Q: I heard recently that some local condo complexes, including some high-rises, are starting to rent their units instead of selling them. Is this true? If so, what do you think about this? — Mark S., Las Vegas
A: Yes, after talking with some local experts, we are seeing some local condominium developments starting to rent instead of sell their units.
I also believe this is the start of a trend, at least here in Southern Nevada. Call it a sign of the times.
The reasons are fairly simple. It’s a natural reaction to market conditions. We have an abundance of vacant condo units on the market. Prices have been falling, the economy is struggling and qualified buyers are harder to find than when many of these projects — especially the more expensive luxury high-rise developments — were being planned.
When that happens, developers of these projects will do whatever they can to get revenue coming in and to find people to occupy what they’ve built.
One example came late in January, when Trump Towers made news by announcing that it will begin leasing its unoccupied condo-hotel units for up to one year as furnished apartments. This is one of the more luxurious high-rise developments in Las Vegas, with more than 1,200 units overlooking the Las Vegas Strip.
In Trump’s case, according to what the developer has said in recent media reports, the decision is being driven by the ongoing credit crunch. Apparently, too many buyers were having too much trouble getting the loans they need to complete their purchase of these high-end condos.
Unfortunately, this situation is becoming increasingly common in Las Vegas.
Like most local real estate professionals, I have to admit that I’d prefer to see these developers sell these residences, instead of renting them. But, given the current market conditions, I can’t say that I fault them for choosing the rental route.
In the end, I think everyone benefits from people living in these properties. When the economy improves, developers can always go back to selling these units.
It will be interesting to see how many other condominium projects follow this trend. I suspect we’ll see more of this through 2009.
This trend presents great opportunities and advantages for consumers. For instance, if you ever wondered whether the high-rise lifestyle is for you, you now have a unique and affordable way to find out by renting one of these condos.
Also, the other point I’d like to make is that declining local home prices are creating unprecedented bargains for buyers.
For more information on such issues, visit lasvegasrealtor.com or contact an experienced local Realtor.
Sue Naumann is the president of the Greater Las Vegas Association of Realtors and has worked in the real estate industry for nearly 30 years. GLVAR has more than 14,000 members. To ask her a question, e-mail her at firstname.lastname@example.org. For more information, visit lasvegasrealtor.com.
14,000 ask her a question, e-mail her at email@example.com. For more information, visit www.lasvegasrealtor.com.
Q: What are the pros and cons of selling your own home versus using a Realtor, especially in today’s housing market? I’m also wondering if more people are working with Realtors these days.
— Debbie H., Las Vegas
A: I’m so glad you asked this question and am happy to answer it in my debut column here in the Review-Journal real estate section.
First, let me thank the folks at the Review-Journal for giving me and the Greater Las Vegas Association of Realtors the opportunity to answer questions in this column throughout the year.
As for the pros and cons of working with a Realtor, I have to start by admitting my obvious bias. I’ve been working in this profession in one way or another since 1975. I’ve had a Nevada real estate license since 1979. So, you can imagine how strongly I feel about the advantages of working with an experienced, educated and ethical professional Realtor.
Keep in mind there’s a difference between being a Realtor and simply having a valid real estate license from the state. I think it’s important to work with someone who has put in the extra time and effort to gain the additional expertise and live up to the ethical standards we require of our Realtor members.
Your question also comes at an interesting time. During the housing boom we experienced here in Southern Nevada from 2003 to 2006, we heard questions like yours more often. Back then, many of our clients and members of the public asked us to explain why they needed a professional to help them sell a home when it seemed like homes were selling in days, or even hours.
As I explained at the time, Realtors helped homeowners through the home-buying process then and can be even more vital now. In today’s more challenging housing market, it makes more sense than ever before to work with an experienced and professional Realtor.
For one thing, it is more difficult to sell a home today than it was a few years ago. Today’s sellers must compete with the unprecedented number of bank-owned homes, which are usually sold at bargain prices and now account for about two of every three homes sold here.
Realtors work to get the most money possible in the least amount of time with the least amount of inconvenience for the home you’re selling. As part of doing that, of course, we aggressively list and market your home on the Multiple Listing Service, along with many other means.
We prepare a comparative market analysis to help you determine the best price for your home.
We also promote our listings with other Realtors. Many people don’t realize that up to half of all our home sales involve other cooperating real estate brokers.
Realtors qualify and make appointments to show your property to prospective buyers, then present and negotiate offers to buy your home.
Realtors handle details that go into the appraisal, loan approval, escrow and closing process, keeping you informed along the way. Finally, we represent you when you close the transaction.
I think people are seeing the benefit of these services. Our research shows more buyers and sellers than in past years are choosing to work with a Realtor today.
Studies by our national association show you typically sell your home for about 16 percent more when working with a Realtor as opposed to selling it yourself.
Nationally, about four of every five sellers use real estate agents to list and sell their homes. Of the other 20 percent, some sell for sale by owner. Property transfers between family members account for some of the direct home sales. Also, tenants are often offered the opportunity to buy the property they are renting before the landlord lists it for sale.
I know some sellers prefer doing all this themselves for various reasons. Most often, I hear do-it-yourselfers say they are trying to save on paying a commission on the sale of their home. On this topic, people should also know that real estate commissions are always negotiable and that there is no such thing as a standard commission rate.
For more information, visit www.lasvegasrealtor.com or contact an experienced local Realtor.
Sue Naumann is the president of the GVLAR and has worked in the real estate industry for nearly 30 years. GLVAR has more than 14,000 members. To ask her a question, e-mail her at firstname.lastname@example.org. For more information, visit www.lasvegasrealtor.com.