Inventory of Las Vegas short sale listings in Las Vegas MLS will not increase until Congress reinstates The Mortgage Forgiveness Debt Relief Act
In this video we talk about the reasons for the shrinking inventory of Las Vegas short sale listings in the MLS.
We will talk about:
1: The effect of the expiration of the Mortgage Forgiveness Debt Relief in December 2013 on the inventory of Las Vegas short sale listings in Las Vegas MLS.
2: Change in the bank’s policy in regard to when they price a short sale listing at the time of approval which ended up costing short sale buyers
3: Banks are doing all they can to postpone foreclosing on delinquent Las Vegas homes or condos. Some homeowners have been living in their residence without paying the mortgage for a while now and are in no hurry to leave.
In this video, we will talk about these and the shrinking effect of Las Vegas short sales on the Las Vegas real estate market.
Video transcript of Las Vegas short sale homes, condos and townhomes market report
Las Vegas short sales homes, condos and townhomes market report
Let’s discuss the effect of Las Vegas short sale homes, condos and townhomes pricing and sales numbers on the Las Vegas residential real estate market.
Las Vegas short sales have been losing market shares and their share of total single-family homes sold through the Las Vegas MLS has been less than 15 percent since February 2014 and kept falling to the lowest point in June 2014 at 11.6%, however, it went up to 12% for July. The same goes for Las Vegas condos and townhomes and the percentage of these sold has been in the 8.1%-10.1% range.
Another important change was how banks countered short sale offers in August of 2013.
The only incentive for making an offer on an unapproved Las Vegas short sale was the discount that buyers expected for dealing with the uncertainty of the outcome and waiting for months to get an approval from the banks.
Before the fall of 2013 banks used to counter offers based on prices at the time that the buyer’s offer was accepted by the seller and not the current price at the time of the bank counter. This was fair given the long wait for the bank approval and exceptional price appreciation of the last 2.5 years, this way the buyer was not penalized for waiting for approval.
About August of 2013 there was a change of policy by banks in countering short sales offers and instead of approving the sales price at the time of acceptance of the offer, they started to counter the latest retail price for offers made months ago.
For example one of our offers that was accepted in October 2012, was countered in November 2013 at current prices at the time. Given the 25% plus appreciation in this period our buyer was penalized for waiting and ended up rejecting the deal. This worked great for the bank as they could market it as an approved short sale and get the top price since approved short sales are treated like non-distressed sales with minimal discounts.
We had to cancel many deals and due to continuing price appreciation we no longer pursue unapproved short sales but we do pursue approved short sales.
However, due to low numbers and high counters from banks, short sales do not have much of a negative effect on the Las Vegas real estate market.
Additionally, the number of Las Vegas short sale listings is not expected to increase since the Mortgage Forgiveness Debt Relief Act expired in December 2013 and has not being reinstated as of today. Thus Las Vegas short sale sellers could face significant new tax bills if they receive mortgage relief from their banks, as forgiven debt can be counted as income by the IRS and taxed heavily.
This is Karen Saberzadeh of lasvegas4us.com and Realty One Group wishing you a great day.
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