Unless you just returned from being marooned in Borneo or were on a Yak expedition in Tibet, you're no doubt aware that our real estate market nationwide has bounced around from being red-hot to currently luke warm.
This uncertainty creates a lot of concerns by sellers and buyers alike. What is a home really worth? What offer should I accept? What if I get more than one offer? What is an escalation clause? What are my risks in accepting an offer with an escalation clause? How can I be sure my home will appraise at the agreed upon sale price? Do I lose my sale if the house does not appraise?
What happens if my buyer is not pre-approved? Does "pre-approved" really mean the buyer is fully approved to buy my home? What happens if I accept an offer and the buyer then comes to me with a long list of repairs from the home inspection? Do I have to make the repairs? Does the sale fall apart if I don't make them? What information do I need to keep the buyer from sueing me later if he finds something I didn't disclose? The list is almost endless.
Answers to such questions are critical to the successful sale of your home. A real estate attorney or an experienced real estate team can answer those questions and more.
Monday, July 17, 2006
New Central Air and Heat Pump Regulation
As of January 2006 the US Department of Energy requires stricter energy efficency in all heat pumps and central air systems. In an effort to boost energy efficiency by 30%, all newly manufactured air conditioning and heat pump systems are now required to be 13 SEER ("Seasonal Energy Efficiency Rating") or greater. In previous years the standard was 10 SEER.
One outcome of the new 13 SEER standard is that they are twice as large as 10 SEER units. Therefore they will need larger pads and will take up more space in warehouses and delivery trucks. It also means they may require more than one person to install. This means of course more man-hours and higher costs to both contractors and consumers.
There is an excellent way to avoid these potentially higher costs…a home protection plan. Such plans protect all the major components in your home, such as the furnace, air-conditioner, water heater, electrical, plumbing, and more.
Let us know if you wish more information on this topic.
One outcome of the new 13 SEER standard is that they are twice as large as 10 SEER units. Therefore they will need larger pads and will take up more space in warehouses and delivery trucks. It also means they may require more than one person to install. This means of course more man-hours and higher costs to both contractors and consumers.
There is an excellent way to avoid these potentially higher costs…a home protection plan. Such plans protect all the major components in your home, such as the furnace, air-conditioner, water heater, electrical, plumbing, and more.
Let us know if you wish more information on this topic.
The Power of Compounding
Mortgage interet rates are low but heading higher. Suppose you wish to increase your mortgage payment to reduce your dept faster. Let’s see how much interest you would save if you paid off your loan sooner.
Let’s assume you have a $300,000 mortgage at 6% interest-only on a 30-year note. Your monthly payment is approximately $1799.00 on a 30-year interest-only note. The interest paid over 30 years is about $347,000. Add that to the $300,000 purchase price and you have a total of $647,000 into the total payment.
However, if you increase your monthly payment just $100 to $1899.00, you will reduce your payment term by 4 years and save $70,000 in interest. If you boost your payment by $200 to $1999 per month, you will shorten your payment period by almost 7 years and save almost $120,000.
Some precautions to take…ask you lender if you have a pre-payment penalty on your contract, and talk to your CPA or real estate attorney about tax consequences.
Let’s assume you have a $300,000 mortgage at 6% interest-only on a 30-year note. Your monthly payment is approximately $1799.00 on a 30-year interest-only note. The interest paid over 30 years is about $347,000. Add that to the $300,000 purchase price and you have a total of $647,000 into the total payment.
However, if you increase your monthly payment just $100 to $1899.00, you will reduce your payment term by 4 years and save $70,000 in interest. If you boost your payment by $200 to $1999 per month, you will shorten your payment period by almost 7 years and save almost $120,000.
Some precautions to take…ask you lender if you have a pre-payment penalty on your contract, and talk to your CPA or real estate attorney about tax consequences.
How to select a good REALTOR(r)
Your first order of business is to select first-rate Realtors(r) who are knowledgeable about the area in which you wish to buy or sell. If you are selling, your agents should be enthusiastic about your home (believe me, if they are not, you'll hear it in their voice or manner). You want agents who are truly enthusiastic about your home. Conversely, don't hire "yes" persons. You want agents who are willing to warn you about issues that may hurt your chances of selling at top price.
For example, my partner and I always recommend our sellers hire a professional inspector to learn about serious problems before putting your home on the market. That way, if your home needs a new roof or has water in the crawlspace, you can correct it and turn a negative into a positive.
This positive action helps you in two ways: (1) You may be able to account for that cost of repair when bargaining your sale price. (2) Eliminating a problem ahead of time gives the buyer confidence you are trying to present your home without serious issues. We also offer great tips on how to minimize cost and maximize profit.
If you are buying a home, you want brokers who are keenly aware of matters that can hurt you as a buyer. For example, can they provide you with testimonials from former satisfied clients? Select agents who recommend a home inspector who (1) is computerized and (2) takes pictures of problem areas. Seeing is believing when you're asking a seller to replace a roof or repair dry rot in the crawlspace.
For example, my partner and I always recommend our sellers hire a professional inspector to learn about serious problems before putting your home on the market. That way, if your home needs a new roof or has water in the crawlspace, you can correct it and turn a negative into a positive.
This positive action helps you in two ways: (1) You may be able to account for that cost of repair when bargaining your sale price. (2) Eliminating a problem ahead of time gives the buyer confidence you are trying to present your home without serious issues. We also offer great tips on how to minimize cost and maximize profit.
If you are buying a home, you want brokers who are keenly aware of matters that can hurt you as a buyer. For example, can they provide you with testimonials from former satisfied clients? Select agents who recommend a home inspector who (1) is computerized and (2) takes pictures of problem areas. Seeing is believing when you're asking a seller to replace a roof or repair dry rot in the crawlspace.
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