Make Your Home Energy Efficient
If you’re buying an older heritage home, it won’t be quite as energy-efficient as a modern home. But there are many construction styles, each with its own set of environmental issues. If you want to know how efficient a home is, you need some key information. When buying a home, you want to understand all financial aspects of your purchase. You know what your mortgage payment will be. You know what your property taxes will be. And you know what any escrow fees will be. But no matter what kind of home you buy, you’re going to have to pay for utilities. And these bills aren’t always easy to predict. Check Energy Efficiency Features During Your Walkthrough When you first view the home, there are a few key indicators you can look for. These can help you gauge how energy-efficient a home is. The largest power draw in a home comes from the appliances. The first thing you should look at is appliances because most homes are sold with some appliances. In the United States, all appliances are sold with energy labels. These will tell you the estimated yearly power draw. Ideally, you’d like to see Energy Star-certified appliances. The more modern they are, the more efficient they are. You can compare the power ratings of the appliances you have at home to the home you are viewing. Then you will get an idea of how your power bill might change. Solar system reduces energy bill You should also pay special attention to the thermostats. The older, non-programmable thermostats would indicate that the HVAC system is either outdated or installed inexpensively. If you see a very old thermostat, it may indicate that the HVAC system is too old to be compatible with modern hardware. Alternatively, programmable thermostats would indicate that the previous owner invested in their heating system, ensuring it was as efficient as possible. By comparing this data against your current home, you should get an idea of what to expect on a utility bill. To further clarify your estimations, there are a few questions you can ask the homeowner. Change your bulbs to LED Look for features in the home that contribute to lowering your energy bill, such as skylight, whole-house fan, dual-pane windows, good insulations, solar system, LED lighting, heated floors, efficient appliances, roof type, weather strips, and such. Homes may not have all these features, but some of them would help lower the utility bill. Ask the Homeowner Some of the information you need won’t be available from a simple walk around. But a lot of it is easily available if you ask the right questions. The first thing you should ask is the utility bills for the past 12 months. If there is a lot of money that can’t be accounted for by the appliances you saw, that would indicate an inefficient home. You should also ask the homeowner what the R-value of the insulation is. In California, it’s recommended that homes are insulated between 25 and 38 R-Value. Your home will stay cooler in the summer and warmer in the winter if you have better insulation. This will save you a lot of money on utilities. In California, homeowners can get funding assistance to add more insulation to their homes. Ask your realtor about those programs if you decide to buy an older home. Check the Energy Star logo on the appliances You can also ask the homeowner about the types of windows that are installed. Dual-pane windows keep the home temperature in control; while single-pane windows let your energy bill escalate. Ask for any maintenance records the seller might have for the existing heating or cooling system. Not everyone will have this information. However, a homeowner who has spent time and money making their home energy efficient will. Ask Your Realtor If you’re working with a realtor, he or she can help you find out the information you need, and open lines of communication between you and the homeowner. Should you decide to move forward with buying this house, the home inspection report will help you get the final word on the efficiency of the home. If you are selling your home, your realtor could provide options for you to add more energy-efficiency features to your home in order to stand out amongst the other inefficient homes. Simple modifications, such as changing all bulbs in your home to LED lights could go a long way. If you are thinking of selling your house now or in the near future, call us to put you on the right path to market your home as an energy-efficient home.
10 Tips to Buy a House and Shop for Best Loan
To most people, purchasing the first house is an overwhelming job. But countless other people were there before and lived to tell a story. If you do your homework upfront, there's a good chance of finding the best house and the best loan you can afford. To the surprise of most first-time home buyers, shopping for a house is not the first thing to be done! The loan should always come first to avoid disappointment. The first five steps below are essential to your success. Review Your Finances First, consider savings. Look into how much you could put aside for a down payment or save an additional amount for it. Next, review your monthly expenditures and figure out where to possibly cut down in order to allocate to mortgage payment. As you study the best neighborhoods, calculate how moving to your new home will decrease or increase your daily commute costs. Find out Programs for First-Time Home Buyers What is a good deal? Most cities within California have programs to assist first-time home buyers with the down payment and other closing expenses. Having some knowledge about the various available programs helps you choose the one that fits your needs, helps you understand your lender, and helps you plan for the final closing expenses. Contact Lenders Many realtors won't spend time with customers who have not verified their purchase ability with a lender. So, if you are not a cash buyer, and most first-time home buyers are not, speak to a lender or mortgage broker to figure out your ability to buy a home. Most lenders give you approximate numbers within a few hours. If you need actual approval, then you might need to wait a few days. A lender or agent will rate your credit rating and the amount that are able to qualify to get financing. That is where your homework on first-time house buyer applications can help. If you feel you qualify, start looking for a lender… call us for recommendations for local lenders. Do a little research online; however, having a 1-on-1 meeting with a lender will give you immediate review of your financial situation, answer questions and, if needed, indicate how it is possible to enhance your credit score. Online calculators don't always include taxes and insurance or PMI (Private Mortgage Insurance policy necessary if the deposit is less than 20 percent). Online calculators also do not include loan fees. Go Shopping for a Loan Check loan rates with two or more lenders: Do not allow loyalty to a family lender to block you from seeking a pre-approval or looking for a mortgage outside your circle of friends. It is best to shop around for loan even if you only qualify for a single type of loan. Different lenders charge different fees for the exact same loan type and loan amount. When you think you got the best deal on a mortgage, make sure to get pre-approval to avoid any surprises. Being pre-approved is better than just simply being pre-qualified. Why? Because pre-qualification means your lender bases his evaluation on what you tell him. Pre-approval means you provide your lender with all the paperwork necessary to run your credit. Keep a Backup Lender Qualifying for a loan may not mean your loan will be approved. The underwriting guidelines and process is very tedious. A lender could suspend financing a loan at any point in time during the transaction and before close of escrow. Loan suspension can happen even after the lender approves a loan and after escrow documents are signed. A second lender who already qualified you for a mortgage gives you an alternate way to keep the loan process going with a different lender. Look for a Realtor Find a realtor to help you. Starting July 1, 2024, realtors will start signing Buyer-Broker Agreements with the buyers before they can take them to see homes for sale. The seller will no longer pay for all realtors’ commissions on both sides. However, commission to realtors will be a negotiable item like any other terms when buying a property. You probably have already found a realtor who directed you to a lender (point 3 above). If you have not, then find a realtor once you get pre-qualified. You will be more confident and comfortable shopping for a home when you have a letter in your hand showing the amount of the loan you qualify for and the highest purchase price. call us for recommendations on the best realtors in your area. Choose a neighborhood Your best location might not fit your budget. Try to explore various areas and give yourself a chance to compare prices and locations. The farther you get from metropolitan areas, the cheaper the homes are. On the flip side, it is an easy trap to think that the long commute is cheap. The stress and cost of a long commute can have a toll on marriages, health, and savings. So, it is a good idea to calculate how much the commute will cost you and if the cost of that commute is the same as your monthly mortgage difference if you live close to work. Revisit your numbers when you locate a house Review and update your finances: When you are ready to make an offer on a house, review your budget again. This time, ask your realtor to provide you with closing costs and any other upfront expenses, such as necessary repairs. You also need to set aside some money for moving expenses, appliances, and furniture that you may need to buy before you can move to the house. Don’t forget to add HOA (Home Owner’s Association) fee if required in that location. Review Utility Bills Homes with high ceilings and more windows have bigger utility bills. Heating and cooling high ceiling spaces takes longer time. Windows could leak air and cause energy loss. Utility bills could soar. For those reasons, request the energy bills from the past 12 months to lay out a typical monthly price. Perform a Home Inspection After your offer has been approved, splurge for a home inspection. Spending even $500 can instruct you about the home and help you determine if you really want to pay for necessary repairs. You can also leverage your offer depending upon the results of the inspection report and make the vendor financially responsible for all or a few of the repairs. Here is the Most Important Thing If you do your homework, you can buy your dream home: One of the biggest decisions and investments you could make is buying your first home. Try not to add more financial obligations to your plate. If you are thinking of buying a car, you may want to postpone it to avoid another monthly payment. Therefore, it is wise to save more money for a down payment on your house. The higher the deposit, the smaller the loan. The smaller the loan, the more comfortable your life will be, Call Us for more guidance.
11 Tips to Buy a Flipped House
Investors in California have been busy buying distressed homes to rehabilitate and renovate then sell for a 10%-50% profit margin. As a buyer, when you see a house that has been recently renovated, you need to ask your realtor if this renovation was done by the homeowner or flipped by an investor. There is an evident difference in the quality of workmanship and possible lingering issues yet to be addressed. Buyers: Do Your Homework. Ask for existing inspection reports Prior to submitting an offer, ask your realtor to request any inspection reports done by the seller or a previous buyer. Some investors will perform at least a pest inspection to avoid surprises that put a damper on the sale during a transaction. The seller must share the inspection report with potential buyers. So, do not hesitate to ask. Perform as many types of inspections as possible If the seller did not perform any inspections, you have no way of knowing the condition of the major parts of the house unless you order those inspections yourself. Yes, inspection cost is a direct up-front cost to buyers. Therefore, a set-aside budget for inspection costs needs to be accounted for prior to committing to purchasing a house. On older homes, the buyer should do the following inspections: Pest/termite, home, roof, sewer, and heating and air (HVAC). Structural inspection is necessary if recommended by any of the inspectors above or if you see a need for it. Be present during Inspections Inspect the House Thoroughly: Most buyers depend on their realtors or other agents to be present during inspections. Buyers do not need to be present during the entire period of inspections. However, it is extremely important for buyers to free themselves and be present by the end of inspections… say the last 20 minutes. Inspectors usually walk you through the house and show how things operate on one hand. Most importantly, they show you where the repair is a must or if the repair can wait. Being present during a walkthrough with inspectors will help you make a sound decision when you ask the seller for repairs. Check if Crawl Space is a Nightmare Houses either sit on a concrete foundation or a raised foundation. Raised foundation homes, especially those older homes, could have major dry rot and fungus. They might also have active termite and/or rodent activity. If the access to the crawl space is small and your inspector is unlikely to fit in, do not encourage skipping the crawlspace inspection to just finish the inspection task. You can ask the company to send someone who could fit through the opening. Rule of Thumb, since buyers are not likely to visually inspect the crawl space, ask the inspector to take photos for you. Pest inspectors usually do not take photos for the purpose of the report. If you do not ask them, they will not take any photos. If you are not present at time of inspection, you will miss on that opportunity. Venting is another issue in the crawl space. There must be a way for air to circulate under the house. If there is not sufficient venting from all sides, mold might build up and cause health issues and damage to subfloor wood. Check Cracks in Concrete Foundation If the house you are buying is on a concrete foundation, you need to watch for cracks and the size of cracks in concrete. If you see tangible-sized cracks in concrete outside the house, but running inside the house, you need to examine where the cracks are going inside the house. If there is a new carpet where you expect to see the tail of the outside cracks, then you have a problem that is worth checking. A structural engineer will be able to examine if the structure has major issues to address. Do not ignore Electrical Wiring and Main Switch Fire Hazard in Main Panel: Old main switches could be a fire hazard. Electrical re-wiring in an older house is a very expensive item for investor flippers. Re-wiring requires a licensed electrician, who usually charges thousands of dollars. Most flippers leave that task undone! Bad electrical wiring could lead to fire. Hidden wires in the attic could spark and lead to lighting of the insulation material. What’s in the Attic? Normally, there is insulation, air ducts, water pipes, and electrical wires in attics. The attic is also a storyteller. You can find out more history about the house than what’s in the living space. Inspectors, sometimes, find charred wood, which is clear evidence of a past fire. Most flippers do not know about a past fire if they have just recently bought the house and they have not done an inspection. It is a negotiation item for the buyer. The attic could have active rodents or evidence of it. The attic could have low or no insulation, which contributes to low-efficiency home and high utility bills down the road. Make sure the attic is properly inspected. Roof Inspection is a Must Water penetrates through rain boots on the roof. Roof repair or replacement is one of the high-ticketed price items in flipping a house. Almost all investors selling in the summertime will ignore roof repairs because shingles are dry and leaks do not show. If they are selling in a rainy season, they will do minimum repairs to cover any issues. The home inspector will climb and take photos. He also could recommend a roof specialist if he suspects major issues. Watch for mildew on shingle edges, missing shingles, debris from adjacent trees, and any patches recently done. Ask the seller to do all repairs Seller should agree to do all health and safety issues that appear on any and all inspection reports. Not all sellers agree to all repairs requested. As a buyer, you need to weigh in the cost of any items that are left unrepaired. Such items could jack up the home price for you and you might be better off buying a different property that do not have such issues. Pick Best Time to Buy a Distressed House Rain season is the best time to buy a House: Flipped homes are sold all year round. Buyers should buy flipped homes winter season and even best during the rainy season. Make sure to schedule an inspection on a rainy day! Why? Because only rain will show you if there are any leaks in the roof. Only rain will show the condition of the crawl space, which sometimes functions as a water collection pot. If that’s the case, major work needs to happen to divert water from going under the house and causing thousands of dollars in damages. The dual-pane windows will fog or you will see water condensation inside, which is evidence of the failing seal of the windows. Call, text, or email for advice on any issues you might have or to hire a realtor. Do You Want to Buy a Flipped Home? A professional realtor will handle your transaction and related inspections: Make sure that your realtor is a savvy agent when it comes to inspections. Your realtor needs to be equipped with sufficient knowledge about what to look for in a flipped home. Having fresh paint, granite countertop, new kitchen cabinets, and new floors might only be a trap for first-home buyers. Do not fall into that trap. What is hidden under and behind those nice finishes could be a deal breaker if you are lucky to discover them. For all your questions, contact me.
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