Las Vegas, NV – If you’re thinking about buying a home in Las Vegas, you’re not alone. At the end of 2021, Sin City ranked as the third most popular migration destination in the country, behind only Miami and Phoenix, according to Redfin data. With so many people flocking to Nevada’s most populous city, you’ll face plenty of competition to find the perfect home. Read on for helpful tips on how to buy a house in Las Vegas.
Why buy a house in Las Vegas?
While impressions of Las Vegas are often rooted in gambling away your cash, this is a city with loads of sure bets to make money, too. Major companies like Zappos, Allegiant Airlines and Amerco are headquartered here, and living here is much more affordable than many other parts of the southwest. For example, Bankrate’s cost of living calculator shows that Vegas is 33 percent more affordable than Los Angeles — a key reason that so many people are looking to buy a home in Las Vegas from out-of-state.
Plus, Las Vegas looks like a very solid long-term investment. Research from UNLV estimates that the population of Clark County will welcome nearly 700,000 additional residents by 2040. So, if you decide to relocate down the road, you should be able to find a buyer or renter easily.
Find a Las Vegas home for your budget
Home prices have climbed in Clark Country throughout the pandemic, but recent developments signal good news for buyers: Those prices are starting to come down. According to Las Vegas Realtors, the median price for a single-family home in October was $475,000 — a significant decline from the $525,000 price tag in May. (Of course, mortgage rates are higher now than they were in May as well.)
As you begin browsing properties, think about what you’re looking for in a neighborhood and a living environment. Are you hoping for a creative hub with plenty of cocktail and culinary destinations? Start your search in the Downtown Arts District. Are you looking to be farther away from the hustle and bustle of the city? Perhaps a more affordable suburb like Mission Hills or Whitney would be a good match. Can your life — and belongings — fit into a smaller space? Condos and townhomes deliver big savings: The median sale price in this category as of October was just $282,500. As you compare prices in different parts of the metro area, use Bankrate’s new-home calculator for an understanding of how much house you can afford.
When to buy a house in Las Vegas
The pandemic-fueled rush to buy property here has made timing the market in Las Vegas challenging, and you’re likely wondering whether you should buy a house now or wait. Now might be the time to make your move. The number of homes available for sale in Las Vegas surged from just 5,572 to start the year to more than 10,000 listings in October. It’s no longer entirely a seller’s market here: Redfin data shows that 46 percent of homes had price drops in September of 2022, a 23 percent increase year-over-year. As long as your budget can handle high mortgage rates, 2023 is looking like a prime time to buy a house in Las Vegas.
Things to know about buying a house in Las Vegas
How safe are the neighborhoods where you’re looking?
Las Vegas deals with the same problems as any other major city, and some neighborhoods have much higher crime rates than others. As you compare different listings, make sure you do your research on whether you’ll feel comfortable parking your car or walking your dog late at night. CrimeGrade’s rating map is a good place to start.
How long will your commute be?
While you might find a great deal on a home in, say, Boulder City, what if you have to make the 27-mile trek to downtown Vegas every day? Be sure to think about your daily journey to and from work and other obligations when you’re looking for the best place to call home. As Las Vegas continues to grow, traffic congestion will likely do the same.
How much will you pay in closing costs?
As with anywhere else, in addition to saving for a down payment, Vegas buyers need to consider how much cash to stash away for closing costs. In 2021, Nevada closing costs averaged 1.5 percent of the home’s purchase price, according to ClosingCorp. On a median-priced $475,000 purchase, that adds up to $7,125 in closing costs.
It’s important to note the transfer tax rate is a bit higher in Clark County than in the rest of the state: $2.55 for every $500 of value, which is 60 cents higher than most of the rest of the state. However, the seller typically covers half the tax bill.
How much will you pay in property taxes?
In addition to your upfront purchase price, you’ll need to think about how much you will owe the government each year. There are 112 different tax districts in Clark County, so rates are different depending on where you live. The good news: No matter where you land, your bill likely won’t be too high. Las Vegas property tax rates are fairly low, averaging between 0.5 and 0.75 percent of the home’s appraised value.
What else will you need to pay for as a homeowner?
You might not think of the Nevada desert as a place where you’ll need to worry about water damage to your home. But extreme rain this summer was a reminder that Las Vegas isn’t immune to flooding. As you look for homeowners insurance coverage, you’ll want to consider any additional options to protect your investment.
Tips for buying a house in Las Vegas
Save for a down payment
The median down payment on a home in Nevada was $50,000 in the spring of 2022. However, you might be able to get by with a much smaller upfront investment. If you have excellent credit and qualify for a conventional loan, some lenders will allow a down payment of just 3 percent of the purchase. On a median-priced $475,000 purchase, that comes out to $14,250.
That amount can still feel overwhelming, particularly if you’re a first-time homebuyer or you’re living on a low income. There are down payment assistance options available, though. For example, Greater Nevada Mortgage offers a down payment grant program that can add up to $22,000. And the Nevada Rural Housing Authority’s Home at Last program offers down payment assistance in certain parts of the Vegas metro area.
Get preapproved for a mortgage
Before you start searching for a home, you need to get preapproved for a mortgage. Any seller will want to see your preapproval letter to take your offer seriously. Luckily, it doesn’t take much work to get one of these if you have your financial documents (pay stubs, tax returns, bank statements, etc.) in order. In fact, some lenders will issue one via an automated system in just 15 minutes.
Find a local Las Vegas real estate agent
As the market continues to change, the right real estate agent can be your biggest asset. They will have a firm grasp on the pulse of local buying and selling activity. How quickly are homes going to contract? Are buyers offering over asking price? Are sellers willing to come to the bargaining table? With the expertise of a real estate agent on your side, you can avoid mistakes like paying too much.
In Nevada, dual agency is legal, which means that your agent might also represent the seller. That can create some conflict of interest, so state law requires you to give your consent if you’re OK with the arrangement.
In addition to securing an agent to help you find a property that fits your needs, it’s wise to find a lawyer who can navigate the mountain of paperwork required to close the deal. While real estate attorneys aren’t required in Las Vegas, they are a good way to protect yourself from gambling on a contract that isn’t in your favor.
Understand the playing field
You actually want to live in this house, but keep in mind that you might be competing against real estate investors who never plan to call it home. Las Vegas is a huge market for real estate investment firms that pay in all-cash. In fact, 34 percent of homes purchased in the area in May didn’t involve any type of financing. That can be a big challenge for buyers who need financing: Sellers love the certainty of a cash deal without any worries about a lender denying a loan application.
However, you have options. Some cash-backed bid programs make your offer look just as good as someone with a super-deep pockets. Additionally, your real estate agent can help you understand what might resonate with the seller, such as being flexible about the timeline or waiving certain contingencies.
Buying a house in Las Vegas may feel quite challenging, but if you’re planning to be here for the long haul, renting isn’t a great option, either. The metro area recently ranked second in the nation for fastest-rising rents since before the pandemic, so delaying a purchase may mean writing a bigger check to your landlord. If you have enough cash saved up to cover a down payment and closing costs, you can begin building equity in one of the fastest-growing regions of the country today.
* Story originally appeared on bankrate.com