or smartphone screen, side-by-side with every other comparable property’s. When the drill-down data (items like ‘cost per square foot’ ‘projected mortgage payment’) is instantly available for side-by-side comparisons, selling real estate without being able to demonstrate genuine value is an impossibility. • Today financial visibility—in terms of the viability of a proposed purchase—is no longer anything like the mystery it was in times past. The process of filling out a mortgage application and having to wait interminably for the bankers’ next questions has yielded to the realities of a considerably more competitive arena. Online rate ‘locks’ can actually happen (although the actual verification of same remains a process subject to the more traditional pace). These fundamental shifts in the buying and selling of Las Vegas real estate make the whole process much more efficient for buyers and sellers. By improving the ease and likelihood of making the best match for each, it also builds buyer confidence through transparency. Of course, there still are elements that remain largely unchanged. One is the need for sellers to document and put forward their property’s selling points above and beyond their listing’s spare mechanical data points…that is, to bring creative marketing experience to the table. Selling real estate, like every other kind of selling, is at its best when it connects with buyers by firing their imaginations in positive and uplifting ways. Another is the continuing need to make sure all the documentation is letter-perfect: I’s dotted and t’s crossed. There once was an adage about the ABC’s of selling: “Always Be Closing!” Today, making Las Vegas real estate transactions happen isn’t about bringing pressure to bear on anyone! It’s supplying the service of aiding and abetting our newly transparent marketplace. My own “ABC” works out to be more like, “Always Be Contributing!”—a corny way of saying my job is to help Las Vegas’s buyers and sellers make the best match reliably and effortlessly. The first step is to give me a call!
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