Reno/Sparks Real Estate Stats For January 2015

Thanks to the Reno/Sparks Association of Realtors for providing the updated statistics for January 2015.

You can view the whole report here… January 2015 Stats

Below is an overview of the main points.

  • The median sales price dropped to $252,000. Pretty normal for January.
  • Average sold price per sqft. fell to $144 from $147. Nothing major.
  • Number of homes sold dropped significantly to 359 but was higher than January of 2014. Normal January stuff.
  • Average days on market rose to 126. Even regular sales rose by about a week.  Pretty interesting since we have really low inventory right now.
  • 430 new listings came on the market compared to 288 in January. February’s sold number will be improved with the addition of these listings.
  • Because of those new listings the months supply of inventory rose to 3.8 months. Still a seller’s market.

Overall, not much change. It was nice seeing some new listings come on the market because buyers didn’t have too many choices.

For more information on the market or about buying and selling in Reno/Sparks call me at (775) 393-9601 or email me at Ricky@RickyBeach.com
To search for homes visit RickyBeach.com

To get your home’s value visit HomeValuesOfReno.com

To stay up to date on your neighborhood visit RenoSnapShot.com.

If you have any specific questions email me at Ricky@RickyBeach.com

Ricky Beach

Broker/Salesman


Keller Williams Group One Inc.

10539 Professional Circle., #100

Reno, NV 89521

Office: (775) 393-9601
Cell: (775) 750-1437
Email: Ricky@RickyBeach.com
Website:www.RickyBeach.com

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Question of the week: How do you sell your home and buy another one?

chasmYou want to buy a new or different home because of lifestyle changes but need to sell yours to afford a new down payment and get the new mortgage to an acceptable level. This has become commonplace in the Reno/Sparks area due to rising home values starting in 2011 but is very complicated due to low inventory. There’s a large chasm of the unknown keeping you from getting your new place.

So how do you do it? Do you need to rent or shack up with a relative after your home sells?

After many consultations with clients asking those and other questions and getting some of them through the process and closing I decided I should make a list.

Below are a few processes that may work and some definitions to lead you through. There’s not enough time to fully write out the potential pitfalls and options, nor enough space on my server, but this should be a good overview.

Home Sale Contingency: There are a lot of contingencies when buying a home. You needing to sell your home first in order to buy another one is the biggest and most detested by sellers.

Open Contingency: The seller will allow you to put an offer on their home with your current home sale as a contingency. If the seller gets another offer you have X days (typically 2) to remove your home contingency. Yeah, you need to sell and close on your home in 2 days or the seller can remove your offer and go with another one.

Closed Contingency: The seller accepts your offer and will not review other offers until a certain time frame has expired (we usually ask for 3-4 weeks). If you’re unable to get your current home into contract or your buyer fails to complete their contingencies (inspections, appraisal, etc.) within that time frame and the seller isn’t willing to extend it you back out and start looking for another home.

Re-finance aka refi: Getting out of your current loan for a new one with better terms, interest rate, and pricing. A refi does cost money to perform and you’re subject to an appraisal.

Hard-Money Loan: Getting a loan from a rich person or group of people. They don’t do thousands of loans a year like big banks and lenders so your rate will be higher and the terms not as good as an institutional loan. These are generally used for people with poor credit but have good, steady income and a sizable down payment.

Loan Occupancy Requirement: A lender or investor may have a requirement for how quickly someone must move into a home that is purchased with an owner occupied loan. Typically, 60-90 days.

Rent-Back: An owner sells and closes on their home but remains there while paying rent until the home they’re buying closes. The owner is now a tenant and the buyer is now the landlord.

Negotiating Power: Compared with a regular buyer that doesn’t have a home to sell.

Risk: Compared with buying a home and not having to sell your current home (turning it into a rental). Including financial risk.

  • Bridge loans, well kind of…  According to every lender I’ve spoken to, bridge loans are out the window because of QM lending rules and government intervention of types of loans. The alternative to this is getting a hard money loan with a higher than market level interest rate (think 10-12% instead of 4%)  and then re-financing if possible. It may not be possible to refi out of that loan so the best you could do is pay down the current loan amount with the funds from your home sale. At worst, you have a high interest loan but have a lower loan principal.  Negotiating Power: Strong   Risk: Moderate (depending on if you can refi)
  • Buying a new build… Buying from a builder can give you the extra time you need to get your home on the market and sold. Let’s say you and your agent meet with the builder and finalize terms for a built from scratch home that will close in six months. Because the builder couldn’t sell and transfer the home within 30 days (it’s still being built) you have time to prepare a timeline for your current home sale to match up with the builders. It’s better to pad your timeline and get the home on the market earlier rather than later and use a rent back if you sell quickly. It’s prudent to have good communication between your agent and builder in order to make this work. They’ll already be discussing the new home purchase so the relationship should already be there. At worst, your current home doesn’t sell in time and you ask the builder for an extension. Negotiating Power: Poor (It’s a builder)   Risk: Moderate
  • Selling your home while looking for another… This can work in multiple ways so I’ll explain them as clearly as possible. These are all based on the seller accepting your “closed contingency”. An open contingency has too many pitfalls and I never advise doing it unless you’re in dire straights.
    • Putting your home on the market with the stipulation that the buyer’s timelines will not begin until you get into contract on another home and reach some milestone in that escrow within a certain amount of days.  The problem with this is there are many contingencies remaining (inspections, appraisal, full loan approval, etc.) before either party can own their new homes. These contingencies make the seller of your new house very nervous and unlikely to accept an offer unless it’s amazing. The goal is to close both homes simultaneously with a short rent-back for moving.  At worst, you don’t find a new home in the specified time frame and you release the buyer of your home from his contract. Negotiating Power: Poor    Risk:  Moderate
    • Putting your home on the market and accepting an offer with a predetermined rent back time frame and price within the buyer’s occupancy requirements of their loan. If the rent-back is 60 days you technically have the 30 days of closing and 60 days of rent-back. So, 90 days total to find, offer, and close on another home. This is a little more appealing to the seller of the home you’re going to buy. Especially, if the buyer of your home has already completed the inspection and appraisal contingencies. The major downfall is that you have added pressure to buy a home quickly.  At worst, you don’t find a new house, have sold your home, have your money, and are a renter… in an apartment or someone else’s house.              Negotiating Power: Poor    Risk: High
  • Sell, Move, Then Buy… No one likes this one because it means moving twice. Though, it’s probably the most likely in a low inventory market. You sell your home and move into a rental or with family/friends while storing the majority of your things so you don’t pay too much on rent. You have your money from the home sale and you’re now able to shop like a normal buyer with less pressure than a rent-back contingency. Negotiating Power: Strong      Risk: Low      Annoyingness: High
  • Buy Then Sell… If you’re lucky enough to have a big bank account and high earnings you can probably go buy a home without selling first. The loan terms may not be the absolute best but better than a hard money lender. Once you move in and sell the other one you can refi out of the current loan or apply your proceeds to the loan balance. Remember, a portion of your current mortgage will be considered debt when running your debt to income ratios.  Though, if you’re doing this you’re very well off financially and it shouldn’t matter.            Negotiating Power: Strong   Risk: Low
  • Borrow the down payment… Have a family member gift you the funds you need to buy the new home. Buy it and then sell yours. The giftor will have to write a letter stating the amount they’re giving, why, and that no repayment is expected. At worst, you owe a big one to someone that loves you. Negotiating Power:  Strong    Risk:  Low

Each of these scenarios are much more intricate than I could put on paper. If you’d like to walk through these options please contact me at (775) 750-1437 or Ricky@RickyBeach.com

To search for homes visit RickyBeach.com

To get your home’s value visit HomeValuesOfReno.com

To stay up to date on your neighborhood visit RenoSnapShot.com.

If you have any specific questions email me at Ricky@RickyBeach.com

Ricky Beach

Broker/Salesman


Keller Williams Group One Inc.

10539 Professional Circle., #100

Reno, NV 89521

Office: (775) 393-9601
Cell: (775) 750-1437
Email: Ricky@RickyBeach.com
Website:www.RickyBeach.com

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December 2014 Real Estate Numbers

reno real estate stats

The new real estate numbers are in. Thanks to RSAR for compiling them.

You can view the whole report through this link with the main points discussed below.

December 2014 Real Estate Stats

  • The median sales price rose by $2,000 over the previous months to $262,000 and is comparable to mid 2007. Not much change but it’s interesting that it didn’t go down in a traditionally slow month.
  • The average sold price per sqft rose to $146. Most of the homes built since the 2000’s are selling above $150 per sqft.
  • Number of homes sold jumped from November to 501 and outpaced December of 2013. This winter doesn’t seem to have the same slow down as winters past.
  • Average days on market was 111. A pretty big jump from November’s 97 days. Regular sales are taking about 96 days to sell so around 60 days of market time before an accepted offer.
  •  A low number of listings came on the market, 281, compared to November which had 380. Pretty normal since people don’t want buyers trampling through their homes during Christmas and New Years. Those numbers will rise in January.
  • 83% of those new listings were regular sales as the distressed market continues to shrink.
  • Because of the lack of new listings the inventory dropped to 2.7 months. Meaning, if no new houses came on the market we would run out before 3 months have passed. I know the buyers I’m working with are feeling this crunch.

For more information on buying or selling in Reno contact me at (775) 393-9601 or Ricky@RickyBeach.com

 

 

Reno/Sparks Real Estate Stats for November 2014

reno sparks real estate market reportThanks to the Reno/Sparks Association of Realtors for the updated stats.

You can view the whole report here.

Below is an overview of the main points with commentary.

  • The median sales price held at $260,000. Still up 15.6% from November 2013. Hopefully, this is a sign that the market is straightening out.
  • Number of units sold dropped to 464 from 489 in October. Typical of this time of year.
  • Average days on market for sold properties was 97. Short sales took an average of 286 days while regular sales took 83 days. It seems short sales are getting longer and regular sales are still a little overpriced as they’re taking 50 or so days to get an accepted offer.
  • There were 378 new listings which is a major drop from the 483 in November of 2013. Much of this can be attributed to sellers worried about finding a home once they sell.
  • Month’s supply of inventory dove to 3.8 months. A strong seller’s market tough buyers aren’t biting as much on initial list prices.

For more information on homes for sale and what your home is worth visit the websites below or give me a call at (775) 393-9601.

To search for homes visit RickyBeach.com

To get your home’s value visit HomeValuesOfReno.com

To stay up to date on your neighborhood visit RenoSnapShot.com.

If you have any specific questions email me at Ricky@RickyBeach.com

Ricky Beach

Broker/Salesman


Keller Williams Group One Inc.

10539 Professional Circle., #100

Reno, NV 89521

Office: (775) 393-9601
Cell: (775) 750-1437
Email: Ricky@RickyBeach.com
Website:www.RickyBeach.com

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Question Of The Week: How Much Does Free Money Cost?

We’ve blogged about down payment programs before but I thought we’d get some more insight on the cost of getting free money, from an actual lender.

Rob Griffin, local lender at Eagle Home Mortgage, is experienced in these programs and took the time to break down the costs.

For “The Home Is Possible” program we’ll use a $200,000 purchase price with a 5% down conventional loan and a loan amount of $190,000. The grant gives you 4% of that loan amount, $7,600, to be used for a higher down payment or closing costs.  The 4% grant isn’t technically free money because there are additional closing costs associated with it that you wouldn’t have to pay if you didn’t get it.

  • Bond Application Fee: $225
  • Bond Funding Fee: $300
  • Bond Tax Service Fee: $85
  • Grant Origination: 1% of loan amount.

When you subtract those fees from your grant money ($7,600-$2,510) you get a net grant of $5,090.

 

 For more information on these loan programs contact Rob at (775) 336-3257 or RobGriffin@EagleHM.com

 


 To search for homes visit RickyBeach.com

To get your home’s value visit HomeValuesOfReno.com

To stay up to date on your neighborhood visit RenoSnapShot.com.

If you have any specific questions email me at Ricky@RickyBeach.com

Ricky Beach

Broker/Salesman


Keller Williams Group One Inc.

10539 Professional Circle., #100

Reno, NV 89521

Office: (775) 393-9601
Cell: (775) 750-1437
Email: Ricky@RickyBeach.com
Website:www.RickyBeach.com

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