Everything You Need to Know About Buying a House in Nevada

Nevada has something to offer anyone looking to buy a house there.
Written by Bonnie Stinson
Reviewed by Melanie Reiff
Whether it’s the breathtaking landscapes like Lake Tahoe or the exciting nightlife of Las Vegas,
has something to offer anyone who might be thinking of buying a house there. 
Even if you’ve bought a house before, the real estate market is constantly shifting, and there are special considerations to keep in mind when moving to a new state.
That’s why car insurance broker
has put together this homebuyer’s guide specifically for the Sagebrush State. We’ll walk you through the process of buying your dream house and what to know regarding the state’s market conditions.

Figure out your finances

The first step for any big purchase is always evaluating the current state of your finances, and buying a home is no different. So before you completely fall in love with that mountain cabin or sleek Vegas loft, figure out what your house budget is.
Knowing your credit score and how much debt you currently have can help you make wiser decisions while house-hunting. And don’t forget to factor in all the fees associated with buying a house beyond the sale price.

Check your credit score

First things first—you need to know your credit score. If you plan to take out a conventional mortgage to finance your house, this will be the first thing the lender checks.
Typically, lenders in Nevada are looking for a credit score above 620. A credit score of 620 or higher will allow you to get approved for loans and might even help you secure a lower interest rate.
If your credit score is below 620, don’t panic. There are some things you can do:
  • Find ways to build your credit score and wait until you qualify for a better mortgage or interest rate. 
  • If you’re a veteran or active service member, you might qualify for a Veterans Administration (VA) loan. A credit score as low as 500 can qualify you for a VA loan.
  • The Federal Housing Administration (FHA) also offers loans for those with lower credit scores, particularly low-income and first-time homebuyers. You can qualify for an FHA loan with a credit score of 523 or higher.

Calculate your debt-to-income (DTI) ratio

Along with knowing your credit score, you also need to calculate your debt-to-income ratio, or DTI. Just add up all your monthly debt payments and divide them by your (pre-tax) income.
Payments to factor into your DTI include:
  • Rent or house payments 
  • Car payments
  • Credit card payments
  • Student loan payments
  • Alimony or child support 
Adding a mortgage payment if your DTI is near or above 50% may not be a wise financial decision. It might also make it harder to secure a mortgage in Nevada.
Before buying a house, pay down some debt and aim to get your DTI below 36% for an easy mortgage approval process. As an added bonus, paying off some debt will raise your credit score too!

Determine your down payment 

Another big consideration to make when you’re calculating your house budget is how much of a down payment you can make. For a conventional mortgage, lenders usually require a 20% down payment.
However, Federal Housing Administration (FHA) and Veterans Administration (VA) loans offer financial assistance with lower down payments. See if either option might work for you:
  • FHA loan: For low or middle-income homebuyers, especially those buying a house for the first time. Can make a down payment as low as 3.5% with a credit score around 580.
  • VA home loan: For current service members, veterans, or surviving spouses. Usually requires no down payment, and they offer low interest rates and lower closing costs.

Prepare for closing costs and other fees

Like down payments, closing costs are paid out-of-pocket and should be added to your home buying budget. But how much should you expect to pay?
In short, closing costs usually amount to 2-5% of the home’s total value. The average home value in Nevada is around $320,203, so your closing costs could be between $6,404 and $16,010.
So what exactly are you paying for with closing costs? Generally, closing fees include: 
  • Home appraisal fee
  • Credit report fee
  • Home inspection fee
  • Mortgage origination fee
  • Earnest money 
  • Mortgage insurance
  • Property taxes
  • Homeowners insurance
If you want to save some money on closing costs, shop around for multiple homeowners insurance quotes to make sure you’re getting the best deal. You can also check property tax rates to find houses in a less-expensive area. 
Property taxes in Nevada are already some of the lowest in the country: 0.53% (which is half the national average of 1.07%). Tax rates vary by county, so if you do some checking before settling on a property.
Key Takeaway Be prepared with 2-5% of your new home’s value on hand to pay for closing costs.

Look for homeowners insurance

Homeowners insurance is a major expense that you’ll have to deal with long after buying your house. The national average cost of homeowners insurance is around $115 per month, but that number will largely depend on where you live.
In Nevada, your homeowners insurance might be more expensive. In addition to your regular policy, you might have to add on coverage for earthquakes.
While you’re shopping around for a house in your budget, give your homeowners insurance the same treatment. It's wise to compare rates from at least three different insurance companies to make sure you’re getting the best deal. 
The first place you should start is your car insurance company. Most car insurance companies will offer discounts if you bundle car and homeowners insurance policies together. If you want to save time and money, let car insurance broker
show you dozens of competitive quotes.
Key Takeaway Shop around for homeowners insurance coverage to make sure you’re getting the best deal. 

Get preapproved for a mortgage

Now that you have a good handle on your financial situation and a well-calculated budget, your next step is to get prequalified for a mortgage. Most realtors will only show the property to buyers with preapproval letters on hand, so it’s important to get prequalified as soon as you can. 
Here’s how to get preapproved for a mortgage: 
  • Shop around for a mortgage lender
  • Send them your Social Security number along with banking information
  • Fill out the lender’s mortgage application
Keep in mind that your lender will use the above information to check your finances and run a hard credit check. If you try to get pre-approved too early, it could actually damage your credit score—and thus your chances to get a loan. 
Only start the pre-approval process when your finances are in order and you’re ready to move forward with the home-buying process.

How to pick the right mortgage in Nevada

The two key factors of any mortgage are the mortgage term and interest rate. Most mortgages are either 30-year mortgages or 15-year mortgages. Each comes with distinct pros and cons.
As a general rule, a 30-year mortgage will have lower monthly payments than a 15-year mortgage. However, 30-year loans have higher interest rates than shorter-term loans: sometimes 1% higher or more. This can really add up over the life of the loan.
Before choosing a mortgage, decide what’s best for you financially. If you can afford the higher monthly payment, paying off your mortgage in 15 years might be a better option. But if keeping your monthly payment lower is a bigger priority for you, stick with a 30-year mortgage.

Look for a house

Still dreaming of that cabin near Lake Tahoe or apartment on the Vegas strip? Now that you’ve got all your finances in order and you’ve pre-qualified for a loan, it’s time to start house hunting.

Pick your city or neighborhood 

Nevada has something for everyone. It’s all just a matter of finding a city that matches your lifestyle. 
Consider your current hobbies and interests. If you love the outdoors, you might want to buy a home near gorgeous landscapes like Lake Tahoe or Red Rock Canyon that offer plenty of opportunities for outdoor recreation.
If you’re more interested in exciting nightlife, try looking for properties near larger cities like Las Vegas or Henderson.
One thing about Nevada to keep in mind is there’s a lot of open space. With a population of around 3 million people for the entire state, half of that population lives in Las Vegas, Henderson, and Reno. 
If you’re a people person, definitely stick near the cities. But if wide-open spaces appeal to you, there’s no shortage of opportunity for some peace and quiet.

Buyer’s market vs. seller’s market

You’ve probably heard the real estate market described in terms of a buyer’s market or a seller’s market. Knowing which state the market is currently in can help you when it comes to buying a house.
  • In a buyer’s market, there are more houses on the market than there are people to buy them. This means prices are usually lower and you have more negotiating power.
  • A seller’s market is the opposite, which means buyer competition for available real estate can get pretty fierce.
When you’re looking at real estate in your chosen area, check out recent home sales. Compare the seller’s asking price to the actual purchase price. If the purchase prices are consistently higher than asking prices, you’ve got a seller’s market.
Also, pay attention to how long houses are staying on the market. If houses are disappearing off the market faster than cake at a birthday party, chances are it’s a seller’s market.
As of January 2022, most large Nevada cities are seller’s markets. Available real estate is selling quickly, and housing prices have risen by 23% in some areas like Las Vegas and Reno.
However, housing markets change rapidly. Check interest rates and prices before you start your housing search. If prices are too high, you can always wait a little while to see if the market changes before buying.

Find a real estate agent

If the idea of braving the housing market on your own sounds a little intimidating, then consider hiring a real estate agent. While it’s not a requirement to have a real estate agent to buy a house in Nevada, an agent can definitely take the hassle out of the process for you.
Try to find an agent based in the community you want to move to. They’ll likely already have extensive knowledge of the area and housing market there. 
Pick an agent that listens to what you’re wanting in a house (especially your budget!) and is committed to working with you to find you exactly what you need.

Make an offer

Once you’ve found the perfect house for you, the next step is making an offer. If you have a real estate agent, they can walk you through the process of making an offer to the seller and filling out any necessary paperwork. 
It’s pretty normal to have a bit of a back-and-forth negotiation process, and that’s nothing your real estate agent can’t handle. Once an offer has been accepted, you’re nearly ready to move into your dream house!

How to save on homeowners insurance

You’ve spent so much time (and money!) finding your new dream home—don’t forget to protect your investment with homeowners insurance.
Finding quality homeowners insurance doesn’t have to be the stuff of nightmares. With just 45 seconds and the
app, you can compare rates from many top insurance companies and even
bundle your home and auto policies
for extra savings.
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The average cost of a house in Nevada is $320,203, but the exact price will vary depending on where you buy. 
If you’re going to make a 20% down payment and need around 5% for closing costs, you’re looking at—on the high end—$80,050 to purchase a house.
Most lenders will look for a credit score of at least 620 to buy a house in Nevada. However, if your credit score isn’t that high, you can look at getting an FHA or VA loan.
If you’re wanting a property placed near big cities and exciting nightlife, look at areas around Las Vegas, Henderson, or Reno, Nevada’s three largest cities.
If you’re the type that would rather not see your neighbors (or have them at all), the middle and southwestern parts of the state are scarcely populated.
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