Archive for August, 2008
ENERGY STAR RATINGS CAN BE DECEPTIVE
INDUSTRY NEWS, REAL ESTATE PRACTICE, SHASTA COUNTY, TIPS FOR BUYERS, TIPS FOR SELLERS, TIPS FOR SENIORS
Some new housing developments in the Redding/Shasta County area build homes that are above minimum energy codes. Earth Advantage homes built by Ochoa and Sheehan claim to be 20% more efficient than other homes built to barely meet energy code requirements. Part of the equation to calculate a particular homes overall energy efficiency include appliances that are “Energy Star” compliant.
CONSUMER REPORTS uncovered some interesting findings while testing efficiency of appliances bestowed this badge of honor. CU’s tests, which are tougher than the Department of Energy’s, better resemble how these appliances are used by the average consumer. One LG refrigerator claims to use 547kW/year. Real-life tests found double that. Why? DOE’s test allows the ice-maker to be off during testing. On this model, shutting off the ice-maker also cuts off the cooling to the door mounted ice-making compartment.
This “highlights a fundamental drawback to Energy Star, a 16-year-old federal program administered by DOE and the EPA that covers more than 50 product categories and is voluntary for manufacturers,” the article points out. To qualify for the Energy Star rating a product must use about 10-25% less energy than the DOE’s maximum amount allowed for that product category.
Theoretically, about 25% of the products in a category should qualify. 92% of all dishwashers qualified. Standards were recently tightened, now 50% qualify. 67% of oil-fired boilers qualified, as did 60% of dehumidifiers, both rare in this area. Furthermore, manufacturers test their own products and the results are not verified, according to the article.
70% of consumers have heard of Energy Star ratings. Very few know the details of this program or how the products are tested. Standards are raised over time, but it is a lengthy process that does not respond quickly to technological advancements.
The next time you see that Energy Star symbol on the Energyguide label, pause, think and take the rating with a grain of salt.
If you seek an agent with a 100% satisfaction rating as determined by independent survey firm QSC, contact me:
530-224-6767 or 530-941-7492
BRAD GARBUTT
REALTOR/BROKER ASSOCIATE
REAL ESTATE PROFESSIONALS GMAC
QUARTER CENTURY LOCAL REAL ESTATE EXPERIENCE
NOW THAT YOU OWN A HOME, SAVE MONEY WITH THESE ENERGY SAVING IDEAS
REDDING LIFESTYLES, SHASTA COUNTY, TIPS FOR BUYERS, TIPS FOR SELLERS, TIPS FOR SENIORS
CONSUMER REPORTS just published October issue has some wonderful
tips most anyone can use to save thousands of dollars or watts in energy costs. It’s unlikely you would want to implement all these ideas at once, but keep them in mind for future reference. Here are their home related suggestions:
- Clean your refrigerator coils
- Skip prerinsing dishes (saves 6500 gallons of water/year)
- Wash clothes using cold water (saves $60/year)
- Put your PC to sleep(use standby or hibernating and save $75/year)
- Use power strips and turn everything off at once
- Open shades and blinds on cold days to allow solar heating, close at night to stop heat loss
- Don’t overload the dryer. It takes longer & clothes are wrinkled. Line dry if possible
- Use your slow cooker-it uses a lot less energy than your oven
- Check your local utility provider for rebate offers to replace old appliances
- Lower the heat before guests arrive, a house full raises the temperature 1-2 degrees
- Clean or replace furnace filters monthly. Clogged filters raise your electricity costs
- Use LED lights this holiday season. You can save $11/year
- Seal HVAC ducts. It can save 30% in energy costs
- Lower water heater temperature to 120 degrees. Knocks 5% off utility bills
- Weather strip old windows and doors. Can save 15-30% in heating/cooling costs
- Use motion/ light sensors on outdoor lights
- Use high-efficiency shower head-can save 50% in hot water use
- Change to low-flush toilet-save 4,000 gallons per year
- Drain a bucket’s worth of water from your water heater to remove sediment.
- Move your thermostat away from windows and doors to an inside wall to reduce unnecessary cycling
- Add insulation. More than 80% of older homes are under-insulated. Save at least 10%
- Plant a deciduous tree on the west or southwest side of home to save energy year round
- Use supplemental heaters wisely. Space heaters work well only if you keep the rest of the house chilly. Fireplaces using wood can suck more heat out than they put back in
- Get an energy audit. They pinpoint energy leaks. Some areas offer free audits.
There are many other things we can do to leave a lighter energy footprint as our legacy. I will post more ideas shortly. In the meantime, if I can assist you with any real estate matter, Contact me:
530-224-6767 or 530-941-7492
BRAD GARBUTT
REALTOR/BROKER ASSOCIATE
REAL ESTATE PROFESSIONALS GMAC
QUARTER CENTURY REAL ESTATE EXPERIENCE
MORTGAGE FRAUD CONTINUES TO PLAGUE INDUSTRY
HOME LOANS, INDUSTRY NEWS, REAL ESTATE PRACTICE, SHASTA COUNTY, TIPS FOR BUYERS, TIPS FOR SELLERS, TIPS FOR SENIORS
Mortgage Asset Research Institute reported recently that reported incidents of fraud were up 42% the first quarter of 2008 compared to a year ago. MARI named Florida, California, Illinois and Maryland as having the biggest problems with mortgage fraud. Misrepresentations are concentrated in loans originated for properties in urban areas. Florida was the worst, with 1 in 4 loans found to have material misrepresentations.
Here in California, more than half the loans found to have misrepresentations are in the Los Angeles area. 94% of investigations in Illinois are in Chicago. 25% of reports in Maryland were in Baltimore. Another area of the country, Detroit, represented 56% of all fraud reported in Michigan. Most of the fraud centers around “general application misrepresentation“. Income and employment were also misrepresented and many of the fraud cases involve identity theft and identity fraud.
The prime opportunity to stop this fraud lies in the origination and prefunding processes. Once the fraud has been committed and the crooks get the money, it becomes very expensive to unwind or catch the guilty parties. Lenders that allow such loans to fund attract more fraud as the criminals see how they can beat the system.
Hopefully, if these loans are scrutinized half as much as the loans my Shasta County clients are trying to get approved, this problem should get nipped in the bud. In many cases, the borrower and the loan officer conspire to defraud the lender. The fraud can also include escrow officers, notaries, appraisers and yes, even real estate agents.
In my practice, I have come across lenders, usually from out of the area, that suggest clearly illegal creative financing schemes that seek to put one over on the lender funding a particular loan. I always nix those deals even if it means my buyer must find another lender or not buy at all or my seller has to put their home back on the market. No commission is worth losing my license to practice real estate. Contact me if you suspect something fishy about a real estate transaction you are involved with, I’m happy to provide free consultation:
530-224-6767 or 530-941-7492
BRAD GARBUTT
REALTOR/BROKER ASSOCIATE
REAL ESTATE PROFESSIONALS GMAC
QUARTER CENTURY OF LOCAL REAL ESTATE EXPERIENCE
JOHN McCAIN HOUSING PLATFORM:HANDS OFF!
INDUSTRY NEWS, REAL ESTATE PRACTICE
A few posts back I highlighted Barack Obama’s housing policy statement. It won’t be easy to do the same for John McCain because he has commented on the devastating impact the housing crisis but doesn’t have a multi-point plan on his website as of yet. His positions must be gleaned from speeches he has given regarding the housing market.
He believes the steps taken by the government should be limited in focus. “I believe the role of the government is to help the truly needy, prevent systemic economic risk and enact reforms that prevent the crisis we are currently experiencing from ever happening again,” he said.
He further stated “deserving” homeowners need to be helped and he is willing to consider “any and all proposals” that would accomplish that goal. He makes a point that he is opposed to any large government programs that would be a “bailout” for banks or real estate speculators. “This is a complex problem that deserves a careful, balanced approach that helps homeowners in trouble, not big banks and speculators that acted irresponsibly. I again call on our lending institutions, where possible, to step up and help Americans who are hurting in this crisis,”he said.
The fact that McCain does not have a detailed checklist of proposals is not out of step with his policy. He clearly does not want to reward those that made risky financial decisions including flippers and banks that exercised lax oversight approving loans. “Those reforms should focus on improving transparency and accountability in our capital markets-both of which were lacking in the lead-up to the current situation”.
Obama and McCain differ in their planned response to the ailing housing market. The winner of the presidential race will still need to convince the House and Senate their plan will best serve the public good as it pertains to solving the housing crisis. We all know campaign promises can, and usually are, broken. Perhaps the housing market will improve enough before a new president is sworn in, nixing any further government intervention.
Contact me if I can assist you with any real estate need:
530-224-6767 or 530-941-7492
BRAD GARBUTT
REALTOR/BROKER ASSOCIATE
REAL ESTATE PROFESSIONALS GMAC
QUARTER CENTURY LOCAL REAL ESTATE EXPERIENCE
FHA WILL ELIMINATE RISK-BASED PRICING FOR ONE YEAR
FHA LOANS, HOME LOANS, TIPS FOR BUYERS
Just announced this week, FHA loans will temporarily eliminate a sliding scale charge to borrowers of an up front fee based on their credit standing. In May of this year, FHA implemented a policy of risk-based pricing which charged an upfront fee to borrowers from 1.25% to 2.25% depending on their credit rating. The theory behind risked based pricing is to allow borrowers with good credit to pay less while higher risk borrowers would pay more in loan fees.
Starting October 1st, FHA will suspend risk base pricing for 1 year. Congress included a provision in HR 3221 to set the fee at a flat 1.75% for all borrowers. However, borrowers behind in payments refinancing with an FHA loan will be charged a 3% upfront premium. Premiums for streamlined refinances for borrowers in good standing will be 1.5%. Annual mortgage insurance premiums are also charged based on the loan-to-value and the term of the loan. Contact an FHA loan specialist for details or call me for a referral.
This change will aid those buyers or homeowners wishing to utilize FHA loans for purchases or refinances. 100% financing options are scarce.FHA has seen a surge in popularity because of the low downpayment required, typically 3% of the purchase price.
HR 3221 also created a new program called Hope for Homeowners which provides $300 billion for refinancing of delinquent loans if lenders agree to write down the principal owed in line with current market value and borrowers share future equity gains with FHA when the home is sold. This equity sharing arrangement allows borrowers to save their home from the auction block, lower their payments so they can stay in their home and save their credit from more serious damage.
If you have questions about this or any real estate matter….contact me:
530-224-6767 or 530-941-7492
BRAD GARBUTT
REALTOR/BROKER
REAL ESTATE PROFESSIONALS GMAC
QUARTER CENTURY LOCAL REAL ESTATE EXPERIENCE
ON SALE NOW-THE AMERICAN DREAM!
FHA LOANS, HOME LOANS, SHASTA COUNTY, TIPS FOR BUYERS
How does 40% off sound to you? It’s hard to resist a sale of that magnitude! That is how much some California home prices have declined since the market peaked in the Fall of 2005. Redding & Shasta County are no different, we too, have seen declines in the 20-40% range. Combined with low interest rates and sellers willing to assist first-time buyers with credits for closing costs, now may be the time to buy.
In recent weeks, statistics have been released that show the steep decline in prices is slowing, sales are up in large metro areas such as Sacramento, San Diego and Los Angeles and the pace of foreclosure activity is decreasing. Combine that news with the fact President Bush signed into law HR 3221, The Housing Recovery Act of 2008, which has many provisions to stimulate purchases of homes, help current homeowners in trouble keep their homes by refinancing and reward homebuyers that buy now with a tax credit.
Downpayment Assistance Programs have seen a surge in popularity. Barely used in the heyday of the the real estate boom because sellers were reluctant to comply with some of these programs unique requirements, in the past two months, I have had two different buyers utilize this program in conjunction with FHA financing. Redding and Shasta Lake City allowed them to get $60,000 & $80,000 respectively in the form of a silent second mortgage with no payments or interest. They are required, however, to share a portion of equity appreciation when the property is sold. Both buyers now have mortgage payments less than what they would pay to rent the homes they purchased! And, unlike rent, their mortgage payments will never change during the time they own their homes.
The length of time a home stays on the market is decreasing in some areas of California but not here in Redding. Since many of our buyers move here to retire, expect sales to slowly increase and days on market to decrease as those sellers from the city make their move this way. In Redding/Shasta County, the majority of sales are concentrated in the under $350,000 price range. Of the 168 homes that sold in July, only 32 homes, or 19%, had a list price over $350,000. Both first-time buyers and wealthy speculators are snapping up distressed properties at the lowest price tier in our marketplace. Very few homeowners are moving laterally.
It is easy to become overwhelmed with the stats being quoted by mainstream media so I believe it is more important to focus on what is happening here. What happens elsewhere in the state and country will eventually impact our market, but we must base our decisions today on current market conditions in our local market.
If you need a real estate expert on your side when it comes to buying or selling real estate. contact me:
530-224-6767 or 530-941-7492
BRAD GARBUTT
REALTOR/BROKER ASSOCIATE
REAL ESTATE PROFESSIONALS GMAC
QUARTER CENTURY REAL ESTATE EXPERIENCE
MORTGAGE WORKOUTS REACH RECORD LEVELS OF SUCCESS
HOME LOANS, INDUSTRY NEWS, SHORT SALES, TIPS FOR SELLERS
HOPE NOW, a private alliance of investors, mortgage servicers and credit counselors completed more than 181,000 mortgage workouts in June alone on properties that otherwise would have gone into foreclosure. The second quarter total for 2008 saw 522,000 workouts completed. These numbers far exceed goals and expectations set by this private sector alliance.
Jeff Davi, California’s Real Estate Commissioner, commented at the January 2008 California Association of Realtor’s business meetings that more than 50% of homeowners in trouble never tried to contact their mortgage holder to discuss workout options. Based on this news release, it sounds like mortgagees are getting the message they have options and need to explore them before throwing away their house keys.
The goal of the loan workouts facilitated by this organization are intended to be permanent changes that will allow the homeowner to stay in their home for as long as they wish to live there. Subprime loans represent more than half of all the loans approved for modifications.
The alliance estimates industry-wide:
- More than 1.9 million foreclosures have been prevented since July of 2007.
- Workouts in June increased by 14,000 over May to 181,000.
- Approximately 105,000 of the workouts in June involved repayment plans with the balance receiving loan modifications.
HOPE NOW statistics are arrived at by extrapolating data from various regulators including the Office of the Comptroller of the Currency (OCC) and the Office of Thrift Supervision (OTS).
Some additional numbers of interest include:
- Roughly 928,000 subprime loans are scheduled to reset the first 6 months of 2008.
- Loans that were resetting saw less than 1% start the foreclosure process.
- More than 57,000 of these loans have been modified.
- 41% of the subprime adjustable rate loans scheduled to reset were paid in full when the homeowner either refinanced or sold the property.
If you or anyone you know needs help with a mortgage they can no longer afford, give HOPE NOW a call @ 888-995-HOPE. If you have any questions about options to keep your home or sell using a short sale, contact me:
530-224-6767 or 530-941-7492
BRAD GARBUTT
REALTOR/BROKER ASSOCIATE
REAL ESTATE PROFESSIONALS GMAC
QUARTER CENTURY LOCAL REAL ESTATE EXPERIENCE
CALIFORNIA LEGISLATURE WORKING ON BUDGET, REAL ESTATE LAW CHANGES
REAL ESTATE LEGISLATION, SHORT SALES
Constitutionally speaking, the legislature is suppose to adjourn by the end of August. However, there are hundreds of bills awaiting action and we are still without a state budget.
SB 1240 (Machado) Expanded Mortgage Broker Regulation- would establish a comprehensive mortgage regulation system in the Department of Real Estate (DRE). California is one of only two states in the country that does not require a separate license for mortgage brokers. This bill will:
- Set up a targeted regulatory system within DRE without requiring brokers to have a separate license.
- Allows California to comply with a new federal mandate for individual licenses for mortgage loan originators.
SB 1737 (Machado) C.A.R.-Sponsored Mortgage Loan Disclosures-would require notice to all parties whenever an agent undertakes representing a party and arrange a loan in the same transaction. This bill also:
- contains prohibitions on manipulating broker price opinions (BPO’s) in short sales in order to squelch another agent’s transaction.
- contains expanded ability for the DRE to ban a licensee from further activity as part of a punishment for loan-related violations.
SB 1386 (Lowenthal) Point-of-sale mandate bill that would have required installation of Carbon Monoxide Detectors in properties at the time of sale. This bill was changed to apply to all properties by a date certain. C.A.R. removed opposition when the bill was changed from a point-of-sale mandate to a comprehensive requirement. C.A.R. fights all point-of-sale mandates because our association believes if a law is needed regarding real property it should apply to all properties not just properties being sold. This bill contains:
- a liability safe-harbor for real estate agents
- requirement that the property owner be given a 30-day notice to comply before being cited for a violation.
I will keep you informed of the results of this year’s legislative actions concerning real estate after they adjourn for the year in a subsequent post. If you have any questions about these bills or any real estate matter, contact me:
530-224-6767 or 530-941-7492
BRAD GARBUTT
REALTOR/BROKER ASSOCIATE
REAL ESTATE PROFESSIONALS GMAC
QUARTER CENTURY LOCAL REAL ESTATE EXPERIENCE
DON’T LET BUYING A HOME WITH A SEPTIC SYSTEM GET STINKY
HOME INSPECTIONS, REAL ESTATE LEGISLATION, TIPS FOR SENIORS
Once you leave the city limits, it is very common to find homes for sale with private sewage disposal systems. These are known as septic systems. Each system is designed to serve a specific size home based on soil conditions at that home site. Depending on the soil depth and type, septic systems may be standard or engineered. The cost difference to install and maintain an engineered system can be substantial.
Standard systems consist of a concrete tank buried in the ground with inlet and outlet pipes near the top of each end of the tank. The top of the tank has two removable lids that provide access for periodic pumping. The outlet pipe leads to a leach field that consists of perforated PVC pipes laid in trenches filled with gravel. The leach pipes are usually buried only 1-2 feet deep. The liquids that are pushed into the leach field percolate into the ground and/or evaporate from the surface soil.
Engineered septic systems can cost as much as $50,000 for a large home. Some require dirt to be imported to create a mound if the native soil does not percolate adequately. Pit leach fields are used in parts of Tehama County. Large holes are dug deep into the ground and filled with small stones. This replaces the conventional leach field. Sand filters and other more complex systems have been developed to address sewage disposal on some properties with shallow or hardpan soils.
It is the standard of practice in this area to ask the seller to have the septic system pumped and inspected by a licensed septic service company. The cost is $350-$500 depending on the gallons pumped. Most tanks range from 1000-2000 gallons. The size is usually based on bedroom count. Once the tank is pumped, the tank is inspected for cracks, broken inlet or outlet pipes and leach field functionality. A leach field failure is usually indicated when liquid flows back from the leach field into the tank after the tank has been emptied. The leach field can fail due to the leach pipes becoming clogged or broken (don’t drive over your leach field), a rise in the water table or poor soil conditions.
California is in the process of developing statewide septic regulations. Currently, septic systems are approved and regulated by county environmental health departments. Once these regulations are implemented, minimum soil depths of 4′ will be required to bedrock or a water table in order to obtain a septic permit. All septic systems would have to be pumped and certified every 5 years. Septic repairs may require state approval. Budget problems in California have slowed the creation of the new bureaucracy that will implement these regulations.
I have only scratched the surface with regards to issues surrounding septic systems. If you have any questions, contact me:
530-224-6767 or 530-941-7492
BRAD GARBUTT
REALTOR/BROKER ASSOCIATE
REAL ESTATE PROFESSIONALS GMAC
QUARTER CENTURY LOCAL REAL ESTATE EXPERIENCE
REDDING COMMUNITY CREEK CLEAN-UP GROUP SEEKS DONATIONS
LOCAL GOVERNMENT, REDDING LIFESTYLES, REDDING RECREATION, SHASTA COUNTY
The third annual Community Creek Clean-Up is set for Saturday, September 6th, from 8am to noon. The event will conclude with a complimentary lunch and swim at the Redding Aquatic Center. The McConnell Foundation has generously donated funds and food for the event. If you are a member of a service club that might want to help, call 225-4505 and leave a message for a return call from one of the organizers.
This year, the community volunteers will return to Churn Creek, the site of the inaugural event. Clover Creek, from Hwy 44 south to the Sacramento River also will be targeted for clean-up. In the past, organizers furnish volunteers with gloves and bags. Water and snacks may also be available. Last year, volunteers were given a T-shirt to mark their volunteer efforts. The BBQ lunch included hot dogs and hamburgers and ice cold drinks served by the pool.
If scouting waterways for trash is not your bag, consider volunteering for checking in participants. Each volunteer must sign waiver forms and review safety tips before striking out on their designated stretch of creek. Staging areas will be predetermined and volunteers will meet there and divide up into groups. It is rewarding to know that after this event the creeks will have been relieved of more than 100 tons of trash that ultimately would end up in our pristine waterways. Call 225-4505 for information or visit www.shastacreeks.com for details.
If you have any questions about this or any real estate matter, contact me:
530-224-6767 or 530-941-7492
BRAD GARBUTT
REALTOR/BROKER ASSOCIATE
REAL ESTATE PROFESSIONALS GMAC
QUARTER CENTURY LOCAL REAL ESTATE EXPERIENCE
PREMIER SERVICE® is the focus of Real Estate Professionals/GMAC. We are located in Redding, CA (at the North end of the Sacramento River Valley) in the midst of river, lake, ranch and mountain terrain.
Our Customer Satisfaction Rating, based on an independent survey, exceeds 97%. This is reflected in our 2008 "QUIE" Award recognizing the TOP 10 REAL ESTATE COMPANIES in NORTH AMERICA! REP/GMAC in #2.
