Transaction Types

Monday, March 14th, 2011

There is much confusion in the Las Vegas Area Market in regards to Sellers and Sales Categories or Types.

Over the next several months I will be exploring (through a series) different sellers and sales transaction types.  I will be giving general advice that goes with current market conditions and will be revised when deemed necessary.

Our market is unique and extremely diverse with the types of transactions that are available.

It is important for a buyer to understand what type of transaction they are entering  in to.  Different transactions call for different actions.  Some involve court (probate and lis pendens), some involve long seller contingencies (short sale) and some are just plain “normal” without a glitch.

Some transactions are more complicated than others.  I always recommend that my clients seek legal advice in regards to ANY contract they come across.

I am a licensed real estate agent, I am not a home inspector, CPA, financial advisor, lender , lawyer, etc.  My job is mainly to GUIDE you through transactions and connect you with the right professionals if you ask for such advice.  My role in the transaction is a facilitator, negotiator and marketing professional.

Bookmark this post and I will be adding to it as I post or revise:

Seller Types:

  • Lis Pendens
  • Short Sale
  • Builder
  • REO (aka Foreclosure, bank owned)
  • The “Flipper”
  • Probate

Transaction types:

  • Auction
  • Trustee’s Sales
  • New Construction
  • Lease Option to Purchase

Here are typical buyer procedures from start to finish:

Get Pre-Approved with a direct lender.  Right now with tight lending guidelines, sellers prefer to see direct lenders over mortgage brokers.  This doesn’t mean that you can’t use a mortgage broker if you get Pre-Approved with a direct lender – you most certainly can use your lender of choice!

~OR~

If you are all cash, you need to be “proofed” which means that you will be asked for “proof of funds”.  This can be in the form of a bank statement or bank letter.

After your are approved or “proofed” your buyer’s agent should set you up on a search to receive listings to your email.  My favorite tools are MLS (Multiple Listing Service) or HBSR (Home Buyer’s Scouting Report.)

Have your Earnest Money Deposit (EMD) saved up!  EMD (even if you are in a no money down payment assistance program or VA loan) is required in almost EVERY transaction to show the buyer is serious to buy the property.  Sellers usually have a recommended amount to consider your offer.  This is all negotiable and nothing prevents you from negotiating with more or less EMD.  The EMD will go towards your down payment or closing costs at close of escrow.

View Homes with your Buyer’s Agent

Write your contract with your Buyer’s Agent.  Your buyer’s agent should give you closed (or sold) comparables.  !!! This is where your buyer’s agent should determine if there are multiple offers on a property (Las Vegas Area Real Estate Market is currently a SELLER’S MARKET.)  Figure out what price and terms you want to offer with the information your buyer’s agent has gathered and shared with you.

After you figure out the details, your buyer’s agent will write your offer and present it to the listing agent and negotiate with the listing agent who negotiates with the sellers.  The sellers will then decide whether to:  accept your offer, send you a counter proposal (or counter offer,) or reject your offer.

Once you have an acceptance (a fully executed contract), escrow is opened and your due diligence period begins

Due Diligence is resolving all of your contingencies (inspections, appraisal, loan approval, etc) during a certain time frame (this will be defined in the executed contract.)

Common Due Diligence Contingencies that need fulfillment:

  • Home Inspections for mechanical, structural, pool, spa, roof, etc
  • Pest Inspections
  • Appraisal
  • Full Loan Approval
  • HOA Document Examination (commonly referred to here as the “HOA Resale Packet”)
  • Preliminary Title Report Review

***NOTE:  make sure you play an active role in your due diligence period:

  • Attend your inspection
  • Review Your Appraisal
  • Get necessary loan documents to lender as soon as possible after they request it
  • Read title report to make sure there may not be any large issues that could delay your closing
  • Read your HOA documents – these include deed restrictions and do limit the ways you can use your home!

The above are just examples of contingencies, make sure you understand every contingency you must fulfill.  There may be more, there may be less in your contract.

The lender will deliver your loan documents to title (if financed)

You will now need to make an appointment to sign your loan docs and for a final walk through.  You will need to wire (cash transactions, down payment, closing costs) money or bring your money (in certified funds) to title.

!!!The house does not “close” in Nevada when you sign your loan docs.  Your loan must fund and the property must record.

THEN YOU GET THE KEYS AND GET TO MOVE!

The Las Vegas Real Estate Market is NOT your “Daddy’s Real Estate Market.”  You should be emotionally prepared to make one step forward and two steps backward!  I always <jokingly> tell my clients they are only allowed to cry to me twice (as I am often crying about this market!)  I try to guide my clients through these difficult transactions and let them know what steps they need to take in order to have a successful transaction.

Happy House Hunting!

REO (aka “Real Estate Owned”, “Bank Owned”, Foreclosure”)

Short Sales

New Construction

Trustee Sale Auctions

Sending