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February 2010

70% of Nevada Mortgaged Properties are Underwater - 11.3 Million U.S. Homes with Negative Equity

Nevada leads the nation with the highest percentage of negative equity properties according to the First American Core Logic 4th Quarter 2009 Negative Equity Data Report released 2-23-10.  More than 70% of mortgaged properties in Nevada are in a negative or near-negative equity position. 

Negative Equity ("underwater or upside down") refers to the fact that the borrower owes more on their mortgage than the current value of the property.  Negative equity occurs due to a decline in value, an increase in mortgage debt or a combination of both.


From the report:

The rise in negative equity is closely tied to increases in pre‐foreclosure activity and is a major factor in changing homeowners’ default behavior. Once negative equity exceeds 25 percent, or the mortgage balance is $70,000 higher than the current property values, owners begin to default with the same propensity as investors.

More than 11.3 million, or 24 percent, of all residential properties with mortgages, were in negative equity at the end of the fourth quarter of 2009, up from 10.7 million and 23 percent at the end of the third quarter of 2009. An additional 2.3 million mortgages were approaching negative equity at the end of last year, meaning they had less than five percent equity. Together, negative equity and near‐negative equity mortgages accounted for nearly 29 percent of all residential properties with a mortgage nationwide.

The following chart shows the five hardest hit states (Nevada, Arizona, Florida, California, and Michigan).  The average "underwater" mortgage in Nevada is over 50% negative equity. 

Here is a real-world example illustrates the severity in Las Vegas, Clark County.   Borrower / homeowner owes a total of $325,000 on a first and second lien and property is currently valued at $160,000.


Visit the excellent CalculatedRiskBlog for full post and to download the report:

Q4 Report: 11.3 Million U.S. Properties with Negative Equity


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Update on Best Practices for Multiple Offers on Short Sales

MediationIn June 2008, I wrote this blog post: Multiple Offers on Short Sales - Best Practices.

This is an update to that post as the GLVAR addendum to the purchase agreement regarding short sales has been revised as of 06-09. Also, I wanted to re-iterate and expand on my opinion of best practices on handling multiple and subsequent offers.  Note:  this post discusses procedures and forms applicable to Nevada real estate licensees.

In my opinion, the best practice in a multiple offer short sale (or any offer actually) is to ...

  • Review all the offers with the seller
  • Possible options for handling multiple offers:
  • the seller accepts or counters one offer, rejects other offers in writing with option of remaining in a back-up position
  • use a multiple offer notification form to inform all cooperating agents and their prospective buyers that they are in a competing offer situation.  The form should have a time frame to submit highest and best offer
  • counter all of the offers using a proper multiple offer form which puts all parties on notice of the multiple offers and contains contract language that states the offer is not valid until re-signed by the seller  (this option also allows all prospective buyers to present their final and best offer or withdraw their offer)
  • Use the GLVAR Short Sale Addendum to Purchase Agreement which contains key clauses and disclosures about the short sale process. Download ShortSaleAddendumtoPurchaseAgreement
  • Submit the fully executed best offer to the lender for approval
  • Keep all parties informed of status as appropriate; notify respective agents if any offers have been rejected by seller
  • In the event another offer is subsequently received, the Short Sale Addendum contains language which states:

     6.Other Offers; Right of First Refusal.
     Buyer and Seller acknowledge that the Seller's Agent is required by the Multiple Listing Service to place the property in "Contingent" status after the Purchase Agreement is executed, while the transaction is subject to Lender Approval. The Parties understand that additional offers may be received by the Seller's Agent, which must be presented to the Seller pursuant to Nevada law. If Seller receives a bona fide written offer from a third party for the purchase of the Property, which offer Seller is willing to accept, Seller will give Buyer written notice thereof, including the material financial terms and conditions. Buyer shall have the right for 3 business days after receipt of such notice to meet the price and terms as contained in the third party's offer. To exercise this right, Buyer shall provide a written addendum including the new price and terms, as well as a pre-approval letter for the new Purchase Price. If Buyer fails to exercise this right within the time specified, Seller reserves the right to terminate this Agreement and to accept the third party's offer and forward it to Lender for review.

When Taking the Listing

  • Explain to the client that competing offers may be received.
  • Discuss with the client options for handling multiple offers.
  • The client decides how they want to handle multiple offers.
  • Advise the client that they may wish to seek legal counsel if they do receive multiple offers.

Multiple Offer Resources:

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Realtor Resources for Short Sales, HAFA, Alternatives to Foreclosure


Here are important downloads, resource sites and aticles concerning short sales, HAFA/HAMP, and alternatives to foreclosures.

To Download this Post as a PDF: ShortSale_Foreclosure _Links


FREE Membership is open to all Real Estate Professionals






Resources for Short Sales


Alternatives to Foreclosures

Avoid Foreclosure - Help



Nevada Foreclosure Help and Resources


Legal and Tax Ramifications for Sellers

IRS.GOV useful links

State Foreclosure Laws Summary  

The National Consumer Law Center -

This site has some excellent resources regarding programs for foreclosure mediation by state. 

Recommended Blogs to Read/Subscribe to:

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2009 Best Blog Posts & Resources on Social Media Marketing, SEO, Social Networks

Tamar Weinberg of Techipedia compiled an unbelievably comprehensive and well-researched “Best of 2009″ summary of the best blog posts on social media, social networks, reputation management, branding, seo and more. This post is a must bookmark for reference and reading.

Best Internet Marketing Posts of 2009

Attention Las Vegas Real Estate Agents & Business Professionals!


Don't miss the Blogging & Social Networking for Business Workshop

Next Class Date: Friday, February 12, 2010, 1:00 to 4:00 pm
Download the class flyer:  Blog Class Flyer Feb 12, 2010

Location: Robb & Stucky Community Room, (Town Square Las Vegas • At I-15 and the 215 Beltway )

Address: 6521 Las Vegas Boulevard South, Las Vegas, NV 89119
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Approved by the Nevada Real Estate Commission

3 Hours Continuing Education (PD) CE.3706000-RE

$45 in advance; $55 at the door
Register online at:


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