The Las Vegas market has been slowing, the inventory has been growing, and the frustration among real estate agents and sellers is increasing as well. That has lead to some creative solutions–some maybe a bit too creative– and others just new in their approach.
In Saturday’s Craigslist was the following listing:
$200,000 CASH BACK @ CLOSING act now only 2 left
have 2 houses under contract that i can assign.
They are on the golf course in a new community, with houses not the golf course that have sold for over $950K, it has a very nice clubhouse setting with pool/spa and workout facilities.
This home has apr. value before consrtuction of $1,050,000 — i can get you 100% financing which will allow you get the $200K cash back. i bought directly from builder/developer
the home is 2100 sq. ft. it will have a fireplace on the front deck over looking the golf course it will within 15-20 min of the new international airport
if this intersts you at all please contact me asap so we can get YOU the cash back at closing of $200K
i am working with same builder on a couple of other projects as well that have around $150K cash back — contact me to find out about these great deals!!!
email me or phone me direct Kurt @ 218-***-****
THANKS FOR LOOKING
(Punctuation, capitals, and grammar NOT mine- I just pasted the ad)
***************************************************************************************
I do wonder if they have let the lender in on this arrangement.
Another creative solution (not quite as creative as Kurt’s- this is a different sort of solution) comes from Bruce Hiatt, a Las Vegas Realtor–a moratorium on single family housing. Here’s a few quotes from his article in Realty Times:
We continue to be frustrated with the continuation of ongoing new home construction in Las Vegas. With new home builders selling homes to investors over the past two years which is evidenced in our statistical sample, could the new home builders forecast such strong competition with their own new homes sales? Could the new home builders have reduced their new home inventory to help create a softer landing in the "bubble" impact of the real estate market? As these observations are from hindsight, no one can accurately identify exactly what cause created what effect. We do believe however the lack of any moratorium or controlled permitting of new single family home sub-division construction by our planning commissions knowing many investor purchases were occurring over the past two years is one contributor to our excessive single family home inventory.
With such a significant amount of resale single family homes for sale, Las Vegas doesn’t need more new home sub-divisions. It needs to reduce its resale inventory and start rethinking its growth and impact on the big infrastructure picture. Each new sub-division that gets built creates the need for more roads, more schools, more infrastructure services and lots of new water requirements. It doesn’t make sense in a city that needs to manage its precious resources, especially water.
Overall, failure to control or slow the explosive growth of new single family home sub-divisions as traditionally built in the past across Las Vegas will, in our opinion, result in an ongoing erosion of the value of single family homes, especially for those homes in the $300,000 to $1 million price range. At our current resale and new single family home inventory levels, we forecast a twelve to eighteen month window to bring our resale inventory back to more realistic levels for a growing city like Las Vegas. (all emphasis mine)
Hiatt’s moratorium idea would be controversial, but he’s right about one thing- Increasing inventory and slowing sales is liable to continue to erode resale value. It will be interesting to see what other solutions sellers and their agents come up with as the market weakens over the next few months.
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We are starting to see the “money back” Deals here on long island.
check this crappy house out:
http://www.mlslirealtor.com/uniDetails.CFM?MLNum=1812711&typeprop=1&start=1&rpp=20
what is the point of doing this? Can anyone tell me?
-liz
MEA CULPA-
Find is listed on Las Vegas Craigslist- but I missed the part about being near Destin, FL. (I’m afraid I wouldn’t take the deal, wherever it is.)
Twist
Craigslist Does Offer Other Las Vegas Deals though:
Will pay your mortgage for a year:
http://lasvegas.craigslist.org/rfs/202392308.html
We will pay your property taxes and buy your house
http://lasvegas.craigslist.org/rfs/202321043.html
Hmmm…
There are 533 “Cash Back” listings on DC’s Craigslist today.
Most of the ads also have “REDUCED!!!” in their headlines.
Craigslist postings are not trustworthy. IMO.
If you want to see a Craigslist ad in Vegas that offers the buyer of a $500K home $400K back at the closing, just say the word.
Anyone can create the ad.
I just had someone call the number in the ad and they talked to Kurt. Kurt’s story is that he got a big discuout from the builder because he bought 25 of 30 houses built in the development. Because of this, he can sell them at below market value. He is offering to “rebate” the difference between the actual selling price and the appraisal to the buyer.
You’re right Mike, anyone can put a post on Craigslist. But there is someone at the other end of the phone number listed in this ad who claims to be doing what the ad says.
Maybe im not too bright but can anyone explain to me WHY sellers would offer money back instead of lowering the price? I can understand on a large number of identical new homes doing this to keep the price UP on the books but how about individual sellers doing this? i dont understand why you would do this.
-liz
Liz -
some guess sellers are getting pressured from their agents (who have to worry about the comps affecting future transactions)
John (who’s really, really going to get off the computer now)
Liz-I went into a major builder sale’s office a couple of weeks ago. They were saying that if they had a price reduction before you closed escrow, they would retroactively lower the price of everyone who purchased that model. I’m sure they hate to do that.I know there are people who have seen their model go down in price after closing- and they get really upset. In addtion, you’ve seen those car ads with “Get $1,500 cash rebate with purchase of…” some people are willing to borrow more to put cash in their pocket.In spite of all the tricks though, new home inventories continue to rise. They might have to resort to different tactics- like lowering prices.
These deals were happening in the thousands and half of the builder deals from 05,06,07 invloved cash back thats why you see half
of the new home communities vacant.
http://www.youtube.com/watch?v=eKS0pvE-hqg
Las Vegas real estate agents and consumer advocates Kendall Trotter and Steve Hawks discuss questionable transactions that new home builders were facilitating to move homes with a former insider and builder employee Dana Ellis. Ms. Ellis brings to light shocking hidden addendums from lenders, paying off peoples credit cards , buying them cars, paying huge sums of money to contractors who would in turn funnel it back to the buyers. Homes prices being inflated by hundreds of thousands of dollars. Did this fraudulent inflation of prices lead to the skyrocketing rise in home values and the eventual crash? Watch this episode of Las Vegas Real Estate Update and you decide!
heres another. The making of a modern day ghost town.
http://www.youtube.com/watch?v=H5-EY4pcPH4