Nevada Mortgage Trouble: Foreclosures Hit Record Levels, Sellers Struggle Finding Buyers

Foreclosures have tripled in Nevada in the past year. More than 2,000 homes went into foreclosure in August — setting a new record.

Experts say Nevada is outpacing the national rate as homeowners succumb to rising rates on adjustable-rate mortgages. Some homeowners who didn’t put up down payments now owe more than their homes are worth.

After all, when there is no amortization, there is no equity built in the home — a recipe for trouble.

Others can’t make payments and are forced into the dreaded foreclosure stage — as we discussed above, this is happening in record numbers.

Others still are forced to take out second mortgages, a risky proposition by just about any measure.

No matter which way you look at it, a cooling Nevada housing market has made it tougher for sellers and as a result, sellers are offering some unique incentives to try to make sales.

Denny Segler is what most would call a motivated seller. His 1,298-square foot house has been on the market for two months, leading this real estate agent to up the ante in order to get it sold.

“I’m offering a new car in the driveway if somebody wants to buy this house. Rather than spend the money and give it to another agent, I’d just as soon give it to the people buying the house,” Segler said.

He is proud of the two-story house purchased for one of his children, but never lived in.

“We still have the starter packet that came with the house when it was purchased brand new,” he said.

Segler realizes that the current glut of homes for sale in the Las Vegas valley, and mortgage rates that are still relatively low, mean buyers can be more demanding than in years past.

“As soon as I get someone that’s interested in this house, I’m willing to negotiate with them,” he said.

Real estate agent Myrna Kingham calls it creative home buying. She says more sellers are offering incentives.

While she says most sellers are honest, she cautions the buyer to beware.

“Sometimes when something looks really good, it’s too good to be true. I would say, if you see an ad, make the phone call, ask a lot of questions, and find out for sure what type of incentive you’re getting,” said Kingham, Tower Realty Group.

As further proof of a housing market slowdown, builders are also seeking price cuts from contractors to make new homes more affordable for potential buyers. The Nevada market, and particularly greater Las Vegas, has been one of the nation’s hot spots (and not just for the nightlife) for years.

Only time will tell if the market lands softly or with a bang.