I thought I’d write a blog post on lease options on Las Vegas Homes and why I feel they are a bad idea. In today’s economy there are buyers who want a home but for one reason or another can’t qualify for a property. This can be due to a recent short sale/foreclosure or just flat out bad credit.
The biggest issue with a lease option is an unrealistic seller. A typical seller who is looking to sell a home on their own is trying to save themselves money on paying a professional to sell their home. The reason in most cases is because they are so tight on their margins, they can’t afford to pay the commissions.
If a seller has some equity, the commission payed to an agent is not that much. One a 100,000 sale we are looking at 3,000. This fee covers handling the entire transaction. From listing the home, shooting pictures and video, marketing the property, showing the home, negotiating the contract, taking care of all the items required to close. Escrow, title, hoa resale docs, signing and working with the buyers agent every step of the way.
The biggest issue with a seller looking to do a lease option, they think their home in Las Vegas is worth more than any other property in Las Vegas. Let’s take an example to a recent scenario I just encountered.
A home was recently purchased in the last year at 107 per ft. The home is available to be as a lease option at 118 per ft. This doesn’t sound to unreasonable. The problem is, the home purchased at 107 per ft, was the most expensive home sold in a one mile radius in the last 6 months. The next two comparable sales were 81 per ft and 90 per ft. Now 118 per ft is nearly 25% higher than 90 per ft and 32% higher than the 81 per ft. The active homes with similar to this scenario are priced between 80 to 104 per ft.
As a buyer, why pay 20% more more for a home, for the instant gratification of moving in now. The other issue is you are limiting the available properties to yourself. If there are 50 homes available for sale, there may be 3 of them that will do a lease option. Wouldn’t you rather be able to choose a home out of a pool of 50 properties compared to a handful of choices. Wouldn’t you rather pay fair market value for a home than over pay for a property with an unrealistic seller?
This is why you need to have a Las Vegas Realtor protecting you’re best interest when purchasing a home. If you walk into a lease option without the knowledge of the true market value you could be making the wrong decision.
What if the market drops more in the coming 1 to 2 years, when you are ready to purchase. if you just put down 10,000 on a lease option, that money could be right out the window if the home does not appraise when it is time for you to exercise your option to buy.
Let’s do an example. Say you did a lease option on an overpriced property. Last year they offered it for sale at 130,000 because they paid 120,000. You put down 10,000 on the home. So the option purchase price is 120,000. If this price was too high to begin with, here is the problem. You paid 130,000, you put down 10,000 in a year ‘s time the home values drop just 3% the home has lost 3600 in value and is now worth 116,400.
Now you have paid 130,000 for a home that is worth 116,400. That is not so bad to stomach but if you are getting a loan, you have to get it appraised. If the appraisal comes in at 115,000 here is the issue. If the seller bought the property with an FHA loan for 120,000, their balance is still going to be close 116,000. At the time when you close they owe their lender 116,000 but you appraisal is 115,000. The seller’s closing costs will be about 1,500. As the buyer, you typically have close to 3% in closing costs.
On most deals traditional deals in this price range, we get the seller to pay your closing costs. These will be about 4500. Since the seller is so tight on their margins, they can’t afford to pay your closing costs. You will need to pay your own closing costs to close on the property.
Let’s breakdown the real money out of pocket that you just put into the lease option home:
10,000 Lease option down payment
4,500 in your closing costs
1,000 to cover the amount to seller and the appraisal
4,025 for an fha 3.5% downpayment
19,525 Total cash for the property
Now if you would wait a just a year to purchase with a traditional FHA loan the same valued house at 115,000. Just the fact alone that you are free to chose from all homes on the market is the first plus!
Now the home you are buying is 115,000 and that is the true current market value. You will need your 3.5% down payment, but this time we get your closing costs paid for by the seller. Now let’s compare
4,025 for your downpayment.
That’s all the cash you need out of pocket! So what is better, a home that you put 19,525 real cash into or wait a year and put 4,025 into the same valued property. That is saving you from overspending 15,500 in real cash money.
As a buyer, you need to know what the true market value of the home is before you ever enter into a lease option. This isn’t the year 2004 where the market is growing each year so need to worry. We are in a different market than ever before, so beware! I understand that waiting a year or so to get your credit back in line is tough, but are you willing to spend an extra 16,000 to do it?
Call and talk with a Las Vegas Realtor before getting involved on a lease option for a free CMA of the property. Please call Jeff Mix at 702-510-9625.
Great 2 story home in Henderson 89052 zip code just off of Carnegie and Horizon Ridge. Located in the heart of the shopping district of Eastern and Horizon Ridge. Very spacious 2,022 sq ft home that has the main living on the second floor along with the large masterbedroom. Home features 3 bedrooms and 2.5 baths.
Home has nice granite countertops, upgraded cabinets, undermount sink, fireplace and a balcony overlooking the backyard. The downstairs also has a second family room that leads out to the spacious backyard with artificial grass for easy upkeep. The property is also next door to a small dog park and there are also several additional places within the community.
For an experienced Las Vegas Realtor contact Jeff Mix today of BHG Desert Properties at 702-510-9625 for a home tour today. View th MLS listing of this HUD Home in Henderson at 2476 Autumn Chase Henderson NV 89052.
Great Silverado Ranch Single Story home in Las Vegas. This home is situated on a nice size lot with a pool and 6,000 + sq ft lot.The home has plenty of living space with close to 1500 sq ft, 2 generous baths and 2 bedrooms. The floor plan is very open with catthederal ceilings, formal living and dining rooms along with a seperate family room off the kitchen.
Now the thing that makes every home in Las Vegas a little better….A pool! Slider right off the kitchen to a huge pool and deep for your biggest cannonball. Backyard has enough space to really stretch out and make the best of the hot Las Vegas Summers.
The best part on this home is the convienent location to all of the shopping and restraurants on eastern and the home has low HOA fees of just 15 per month and taxes are only 1492!
Please call Las Vegas Realtor Jeff Mix to view this property today at 702-510-9625.
View the MLS listing of this Las Vegas HUD Home on 1564 Silver Point Ave Las Vegas NV 89123.
Las Vegas HUD Home in the Southwest part of town. It is a 2 story home located just off of Buffalo and the 215. It is currently priced at 135,000 and is a Las Vegas HUD Home. The home features 1744 sq ft of living space and is a 2 story home with 3 bedrooms and 2 baths.
The home has a very open floor plan and has all tile flooring downstairs. The kitchen is is well sized with an island kitchen over looking the family room. The kitchen is also located just off the garage which makes bringing the groceries a whole lot easier.
Some of the upgrades of the home include a stone facade in fron, corian countertops, security gaurds on windows, stamped concrete patio outside along with a spacious yard. The laundry is located on the second floor along with the 3 bedrooms and a loft which be a great place to hide away with a book.
Please call Las Vegas RealtorJeff Mix of Better Homes and Gardens to view this home in Las Vegas today at 702-510-9625. Thanks for watching the video tour. Please call us for a list of all Las Vegas HUD Homes. View the mls listing of this home in Las Vegas on 8155 Sandy Slope Las Vegas NV 89113.
View the mls listing of this home in Las Vegas located on 6054 Sierra Medina Las Vegas NV.
This 1903 square feet single story home was built in 2008 in the planned community of Cactus Hill Manor. This one story has 3 bedrooms and 2 full baths plus a casita on a 5117’ lot size. Each bedroom includes prewired for ceiling fans.
Kitchen has pantry and tile throughout high traffic areas. This home features an open floor plan, with media niche, raised panel doors, cathedral ceilings, maple finished cabinets, surround sound and window blinds throughout the home. A must see as house will sell fast.
Please call Las Vegas RealtorJeff Mix to view this HUD home in Las Vegas. Our blog also has additional video tours of HUD homes in Las Vegas. View the mls listing of this home in Las Vegas located on 6054 Sierra Medina Las Vegas NV.
View the mls listing of this home in Las Vegas located at 10380 Borah Park Las Vegas NV.
This gated 2118 square feet single story home was built in 2008 in the planned community of Mountains Edge. This one story has 3 bedrooms and 2 full baths and 1 bath with stand shower on a 5663’ lot size. Each LARGE bedroom includes ceiling fans and mirrored closets. Kitchen has granite countertops, which include a breakfast bar, walk-in pantry and tile throughout.
This home features an open floor plan with den, living room, with a gas fireplace, media niche and crown molding in the living room and bedroom. Some amenities are that home is in single story neighborhood, home has large baseboards and garage has racks installed. A must see as house will sell fast.
View the mls listing of this one story Home in Las Vegason 5601 Indigo Bay Las Vegas NV 89131.
Nice single story home in Las Vegas on corner lot. The lot is very big with more than 7,000 sq ft. The home features 1500+ sq ft of living space in this very open floor plan. This is a Las Vegas short sale being negotiated by an attorney. Buyer walked so a new offer should get a pretty quick approval.
Home has a very open floor flan. Tiled entry opens to a huge great room with very high ceilings. Kitchen has a large open kitchen with plenty of room for seating. The home has nice apliances, recessed lighting and nice maple cabinets.
This home has possible rv parking and so much room on the huge corner lot. The front yard is beautifully landscaped and has great curb appeal. The masterbedroom has ceiling fan, crown moulding and french doors that lead to a patio. Great place for a jacuzzi.
Please call Las Vegas Realtor Jeff Mix to view this home today at 702-510-9625.
Awesome 2 story home in the southwest at the foothills of the mountains. This home has a ton of upgrades and will not dissapoint even the fussiest of buyers. This home in Sunset Ridge is a knockout, from the moment you enter this well maintained pocket of homes, that are located just off of Sunset and the 215.
This home features 2327 sq ft of living space with 3 bedrooms, 2.5 baths and a very open concept. This is an upside down home home where the main living and master is located on the upper floor. Upon enetering you will see just how open this home is. This is perfect for the buyer who doesn’t want all of the choppy floor plans with rooms that no one uses!
The main living area has 18″ tiles that have all of the beauty of Travertine but the durability of porcelain. Another big bonus is the seller stepped up to the 9′ ceilings and this makes such a difference in the feel of a home. Raising the ceilings is one of the upgrades I reccomend to a buyer purchasing new Las Vegas Homes.
The kitchen is open to the entire room and features dark granite, upgraded maple cabinets, stainless steel appliances and recessed lighting. The kitchen opens to the expansive balcony that runs the entire length of the back of the home. Another plus is there is a bbq stub already there which cookouts both conveinent and easy. The back porch offers wonderful views of the serene desert mountains.
The masterbedroom is also located on this floor and is more than generous in size. The bedroom features hardwood flooring, duel closets with ample shelving and gorgeous ceiling fan. The master bath has duel sinks, garden tub and a seperate shower. Nice finishing touches with the textured shower glass on the surround, nickel fixtures and glass block.
The downstairs offers a second family room with sliders out to the backyard. There is a full covered patio and private backyard ready for your finishing touches. The 2nd and 3rd bedrooms are both on the lower level. They are very sized rooms both with hardwood flooring and window treatments. The full bath is located here as well and features tile flooring and full tub/shower combo.
This home in Las Vegas has extensive upgrades inside and out. Buyer had spared no expense with the stone exterior package, pre wired surround sound, 9 ft ceilings, upgraded insulation for energy efficiency along with duel AC units, tile and hardwood flooring and wood mini blinds.
This home will not last long and is move in ready. We are experienced las Vegas Short sale Agents and there is just one bank to contend with. Please call Las Vegas Realtor Jeff Mix to view this property today.
View the mls listing of Las Vegas Homes on 10054 Pelham Park Las Vegas NV 89148.
Very nice home off the 215 and and the 95 in the northwest part of Las Vegas. The home is located near Centennial Hills in Las Vegas. The home has 1497 sq ft of living space with a 2 car garage, 3 bedrooms and 2.5 baths.
The home is in a newer community built by Richmond American 2005, right at the height of the boom. Needless to say this home is a Las Vegas short sale. The community is well taken care and the homes all look nice as you enter the community. The property is located towards the back and is just a hop, skip and jump fro the community park that features dog walking trail, picnic benches, bbq grills and some refreshing green space for those of you who need a grass fix!
The home features a nice cozy front porch with plenty of room for a couple of chairs and table. The entry opens to the living and formal dining room. There are ceiling fans in all but one bedroom and the home is just about turn key! I imagine the builder had a living and dining room set up in their model of this floor plan but with the large kitchen, it would easily accommodate a nice size table which would in turn make for a great sized living room.
The kitchen is well equipped with plenty of cabinets and they are gorgeous. These cabinets are dark and rich and are the taller 42″ cabinets that go all the way to the ceiling. Again the space is so nice that a portable island would be ideal for this space and the slider in the eatin area goes directly to the private backyard.
The backyard has a putting green, landscaped completely as well as stamped concrete that wraps the backyard. This is the perfect yard for someone who wants a little space but not the headache of upkeep.The upstairs features the master bedroom with a double door entry. The master bath offers the extra tall counter-tops with duel sinks. There is a roman tub/shower combo. The 2nd and 3rd bedrooms are both spacious and spare a Jack and Jill bath each with their own sinks. The laundry is also located on the second floor so no more lugging dirty clothes down and clean ones up!
This Las Vegas Short sale home would also make a nice investment property. The average rents over the last 90 days in the community have fetched rents in the price range of 1050 to 1100 per month. Click here for the Comparable rental comparables in Elkhorn Tule Springs. Please call Las Vegas Realtor Jeff Mix of Better Homes and Gardens Desert Properties to view this home today at 702-510-9625.
View the mls listing of this Las Vegas Homes on 8172 New Leaf Las Vegas NV 89131.
[idx-listings tract="Elkhorn Tule Springs" propertytypes="128" orderby="Price" orderdir="DESC" count="5" showlargerphotos="true"]
Las Vegas Short Sale home in the Northwest. This property features 1573 sq ft of living space. With 3 bedrooms and 2 full baths, it’s just enough room! The home features a formal living and dining room just off the front of the home.
The kitchen and family room are adjacent to each other. The family room has cathedral ceilings and a brick fireplace.
The kitchen has all appliances included with a great garden window overlooking the side yard. Great place for some homegrown herbs for cooking. The kitchen also has a seperate eat in kichen with a bay window overlooking the huge backyard.
The home has RV parking. Anyone who needs RV parking understands the difficulty in finding homes in Las Vegas with RV parking. The yard .2 of an acre and also features a covered gazebo and small waterfall fountain for your zen moments.
The AC unit was just replaced a year ago. A new AC unit can be one of the biggest repair items on Las Vegas Homes. With that out of the way should be smooth sailing!
Please contact Las Vegas Realtor Jeff Mix to view this home today. We are experience las Vegas Short sale Agents so write with confidence.
I thought I’d write a blog post on lease options on Las Vegas Homes and why I feel they are a bad idea. In today’s economy there are buyers who want a home but for one reason or another can’t qualify for a property. This can be due to a recent short sale/foreclosure or just flat out bad credit.
The home is available to be as a lease option at 118 per ft. This doesn’t sound to unreasonable. The problem is, the home purchased at 107 per ft, was the most expensive home sold in a one mile radius in the last 6 months. The next two comparable sales were 81 per ft and 90 per ft. Now 118 per ft is nearly 25% higher than 90 per ft and 32% higher than the 81 per ft. The active homes with similar to this scenario are priced between 80 to 104 per ft.
