Q&A
Here are some of the most frequently asked questions in real estate. If you have a question that has not been included in this comprehensive list, please e-mail us and we will get back to you as quickly as possible.

Is there a difference between market value and appraised value?
The main difference between appraised and market value is that the former is an opinion, while the latter is based on a comparative market analysis. A certified appraiser's opinion of property value is based on comparable sales within the last six months with fees ranging from $200 to $300. Lenders require appraisals as part of the loan application process. A comparative market analysis is an estimate of value based on sales of comparable properties, and is usually provided by an agent or broker.

Using an Agent vs. For Sale by Owner(FSBO)                   

The median sales price of a REALTOR sold home was 27% more than ones sold For Sale by Owner in 2004.  Especially with the current market in Phoenix, being able to put your home on the Multiple Listing Service can net you thousands more even though you are paying commissions! The reason is simple.  Because homes for sale inventory is so low, often agents have several buyers who are ready, willing and able to pay whatever it takes to get in a home such as yours! And often you have agents and their buyers competing for your home.

But having an agent represent you has other benefits as well. We will net you the best price AND TERMS for your house, with the least amount of inconvenience to you and your family as possible. We will take care of all the details and "roadblocks" that can occur so you can have peace of mind and a smooth transaction.

Are property taxes deductible? What about taxes on second homes or investment properties?
Property taxes on all real estate transactions are deductible against current income taxes. Interest and property taxes are deductible for second homes if expenses are itemized. The best advice to follow can be provided by your accountant or tax adviser.

What are, and why do we pay, property taxes?
Property taxes are the annual fees that property owners pay for owning real estate - usually 1.5 percent of the property's current market value, although they are calculated in many different ways. The county or local government uses the money to help fund public services.

What are closing costs?
Closing costs are the fees for services, taxes or special interest charges that surround the purchase of a property. They may include upfront loan points, title insurance, escrow charges, document fees, and prepaid interest. Unless these charges are included in the loan, they are paid at the closing.

What kind of home insurance should I get?
An "all inclusive" policy is standard fare when dealing with home insurance. This type of policy will usually cover claims involving:
-Lightning, wind, storms, hail
-Fire, explosions, smoke
-Electrical damage and water damage from plumbing
-Heating or air conditioning systems
-Floods

For personal property, homeowners can increase coverage beyond the depreciated value of items such as televisions or furniture by purchasing a replacement cost endorsement. Another option is to purchase an inflation rider, which automatically increases coverage as the property value increases.

Do I need a home inspection?
Absolutely. For example, roof, plumbing, and electrical repairs are major problems and can amount to tens of thousands of dollars or more. Think twice before signing a contract to purchase property "as is."

When is the best time to buy?
Here are some great reasons to buy:
-You need a tax break.
-The mortgage interest deduction can make home ownership appealing.
-You plan to use the property long enough for any appreciation to cover your transaction costs.
-You want to own, not rent.
-You can afford it!

How does one choose between buying and renting?
While homeowners have the freedom to make decisions regarding their property, most renters do not worry about maintenance and other financial obligations associated with property ownership. Homeowners that secure a fixed-rate mortgage, are better able to plan financially because monthly housing expenses will not increase dramatically. This way, wise investments can be made, and, hopefully, yield long-term profits on the initial investment.

However, such returns depend on value appreciation. Aside from maintenance costs, the monies paid to the lender is usually greater than the total amount paid in rent. To determine whether a property is a long-term investment, prospective buyers should spend some time investigating potential communities or neighborhoods.

How do I determine the price of my property?
The best way to determine the price of a property is to refer to a comparative market analysis, which is a report based on recent sales of comparable properties in your neighborhood. Although the real estate market fluctuates, it is still important to base the list price on current market conditions.