Las Vegas Real Estate Blog

If you want to get the best price possible when selling your home, it is very important to make sure that it is appealing to potential buyers. Fix-up the following areas for an easy, quick sale:

•  Repaint walls in rooms that have high visibility (kitchen, baths and living areas).
•  Choose a neutral paint color scheme.
•  Refinish wood floors.
•  Have carpet professionally cleaned or replaced with a neutral colored carpet.
•  Replace or repair loose cabinet hardware.
•  Fix leaks in ceilings and walls.
•  Put magazines in decorative baskets. Weed out those you don't need.
•  Keep bills and personal papers organized and out-of-sight.
•  Replace worn kitchen countertops with new, clean, neutral colored materials.
•  Replace worn or outdated vinyl flooring.
•  Clean ceramic tiles and re-grout if necessary.
•  Reduce the number of personal items and clutter (memorabilia, keepsakes, awards etc.) in each room, to make the house seem cleaner.
•  Keep children's toys organized and in one area.
•  Replace broken, dirty or outdated blinds and curtains.
•  Clean closets and put items in plastic storage containers.
•  Clean and organize basement.
•  Clean and organize attic and storage spaces.
•  Make sure all appliances are clean and in working order.
•  Replace all burned-out light bulbs.
•  Clean all light fixtures and ceiling fans.

I really don't have much talent for writing nor do I have the time do dedicate myself to it. But I read a lot, whenever time permits me... and I have a hell of a time running all day just doing my job.

At the end of the day or sometimes in the weekends (when my phone stop ringing) I navigate through the Internet looking for estate market news, advise or new strategies. Whenever something catches my eye or make me smile I feel that I should spread that bit of experience with other colleges real estate fellows.

I enjoy reading others blogs, real estate newsletters and I envy their writing talents ( and perhaps their ability to find the time to do it). I don't know about others but for me the time is painfully short and I have to catch up with stormy life of a real estate agent this days.

By saying that I want you all to know that whenever you travel through my "ACTIVE RAIN" Blog you'll always have a glimpse of my perception of our world as I see it and as I like to share it with you. They are in most cases not my own writing and don't intend to take credit for them. I MAKE SURE THAT I KEEP ALL THE CREDITS AND ORIGINAL LINKS INTACT. 

I am conscious of others sensibility and don't intent to copy others work but rather to elevate their great ideas and written material, that impressed me the most, hoping that you'll enjoy as I did. Moreover the blog, as general definition, is the place where people exchange ideas, information and share whatever is significant on the subject. I don't see it as an arena of fighting for rating.

Am I wrong in my interpretation here?... Would be a big disappointment for me learning that all that motivates some of us, to join the "ACTIVE RAIN", is primarily seeking our own rating in exchange to the honest desire to join a professional community where we can share all we know.

As for me "ACTIVE RAIN" Blog is a great source of inspiration and learning opportunity. 

Borrowing from Parents Isn't Risk-Free

by Laura Rowley

Posted on Thursday, March 8, 2007, 12:00AM

As warmer weather ushers in another home-selling season, buyers are squarely in the driver's seat. New home sales plummeted nearly 17 percent in January, the Commerce Department reported last week, and inventories rose to a 6.8-month supply.

"For the first time this decade, we have a total swing toward buyers," says Walter Molony, spokesman for the National Association of Realtors. "Buyers can take their time and be methodical. Sellers have gotten the message; they are motivated to make concessions."

Tapping the Bank of Mom and Dad

On the other hand, new homes aren't exactly cheap after years of torrid inflation: The median sales price in January was about $240,000. The difficulty for many first-time buyers, who are 32 years old on average, "is coming up with cash for down payment," says Molony.

That hurdle has some would-be home-buyers turning to Mom and Dad for assistance. And baby boomer parents appear eager to open their wallets. Almost a third of working Americans 45 and older with a child over age 25 pay rent or provide housing for their offspring, according to a recent survey conducted by Brightwork Partners for Putnam Investments.

But there are potential pitfalls for both sides when adult children tap the First National Bank of Mom and Dad, experts say.

"If I save up a down payment and buy a house, I have a different experience than if my dad says, ‘Here's a check for $50,000, go buy a house,'" says Karen Sheridan, a money manager and author based in Lake Oswego, Ore. "You have to do it on your own so you get to be who you are, make your choices and mistakes, and feel your own successes."

An Emotional Investment

Sheridan recommends that parents consider a dollar-for-dollar match toward the goal, rather than writing a large check. "A parent might offer $100 for every $500 the child saves," she suggests. "That's helping a child step up to the plate of adulthood."

Other counselors say the decision depends solely on the relationship between parent and child. "I think doing things on your own is one thing, but having to be completely alone in the world is another thing," says Olivia Mellan, a Washington, D.C., psychotherapist and author, who's specialized in money therapy for more than two decades. "It's OK as long as the person is not disempowered by the loan."

Borrowing from parents may be unavoidable in the nation's hottest housing markets. "A lot of people would never be able to buy their first house in California without some help," adds Karen McCall, a financial counselor and founder of the Financial Recovery Institute in San Rafael.

But beware the parent who uses lending to keep children emotionally indebted, McCall warns: "Some parents are invested in being needed by kids. There may be strings attached. The parents help a child buy a house or do whatever, and then they feel they have a say over what the kids do with their money."

Family Dynamics

Sheridan agrees. "Parents are not the bank -- they are emotional. They may say, ‘Why are you putting central air in? You don't need that.' Or ‘You buy this new BMW but had to borrow money from me for the house?'"

Talk about parents' expectations upfront, outlining the worst-case scenarios: What happens if you default on the loan? Clarify that the money toward a home doesn't give parents a vote in your design or other decisions. Put everything in writing.

Consult a financial advisor to ensure the promissory note is written properly. For example, with a mortgage loan, the Internal Revenue Service may require that the interest rate be tied to a specific benchmark. There may be gift tax consequences if the parent forgives a large obligation.

Meanwhile, realize that borrowing can quickly become an ugly family affair. Children who hit up parents for money should be prepared for the resentment of siblings who don't -- and potential squabbles over the parents' estate, experts say.

Don't Subsidize a Lifestyle

Beyond home buying, many parents subsidize adult children in other ways. Some 45 percent of middle-aged workers with grown children provide financial support of about $2,500 a year on average, the Putnam survey found.

"There are millions of Peter Pans of the financial set," says Sheridan. "I see this more and more. When I meet with a new client, I always ask about their adult children. Many times they are paying for one adult child or more."

Before they give, parents should consider whether the money is to enhance a child's future or subsidize his lifestyle, and make a distinction between a one-time event and a chronic condition, Sheridan suggests. For instance, she says she helped her daughter with medical expenses after the daughter's twins were born prematurely, and a mediocre health insurance plan saddled her with tens of thousands of dollars in hospital bills.

That's very different from children who continually seek loans to pay off credit cards, or investments in a series of get-rich-quick schemes, Sheridan says. "The bottom line is, is the child completely independent of you in all ways, including financially? Then it's OK to make the offer to help."

Shred the Parental Safety Net

Finally, borrowers should be certain parents can afford to give or lend the money, advisors say, because some parents compromise their own security to help their children.

Do you want to borrow money now, and later find yourself in the position of supporting elderly parents along with your own children? The Putnam survey, for instance, found roughly one in five workers age 45 and older provide financial support to a parent.

"I see that all the time, parents who have children in private school but no savings for themselves," says McCall. "As they say on airplanes, put the oxygen mask on yourself first. We're all going to get old someday -- we should be modeling for our kids that we're going to take care of ourselves."

"It's much better if parents don't offer and children don't ask," adds Sheridan. "Then you have very clear relationship lines that aren't muddied by money. A child who borrows never gets that opportunity to really be on her own. That creates anger, anxiety, and a feeling of vulnerability. You don't have the same life experience if you always have a safety net."

BOSTON (AP) -- A company trying to harness energy from sunlight and interior light to wirelessly power everything from cell phones to signboards now has financial backing from the White House.

President Bush's program to help solar energy compete with conventional electricity sources will help fund Konarka Technologies' development of flexible plastic solar cell strips -- material that could be embedded into the casings of laptop computers and even woven into power-producing clothing to energize digital media players or other electronics.

Energy Secretary Samuel Bodman is scheduled Thursday afternoon to tour Konarka's headquarters in a former textile mill in Lowell, where he's expected to announce funding from Bush's Solar America Initiative.

The award amount and other details were to be announced in a news conference at Konarka, a six-year-old private company that has attracted nearly $60 million in venture capital funding.

Konarka's nearly $10 million in grant money to date from U.S. and European governments includes funding from the Pentagon to supply lightweight portable battery chargers and material for tents to draw power from sunlight.

Chief Executive Howard Berke said the new White House support is a milestone for Konarka.

The first commercial product using Konarka's technology isn't expected to hit the market until next year, and the company isn't saying what that product might be. Konarka expects to provide prototypes in the second half of this year to commercial partners that would bring the technology to market.

Konarka's approach "is potentially a great breakthrough technology, but like all breakthroughs, they don't happen instantaneously," Berke said in a phone interview.

Observers say Konarka has a good chance of becoming a leader in solar power, an industry enjoying a recent surge in initial public stock offerings by startup companies as well as growing investments from traditional energy companies -- for example, one of Konarka's financial backers is Chevron Corp.

Konarka's development of plastic solar cell strips that can be manufactured like rolls of photographic film "has the promise of becoming a low-cost manufacturing technique," said Jeffrey Bencik, a Jefferies & Co. analyst who follows the solar industry. "Some of their laboratory production has worked as advertised. But can they mass-produce it and get the same result? That's the biggest question."

Among developers of solar technology for small-scale uses, Konarka is "definitely doing the best job at developing what ultimately will have to be a mass-manufactured material," said Dan Nocera, a Massachusetts Institute of Technology chemistry professor.

However, Nocera said it remains to be seen whether Konarka's so-called "Power Plastic" is sufficiently chemically stable to convert energy efficiently both when light is dim and when it's bright.

Konarka, which takes its name from an ancient temple in India dedicated to the sun god Surya, was founded by Berke and Alan Heeger, who shared the 2000 Nobel Chemistry prize for showing that certain plastics can be made to conduct electricity.

The discovery about polymers -- long considered to be useful only as electrical insulators -- led to the development of new types of plastics to create flexible and lightweight alternatives to traditional solar cells on heavy glass panels.

Konarka developed low-cost plastics that could be used as the top and bottom surfaces of the photovoltaic cell. The 50-employee company says it has more than 280 patents and patent applications for materials, manufacturing and other processes and devices.

The company says its solar cells are efficient across a much broader spectrum of light than traditional cells, allowing them to draw energy from both the sun and indoor lighting.

Konarka says its material is lightweight and flexible so that it can be colored, patterned and cut to fit almost any device. The firm envisions embedding its material in cell phones, laptops and toys to provide power on the go. Clothing could be woven with the material to supply power for handheld electronics, and signboards, traffic lights and rooftops could be fitted with solar strips.

Berke foresees wide use of such technology in the developing world and areas off the electrical grid.

To that end, Berke said Konarka has held confidential discussions with the manufacturer of an inexpensive portable computer developed for the nonprofit One Laptop Per Child project, which seeks to provide computers to young students in the developing world. The project's current design features a hand crank for charging batteries.

"In the developing world, great demand exists for off-the-grid support of electronic devices," Berke said.

Posted on Friday, March 2, 2007, 12:00AM

Mortgages and Your Credit History

by Jack M. Guttentag

Credit reports and credit scores are a crucial part of obtaining a mortgage loan. Here's a no-nonsense primer. 

What Is a Credit Report?

A credit report is a report from a credit bureau containing detailed information bearing on credit-worthiness, including an individual's credit history.

A typical credit report includes the following:

• Personal information: This is to identify the individual, hopefully distinguishing him or her from every other individual on the planet. It includes Social Security number, current and past addresses, and current employment.

• Information from public records (states and counties): This includes liens, garnishments, foreclosures, bankruptcies, law-suits, and judgments.

• Information from collection agencies: This consists of past-due debts that have been given to collection agencies to collect.

• Information from creditors: This includes the identity of the creditor, the date the relationship began, the current status of each account including the amount outstanding, the maximum line if any, the current status of the account, and any past delinquencies.

• Information about inquiries: This identifies companies that have requested the individual's file within the last two years, distinguishing those authorized by the consumer and those not so authorized. Only the former affect credit scores.

There are three major repositories of credit information: Equifax, Experian, and TransUnion. The information provided by the three is not exactly the same because not all credit grantors report information to all three.

At one time, underwriters with responsibility for determining whether or not a mortgage applicant was "credit worthy" spent much of their time studying and interpreting credit reports. Increasingly, however, this judgment is being based on credit scores, which are derived mechanically from information in the credit reports. Credit scores are discussed later.

Errors in Credit Reports

The credit reporting system is imperfect. Credit grantors, which are the source of much of the information that goes to the three credit bureaus, make mistakes. Some are due to sloppiness, some to confusion over names, and some are intentional. Some lenders deliberately withhold information on timely payments and maximum credit lines to prevent a customer's credit score from rising, because it might result in losing the customer.

The credit bureaus also make mistakes. They have no financial interest in keeping anyone's credit score low, but they do have a financial interest in managing their enormous databases at the lowest possible cost. The more common your name, the higher the probability that your file contains information pertaining to someone else with the same name -- and that information about you has been inserted into someone else's file.

Errors from credit grantors and credit bureaus are of both omission and commission. An error of omission is a piece of information which should be in your file but isn't. An error of commission is the placing of information in your file that doesn't belong there. Whatever the source, errors can adversely affect your credit report. The last section in this column is a guide on how to remove errors.

What Is a Credit Score?

A credit score is a measure of your credit worthiness. The most common credit score is called the FICO score because it was developed by the Fair Isaac Company. The higher the FICO score, the greater the likelihood that the debts of the borrower will be repaid on time.

FICO scores range from 350 to 850. According to Fair Isaac, the median score over the entire population is about 715, with 20% above 780 and 20% below 620. The minimum score required to qualify for the lowest mortgage rate is about 740, but it varies from lender to lender, and often depends on other characteristics of the transaction.

Credit scores have speeded up the process of making loan decisions, and have largely eliminated personal bias and subjectivity in the decision process. The major downside is the possibility of data error. FICO scores are based entirely on information taken from credit reports. If the credit report is contaminated by erroneous or incomplete information, the FICO score will also be contaminated.

In 2006, Equifax, Experian, and TransUnion set up a rival credit scoring system, VantageScore, in competition with Fair Isaac's FICO. VantageScore uses a scale that ranges up to 1,000, with 900-1,000 representing an "A" credit, 800-900 a "B," and so on. This type of ranking is akin to that used in academic tests, which may make it intuitively more appealing to users. On the other hand, having two different scaling systems could result in confusion. A score of 750 is an "A" with FICO but only a "C" with VantageScore.

Will Time Improve Your Credit Score?

The Federal Fair Credit Reporting Act puts time on your side by setting limits on how long negative information can appear in consumer credit records. Once a piece of information has been on a consumer's record for the prescribed period, it's supposed to drop off. Once off, it will no longer affect your credit score.

The prescribed periods are as follows: inquiries about you from credit grantors, 2 years; late payments, mortgage foreclosure, collection accounts, and Chapter 13 bankruptcy, 7 years; Chapter 7 bankruptcy, 10 years; unpaid tax liens, forever.

Even before negative information drops off a credit report, credit scoring will give it lower weight as it ages. However, this doesn't do borrowers any good unless they generate new positive credit information. Old bad stuff plus recent good stuff generates a rising credit score. Old bad stuff followed by no credit activity results in a continued low score.

Will Paying Delinquent Accounts Improve Your Score?

No. Delinquencies reduce your credit score because they're viewed as evidence of a weak commitment toward meeting your obligations. This evidence of your attitude toward debt is not wiped away when you repay the delinquent loans. They stay on your record for seven years. However, their weight in your credit score gradually declines with the passage of time, provided your recent payment record is better.

Do Credit Inquiries Hurt Your Credit Score?

Credit inquiries reduce credit scores because credit scorers have found that multiple inquiries are associated with high risk of default. Distressed borrowers often contact many lenders hoping to find one who will approve them.

But multiple inquiries can also result from applicants shopping for the best deal. To avoid catching shoppers in their net, credit scorers ignore auto and mortgage inquiries that occur within 30 days of a score date. To avoid biasing the credit score from earlier shopping episodes, the scorers treat all auto and mortgage inquiries that occur within a 14-day period as a single inquiry.

The upshot is that credit inquiries will not significantly impact your credit rating if you do all your shopping in a short period. Since the market can change from day to day, this is the only effective way to shop anyway.

Consumers shouldn't be concerned about inquiries they make, such as ordering a credit report. Self-inquiries don't affect the credit score. Neither do inquiries from your existing creditors, potential employers, or businesses considering whether or not to solicit you. The only inquiries that affect your credit score are those by new credit grantors that you have explicitly authorized to check your credit.

How Much Debt Is Too Much?

The two major components of a credit score, which on average account for two-thirds of the total score, are payment history and amounts owed. Where the first is a record of how well you've met your obligations over the years, the second is a snapshot of your indebtedness right now. If your credit history is short, your current indebtedness can be the most important factor determining your credit score.

The approach that FICO credit scorers use to determine whether you're living beyond your means is to compare the outstanding debt on each of your accounts with the maximum amount of debt that the credit grantor has set for you on that account. This generates a set of "utilization rates" for each of your accounts.

For example, if you have two credit cards with maximum balances of $4,000 and $5,000, and if the actual balances are $3,000 on both as of the most recent date of record, the utilization rates are 75% and 60%.

In general, the higher the utilization rates, the lower the FICO score.

(Note: Don't run out tomorrow to open some more lines so your balances can be spread over a larger number of accounts. The FICO genie has a strong distaste for multiple new accounts in a short period of time, which can be an indicator of financial distress.)

Consumers should be aware of potential problems in connection with the utilization rates that affect their credit score. The data on debt balances as reported by credit grantors isn't always correct. Furthermore, for various reasons, credit grantors do not report maximums on all revolving accounts. Where no maximum is reported, the largest balance ever to be reported on the account is used in its stead. Since the highest balance is below the maximum, often substantially below it, this necessarily results in higher utilization rates for such accounts.

Before going into the market, it's a good idea for consumers to check their balances and their credit limits. If an account has no reported limit, you can either ask the credit grantor to report the limit, or terminate the relationship. In the unlikely event that the credit grantor won't report the limit but you want to maintain the relationship anyway, you can shift all your balances into this account temporarily so that the highest balance comes closer to the unreported maximum, then quickly reduce them.

What Is a Delinquent Payment?

A delinquent payment is one that is 30 days or more past due. This is not the same as a late payment, which is one received beyond the grace period granted by the lender. If a mortgage payment due on the first of the month is received on the 20th, for example, it's late and will incur a late charge, but it isn't delinquent and will not appear as such on the credit report.

Don't Try to Skip a Mortgage Payment

A single skipped mortgage payment can mushroom into a cascade of delinquencies if you don't cure it immediately.

Under the accounting rules used for amortized mortgages, lenders always credit a payment against the earliest unpaid obligation. If you skip your payment in April, you'll record one delinquency. If you make your payment in May, it will be applied to April, making you delinquent for May as well. When you make your payment in June it's applied to May, making you delinquent for June. The delinquencies accumulate until the skipped payment is made good.

Removing Errors in Credit Reports

It's a good idea for consumers to check their credit well before they go into the market. This will give them time to get any errors fixed. Give yourself a minimum of three months.

If you find an error, use this form to contact the credit reporting agency that reported it. If you follow the instructions exactly, the agencies are obliged by law to act on your complaint.