As my readers know, I often share a reader's question if I think the answer may be useful to other readers. Richard C wrote, "Thanks for the information on escrow. We don't use title companies here; my attorney has always handled my closings. Can you tell me if my title insurance covers my property for physical damage?"

Richard, the simple answer is "NO!". Title insurance is issued by the title (or escrow) company in the form of a "title policy". The title policy insures that you are receiving "marketable title" to your property; in other words, that no claims such as liens exist against your home at the time of issue.

Physical damage to a property is covered through hazard insurance policies. Since it's been about 20 years since I've been a licensed insurance agent, I turned to my "insurance expert buddy", Lorin Bronston of Liberty Mutual. Never one to shy away from using my network to get free answers or advice for my clients, I asked Lorin to explain the basics of homeowner coverage for this out-of-state buyer.

Having moved here from southern California to attend UNLV, Lorin's seen miles of dirt become beautiful, lush developments over the past 20 years. He's a weekend NASCAR official ... I'd pay for the privilege of officiating or announcing at a race! Anyway, Lorin weighs in here for the first time on insurance practices in Nevada.

Many buyers purchasing their first home in Nevada are pleasantly surprised to learn how reasonable homeowners insurance is in our state. While some of this information will seem very basic to homeowners who already own homes in Nevada, we are seeing a large influx of out-of-state buyers who aren’t at all familiar with insurance practices and policies in our state.

For the first time in many years, the price you are going to pay for a home is in line with the value of the home for insurance purposes. In the past, mortgage lenders would require you to carry enough insurance to cover the mortgage balance. In most cases, this was more coverage than was needed to replace or rebuild the home in the event of a total loss. This in turn meant homeowners were paying for higher coverage just to pacify the mortgage companies. Now you’re getting more value for your money.

The type of homeowner insurance you require depends on your situation. If you are purchasing a property for a primary residence, then a standard policy will apply. Standard policies provide adequate dwelling coverage to rebuild or replace the home in the event of a total loss. This type of policy also provides coverage for your personal belongings, liability coverage in the event someone gets hurt, and for loss of use if you need to be “put-up” somewhere because your house is in an unlivable condition.

If you are one of the many buyers purchasing a rental property, you need to cover only the structure itself as the contents belong to your tenants. The structure would be protected in case of damage due to fire, wind, or lightning; the contents would not be covered. Many rental property owners require their tenants to carry a “tenant policy” which provides coverage for their personal belongings while in the property.

Condo coverage differs from detached homes coverage in that condo associations cover the building itself, including the roof. In these cases, you only need to cover your unit from the “studs” in. In other words, you need to provide coverage for the interior of your unit (e.g. appliances, carpets, cabinets and personal property) for damage or theft.

Because Las Vegas is a great place to live or visit, many non-Nevadans are buying vacation homes here. If you’re buying a home that you plan to leave vacant most of the time, you should discuss this with your insurance agent to be sure you have the right coverage in place.

The local media continues to “inform” us on how bad things are in the real estate market. The reality is that home sales are continuing to rise quickly. I know this from the number of requests I get for insurance binders from my clients, mortgage lenders, and title companies. I’m on the frontlines, so to speak, since insurance is a mandatory item to close escrow on a property.

Your Realtor, mortgage agent, title company and insurance agent should work together to help you make the purchase of a property as painless as possible. Generally the insurance premium will be paid through the mortgage process, and your mortgage agent will help you secure coverage, or ask you to contact me to arrange for a binder. If you are a cash buyer, you will likely be ordering your own insurance.

Liberty Mutual does business in all 50 states and many countries, so if I can answer a question for you please feel free to contact me at Lorin.Bronston@LibertyMutual.com.

Lorin is my fellow Board member for Speedway Children's Charities, and I mention this only so I can plug our upcoming golf tournament! If you love golf like you love Las Vegas, I hope you'll come out and join us for some sun and fun as we raise money for children's charities in Las Vegas on June 2.

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She's baaaaaaaccck...

During the mid-paleozoic era of my teen years, dentistry was not as advanced as it is today. I've been recovering from a second dental surgery in just 3 weeks to correct the last of 3 failed root canals. This last one was much tougher to recover from.  It didn't stop me from showing lots of properties, but I haven't felt like doing much beyond taking care of my clients.

It may take me a few days to get caught up, but I've got some interesting information from the recent American Planners Association conference held in Las Vegas last week. I stole the notes from the bus tour from my land use consultant colleague, Lucy Stewart of LAS Consulting, so I'm going to share the highlights shortly! Ms. Stewart is a former Clark County zoning coordinator and is now Consultant-to-the-Stars (or developers, any way); she's promised to provide my readers with information on land use matters and growth trends in Las Vegas now that the APA's national conference is behind her.

Just an interesting note: prospective homebuyers are searching for foreclosed homes in Las Vegas at a higher rate than anywhere else in the nation. I knew that intuitively; the competition is driving up sales figures. People searching through AOL's search engine are looking for foreclosures in Las Vegas at a higher rate than any other city.

Being the most sought-after city in foreclosure searches is partly due to our vibrant economy, the tens of thousands of jobs to be filled in the next 18 months, and the availability of investment properties that will cash flow now. Of course, no one is complaining about the incredible weather, lack of state income tax, or the exciting nightlife.

There's a certain cachet in having a second home in Las Vegas, and now it's within the grasp of more people.

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Sales are up ... no news there. But for all of you who write asking about condos, take note: condo prices are beginning to rise. There are fewer than 5,400 condos on the market, and I think I've had 6,000 inquiries about condos! (Okay, it's substantially less ... but LVA viewers ask about condos A LOT.)

I'm recovering from dental surgery, but still out showing houses today to out-of-state buyers. One couple is looking for their retirement home seven years early. They want to take advantage of the low prices, and will use the home as a second home or rental until they can retire to warm, sunny Las Vegas. The other is escaping Seattle's cold, wet climate.

My Seattle client is looking for a home with a pool, and asked a very typical question: Does a pool add to the resale value of a home? The answer is "Yes, somewhat." More importantly, a pool adds to the desireability, and when the weather begins to turn warm here in April, pools are in big demand throughout August.

A pool can add anywhere from $10,000 to $25,000 to the value; about $16,000 is typical. Most people are looking in a specific price range, and the pool is just a bonus. The home with a pool will likely sell faster.

Many clients say they want a pool, but a house with a yard large enough to accommodate a pool will suffice. If you want a pool, try to find a house with a pool. That pool that may add $16,000 resale value to your home will cost you around $35,000 if you put it in after buying the house.

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I’ve noticed a bit of a phenomenon that suggests to me that prices are beginning to stabilize in certain areas. Overall, prices are still dropping while sales are rising. However, we may be reaching the bottom in specific developments.

In December, I sold a nearly-new 3,100 sq. ft. REO to a client in the southwest area for $380,000. This was a great buy, but prices dropped again early this year, and a few more houses came on the market at a lower price. Today, I can’t find this model listed for anywhere close to this price. The most recent sales are $400,000 and above.

I have a client trying to buy a similar home in good condition for $375,000, but the bank countered at $415,000 and is standing firm. We’ve countered the counter at $385,000, and I’m working to educate the listing agent on why the bank should accept our price. We’ll see who wins. Unfortunately for his seller, the agent is taking it personally, as though it’s his home. He’d be doing his seller a favor by sending over the comps, but I can’t seem to get him to understand that.

In January, another client’s offer was accepted on a 3,000 sq. ft. home in very good condition for $249,900. There were similar homes that he could have bought for $245,000 to $255,000. He closed escrow in late March. Now I’m trying to find a home for his friend, but homes similar to the model he bought are selling for at least $260,000. His friend just offered $270,000 for a similar home in good condition, but our offer was rejected for a higher offer!

The only difference in both of these situations appears to be the timing. Same models, same condition, but what was available in December and January—when almost no one was buying—is selling for more today. Too early to tell if this pattern foreshadows a trend. But I’m sensing that prices have stabilized in these 2 communities when you can’t buy the same house for the same price you could 60 days ago. More buyers, more competition…supply and demand at work.

I’ve shown houses and written offers this week for clients from Alaska, Saskatchewan, San Diego and Calgary; but no one from Las Vegas! Investors are scooping up the best deals, as are out-of-state vacation and retirement home buyers. I hate to see so many locals miss these opportunities. By the time they get that it’s time to buy, the houses will cost more.

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The last few days have been a whirlwind of showings, Offers and Counter Offers. Maybe it’s the incredible weather—that always brings people out to look.

Or maybe it’s opportunities like the 4,392 square foot home in Mountains Edge for $369,900. That’s certainly the reason offers are flying fast and furious from my desktop today. This house was priced at $84 per square foot—unheard of for this community, where the next-best deal I found in the same development will probably sell for $115 per square foot (to another of my clients).

The home sold new in 2006 for $840,000. It just fell out of escrow, and the bank set a very short window for cash-only offers. The previous owner stripped out all of the kitchen and bathroom fixtures, and all kitchen appliances. It needs about $30,000 to $45,000 in rehabbing, including replacing some horrific vinyl in the kitchen and baths.

But some lucky cash buyer (I hope my client!) will get an incredible deal on this today.

My last blog entry, Nevada Escrow Practices, received double the number of views-in-the-first-48-hours than my average. What’s up with that? If you have a topic of interest (and who would have thought escrow was so interesting?), please feel free to share; I’ll address it in my blog if it’s appropriate.

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I frequently receive questions from my readers in my personal e-mail, and I make it a point to respond to every question. It just occurred to me that some questions repeatedly pop up, and sometimes the answer is universal enough that it will be of interest to a broader audience. In that spirit, I’m going to devote this column to escrow practices in Nevada.

What is an escrow company, you might ask? Okay, you might not—but some of my Canadian readers have. Apparently escrow companies do not exist in Canada; at least not in Moose Jaw. Escrow involves setting up an account where a neutral third party (the escrow company) holds a buyer’s funds and all pertinent documents until the instructions of both the buyer and the seller are carried out, allowing the transaction to close.

In Nevada the buyer generally selects the escrow (or title) company; however, the current trend is for the banks holding foreclosure properties to select their preferred escrow officer. Since the buyer doesn’t usually know an escrow officer, the buyer’s agent will usually select a title company at the time the offer is written. The earnest money deposit check is then made out to that title company, and held in escrow with other funds, invoices and documents.

Realtors develop close working relationships with their preferred title officer over time, and will deal with someone they know is knowledgeable and accessible. Investors may have escrow officers that they prefer to work with, but more often it is the real estate agent that makes the decision. After all, even though escrow agents are completely neutral, the agent wants to work with an escrow officer that returns their calls quickly, is proactive, and possesses good troubleshooting skills.

Escrow officers can be a great source of information on a range of complex real estate matters. Trish Gladd, LandAmerica Commonwealth Title, gave me this handy publication to share with my readers. It’s an educational publication written for real estate agents, but it’s a very handy reference guide to the escrow process in Nevada, California and Arizona. And since these are all community property states, it’s wise to be familiar with your choices for holding title to property in Nevada. This guide has a helpful chart that details vesting options on pages 22-24.

Escrow practices vary widely in many states. Since many of my readers are from California, Nevada, Canada, and the eastern United States it really would not make sense to compare the practices of so many different areas. But if you are reading this blog, your interest is in Nevada real estate. I trust this publication will help you to understand escrow in Nevada.

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I received an interesting comment from Judy, a reader, regarding good investment areas in the Las Vegas area. I'll respond more fully later, but I found it fascinating that so many "experts" are telling Judy where to invest and where not to invest. Some savvy investors are now looking to those less-desireable, less competitive areas that she's being told to avoid!

We all know Summerlin and Green Valley are great places to invest. The competition for good deals is also very steep. There are places in this area where you can buy a similar home for tens of thousands of dollars less, yet the rent is close to what you will get on an investment home in Summerlin. Don't get me wrong--I LOVE Summerlin ... location, location, location. But don't overlook areas where the prices are so low that you can more easily find positive cash flow. Price, price, price.

I'm now up to 6 on the number of above-full price offers that clients have had rejected in the past 6 weeks. I showed houses near Shadow Creek Golf Course this past weekend to a client referred by a former client, Gui Z. Gui finally closed on his home in this area in early April. He purchased his home in move-in condition for $249,900. When he made the offer in early January, no one was buying. Even though prices are not going up, it is difficult to find a similar house in this area listed for less than $265,000 now--there are more buyers competing for these homes.

REOs in Summerlin and Green Valley--in fact nearly everywhere--are getting multiple offers. Perhaps it's time to think outside the box, and look to some of those areas that aren't getting as many offers. There are some real gems out there, and the competition is not as stiff.

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It’s been an interesting week in Las Vegas real estate. I’ve seen three homes this week listed at $57 per square foot or less, which is incredible. Almost unbelievable, really. So is it too good to be true? It is for all but one of those many buyers who made offers on these homes.

Houses do not sell for $57 per square foot in Las Vegas unless they are seriously trashed; even then it’s highly unusual. One had fire damage, and may actually sell for that price. But another was in nearly move-in condition and listed at $81,500. My office alone wrote three offers on this one. With a steady stream of agents in and out, I’m sure the listing office received dozens of offers. We submitted very clean cash offers of $105,000, but our offers were rejected. I won’t know what it sold for until it closes, but this $81,500 home definitely sold for over $105,000.

I almost hate to see homes listed for this price. They generate lots of leads, but we’re not here to gather leads … we’re here to find great deals for our clients. Someone probably got a good deal on this home … but paid over $105,000 for this $81,000 listing. So dozens of people wasted their time, when they might have gotten their offer accepted on another good deal.

Listing a home that far under a realistic market price isn’t helping anyone, except the listing agent who gets additional leads to follow up on. There are some incredible deals to be had in the $70- to $80-per-square-foot range, and investors are scooping these up. Occasionally something will sell for less than $70 per square foot on the MLS. Keep in mind that you may very well need to offer full price or more on an REO that’s priced too low; however, you’ll still walk away with an incredible deal.

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I’ve had several readers ask questions recently, and I think the answers to these two would be of interest to most of my readers:

Deb recently asked why she read in my blog that sales are increasing, yet read the following in a Yahoo story: “Sales of new homes fell in February for the fourth straight month, pushing activity down to a 13-year low as the steep slump in housing continued." First, real estate is local; the national news does not always reflect what is happening in any given state, city, or neighborhood. More importantly, we specialize in resales; the Yahoo article was about new home sales.

Single family home sales were up approximately 34% in March. People thought I was crazy in November when I said we were nearing the bottom in terms of sales, and that we should see sales start to rise in late February. Okay, I may be crazy — but I’m also smart! I don’t have a crystal ball, just accurate statistics and the nerve to go out on a limb and make a prediction. I’d like to tell our readers when prices will hit a bottom, but for that I’d need a crystal ball and maybe that cool software that helped Denzel Washington go forward in time a bit. Or was it back in time?

As a reminder: while I will find any type of home my client wants, my research covers about 85% of all resales listed on the MLS. Because they are statistically insignificant, we exclude mobile homes, age-restricted homes, condos and rural areas from our research findings. $3m condos can really skew the statistics, as can these other types of single family residential dwellings. So there’s your answer, Deb, and thanks for asking.

John asks: “Robin, you talk about vacation and retirement home sales; have you seen an increase in non-U.S. buyers? With the dollar so low versus other currencies, has anyone focused on the foreign buyer?”

John, there is a major influx of foreign nationals picking up second homes in Las Vegas. Many of these are from Canada, and they are almost exclusively cash buyers. I’m sure some agents are targeting foreign investors; with our Top10, I don’t need to market — they find me!

People are lured to our market by the incredible values right now, so even when their own currencies are bouncing around a bit they are still looking for homes here. People from all over the world love Las Vegas; now that we are seeing these great investment opportunities here, a number of people are looking to buy their retirement home well before they actually retire.

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