How To Buy A Home In Las Vegas

Considering buying a home? Our guide on how to buy a home in Las Vegas will walk you through the entire process to make sure you know what to expect.

Looking for quick answers click on any one of the links below to jump to that section.

Is Buying Right For You?

Ask 100 different people when the right time to buy is and you’ll get 100 different responses. Buying a home is a personal decision that you need to make.

We advise clients to not buy based on market strength (within reason), when all your friends are doing it, trends, or advice from others.

It’s extremely important to purchase when the time is right for you and your current situation.

If you purchase a home when you have good savings, enough money for a down payment, and no debt (or very little), then your purchase becomes a blessing, not a curse.

When you’re already strapped for money or just getting by, when you purchase a home it will become an added stress in your life.

There will always be the unknowns when owning a home. Having the money to cover those unknowns are crucial.

Owning a home, for many, is one of the big life achievements. Make it a joyous achievement, not one you regret for years to come.

How Much Can You Afford?

The first step in determining what home you can afford starts with your total monthly take-home pay.

From that number multiply by 0.25 (25%) and your monthly payment should be no more than that number.

Let’s look at an example.

Your after tax take home per month is $5,000.

Multiple that by 0.25

Your monthly payment should be no more than $1,250.

Online estimates are a good place to start but they are not completely accurate. Interest rates change over time and depending on what title company is used fees can increase or decrease. As well each lender charges different fees, it’s important to get a few different home loan bids.

You’ll also want to consider tax, HOA fees, and utilities in your monthly costs as well.

One time fees to consider are the home inspection, appraisal costs, appliances, and moving costs.

Know Your Credit

You should not be checking your own credit. If you’re thinking of buying a home in Nevada you have to be pre-approved. A lender will check your credit when you get your pre-approval.

Every time your credit is checked a few points get knocked off. Frequently checking credit is an indication to lenders that you may be taking on a lot of debt. Even if you’re not taking on debt your credit is hurt from frequent checks.

Don’t issue yourself a red flag by doing this and hurting your chance for a better interest rate.

There is no cost to having a lender issue you a pre-approval. The lender will tell you what your credit is when they check for the pre-approval process.

There’s not a hard rule for credit either. There are options depending on where your credit falls.

Find A Lender

There are many places to find a lender.

The best lender recommendation is from your real estate agent. Real estate agents work with different lenders all the time. A good lender recommendation is a reflection of the agent. Real estate agents hold lenders to high standards and are quick to drop the ones that their clients complain about or make the lending process difficult.

If you do not yet have a real estate agent. Ask co-workers, friends, and family who have bought a home in the past. Ask if they had a good experience or not.

When interviewing lenders find a lender that is going to collect all your documentation and run your credit and give you a pre-approval letter.

A pre-qualification letter, which is sometimes given by lenders, carries no weight when you submit an offer on a home. Your offer will not be taken seriously, and you will lose out on the home.

Does my lender need to be in Las Vegas?

No, your lender does not need to be in Las Vegas or Nevada. But they do need to be familiar with the purchasing process here in Las Vegas.

Each state is different. If the lender is out of state make sure they have previously closed transaction in Las Vegas.

What’s the difference between a loan from a big bank and from a private lender?

Each come with their pros and cons.

Big banks, usually, have lower fees but their communication with the agents and title companies is poor. Big banks are also bad at sticking to time frames that are in the contract leading to extensions. In a competitive market, this is will be looked at by the seller’s agent as negative when assessing all the offers.

Private lenders make up for their slightly higher fees with their flexibility. They have more options and programs when it comes to working with your specific situations that big banks don’t have.

A highly recommended private lender will always go above and beyond anyone else.

Get A Pre-Approval Letter

A pre-approval letter is issued by a lender that lets the sellers know that you are approved to purchase the property you’re writing your offer on.

You can put an offer on a home with a pre-qualification letter but any offers with a pre-approval will be taken over yours.

For a pre-approval letter, a lender has collected all of the necessary documentation knows your credit and is prepared to issue you a loan based on their findings when the home offer is accepted.

For a pre-qualification letter a lender has spoken with you on the phone about your financial situation and pulled your credit. If you offer is accepted based on this information the lender will then have to do their due-diligence to approve for your loan and you are not always approved.

What Is PMI? Do You Have To Pay PMI?

PMI Or private mortgage insurance is an insurance policy that protects the holder (lender) against loss resulting from default on a mortgage loan

You can remove PMI from your loan once you have at least 20% equity in the home.

Putting down 20% will prevent PMI. You will be required to pay PMI with any down payment less than 20% of the home value.

Need Help Buying a Home?

We’re here to help. Let us know what we can do for you. We’d love to talk.

Find An Real Estate Agent

Many people start their agent search by asking for referrals from family, friends, and coworkers. Finding out about their experience will help you decide on who to work with.

Online is also a good place to start. You can see reviews and their history of home sales.

Who you choose can make buying a home a wonderful experience.

What’s the difference between big brokerage and small brokerage agents?

For a home buyer, there is very little difference between big brokerage agents and small brokerage agents. If you’re looking for very specific, difficult to find home a big brokerage agent may have an advantage because of all the prelistings that will be available to them as a result of the large number of agents at their brokerage.

If you’re selling a home, it’s in your benefit to be with a larger brokerage for the exposure that will naturally occur with a large brokerage firm with many agents.

The most important quality to look for in an agent is that they are a full-time real estate agent. Being a full-time real estate agent indicates that they are a successful proven agent that is always available to handle any issues that may arise. And many do, often without the client even knowing when a great agent is there to head them off before they ever become a problem for you.

Who pays the buyer’s agent?

The buyers and sellers agents are paid by the selling side of the deal. The only fees that a buyer may have to cover with an agent is a transaction fee.

The average total commision on a home is 3% to 6%. Where the two agents will then split that commision.

Buyer’s agents who cut their commissions generally do so because they make up for it by having your bid higher and not fighting for the best deal for you.

Determine Your House 'Must Haves'

Before you meet with an agent it’s important to sit down and go over what is important to you. Create a list of must-haves. Then a list of items that would be in your dream home.

Must haves are non-negotiable. Dream home features would be nice to have but you’re flexible on them.

Depending on price and location these dream home features can be added or dropped.

These lists will also give you a jumping off point when you sit down with your agent because…

You MUST work with an agent that does a buyers consultation. A buyers consultation shows that the agent cares, is professional, and knowledgeable. A buyers consultation only takes 30 to 60 minutes.

What is a home buyers consultation?

During a buyers consultation, the agent takes you through the entire process of purchasing a home in Las Vegas.

This includes details about how to protect your money in escrow, the areas of the deal that can get bumpy. They will explain what their job is and how they will protect you as you proceed through the deal.

At the buyer’s consultation the agent will set you up with a detailed search right in front of you. Most buyers are unaware of how small tweaks to their search greatly affect the number of properties that meet your criteria.

Pick Some Locations That You'd Like To Live

There are many ways to choose a location. Depending on your needs and wants location may be the deciding factor or it may not be high on your must-haves.

Generally, start with your dream location and work your way out from there.

Location becomes most important when you have children and are either trying to move into a school district or stay in your current school district.

Check Schools (If Applicable)

The best place to check schools and their rankings is HERE.

Setup Home Search

After your buyers consultation your home search will be set up. Your agent will have walked through your home search. The home search is performed on the MLS. The Multiple Listing Service.

The MLS is not available to people who do not have a real estate license. The MLS is the most up to date home listing database. Every region has their own MLS. The Las Vegas MLS is run by GLVAR (Greater Las Vegas Association of Realtors). GLVAR fines agents if their MLS properties are not kept up to date.

Why you should not use Zillow and Redfin for your home search?

Zillow and Redfin are behind the MLS. It’s one of the most common phone calls a buyers agent gets. “Why is this home I’m seeing on Zillow, not showing up in their MLS search?” The answer is the already had an offer lined up before it hit the MLS, not allowing for you to even see the property.

Although in their best interest, Zillow and Redfin are not required to keep their home database up to date.

Make An Offer

Who Makes The Offer?

Technically, you the buyer makes the offer. The buyer’s agent coaches you through it and gives you their professional opinion based on their experience. The agent is the one who writes up and submits the offer to the seller’s agent.

What To Expect When Making An Offer?

Expectation entirely depends on the state of the market. In a seller’s market (Las Vegas 2018) a buyer should expect to compete with other offers.

Buyers should expect to pay their closing costs. Possibly pay over a home appraisal value if this is a property that you really want, has features that are in high demand, or at a rare price point.

In a buyers market, it’s not uncommon to have your closing costs covered. You’ll get a deal on price and you’ll have lots of options.

What is a strong home offer?

A strong offer in a seller’s market has many variables. Commonly a strong offer will be an offer slightly above list price and a willingness to pay over the appraisal amount.

A strong offer is a ‘clean’ offer. Don’t muddy up the offer with small, inconsequential requests and fees.

The listing agent will have notes on the property that the buyer’s agent will be aware of. This will give clues as to what the seller is looking for. Not all sellers value the same things. The buyer’s agent should ask the sellers agent if their offer can include anything that will make the offer more attractive to the seller.

Negotiation #1

After the offer is made negotiation will start. If the seller likes your offer they may request some other things from you. Not always but commonly they do.

These are the main points that can be negotiated on a normal deal, of course, there can be exceptions.

Initial Offer

This is the first time you get to negotiate. Make sure your offer is asking for everything you want. When writing an offer you can negotiate really anything but below are the most common things negotiated.

Price

When writing an offer the seller will have a specific price listed but that doesn’t mean you have to offer that price. When doing your due diligence with your agent, you can decide to offer more than what they are asking or you can offer less.

Appraisal Contingency Time

On average in Las Vegas the appraisal contingency time is around 21 days. Meaning you have 21 days to get the appraisal back to make sure the home is worth what you are offering. When competing we tend to offer 15 days to make your offer stronger but make sure the lender you are using can make that timeline work.

Loan contingency Time

This is the amount of time your lender is given to have final approval. It doesn’t mean your loan is closing in this amount of time. Only that you are through all loan contingencies and there is nothing that is going to throw off closing. On average we chose 25 or 30 days.

Close of Escrow Date

The close of escrow date is always negotiable because everyone’s situation is different. The sellers could be purchasing a new home and want to close in 3 months. They are moving out of state and want the home to close in 3 weeks. Or as the buyer, you might be stuck in a lease and want a 2-month closing. Or you might be getting evicted from your property and need a closing ASAP. Whatever the situation is you make sure this is negotiated up front in the offer.

Closing Cost

Closing costs are fees the buyer must pay if they don’t get it covered by the seller. They run on average from 1.5%-3%. In a competitive market closing cost is usually rejected but if a property has been on the market for some time you might be able to get some of the closing costs covered.

Home Warranty

The home warranty is a protection plan that covers items in the home such as appliances or your AC/heating systems. This is different than your homeowner’s insurance. Again you would only want to ask for this in a buyers market or on a property that has been on the market for some time.

Need Help Buying a Home?

We’re here to help. Let us know what we can do for you. We’d love to talk.

Open Escrow

‘Open Escrow’ involves going to the escrow or title company and handing over a deposit.

This deposit, or earnest money, is the good faith check that is given by the buyer at the time the purchase agreement is signed. Once escrow is opened, it will be assigned a number and an escrow officer to assist you.

Your agent is in charge of sending the contract to the title company. The buyer is in charge of wire the EMD (Earnest Money Deposit) or dropping off a check.

The escrow company is usually chosen by one of the two agents.

Earnest Money Deposit (EMD)

EMD or Earnest Money deposit is money that the buyer puts down to show the sellers that they are earnest about purchasing. This money is not given to a seller it’s deposited into an escrow account a returned to the buyer at closing or subtracted from the buyers total amount due at closing.

Home Inspection

Who does the home inspection?

A Nevada licensed home inspector will perform the inspection. Your agent will have a few trusted, experienced home inspectors for you to choose from.

Do I have to be at the home inspection?

You do not have to be present. If you’re moving from out of town, often it’s not possible to be present. However, we recommend to our clients, if the can, that they at least stop by while the home inspection is going on. Being there will give the inspector a chance to walk you through what they have found and how serious the issues may or may not be.

What do I do with the home inspection report?

After the home inspection, the inspector will issue a report. The report is for you to keep. It’s a handy reference for after you move in. It will allow you to prioritize maintenance of your new house.

Your agent can also negotiate over the findings of the home inspector. If you want something fixed or a reduction in price based on the fixes that need to occur you agent can negotiate over these points.

What if I no longer want the house after the inspection results?

In some unfortunate cases, the home inspector uncovers something that prevents the buyer from wanting to move forward. You are within your right to cancel your offer. Your agent will put together a cancellation addendum.

In the case of a cancellation, it is extremely important that you and your agent are following the timeline of the contract that is already in place. Missing deadlines will hamper your ability to cancel.

Negotiation #2

During negotiation number 2 you’re negotiating ‘due diligence’. Most commonly, repairs that need to occur for you to be comfortable in purchasing the home.

Either the price can be reduced to account for the repairs that you’ll need to make after purchase. Or the seller can perform the repairs.

If the seller performs the repairs, your agent should ask for the seller to provide the repairman’s information to ensure they are licensed in Nevada for the work they are completing.

Home Apprasial

What is a home appraisal?

Your agent will have already done an appraisal based on their experience and training. This appraisal is how you decided what the best offer strategy would be. Most experienced agents a skilled at appraisal. Their appraisal is often close to the actual appraisal.

The official appraisal is when a third party appraisal person/company goes out to the home and evaluates the home based on comparable properties that have sold recently.

Who does a home appraisal?

The bank sends out appraisal bids and at random, the appraiser is chosen.

What if the appraisal differs from the offer?

If the appraisal comes back higher than what you offered and the seller accepted, congratulations! You’re new home already has equity from the day you close.

If the property under appraises you’re required to tell the seller the appraised value. You then move into negotiation #3.

Negotiation #3

Negotiation number 3 occurs when the home appraisal comes in below the agreed on selling price.

If you’re purchasing the home with a loan, the appraisal is required for the bank to know what the home is worth. This is for both their protection and yours.

When the appraisal is lower than the agreed upon selling price, the most common scenario involves putting together an addendum, where you ask the sellers to reduce the price to the appraised value.

The sellers can either accept or decline. If they accept the price is lowered and the deal moves forward.

If they do not reduce the price:

  1. You can pay the difference between the appraisal that they bank will not loan you.
  2. You can cancel the deal.
  3. You can negotiate somewhere in between the offer and appraisal.

At this point you must decide how important this house is to you and what you’re willing to do to close on the home.

HOA Resale Package Review

An HOA is a homeowners association. The purpose of an HOA is to keep the neighborhood in good condition and provide a set of rules that all neighbors have to follow.

When purchasing a home the Seller by law has to provide the resale package. The most important information in a resale package are the rules and regulations of the neighborhood HOA and how the HOA spends the money from your payments.

When you receive this package, you will have five days to review everything and make sure your comfortable moving forward with the current HOA rules that are in place. If there is anything in the package that you are not comfortable with you have the right to cancel the transaction and receive your EMD back.

When purchasing a property that has an HOA remember that you are agreeing to restrictions on how you can use your property. Some examples are paint color of your home, type of plants you’re allowed to plant, cars parked in front of your home, types of vehicles at your home, etc.

Also, you’re agreeing to monthly HOA payments which vary via the neighborhood. If you purchasing a condo or townhome in Las Vegas expect HOA fees to be from $150-250. If you are purchasing a high rise expect HOA fees $500+. A single-family home can vary depending on the neighbor and go from $25 – $300. If you fail to pay your homeowners dues you could lose your home. HOA’s have the power to put a lien on your home and foreclose.

Most people don’t know Ombudsman is a place you can go that protects homeowners from abusive HOA’s or HOA’s that are abusing their power.

Closing Disclosure (CD)

The closing disclosure (CD) is a document the lender provides you breaking down all the monies in the transaction of the home.

You legally have 3 full days to review from the time the lender issues you the CD.

Need Help Buying a Home?

We’re here to help. Let us know what we can do for you. We’d love to talk.

Final Walk Through

Who does the final walk-through?

Normally you (the buyer) and your agent will do a final walk-through of the home.

What are we looking for on the final walkthrough?

The final walkthrough is not a time to perform another inspection. You’re there to check the property is in the same condition as it was during the inspection.

You’re making sure the home has not been vandalized, damaged during move out, no major leaks, the AC units are present, no broken windows… The home should be in the same condition when the inspection occurred.

What if we find something in the final walk through that causes me to not want the home?

This can and has happened. Most experienced agents have been involved with a deal that the buyer walked away after the final walk-through due to issues with the home that was not present during the home inspection.

If the home has been vandalized, the seller’s insurance will cover the repairs. The deal will/can be put on hold until the property is returned to the condition that the home was previously in.

To walk away from a deal at the final walk through, something must be seriously wrong. You cannot simply get cold feet and walk away.

Sign Closing Paperwork

Where do I sign the closing paperwork?

In Nevada, the most common location to sign the paperwork is at the title company that has been agreed upon between both parties.

It is also possible to have the title company provide a mobile notary to meet you. A mobile notary comes with additional fees to you.

If you’re out of state additional fees will be added to account for this.

Record On Your New Home (Getting The Keys!!)

The list will be different for sellers than it will be for buyers, but there is some overlap as well.

Buyers: Each buyer needs a government-issued photo I.D., such as a driver’s license. Certified or cashier’s check for the closing costs that you’ll owe, made out to the title or closing company.

During the closing meeting, the seller signs certain documents transferring property ownership. You receive and sign documents related to the mortgage agreement and ownership of the property, and pay any closing costs and escrow payments. The settlement statement detailing all of the costs related to the home sale.

Where Are The Lawyers?

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Maintenance

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Understanding Real Estate Terms and Acronyms

“Agreement” includes this document as well as all accepted counteroffers and addenda.

“Appraisal” means a written appraisal or Notice of Value as required by any lending institution prepared by a licensed or certified professional.

“Bona Fide” means genuine.

“Buyer” means one or more individuals or the entity that intends to purchase the Property.

“Broker” means the Nevada licensed real estate broker listed herein representing Seller and/or Buyer (and all real estate agents associated therewith).

“Business Day” excludes Saturdays, Sundays, and legal holidays.

“Calendar Day” means a calendar day from/to midnight unless otherwise specified.

“CFR” means the Code of Federal Regulations.

“CIC” means Common Interest Community

(formerly known as “HOA” or homeowners associations).

“CIC Capital Contribution” means a one time non-administrative fee, cost or assessment charged by the CIC upon change of ownership.

“CIC Transfer Fees” means the administrative service fee charged by a CIC to transfer ownership records.

“Close of Escrow (COE)” means the time of recordation of the deed in Buyer’s name.

“Default” means the failure of a Party to observe or perform any of its material obligations under this Agreement.

“Delivered” means personally delivered to Parties or respective Agents, transmitted by facsimile machine, electronic means, overnight delivery, or mailed by regular mail.

“Down Payment” is the Purchase Price less loan amount(s).

“EMD” means Buyer’s earnest money deposit.

“Escrow Holder” means the neutral party that will handle the closing.

“FHA” is the U.S. Federal Housing Administration.

“GLVAR” means the Greater Las Vegas Association of REALTORS®.

“Good Funds” means an acceptable form of payment determined by ESCROW HOLDER in accordance with NRS 645A.171.

“IRC” means the Internal Revenue Code (tax code).

“LID” means Limited Improvement District.

“N/A” means not applicable.

“NAC” means Nevada Administrative Code.

“NRS” means Nevada Revised Statutes as Amended.

“Party” or “Parties” means Buyer and Seller.

“PITI” means principal, interest, taxes, and hazard insurance.

“PMI” means private mortgage insurance.

“PST” means Pacific Standard Time, and includes daylight savings time if in effect on the date specified.

“PTR” means Preliminary Title Report.

“Property” means the real property and any personal property included in the sale as provided herein.

“Receipt” means delivery to the party or the party’s agent.

“RPA” means Residential Purchase Agreement.

“Seller” means one or more individuals or the entity that is the owner of the Property.

“SID” means Special Improvement District.

“Title Company” means the company that will provide title insurance.

“USC” is the United States Code.

“VA” is the Veterans Administration.

Need Help Buying a Home?

We’re here to help. Let us know what we can do for you. We’d love to talk.