Ask Cotti•Chaney - Cotti•Chaney & Associates

A. New or previously owned? Once you've started to look for your next home, you need to decide whether to look at homes under construction, or for resales in established neighborhoods. Here are some pros and cons for each type of house:

New Construction
    Pluses are:
You choose the colors and finishes for floors, appliances, kitchen counters and cabinets. You can opt to upgrade and select builder options, and often can choose your lot. Everything is clean and new when you move in.
    Minuses are:
You may not see the home you are buying until the final walk-through, and may find a number of items that need to be fixed by the builder's customer service. Often, new-home buyers have to deal with construction traffic, debris, mud, dust and unfinished roads.

Existing Resale Homes
    Pluses are:
You can see the home you are buying, and many personal touches like drapes and curtains will likely have been added. You can also tell what the neighborhood will be like by driving through during the day, and how rush hour will be by passing through in the evening.
    Minuses are:
The seller's tastes may not be yours, and you may need to do some redecorating to tailor the home to your color scheme. Also, the appliances may be several years old if they haven't recently been replaced for the sale.

A. You can make such a tough decision easier by going back to your starting point. Ask yourself these questions:

•   Review your priorities
Do both properties meet your stated housing needs?

•   Seek new information
What else should you know about the house, the neighborhood, local schools, transportation, and community facilities?

•   Get out the crystal ball
How long do you expect to stay in your next home, and how will each house fit your expected needs and lifestyle over that time period?

•   Compare the added features for each home
Are there benefits that outweigh any shortfalls in your priority list?

•   Keep resale in mind
If you intend to move in five or 10 years, which home will probably be easier to resell?

•   Analyze the costs of both homes
How does the price of each compare, and how do the long-term costs such as heat, local taxes and fees, transportation and other day-to-day living expenses stack up?

A. The "best" time to list your house is actually as soon as you decide to sell it. If you want to get the best price for your house, the key is to give yourself as much time as possible to sell it. More time means more potential buyers will probably see the house. This should result in more offers; it also gives you time to consider more options if the market is slow or initial interest is low.

A. Generally, the first three weeks will be the test period of your initial asking price. If you see showings drop off and very few return visits, you may want to consider repositioning your asking price. Most buyers leave room for negotiation when they make an offer. Thus, a certain degree of flexibility is usually called for on the part of both the buyer and seller.

While it is ultimately your decision to accept or reject an offer, or present a counter-proposal, a good sales professional can be of great assistance to you during the negotiating process. In fact, negotiation is one of the valuable skills a real estate professional can offer you. As negotiations proceed - whether in writing, face-to-face, or by phone - your sales professional will inform you of your options in responding to each offer from the buyer, so you can make an educated decision as to how you want to proceed.

A. "Curb appeal" is a common real estate term for everything prospective buyers can see from the street that might make them want to turn in and take a look. Improving curb appeal is critical to generating traffic. While it does take time, it needn't be difficult or expensive, provided you keep two key words in mind: neat and neutral.

Neatness sells. New paint, an immaculate lawn, picture-perfect shrubbery, a clean driveway, potted plants at the front door - put them all together, and drive-by shoppers will probably want to see the rest of the house.

Then, for both the inside and outside of your house, if you're going to repaint, choose neutral colors, and keep clutter and personal knick-knacks, photos, etc. to a minimum. Remember, when a family looks at a house, they're trying to paint a picture of what it would be like as their home. You want to give them as clean a canvas as possible.

A. Market value or fair market value is the most probable price that a property should bring (will sell for) in a competitive and open market under all conditions requisite to a fair sale, the buyer and seller, each acting prudently, knowledgeably and assuming the price is not affected by undue stimulus. Implicit in this definition is the consummation of a sale as of a specified date and the passing of title from seller to buyer under conditions whereby:

buyer and seller are typically motivated
both parties are well informed or well advised
a reasonable time is allowed for exposure to the open market
payment is made in terms of cash in U.S. dollars or in terms of financial arrangements comparable thereto
the price represents the normal consideration for the property sold unaffected by special or creative financing or sales concessions granted by anyone associated with the sale.

A. The answer to this is different depending upon the location of the home. Different markets value amenities differently. Adding a central air conditioner in Houston, Texas may add significant value, while putting one in a home located in Buffalo, New York might not have much impact.

As a rule, the most value returned from renovating a home comes in the kitchen. According to one national survey, kitchen remodels returned an average of 88% of the investment. In other words, a $10,000 kitchen remodeling project would add approximately $8,800 to the value of the home. Bathrooms were second, returning 85%.

A. The primary advantages of interest-only mortgages are a) your monthly payment is at the minimum amount, and b) your payment is 100 percent tax-deductible interest.

The primary disadvantage is you won't be building any equity in the property by paying down the mortgage balance each month.

If you plan to keep the property only a few years, then an interest-only mortgage is advantageous. However, if you expect to keep the property many years, and eventually want to own it free and clear, an amortized mortgage would be better.

A. Gathering data is one of the primary roles of an appraiser. Data can be divided into Specific and General. Specific data is gathered from the home itself. Location, condition, amenities, size and other specific data are gathered by the appraiser during an inspection.

General data is gathered from a number of sources. Local Multiple Listing Services (MLS) provide data on recently sold homes that might be used for comparison. Tax records and other public documents verify actual sales prices in a market. Flood zone data is gathered from FEMA data outlets, such as a la mode's InterFlood product. And most importantly, the appraiser gathers general data from his or her past experience in creating appraisals for other properties in the same market.

A. Each report must reflect a credible estimate of value and must identify the following:

The client and other intended users.
The intended use of the report.
The purpose of the assignment.
The type of value reported and the definition of the value reported.
The effective date of the appraiser's opinions and conclusions.
Relevant property characteristics, including location attributes, physical attributes, legal attributes, economic attributes, the real property interest valued, and Non real estate items included in the appraisal, such as personal property, including trade fixtures and intangible items.
All known: easements, restrictions, encumbrances, leases, reservations, covenants, contracts, declarations, special assessments, ordinances, and other items of a similar nature.
Division of interest, such as fractional interest, physical segment and partial holding.
The scope of work used to complete the assignment.

A. Simply put, the difference is night and day. The CMA relies on vague market trends. The appraisal relies on specific, verifiable comparable sales. In addition, the appraisal looks at other factors like condition, location and construction costs. A CMA delivers a "ball park figure." An appraisal delivers a defensible and carefully documented opinion of value.

But the biggest difference is the person creating the report. A CMA is created by a real estate agent who may or may not have a true grasp of the market or valuation concepts. The appraisal is created by a licensed, certified professional who has made a career out of valuing properties. Further, the appraiser is an independent voice, with no vested interest in the value of a home, unlike the real estate agent, whose income is tied to the value of the home.

A. The appraiser is not a home inspector nor does he/she do a complete home inspection. An inspection is a third-party evaluation of the accessible structure and mechanical systems of a house, from the roof to the foundation. The standard home inspector's report will include an evaluation of the condition of the home's heating system, central air conditioning system (temperature permitting), interior plumbing and electrical systems; the roof, attic, and visible insulation; walls, ceilings, floors, windows and doors; the foundation, basement, and visible structure.

A. There are many reasons to obtain an appraisal with the most common reason being real estate and mortgage transactions. Other reasons for ordering an appraisal include:

To obtain a loan.
To lower your tax burden.
To establish the replacement cost of insurance.
To contest high property taxes.
To settle an estate.
To provide a negotiating tool when purchasing real estate.
To determine a reasonable price when selling real estate.
To protect your rights in a condemnation case.
Because a government agency such as the IRS requires it.
If you are involved in a lawsuit.

A. An appraisal is a process leading to an opinion of property value. This opinion or estimate is arrived at through a formal process that typically uses the 3 approaches to value. The first is the Cost Approach - which is what it would cost to replace the improvements, less physical deterioration and other factors, plus the land value. The second is the Sales Comparison Approach - this involves making a comparison to other similar, nearby properties which have recently sold. The Sales Comparison Approach is normally the most accurate and best indicator of value for a residential property. The third approach is the Income Approach, which is of most importance in appraising income producing properties - it involves estimating what an investor would pay based on the income produced by the property.

A. The condo market is an interesting beast- many are planned, but only a fraction of those will come to fruition. Big name towers such as Icon, Ivanna, Liberty, Juhl, and a few more have either cancelled, or are on the verge of fall out. Much of that is thanks to skyrocketing construction costs pushing upwards of $600/sf, as well as overzealous investors wanting to capitalize on the high rise boom.

The good news is that many projects such as Allure, Streamline, MGM, Turnberry, Sky and a few others are either complete, nearing completion or fully under construction and sales are strong for these units. Most of these are more than 90% sold out-a remarkable accomplishment considering the build time and price point. What's more, there are going to be a few major announcements in the next couple of weeks, such as Las Ramblas making changes to their entire marketing plan and partnering with the Ritz Carlton. You can also expect MGM's City Center, the massive 60+ acre project planned in the heart of the strip just next to the New York, New York begin sales towards the middle of this year.

Let's also take into account the rumblings of Disney purchasing a large chunk of land on the south end of LV Blvd. With big name companies such as these backing Las Vegas, you can imagine the potential still left in the real estate market as a whole.

A. Interviewing a Realtor� to help you buy a home can be very similar to interviewing someone to work in your office. Contacting a Realtor�'s references can be a reliable way for you to understand how he or she works, and whether or not this style is compatible with your own. We will happily provide a list of past clients to any prospective clients or business partners.

A. If your goal is to buy a home for it's resale value and the one you are thinking of buying in the older neighborhood is at the upper end of values for that neighborhood, then it may not be the wisest choice. If it is similar or lower in price to the others, then there should be no problem, because pricing should be considered in relation to the local neighborhood and not compared (for the most part) to homes in other neighborhoods.

Also, is it a neighborhood on the decline, or will other residents be fixing things up so the neighborhood is improving? It could turn out to be a very good deal as long as you don't "overpay" because of the recent improvements.

Remember that you also buy a home for it's value to you as a "home," and that is something else you should consider. Which neighborhood would you AND your family feel most comfortable in?

A. What's the catch with this loan? A. Since the mortgage business is extremely competitive, most lenders' mortgage rates (for comparable loan programs) will usually not vary by more than 0.25 percent.

If a lender is advertising a rate that is significantly lower than everyone else -- as in this case when the rate was 0.5 percent lower -- ask the lender for a detailed breakdown of all fees that you, as a borrower, would be expected to pay. Lenders who offer lower interest rates will likely charge additional fees that other lenders do not charge. On a good faith estimate these charges would be listed in categories 800 and 1300.

Also, compare the lenders' advertised annual percentage rate. This figure should take into account all of the loan costs charged by the lender and provide you with a simplified means of comparison.

A. One of the great things about the finance business is that you can get just about any financing situation you want. If you are looking to minimize your initial cash outlay, a lender can waive fees and charge a higher interest rate. This may be a good option for those who can easily afford monthly payments but have a more difficult time saving up for a down payment and other financial obligations that come with buying a home.

If you are looking to lower your monthly loan payment, the lender can charge you higher up-front fees and lower your interest rate. If your goal is to have lower monthly payments, make sure that you will live in the property long enough to recoup the up-front costs paid and then benefit from the lower payments for which you paid.

If you plan on living in the property for only a few years, you would probably want to minimize your up-front cash outlay.

A. A home is an investment. When you rent, you write your monthly check and that money is gone forever. But when you own your home, you can deduct the cost of your mortgage loan interest from your federal income taxes, and usually from your state taxes. This will save you a lot each year, because the interest you pay will make up most of your monthly payment for most of the years of your mortgage. You can also deduct the property taxes you pay as a homeowner. In addition, the value of your home may go up over the years. Finally, you'll enjoy having something that's all yours - a home where your own personal style will tell the world who you are.

A. Well, that depends on a number of factors, including the cost of the house and the type of mortgage you get. In general, you need to come up with enough money to cover three costs: earnest money - the deposit you make on the home when you submit your offer, to prove to the seller that you are serious about wanting to buy the house; the down payment, a percentage of the cost of the home that you must pay when you go to settlement; and closing costs, the costs associated with processing the paperwork to buy a house.

When you make an offer on a home, your real estate broker will put your earnest money into an escrow account. If the offer is accepted, your earnest money will be applied to the down payment or closing costs. If your offer is not accepted, your money will be returned to you. The amount of your earnest money varies. If you buy a New Home, for example, your deposit generally will range from $2500 - $5,000.

The more money you can put into your down payment, the lower your mortgage payments will be. Some types of loans require 10-20% of the purchase price. Closing costs - which you will pay at closing - average 3-4% of the price of your home. These costs cover various fees your lender charges and other processing expenses. When you apply for your loan, your lender will give you an estimate of the closing costs, so you won't be caught by surprise.

A. We save people money all the time. When buying a home, there is no reason not to use us, as it doesn't cost you anything. The last buyer we worked with saved $30,000 on his new home. With our extensive New Homes Sales background, our relationships with many builders allow our clients to take advantage of special opportunities and incentives before most people even know they exist!

A. Unfortunately, there are many reasons for this. I wouldn't be too quick to judge the agent, although he/she should be more aggressive on the marketing. It doesn't necessarily mean the market is cooling off, just that there are A LOT of homes for sale right now. One should also take into consideration when the appraisal was done. Last year, many home values were unjustly inflated, and prices are now at a much more realistic level.

A. Some examples would be replacing carpet with tile, enhancing the kitchen (stainless appliance's are very popular, replace formica with granite and enhancing cabinets.) Be careful when adding a pool - it could cost $50,000 to install and landscape, but will rarely (if ever) add $50,000 to your home value.

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