WHY Las Vegas Pendings Aren't Closing

Services for Real Estate Pros with Savvy Home Pix B.1000860.LLC

I have had a good number of astute real estate professionals recently ask me "why aren't your pendings closing?" on my market reports!

Here is just a peek at some market reports for one specific area (June, July and August Respectively):

Coronado Ranch Homes For SaleCoronado Ranch Homes For SaleCoronado Ranch Homes For Sale

What you are seeing here is that the Pendings (red) has been gaining ground and the Sales have been slowing down (green).  This doesn't make sense with rising pendings, you should see rising closings.

There several very good reasons and I am here to explain why this is going on.

When I got my license here in 2005 our 30 pending to close ratio was a good 60%.  Now (with market conditions) you have to use 60 day pending to close ratio (even with cash, HOA demands can clog up the system!)  Our current 60 day pending to close ratio is a dismal 27%!

Here are the challenges:

Short Sales:  Our system is bottlenecked with short sales.  The "short" part of a short sale doesn't mean it Las Vegas Area Short Salesis a short escrow.  It means that the seller is seeking lienholder 3rd party approval to possibly forgive part of the loan or make it a "short payoff" upon successful contract and close.  These things can take a LONG LONG time for approval.  I would say 3-6 months is the "norm" depending on the lienholder.  Sometimes the approval process is shorter, sometimes longer!  Short sales have a pretty dismal list to sale history (although I feel this is changing at this VERY moment!)  You can view my last short sale market report here and I make clickable links to the last short sale market reports.  You can go back years and see that the closes have always been dismal.  You can also view the graph to the right of this paragraph and note the green (solds).  Very small sliver that never really changes from month to month.

Inventory Reduction:  As our "sellable" inventory (mostly REO) plummeted at the beginning of the year, (due to high buyer interest, low interest rates, moratoriums, etc), more buyers entered into short sales so we started seeing this curve:

Las Vegas Home Listings

As you can see I circled when the dispairity began to take shape between pendings (red line) and closings (green line).

Financing Issues:  We are constantly subject to new underwriting guidelines and changes.  Buyers are now asked to clarify more and more issues that have to do with their financials, et al.  If you ever see anyone that can close an FHA loan in less than a week, they are probably a liar (not saying it can't be done but it is highly unlikely.)  More government backed loans are being used these days and RISK FACTORS are taken into account with underwriting due to the high amount of foreclosures. 

Title Issues:  Distressed properties may have fines attached to the title from the HOA or city or county.  These need to be cleared and can sometimes take a while.

Property Stolen at the 11th Hour:  Yep, property is getting stolen in the 11th hour which can hinder the house's financing status.  Yesterday this just happened at one of my escrows that was due for it's final appraisal reinspection and ready for docs around the end of the month.  This is the third time it has happened to me in the last year and I am not a "big time" agent.  I will have another post about this coming out later today or tomorrow.

That's just a small synopsis on what is going on!  If you are considering buying a home in our market you may want to interview your Realtor closely to make sure they have been working in this market and can effectively deal with the challenges that you will face.  There is NOTHING "NORMAL" about a transaction these days!  Here is an ongoing series I am building to give buyers an idea of what is going on with the different types of transactions and the challenges each type presents in this current market!

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Thanks,  Renée Burrows 702-580-1783 Broker/Owner, REALTOR®


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Jeffrey DiMuria 321.223.6253 Waves Realty
Waves Realty - Melbourne, FL
Florida Space Coast Homes

Great Info. We have short supply here so not having the same issues but it is easy to see how the banks can bottleneck the your progress in getting out of the short sale and foreclosure issues you have. Good Luck!

Sep 26, 2009 04:49 AM #39
Theresa Struckmeyer, Orange Ca Realtor
Orange, CA

Hi Renee curious to read more about "property stolen at 11th hour" I am not exactly sure what this means... Look forward to reading your series.....

Sep 26, 2009 05:03 AM #40
SEO Expert: Michael George
Phoenix, AZ
Real Estate and Law Firm SEO

Renee- I could have wrote this myself-- from the persepective of a mortgage broker.  I am also going through all of this in Arizona...

It's a frustrating market, but it will weed out the weaker members of the tribe.

Sep 26, 2009 05:07 AM #41
Renée Donohue~Home Photography
Savvy Home Pix - Allegan, MI
Western Michigan Real Estate Photographer

Heather:  TRUE STORY!!!  HA!

Lane:  Educating the buyer and SELLER to possible outcomes is paramount!

Nevin:  I appreciate that with your expertise!

Joan:  I am definitely going to be posting a link to this on future market reports because I have been asked over and over :)

Michelle:  BUENO about writing multiple offers.  I think there is a good number of short escrow buyers that are polluting the system that way (and I am guilty with my clients so I am not complaining about writing multiple offers for buyers!!)  Once we see the bottle top cut off (getting shorts approved which I feel is happening and a pretty good clip right now) the offer submission process will be easier.  I do try to let my clients know the inventory situation is dire (not in their favor) but they still can't resist puttign an offer in here or there "just to see"

Greg:  Education is paramount and will separate the "weekend warrior" from the full timer!

Rich:  I am betting it is all over in some of the hardest hit areas!

Julie:  I am curious if you have the same problem w/ stolen REAL property in Hawaii as I know you list a bunch of REO.

Roland:  With distressed sales (rather REO or Short) there are too many issues to address.  Non-distressed, we could probably still close an escrow that involves a government loan as long as ALL parties stay on top of their diligence!

Michelle:  Yea, I read over on Ardell and Wendy's blog that you don't have shorts in Canada!  INTERESTING!

Sybil:  I need to vent every day.  That's why stolen property NEEDS to be addressed.  Regular homeowners need to become proactive if they want to protect THEIR property's values!

Kendall:  R O F L!  Glad you didn't come in here and state you can close loans in a week.  Can you believe that I get those emails still "found you on active rain, new to Vegas and I am eager to meet with you because I can close an FHA loan in 2 weeks".  About two months ago I had one actually exclaim that on my blog.  I debated him and told him that he CANNOT close distressed loans in two weeks because HOA demands are ISSUES and then your clients are going to need TISSUES because the expectations are ENTIRELY too high.  Heck, I can't even get cash closed in two weeks because of addendums that need signatures from invisible sellers and HOA demands and other title issues.  Here's a good chuckler for you.  I had a 45 day cash close on an REO in July due to the seller not being on title.  THE SELLER was giving us hell for not closing on time and they weren't even CURRENT OWNER OF RECORD, LMAO!  It's a fun existence, eh?  Thanks for chiming in!  FYI, I looked at your blog and think you have valuable lending insight to add to my outside blog and invited you to join in as a contributor.  Please accept the invitation :)

Robert:  Thanks, I am so beat down by this market and that post will be directed to las vegas area homeowners who don't do anything when the watch shenanigans at their neighbor's vacant homes!

Michael:  I would like you to expand on that thought because I don't understand what you are getting at ;)

Corinne:  I guess I should have stated "contract to close" rather than pendings.  The general public understands pendings over "contingent contract" or "under escrow" blah!  Congrats on your charts!  I will pop over there to take a peek!  I like pretty charts with market reports!

Stephen:  By stolen, I mean real property is disappearing:  air conditioners, spas, pool pumps, appliances and this is mostly in the 11th HOUR!!

Melissa:  I incorrectly stated pendings but I use both contingent and pending when in the category "under contract".  I should have said contract to close and that is my bad!!

Terrie:  DONCHA love Active Rain.  I swear I would feel alone without it.  Some people haven't a clue about what I am saying (and I would love to work those markets) and some have the same thing mirrored in there market.  It's such a great thing to have a pulse on lots of different local markets in this country (and CANADA!)

SarahGray:  LOL!  I need to show my clients what is going on or they would hate me after they lost their 5th house contract!

Tom:  Thanks for the insight!

Greater Mtg Solutions:  I DREAM OF THAT DAY!

Virginia:  Nice to hear what is going on with my referral partner to the north!  Yes, I got the auto-notifications set up.  Talk to you in 60 days again (and it's always a pleasure!)  Keep in touch with me on the other issue we talked about!

Craig:  Thanks for your insight.  I do think contracts show strength in extremely high buyer interest!

Tim:  Glad to here we aren't alone!

Team DiMuria:  Thanks I will need all the luck I can get ;)

Theresa:  It means that mechanical operating systems (aka real property) is getting stolen around the time we have a re-inspect or have docs at title.  I find it interesting that it happens in the 11th hour!

Arizona Home Loan and Mtg:  Oh we are seeing them weeded out daily.  I also think of weeding myself out some days, LMAO!  I have seen more than I want to see and know more than I want to know from this market.  In about 20 years the newbs will gather around us and we can tell them stories that will be the caliber of great depression stories that my grandparents told.

Sep 26, 2009 05:34 AM #42
Craig Bassignani
RE eBroker - Santa Rosa, CA

Biggest reason shorts will be in and reo's out. 91 day Flipping rule on FHA loans and the second note actually can get money under the MHA plan by a match pay(albeit small) from the gover...er...you & Me to step aside. I think the seconds have pressed to retain some negotiating power.

We are seeing 11yh hour promissory notes requested of the seller... a lot of people here in Cali know they will not see 100% appreciation to offset the already 50% loss... Stats say 25-30% are Strategic foreclosures.

I'm a Home Retention Consultant and most people know they have been had. A silent revolt is underway.. These are ALT-A loans not the sub prime people...


whoops almoast forgot my tag line... Mission Statement

Do Not Follow The Logic! Follow The Money! lol


Sep 26, 2009 06:16 AM #43
Renée Donohue~Home Photography
Savvy Home Pix - Allegan, MI
Western Michigan Real Estate Photographer

Craig:  Thanks for coming back.  I believe that much of this mess (in my neck and I would estimate 50-75% without seeing raw numbers) Alt-A and Strategic Defaulting ~ and I can only speak from my neck of the woods.  Some people are down right proud of their actions and it is tres chic to "let it go" which is more of an ethical issue and can borderline on fraud (if it can be proven.) 

Part of the reason why our economy is crap is because people cannot eat, play, improve, et al because they can no longer use that house as an ATM.  Money isn't floating around our economy because there IS no money.  Cash outs and corporate credit propped up my city's economy for years and years and years and now we will see a "strip" correction because of it.  Sorry about the tangent but it is pretty deep here.

The chicken came before the egg.  Strategic defaults (the chicken) stuck a fork in our economy now we will see people with genuine hardships (the egg) having to let it go.

We have lots of genuine Alt-A's here because of the types of employment (tipped workers).  The tipped income workers (who can amend to qualify) lost out on a good product when it went away.

Sep 26, 2009 07:21 AM #44
Dianne Bartlett
Brightside Realty, LLC - Austin, TX

Renee - if you can make it through this market with these kinds of issues, you will come out the other end a real estate god (or goddess)!  I bow down to you and wish the best of luck.

Sep 26, 2009 07:27 AM #45
Jeana Cowie
RE/MAX Real Estate Limited - Paramus, NJ
Broker Associate, ABR, CRS, GRI, SRES



Your patience level must be at it's higheest. Thank you for educating us on your market. I thought the Bergen County, NJ market was bad, but it's nothing as severe and slow as your area. Try to hang in there, you will be rewarded somehow, someway. Good luck!.

Jeana Cowie, Broker Associate/Realtor, Re/MAx Real Estate Ltd, Bergen County, NJ

Sep 26, 2009 08:13 AM #46
Sharon Alters
Coldwell Banker Vanguard Realty - 904-673-2308 - Fleming Island, FL
Realtor - Homes for Sale Fleming Island FL

Renee, we just lost an approval yesterday for no apparent reason - other than maybe the bank had their quota for the month and didn't want to approve any more. Bottleneck is right! You have given a superb overview of your market, Renee!

Sep 26, 2009 08:46 AM #47
Joe Pryor
The Virtual Real Estate Team - Oklahoma City, OK
REALTOR® - Oklahoma Investment Properties

It sounds like being a Realtor is Las Vegas is like swimming with sharks. If you get through them without a bite you live. I admire your perseverance in the face of calamnity.

Sep 26, 2009 10:46 AM #48
Emily Lowe
The Lipman Group | Sotheby's International Realty - Nashville, TN
Nashville TN Realtor

I would also chalk it up to the short sales as the biggest reason.  And the 11th hour goings-ons.  Homes are definitely harder to get closed these days!

Sep 26, 2009 12:53 PM #49
Chris Olsen
Olsen Ziegler Realty - Cleveland, OH
Broker Owner Cleveland Ohio Real Estate

Hi Renee -- You write the most indepth content and explain it so it is understandable and your visuals and graphics rock beyond compare.  If I were the local media wondering how to get a handle on real estate in Vegas -- you would be my first call.

Sep 26, 2009 01:09 PM #50
Sharon Senger
tcDocs - Seattle, WA
Licensed Transaction Coordinator

Hi Renee,

Thank you for giving us a glimpse of what is happening in Vegas!  I believe your graphics confirm what a lot of people are saying that short sales take a long time to close so patience is needed.

Great post as always.


Sep 26, 2009 02:36 PM #51
Christine Donovan
Donovan Blatt Realty - Costa Mesa, CA
Broker/Attorney 714-319-9751 DRE01267479 - Costa M

I agree with your statement that there is nothing normal about today's market.

Like you, we have a huge number of transactions in escrow that are short sales and are taking months to close, or not close.

Sep 26, 2009 04:34 PM #52
Russell Benson
Berkshire-Hathaway HomeServices/Anderson Properties - Moore, OK


What does stolen mean?  I have been doing this for 11 years and have never heard that one.  OK, never mind as I just read one of your responses (figuring someone else would ask).

I know the Las Vegas market sucks and trust me what I say we feel for you!  I knew the REO's had exploded due to the publicity and I of course figured that would grind to a halt when all the deals were gone and I guess that is where you're at?

What will it take for your market to start to recover?

Sep 26, 2009 05:36 PM #53
Craig Bassignani
RE eBroker - Santa Rosa, CA

I'm also starting to see rent to re-own. My servicers are starting to push rent options hoping down the road prices will inflate so the renter-owner(???) can refi when jobs and pay raises can out pace taxes and Cost of Living increases eg. gas, taxes, fees

What I'm starting to see is multi-family living situations where due to economic conditions they are actually making it work quite nicely without teetering on the financial edge coupled with the stress of too much month and not enough cash. imo I think this to be the next wave... stats are starting to show this trend.

Best news I've heard lately is the Gov extending buying MBS until April 2010.

Prediction: Tax credit extended and possibly increased due to higher end Pick-A-Pay Loans unravelling. They will have to continue/extend this even as it approaches that deadline and will start buying CMBS (Commercial Mortgage Backed Securites)

Side Note: I had two prominent buyers that have widely held commercial properties which had to back out of a move down home purchase because of income evaporation since they have lost tenants. The holdings were in Marin Ca which I thought to be impervious to down turns... wrong again

Watch the falling dollar and retool for foreign investors..(this gives them a chance to dollar cost average their purchases of treasuries also) which we need them to buy. remember the 90's and the Japanese purchases. Everybody is hoping we didnt soil our relations with the foreign investers selling them AAA MBS securities from people that worked at Macdonalds and stated they made 13K a month :)


Sep 27, 2009 02:55 AM #54
Sabrina Kelley
ERA Herman Group Real Estate - Woodland Park, CO
Woodland Park Colorado Mountain Homes and Land

It is good to know where other markets currently stand. Thanks for all the great information and well thought out reasoning.

Sep 27, 2009 08:21 AM #55
Craig Bassignani
RE eBroker - Santa Rosa, CA

wow.. that was fast

CMBS Purchases ok'd through talf..1.5b..


So much for extend and pretend

Sep 28, 2009 03:05 AM #56
Kenny Salame
All Western Mortgage Broker # 14210 - Las Vegas, NV
NMLS ID 313873


I have been waiting for B of A or its investors for three weeks to approve the Final HUD 1. Clients living in a van full of furniture. Approval always are promised for the next day that never come. Frustrating to say the least.

Apr 27, 2010 01:23 AM #58
Robert Earl -The Earl of St Pete
St Pete LUXE Living Group - Saint Petersburg, FL
The Earl of St. Pete

Very good explanation for buyers and sellers (and for other agents as well).  The tale of 2 market is also alive and well in our market place with a backlog of homes under contract that may never make it to the sold column.

Oak Hill VA, USA

Aug 09, 2010 01:33 PM #59
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