Buying a home can be quite a challenge and, well, overwhelming even for experienced home buyers, but especially for first-time buyers. It’s typically a months-long process involving several steps and many tasks to be completed, not to mention all the confusing real estate jargon and legal complexities.
So let’s tackle the process of buying a home in Las Vegas the same way you’d eat an elephant – one manageable bite at a time.
Although every market has its own peculiarities and unique demands, there are some general principles that hold across all markets. Let’s start with those and then drill down to Las Vegas home buying in particular.
Here, then, are our Las Vegas home buying tips to help demystify the process and maybe even make it a little enjoyable.
General Preparatory and Financial Tips
The general home-buying principles and steps remain the same, whether it’s Las Vegas or rural Idaho, and it all begins with preparation and getting finances in order.
Start Saving Early
There’s much more to the cost of buying a home than the monthly mortgage payments. You’ll need a pretty good chunk of cash saved to cover the several one-off, up-front costs such as:
- The down payment – This can amount to 3% to 20% of the purchase price. If you save enough to pay 20% down, you can avoid the extra cost of private mortgage insurance.
- Closing costs – “These are the fees and expenses you pay to finalize your mortgage [and close the transaction], and they typically range from 2% to 5% of the loan amount.” But you can often get the seller to pay a portion of the closing costs.
- Inspection and appraisal fees
- Moving expenses
Determine What You Can Actually Afford
Factoring in your income, debt, credit score, and down payment size, you’ll be able to determine how much home you can afford. This will save you tons of time and effort because you’ll be able to shop only for homes within your price range.
Check Your Credit Report and Improve Your Credit Score
Your credit score will play a huge role in whether you can qualify for a mortgage and what rate you can get. So if your score is below the minimum (typically, 620 to 640 for conventional loans), you need to get busy paying bills on time and paying down debt. Also, be sure to check your credit report for errors – they do creep in. When you report these and have them rectified, your score will instantly improve.
Choose the Right Mortgage
Also, put some serious thought into the best kind of mortgage for your situation and needs. Some of the main options are:
- Conventional mortgages
- FHA loans
- VA loans
- USDA loans
And you can opt for either a 30-year or a 15-year mortgage. “Most home buyers opt for a 30-year fixed-rate mortgage, which is paid off in 30 years and has an interest rate that stays the same. A 15-year loan typically has a lower interest rate than a 30-year mortgage, but the monthly payments are larger.”
And be sure to shop around for a lender that best suits your needs. “The Consumer Financial Protection Bureau recommends requesting loan estimates for the same type of mortgage from multiple lenders to compare the costs, including interest rates and possible origination fees. [Some lenders] may offer the opportunity to buy discount points, which are fees the borrower pays upfront to lower the interest rate.”
Now we come to the tips for the actual home-buying process. And, again, these are solid tips for buying a home in Las Vegas or anywhere else.
Choose the Right Home AND the Right Neighborhood
Certainly, you’ll want to find a home that ticks all your must-have boxes and a good number of the like-to-have boxes. But also keep firmly in mind that you’re not just buying a home – you’re also buying into a neighborhood.
“Check out potential neighborhoods thoroughly. Choose one with amenities that are important to you, and test out the commute to work during rush hour.” And check to see that the personality of the neighborhood and the residents are a good fit for your lifestyle.
Get a Home Inspection
“A home inspection is a thorough assessment of the structure and mechanical systems. Professional inspectors look for potential problems, so you can make an informed decision about buying the property.” And remember, too, that a standard inspection won’t look for things like pests, mold, and radon.
Negotiate Skillfully and Aggressively
Negotiations are an accepted and expected part of the home buying/selling process. So don’t hesitate to bargain for what you want.
“You may be able to save money by asking the seller to pay for repairs in advance or lower the price to cover the cost of repairs you’ll have to make later. You may also ask the seller to pay some of the closing costs. But keep in mind that lenders may limit the portion of closing costs the seller can pay.”
The extent of your negotiating leverage will depend in large part on local market conditions, whether it’s a buyer’s or seller’s market. You will, however, always fare much better with an experienced local real estate agent in your corner.
Las Vegas Home Buying Tips
When it comes to Las Vegas home buying tips specifically, it’s always good to keep in mind the volatility of this market that has experienced some fairly dramatic swings during the past decade.
For example, in June of 2017, median Las Vegas home prices “increased by 2.9 percent from the previous month to $257,373.” Another market change, in addition to rising home prices, to be aware of is the increase in mortgage interest rates.
And since the advent of COVID-19 and owing to the measure taken to stop its spread, the economy took a hard hit. So interest rates were dropped to historic lows. But that’s changing now. Interest rates are steadily rising at an increasing rate, and the consensus is that this trend will likely continue.
So what does this mean for you as a Las Vegas home buyers?
Be Prepared to Make an Offer with Pre-Approval
“Homebuyers need to get pre-approved for a home loan to move swiftly, which Las Vegas market conditions call for, and be taken seriously by sellers. . . . Especially in a multiple offer situation, not having pre-approval can be detrimental.”
Check the Comps
Very often, buyers significantly undervalue homes while sellers typically overvalue their homes. But these opinions have nothing to do with a home’s value – the market decides that.
So be sure to have your agent perform a comparative market analysis (CMA or comps) to arrive at fair market value in order to know what kind of offer to make. This CMA a valuable tool because it looks at the prices of very similar homes in the neighborhood/immediate area that have sold within the past few months.
Make a Strong, Competitive Offer
In southern Nevada, homes in the$350,000 range are in particularly high demand. This means that (after having run the comps, of course) you need to come in with a strong offer, usually meeting the asking price. And a competitive offer will be one with few repair requests for concessions.
Properties in Las Vegas sell fairly quickly. While you should certainly be prudent and exercise a certain amount of caution, acting fast may be in your best interests. One industry pro advises the following: “If you see something you want, you need to buy it on the spot before it’s gone.”
Try to Buy at the Best Time in Las Vegas
This one of our Las Vegas home buying tips has to do with timing. There is an optimal time of year to buy depending on your needs.
If price is your primary concern, then late the slower months would be the best time to buy. Owing to the sweltering summer weather, this is usually late spring and summer, as well as January. In addition, many sellers who list at this time are doing so out of desperation and so may be willing to accept a lower offer.
But if you’re more interested in having a wide selection of homes to choose from, then the peak fall season, say, September would better bet. Prices will be higher, but so will the number of homes on the market.
Putting It All Together . . .
So what does all this mean?
First, basic home-buying principles are pretty much the same wherever you are. And, second, buying a home in Las Vegas presents a few extra considerations and challenges.
And that also means that buying a Las Vegas home calls especially for the services, knowledge, and expertise of an experienced agent.