7 Things You Should Know Before Buying a House (Infographic)
Although prices are still down compared to previous peak prices registered a few years back, the Las Vegas real estate market is moving towards a steady line to recovery. There are clear signs of a slow but steady recovery in terms of volume and pricing, with experts forecasting much more stability in this market for the coming years. Recent reports from RealtyTrac placed Nevada as registering the highest residential sales percentage in the United States, with Las Vegas placing sixth in the highest residential sales tally among metropolitan areas and other large cities.
In another study conducted by Trulia comparing the cost index between renting a home and buying one in some of the United States’ largest metropolitan areas, it was highlighted that Las Vegas was among the best places to buy a home instead of rent. So, if you’re an investor or a homeowner looking for a new home to buy – considering you have the resources for down payment and have good credit – Las Vegas is definitely one of the best destinations to consider.
The following set of questions will guide you through the buying process and tell you the most basic things you should know before buying a house in Las Vegas.
The infographic (click to zoom):
Who is going to be your real estate agent?
The Las Vegas real estate market is very tight and people who are planning on performing the buying process using their own resources and connections will just place their resources at risk. The Las Vegas real estate market is a very complex arena that it would do you good to work and listed to the advice and information given by a reputable real estate agent. It would be to your best advantage to work with experts in the market, particular real estate agents or teams that have successfully handled hundreds or even thousands of transactions in this very same market during the last 5 years or so.
How much are you qualified for?
To qualify for a mortgage, your ability to make mortgage payments and your debt repaying record will determine your qualifications and how much you can be qualified for. The best path to take here is get pre-approved, not just pre-qualified, for a loan that will get you that new house. You can achieve this by going out and meeting with your lender for a person-to-person financial assessment.
The lender will need to check your financial capacity which you can back with important documents that you should bring with you during your meet-up. This includes your updated bank statements, W-2 tax returns for the last two years at least, business or employment documentations and recent payment stubs. They may also need to perform a credit check to verify your financial background.
Once pre-approved, all you need to do is find the new home that you will buy, and you now have the leverage to choose the best loan programs like the mortgage product called HomePath Financing which you can use when buying a Fannie Mae home in Las Vegas.
What monthly payment are you comfortable with?
There are things to consider first when you are deciding on how much monthly payment value you would be comfortable with when finalizing the terms of your loan. You should take into consideration matters like principal, interest, the length of your mortgage, and your insurance premiums. Monthly payments will also be determined by how much you will be paying for your down payment.
Your real estate agent will definitely have their own mortgage calculator to use to determine how much your monthly payments would be, but it would be best to provide you with a basic example here to help guide your understanding. These figures are just assumptions and may not necessarily reflect that of the actual market.
Purchase Price $150,000
Length of Mortgage 30 years
30-Year Fixed Rate Interest 5.00%
Downpayment (20%) $30,000
Amount Financed $120,000
Monthly Payment $644 (Principal and Interest Only)
Property Taxes $14/year for every $1000 of property’s assessed value
Homeowners Insurance $480/year or $40/month
Assessed Value (85%) $127,5000
Yearly Residential Taxes $1,785.00 ($148.75 per month)
TOTAL MONTHLY PAYMENT $816.75
The above example is just a standard mortgage payment computation which your real estate agent can discuss with you in further detail and accuracy. There are just some additional things you need to note like Interest Rates that will depend on your loan terms and the market. The interest rate for a 30-year term is higher than a 20-year term. If current interest rates are favorable at the time of your loan, it would be to your advantage to have the rate locked for a fixed-rate interest for a particular length of time.
How much cash will you need to close?
The typical downpayment rate when buying a new home in Las Vegas is at 20% of the selling price. You can arrange for a lower downpayment terms, but it will just be translated to higher monthly payments. To determine how much cash you will need to have in order to make a downpayment and close the deal, you can make assumptions based on the current median sales prices for Las Vegas homes.
In a report from the Examiner, the median sales price of Las Vegas homes is at $165,000, which is based on the prices of 4,502 homes sold from October 13, 2013 to January 14, 2014. This is also based on the average price per square foot of $122 for a Las Vegas property. These rates already registered an increase from the same period as last year and are expected to further increase in the next 12 months. Still, this will give you an idea of how much downpayment cash you need to raise to buy your targeted house.
What are the areas you want to buy in?
There are several areas in Las Vegas that would be ideal for buying a new home and this would all depend on your goals and purpose. If you are an investor and seeking for a higher return in your investment, then you should go for areas with higher appreciation rates in the whole Las Vegas area. What you need to get a copy of is a Las Vegas Valley Appreciation Map which will tell you areas that have depreciated and areas that have actually appreciated in recent periods. Currently, such areas include Green Valley, Summerlin and the Southwest.
If you are planning on buying a home as your residence, then you need to check not only the appreciation rates, but also the proximity and ease of transport of a particular area particularly to urban and industrial centers where you may be working at. Summerlin for example is a popular choice among young professionals and home buyers with families. If close proximity to urban centers, freeways, airports and the casinos, areas like the Southwest would be a good choice.
What are the features you must have in a house?
When buying a new home, the second most important consideration next to the price of the house is knowing what features you would prefer your new house must have. Making the right choices depends on the nature of your work, proximity to your work, your lifestyle and overall preference. The following are some important home features that you need to consider when choosing for a new home to buy.
Size of the Property – important factor if you need to decide on the number of rooms you need, space requirements, and room for future expansion.
Home Exterior – this includes the home foundation, siding, roofing and overall structure of the home.
Home Interior – this includes interior elements like the walls, ceiling and floors. This also includes other elements like doors, windows, lighting fixtures, plumbing and appliances.
Other Features – this includes home amenities that may have been added to increase home comfort and safety. This includes fireplaces, air conditioning systems, smoke detectors, swimming pools, garage, security systems, etc.
Extensions / Improvements – previous owners may have installed or constructed extensions or improvements to the property that were not part of the original house plans. This includes room extensions, additional bathrooms, and other home improvement projects performed in your new home.
How soon do you have to be moved in?
After you have sealed the deal with your loan and home purchase, the next step is to determine when you will be allowed to move in. It all depends on the property you are buying. Some properties are offered ready for immediate occupation, particularly new homes or units that have already completed renovation. Some properties will still need additional renovation or even repair work, which will delay your moving in period.
The Las Vegas real estate market is on a rebound but with relatively very low price schemes, investors and first-time home buyers will have sufficient reason to come and explore this market. These advantages make it ideal for homebuyers to look into this market and make use of these 7 Things You Should Know before going out with your investments and finally purchasing your new home.