[pommysmommy]

Will this give you an advantage on bank owned properties? I know that homes here have multiple offers but we have decided that we do not want to spend our life savings to pay cash for our retirement home in Las Vegas.

[olecapt]

Originally Posted by pommysmommy

Will this give you an advantage on bank owned properties? I know that homes here have multiple offers but we have decided that we do not want to spend our life savings to pay cash for our retirement home in Las Vegas.

Don't. There is a minor advantage to cash. But it is of the order of a few percent and likely not a percent if the other offer has high down. Banks like cash and high down offers because they are not going to go away with a low appraisal. Low appraisals are common right now.

You can also buy cash and then mortgage. There are some technical problems with that but only if you get into trouble. Talk to a knowledgable mortgage guy.

Daddy///M3 is knowledgable. DM him.

[pommysmommy]

Originally Posted by olecapt

Don't. There is a minor advantage to cash. But it is of the order of a few percent and likely not a percent if the other offer has high down. Banks like cash and high down offers because they are not going to go away with a low appraisal. Low appraisals are common right now.

You can also buy cash and then mortgage. There are some technical problems with that but only if you get into trouble. Talk to a knowledgable mortgage guy.

Daddy///M3 is knowledgable. DM him.

Thank you. I will do that.

[Daddys///M3]

Originally Posted by olecapt

Don't. There is a minor advantage to cash. But it is of the order of a few percent and likely not a percent if the other offer has high down. Banks like cash and high down offers because they are not going to go away with a low appraisal. Low appraisals are common right now.

You can also buy cash and then mortgage. There are some technical problems with that but only if you get into trouble. Talk to a knowledgable mortgage guy.

Daddy///M3 is knowledgable. DM him.

I have to agree with olecapt. Acceptibality of an offer will likely be based on the actual offer price, concessions being asked for, and the likelihood of financing being obtained. A cash offer that is 5%-10% less than an offer based on a strong financing scenario will not likely win in my opinion. That said, I work the finance side so take my advice on offers for what it is worth.

The issue with buying cash and refinancing later is the fact that you will have to pay closing costs for the refi. If the seller covers the closing costs on the original purchase then no worries, but not worth it if you have to pay them twice. There is also an issue of title seasoning. Most lenders require 12 months ownership of the home before they will allow a cash-out refinance, although some lenders will allow 6 months. The rate will always be a little higher on a cash-out refi, and you will be required to use a new appraisal as opposed to purchase price so if the property depreciates that will limit your access to funds.

So in my opinion your down payment should depend more on what you are looking to spend per month on your mortgage and how much cash you would like to keep liquid and less about having an offer accepted. A 30% down scenario with a solid offer price should be sufficient to get you what you are looking for, as long as your expectations are realistic.

[ocean2026]

Most predict a price decline of 20-30% over the next year or two -what would that do to your $90,000?

[pommysmommy]

Originally Posted by ocean2026

Most predict a price decline of 20-30% over the next year or two -what would that do to your $90,000?

It's hard to imagine that home prices could fall even further but your point is well taken.

[ocean2026]

Pommy that's what everyone said the past 3-4 years. I've given two links where the same is predicted - including one that shows in 2012 prices will be down - I think it was 18% in LV from last December. Part of the reason is that more people are unemployed in LV and another is the next wave of foreclosures.

You're in El Paso which is quite different. El Paso is growing- prices are cheap and if you buy something say in the 79902 Zip it will be a solid investment. I bought a nice building there a few weeks ago Florence & Crosby. Las Vegas ( was there last week) is more like gambling but its not yet the time to take the plunge.

[pommysmommy]

We have been very fortunate in El Paso. The Ft. Bliss expansion is keeping the economy here strong. We are planning to purchase our retirement home in Las Vegas so this will likely be our last home purchase. Our home here will be paid in full before we retire and move to Vegas. We bought in 1996 and it is worth much more now than our purchase price in 1996. We hope to make a nice profit when we sell.

[olecapt]

Originally Posted by ocean2026

Pommy that's what everyone said the past 3-4 years. I've given two links where the same is predicted - including one that shows in 2012 prices will be down - I think it was 18% in LV from last December. Part of the reason is that more people are unemployed in LV and another is the next wave of foreclosures.

You're in El Paso which is quite different. El Paso is growing- prices are cheap and if you buy something say in the 79902 Zip it will be a solid investment. I bought a nice building there a few weeks ago Florence & Crosby. Las Vegas ( was there last week) is more like gambling but its not yet the time to take the plunge.

Let us keep it relatively on course. Two years ago was 2007. The price decline began in January and was small until mid year. So this decline is about 2.5 years old. The harsh part of the cycle began in the first half of 2008 and has been running now for a year. Since late in 2008 it has been possible to buy more cheaply than rent and to buy well below replacement course.

Present trends indicate a bottom. We are even to dropping perhaps 0.5% per month...far different from the 3 or 4% of the first quarter. This could of course go on for a while...a slow decline...but I would still see little probability of even 10% over the time between now and 2012. Note that the article calling for the 18% decline is actually a 9% up from where we are.