Tuesday, November 29, 2011
Tuesday, November 22, 2011
Keeping your home warm and saving money
No one likes wasting money, especially in these tough economic times. So it certainly makes sense -- dollars and cents -- to make a small investment of time and supplies to close up those heat-wasting air leaks around your home. It'll pay back big dividends in reduced energy bills and a warmer, more comfortable house this winter. So let's look at some of the areas where those drafts may be lurking, and see how to take care of them.
1. Doors and windows: This should be an obvious one. If you can see gaps between your siding and your windows or exterior doors, close them up with a bead of clear or paintable acrylic latex caulk. Larger gaps can be filled with foam backer rod before applying the caulking.
2. Exterior penetrations: Some of these areas are going to be obvious, while some may take a little bit of searching. Some examples of exterior penetrations where air can leak into the house include exterior faucets, dryer vents, exterior electrical outlets, exterior light fixtures, holes that have been drilled for phone and TV cables, conduit penetrations, exit points for plumbing drains, and penetrations for air conditioning lines. Closing these penetrations may require a variety of different techniques, including caulk, expanding spray foam, or, in the case of electrical boxes and fixtures, specific gaskets that are designed to fit the boxes.
3. Exhaust-vent covers: Dryer vents, range hood vents, bath fan vents, and other interior ventilation equipment typically terminate outside the house in a plastic or metal cover that has one or more louvers on it. The louvers are designed to be in the closed position whenever the fan is not in use, so that outside air doesn't leak in. Check all of these louvers to be sure they're closing completely, with no air leaks. If they aren't, you can adjust the spring tension to hold them closed more tightly; add foam weatherstripping tape for a more air-tight seal; or replace the entire vent cap with a new one.
4. Gaps around interior vents and recessed lights: Inside your home, heated air can be leaking out around that same ventilation equipment, where vent pipes pass through the walls or ceiling, or where vent covers meet wall and ceiling surfaces. Recessed light fixtures can also be real air-leakers. Around the vent pipes and recessed light cans, seal any gaps with caulking. For the vent covers and recessed light covers, remove the covers, then adjust the springs and/or add foam weatherstripping tape to create a tight seal between the cover and the ceiling.
5. Heat-duct penetrations: Gaps around heating-duct cans where they pass through the floor or wall allow cold air to enter from the crawl space, while gaps around ceiling-duct cans allow heated air to escape into the attic. To close those drafts, first remove the register, then use a combination of caulking and/or metallic duct sealant tape to close any gaps between the sheet metal cans and the floor, wall or ceiling surface.
6. Fireplaces and woodstoves: Lots of gaps can occur around these appliances. With a conventional fireplace, keep the damper closed except when burning a fire to prevent heated air from escaping up the chimney. Consider investing in a set of air-tight doors, which close off the air leaks and also make your fires more efficient. Look for gaps around woodstove and gas fireplace flue pipes, and air leaks around masonry chimneys. Use a metal collar if necessary around flue pipe penetrations, and seal gaps with heat-resistant sealant specially formulated for this application.
7. Attic and crawl space hatches: These can be real air losers if they're not weatherstripped, so take care of that with some foam tape. Make sure the hatches are insulated as well.
8. Interior doors to unheated spaces: If you have any interior doors that lead to unheated spaces, including basements, garages or attics, be sure the doors are weatherstripped to prevent air leakage. If possible, replace older, hollow-core doors with solid-core or, better yet, insulated metal doors.
9. Sill plates and penetrations: This one's not as easy to deal with, but it's well worth the effort to try to do whatever you can with it. Air can leak both into and out of the house through gaps where the sill plate meets the foundation or the siding, and around plumbing and wiring penetrations drilled through wall plates in various areas. If you have a gap between your siding and the bottom of your exterior wall, especially in older homes where the use of sill sealers was not a common practice, consider closing up this big air gap with a bead of caulking or expanding foam. In the basement, crawl space and attic, if you can access any of the pipes and wires that pass through the wall plates, seal the penetrations with expanding foam.
1. Doors and windows: This should be an obvious one. If you can see gaps between your siding and your windows or exterior doors, close them up with a bead of clear or paintable acrylic latex caulk. Larger gaps can be filled with foam backer rod before applying the caulking.
2. Exterior penetrations: Some of these areas are going to be obvious, while some may take a little bit of searching. Some examples of exterior penetrations where air can leak into the house include exterior faucets, dryer vents, exterior electrical outlets, exterior light fixtures, holes that have been drilled for phone and TV cables, conduit penetrations, exit points for plumbing drains, and penetrations for air conditioning lines. Closing these penetrations may require a variety of different techniques, including caulk, expanding spray foam, or, in the case of electrical boxes and fixtures, specific gaskets that are designed to fit the boxes.
3. Exhaust-vent covers: Dryer vents, range hood vents, bath fan vents, and other interior ventilation equipment typically terminate outside the house in a plastic or metal cover that has one or more louvers on it. The louvers are designed to be in the closed position whenever the fan is not in use, so that outside air doesn't leak in. Check all of these louvers to be sure they're closing completely, with no air leaks. If they aren't, you can adjust the spring tension to hold them closed more tightly; add foam weatherstripping tape for a more air-tight seal; or replace the entire vent cap with a new one.
4. Gaps around interior vents and recessed lights: Inside your home, heated air can be leaking out around that same ventilation equipment, where vent pipes pass through the walls or ceiling, or where vent covers meet wall and ceiling surfaces. Recessed light fixtures can also be real air-leakers. Around the vent pipes and recessed light cans, seal any gaps with caulking. For the vent covers and recessed light covers, remove the covers, then adjust the springs and/or add foam weatherstripping tape to create a tight seal between the cover and the ceiling.
5. Heat-duct penetrations: Gaps around heating-duct cans where they pass through the floor or wall allow cold air to enter from the crawl space, while gaps around ceiling-duct cans allow heated air to escape into the attic. To close those drafts, first remove the register, then use a combination of caulking and/or metallic duct sealant tape to close any gaps between the sheet metal cans and the floor, wall or ceiling surface.
6. Fireplaces and woodstoves: Lots of gaps can occur around these appliances. With a conventional fireplace, keep the damper closed except when burning a fire to prevent heated air from escaping up the chimney. Consider investing in a set of air-tight doors, which close off the air leaks and also make your fires more efficient. Look for gaps around woodstove and gas fireplace flue pipes, and air leaks around masonry chimneys. Use a metal collar if necessary around flue pipe penetrations, and seal gaps with heat-resistant sealant specially formulated for this application.
7. Attic and crawl space hatches: These can be real air losers if they're not weatherstripped, so take care of that with some foam tape. Make sure the hatches are insulated as well.
8. Interior doors to unheated spaces: If you have any interior doors that lead to unheated spaces, including basements, garages or attics, be sure the doors are weatherstripped to prevent air leakage. If possible, replace older, hollow-core doors with solid-core or, better yet, insulated metal doors.
9. Sill plates and penetrations: This one's not as easy to deal with, but it's well worth the effort to try to do whatever you can with it. Air can leak both into and out of the house through gaps where the sill plate meets the foundation or the siding, and around plumbing and wiring penetrations drilled through wall plates in various areas. If you have a gap between your siding and the bottom of your exterior wall, especially in older homes where the use of sill sealers was not a common practice, consider closing up this big air gap with a bead of caulking or expanding foam. In the basement, crawl space and attic, if you can access any of the pipes and wires that pass through the wall plates, seal the penetrations with expanding foam.
Wednesday, November 16, 2011
Should I sell my home in the winter?
We're getting close to the end of the year, which begs the question of whether it's worthwhile trying to sell your home now. Is it a waste of time? Will it sit on the market and become shopworn? Should I take my house off the market for the holidays? Will the home-sale market be better for sellers in 2012?
The first question you need to ask yourself is: Are you emotionally prepared to sell? Selling is a challenge for most sellers, although some markets are better than others. Unless you bought more than eight to 10 years ago and preserved your equity, you may not be able to sell for enough to pay off the mortgages secured against the property and the other costs of selling.
For sellers who have no additional assets, a short sale or foreclosure may be the only option. If so, first look into government programs that might help you out financially. Also, talk to your attorney and tax adviser.
Sellers who have the resources to make up the difference between the sale price and the amount they owe need to ask themselves if they are willing to pay the additional cash in order to sell and move on.
There are two reasons why you might prefer bringing cash to closing. One is that your credit will not be negatively impacted, as would be the case with a short sale or foreclosure. The second is that many buyers shy away from short sales because of the lengthy and uncertain process involved.
The next thing to consider is the condition of your home. Is it ready for the market? The most salable homes are those that are in move-in condition.
Before racing to the hardware store, ask your REALTOR® about how much competition there would be for your home if you put it on the market before the holidays. Some areas are shy on inventory of good homes on the market. If so, now could be a good time to sell.
HOUSE HUNTING TIP: The supply/demand ratio plays a significant role in the health of a local real estate market. No matter what is said about the housing market nationally, it's the local picture that tells the tale in terms of the possibility of selling your home at any given time.
Most sellers don't put their homes on the market during the last or first couple of months of the year. The inventory of homes for sale tends to dwindle during the winter months. Interest rates are low. So, if there are buyers in your local market, you may be at an advantage selling when most sellers are waiting.
Some sellers feel that if they've waited this long to sell, they should put the process on hold until spring and get the house ready in the meantime. Certainly, it's not a good idea to put your house on the market until it looks great. But if you and your house are ready to sell, move ahead.
The market in general tends to slow down over the holidays. But rather than pull your house off the market and miss a likely prospect, change the showing procedure to require advance notice. And enjoy your holidays. A sale before year end could be a great holiday gift.
There is a lot of pent-up demand, on both the buyer and seller sides. Sellers have been waiting for a better time to sell. Buyers have been waiting for more quality inventory and a sense that prices have bottomed or are close to it.
THE CLOSING: Recent projections call for another five or so years of bouncing along close to the bottom of this market cycle. Many experts believe that the big price declines are behind us. Who knows?
The first question you need to ask yourself is: Are you emotionally prepared to sell? Selling is a challenge for most sellers, although some markets are better than others. Unless you bought more than eight to 10 years ago and preserved your equity, you may not be able to sell for enough to pay off the mortgages secured against the property and the other costs of selling.
For sellers who have no additional assets, a short sale or foreclosure may be the only option. If so, first look into government programs that might help you out financially. Also, talk to your attorney and tax adviser.
Sellers who have the resources to make up the difference between the sale price and the amount they owe need to ask themselves if they are willing to pay the additional cash in order to sell and move on.
There are two reasons why you might prefer bringing cash to closing. One is that your credit will not be negatively impacted, as would be the case with a short sale or foreclosure. The second is that many buyers shy away from short sales because of the lengthy and uncertain process involved.
The next thing to consider is the condition of your home. Is it ready for the market? The most salable homes are those that are in move-in condition.
Before racing to the hardware store, ask your REALTOR® about how much competition there would be for your home if you put it on the market before the holidays. Some areas are shy on inventory of good homes on the market. If so, now could be a good time to sell.
HOUSE HUNTING TIP: The supply/demand ratio plays a significant role in the health of a local real estate market. No matter what is said about the housing market nationally, it's the local picture that tells the tale in terms of the possibility of selling your home at any given time.
Most sellers don't put their homes on the market during the last or first couple of months of the year. The inventory of homes for sale tends to dwindle during the winter months. Interest rates are low. So, if there are buyers in your local market, you may be at an advantage selling when most sellers are waiting.
Some sellers feel that if they've waited this long to sell, they should put the process on hold until spring and get the house ready in the meantime. Certainly, it's not a good idea to put your house on the market until it looks great. But if you and your house are ready to sell, move ahead.
The market in general tends to slow down over the holidays. But rather than pull your house off the market and miss a likely prospect, change the showing procedure to require advance notice. And enjoy your holidays. A sale before year end could be a great holiday gift.
There is a lot of pent-up demand, on both the buyer and seller sides. Sellers have been waiting for a better time to sell. Buyers have been waiting for more quality inventory and a sense that prices have bottomed or are close to it.
THE CLOSING: Recent projections call for another five or so years of bouncing along close to the bottom of this market cycle. Many experts believe that the big price declines are behind us. Who knows?
Tuesday, November 8, 2011
TIPS FOR MAINTAINING GOOD CREDIT
5 simple steps to managing healthier credit:
* Be a better credit manager – Take time to understand credit scoring.
... * Don't be late – Pay your bills on time.
* Regularly check your credit reports – Correct inaccuracies as soon as you spot them.
* Keep balances as low as possible – Your credit balances shouldn't be more than 35% of your available credit limits.
* Put time on your side – Establish a long history of paying your bills on time and using credit responsibly.
* Avoid excessive credit checks – Make sure to apply for new credit in moderation.
* Be a better credit manager – Take time to understand credit scoring.
... * Don't be late – Pay your bills on time.
* Regularly check your credit reports – Correct inaccuracies as soon as you spot them.
* Keep balances as low as possible – Your credit balances shouldn't be more than 35% of your available credit limits.
* Put time on your side – Establish a long history of paying your bills on time and using credit responsibly.
* Avoid excessive credit checks – Make sure to apply for new credit in moderation.
Monday, November 7, 2011
Pre-listing inspections won't make the deal, but they can help optimize your chances of closing the deal. Buyers are not going to buy a house they wouldn't consider otherwise because it has reports, but if they are debating between a property with a home inspection and another property, a clean bill of house health, documentation that needed repairs have been completed, or even reports showing what needs doing and a corresponding discount can help push buyers off the fence.
Deals fall apart because of condition issues not discovered until the transaction is partially underway. Sometimes, advance inspection reports can surface issues, allow you to get repairs completed and thus avoid that issue.
However, at other times, pre-listing inspections show issues too big for you to have repaired that will be deal-killers for almost any mortgage lender. In this case, you do yourself the favor of forgoing even bothering trying to get it past a mortgage lender and empower yourself to list it as a cash-only sale for a fixer-upper price.
However, once you obtain prelisting inspections, you will have a legal duty to provide information about any defects turned up to prospective buyers. That still might make sense, especially if the home is in great shape or you do elect to invest in necessary repairs. Just be aware that by obtaining the inspections you might heighten your own legal duties vis-à-vis making disclosures about the condition of the home.
Your pre-listing inspection won't replace the buyer's inspections. To be clear, whatever inspection(s) you obtain won't be the inspection -- it will just be an inspection. You'll want to expressly advise the buyer that the pre-listing inspections -- and I would encourage you to consider a pest inspection, property inspection and a roof inspection -- are for his information only.
You don't want the buyer to rely totally on it and forgo his own due diligence for liability reasons; your aim is to either verify the place is in good shape, clear the place of major repairs or brief them on why the property is being priced in that way and what they'll need to do (or won't need to do) later, assuming you can negotiate an as-is offer.
But you also want the buyer to still obtain his own inspections, so he can attend, ask questions, select the inspector and not fault you for anything that is missed. And you should work with your listing agent to require that the buyer sign your written advice to get his own inspections, as well as to make the property available to the buyer for just that purpose.
Deals fall apart because of condition issues not discovered until the transaction is partially underway. Sometimes, advance inspection reports can surface issues, allow you to get repairs completed and thus avoid that issue.
However, at other times, pre-listing inspections show issues too big for you to have repaired that will be deal-killers for almost any mortgage lender. In this case, you do yourself the favor of forgoing even bothering trying to get it past a mortgage lender and empower yourself to list it as a cash-only sale for a fixer-upper price.
However, once you obtain prelisting inspections, you will have a legal duty to provide information about any defects turned up to prospective buyers. That still might make sense, especially if the home is in great shape or you do elect to invest in necessary repairs. Just be aware that by obtaining the inspections you might heighten your own legal duties vis-à-vis making disclosures about the condition of the home.
Your pre-listing inspection won't replace the buyer's inspections. To be clear, whatever inspection(s) you obtain won't be the inspection -- it will just be an inspection. You'll want to expressly advise the buyer that the pre-listing inspections -- and I would encourage you to consider a pest inspection, property inspection and a roof inspection -- are for his information only.
You don't want the buyer to rely totally on it and forgo his own due diligence for liability reasons; your aim is to either verify the place is in good shape, clear the place of major repairs or brief them on why the property is being priced in that way and what they'll need to do (or won't need to do) later, assuming you can negotiate an as-is offer.
But you also want the buyer to still obtain his own inspections, so he can attend, ask questions, select the inspector and not fault you for anything that is missed. And you should work with your listing agent to require that the buyer sign your written advice to get his own inspections, as well as to make the property available to the buyer for just that purpose.
Friday, November 4, 2011
Foreclosures - What's happening
The percentage of homes in the foreclosure process continued to climb in September, even as delinquencies and foreclosure starts declined, according to the latest report from data aggregator Lender Processing Services Inc.
While fewer homes are entering the foreclosure pipeline, there's been an even more drastic slowdown in homes coming out the other end, due in large part to the "robo-signing" controversy, which has slowed the pace at which lenders can repossess homes and put them back on the market.
LPS said foreclosure starts were down 20 percent in September from a year ago, to 220,273, slightly below the three-year average. But foreclosure starts continue to outnumber foreclosure sales by a factor of more than three to one, reflecting the fact many homes are tied up in the system for months or years after lenders initiate foreclosure proceedings.
Foreclosure inventories continue to grow in judicial foreclosure states where courts handle foreclosure proceedings, with lenders taking an average 761 days to complete the foreclosure process on delinquent homeowners in those states -- six months longer than in nonjudicial states.
Nationwide, nearly 40 percent of homeowners in foreclosure had not made a payment in two years, and 72 percent had not made a payment in a year or more, LPS said.
LPS estimated there were 2.17 million homes in some stage of the foreclosure process at the end of September. That's 4.18 percent of all homes with mortgages and an 8.9 percent increase in the foreclosure rate, which stood at 3.84 percent at the same time a year ago.
Another 4.2 million homeowners were at least one payment behind on their mortgages. That's 8.09 percent of all homes with mortgages, down 12.7 percent from the 9.27 percent delinquency rate a year ago.
A bright spot in the report was that the number of seriously delinquent loans -- mortgages in arrears by 90 days or more but not yet in foreclosure -- continues to decline. While 1.84 million homeowners were seriously delinquent, that's down 39 percent from January 2010, when 3.06 million mortgages were on the verge of foreclosure.
The government is standing behind about half of seriously delinquent loans, either through Fannie Mae and Freddie Mac (19 percent) or Federal Housing Administration, U.S. Department of Agriculture and Department of Veterans Affairs loan guarantee programs (32 percent).
The rest are loans that were bundled into "private label" mortgage-backed securities (37 percent) or retained by lenders in their investment portfolios (12 percent).
While robo-signing has slowed down lender repossessions, many seriously delinquent homeowners are able to avoid foreclosure through loan modifications.
Lenders have signed off on about 2 million loan modifications since January 2010, LPS noted in reporting the downward trend in serious delinquencies. There's been a dramatic decline in the re-default rate on modified loans, with about nine out of 10 modifications resulting in reduced payments for borrowers.
Loan modifications could be less of a factor going forward, with both Home Affordable Modification Program (HAMP) and non-HAMP loan modifications down sharply in the second quarter from a year ago.
Total loan modifications were down 44 percent during the second quarter from a year ago, to 149,000, with HAMP modifications falling 35 percent and proprietary modifications down 50 percent.
A separate report by the Census Bureau showed the steady decline in the home ownership rate during the housing bust may have hit bottom during the third quarter.
At 66.3 percent, the home ownership rate during the third quarter was down 0.6 percentage points from a year ago, but up 0.4 percentage points from the second quarter, the Census Bureau said.
For decades, the rate of home ownership ranged between 63 and 66 percent, though it began a climb above normal rates in the mid-1990s and peaked at above 69 percent just before the housing bust.
Writing on the blog Calculated Risk, Bill McBride said decennial Census numbers suggest the actual home-ownership rate is now probably closer to the 64 to 65 percent range.
LPS estimates that the total number of U.S. first mortgages has declined by 6.8 percent since January 2008, when there were an estimated 55.7 million homes with mortgages.
Most of that drop -- a decline of nearly 3.8 million mortgages -- was presumably the result of elevated foreclosures and the lower home-ownership rate. Homes that go into lenders' real estate owned (REO) inventories or are purchased by investors in all-cash transactions don't have mortgages.
While some homeowners would also have paid off their mortgages in full and owned their homes outright, the total number of outstanding mortgages usually grows as the population and housing stock expands and first-time home buyers take out new loans.
While fewer homes are entering the foreclosure pipeline, there's been an even more drastic slowdown in homes coming out the other end, due in large part to the "robo-signing" controversy, which has slowed the pace at which lenders can repossess homes and put them back on the market.
LPS said foreclosure starts were down 20 percent in September from a year ago, to 220,273, slightly below the three-year average. But foreclosure starts continue to outnumber foreclosure sales by a factor of more than three to one, reflecting the fact many homes are tied up in the system for months or years after lenders initiate foreclosure proceedings.
Foreclosure inventories continue to grow in judicial foreclosure states where courts handle foreclosure proceedings, with lenders taking an average 761 days to complete the foreclosure process on delinquent homeowners in those states -- six months longer than in nonjudicial states.
Nationwide, nearly 40 percent of homeowners in foreclosure had not made a payment in two years, and 72 percent had not made a payment in a year or more, LPS said.
LPS estimated there were 2.17 million homes in some stage of the foreclosure process at the end of September. That's 4.18 percent of all homes with mortgages and an 8.9 percent increase in the foreclosure rate, which stood at 3.84 percent at the same time a year ago.
Another 4.2 million homeowners were at least one payment behind on their mortgages. That's 8.09 percent of all homes with mortgages, down 12.7 percent from the 9.27 percent delinquency rate a year ago.
A bright spot in the report was that the number of seriously delinquent loans -- mortgages in arrears by 90 days or more but not yet in foreclosure -- continues to decline. While 1.84 million homeowners were seriously delinquent, that's down 39 percent from January 2010, when 3.06 million mortgages were on the verge of foreclosure.
The government is standing behind about half of seriously delinquent loans, either through Fannie Mae and Freddie Mac (19 percent) or Federal Housing Administration, U.S. Department of Agriculture and Department of Veterans Affairs loan guarantee programs (32 percent).
The rest are loans that were bundled into "private label" mortgage-backed securities (37 percent) or retained by lenders in their investment portfolios (12 percent).
While robo-signing has slowed down lender repossessions, many seriously delinquent homeowners are able to avoid foreclosure through loan modifications.
Lenders have signed off on about 2 million loan modifications since January 2010, LPS noted in reporting the downward trend in serious delinquencies. There's been a dramatic decline in the re-default rate on modified loans, with about nine out of 10 modifications resulting in reduced payments for borrowers.
Loan modifications could be less of a factor going forward, with both Home Affordable Modification Program (HAMP) and non-HAMP loan modifications down sharply in the second quarter from a year ago.
Total loan modifications were down 44 percent during the second quarter from a year ago, to 149,000, with HAMP modifications falling 35 percent and proprietary modifications down 50 percent.
A separate report by the Census Bureau showed the steady decline in the home ownership rate during the housing bust may have hit bottom during the third quarter.
At 66.3 percent, the home ownership rate during the third quarter was down 0.6 percentage points from a year ago, but up 0.4 percentage points from the second quarter, the Census Bureau said.
For decades, the rate of home ownership ranged between 63 and 66 percent, though it began a climb above normal rates in the mid-1990s and peaked at above 69 percent just before the housing bust.
Writing on the blog Calculated Risk, Bill McBride said decennial Census numbers suggest the actual home-ownership rate is now probably closer to the 64 to 65 percent range.
LPS estimates that the total number of U.S. first mortgages has declined by 6.8 percent since January 2008, when there were an estimated 55.7 million homes with mortgages.
Most of that drop -- a decline of nearly 3.8 million mortgages -- was presumably the result of elevated foreclosures and the lower home-ownership rate. Homes that go into lenders' real estate owned (REO) inventories or are purchased by investors in all-cash transactions don't have mortgages.
While some homeowners would also have paid off their mortgages in full and owned their homes outright, the total number of outstanding mortgages usually grows as the population and housing stock expands and first-time home buyers take out new loans.
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