November 16, 2014

Home Inspection Issues: Problems related to heating systems.

Filed under: Property Inspection — Chuck @ 9:23 am

With winter about to begin with a vengeance, some of the most worrisome items that might show up on an inspection report include those related to the systems that keep you warm and cozy at home. Especially this time of year, you don’t want heating problems.

That’s true whether you hired an inspector to help evaluate your home being buying or to help you figure out what kinds of repairs might add value to your home before putting it up for sale. Keep in mind, though, that many of the items flagged on inspection reports are related to routine maintenance – or the lack thereof – or to minor problems that can be easily remedied.

Common Minor Heating System Issues

Minor issues may include such things as dirty air filters on a heating pump system that compromise performance and force the unit to work harder.

• The pilot light on a gas-fired furnace may have gone out, and in that case you’ll want to contact your gas company and have them send out someone to reignite it.

• A radiator and boiler system may need annual maintenance including draining the old water or repairing faulty valves on individual radiators.

• A heating system could be inoperative because of something as basic as a broken thermostat, too, or the registers that open up to let heat into your home from the ductwork may be stuck, blocked, or in need of repair or replacement.
• More serious issues may be related to a lack of safe, adequate ventilation of dangerous gases that are the byproduct of heating units including space heaters, furnaces, and fireplaces.

• The inspector may also recommend that a furnace be checked to ensure that the heat exchanger or other major components are in proper working order.

• If duct work is not properly installed, that can be a red flag. The same goes for chimneys that are not properly installed or insulated away from flammable materials like wall studs.

What to Do Next
There are a number of other issues that could show up on an inspection report, because there are many different types of heating systems and they each have multiple components.
But virtually anything that the inspector finds can be carefully investigated and properly addressed by a qualified contractor. So study the report, ask any questions needed to get clarification, and then follow the inspector’s suggestions.

In most cases you’ll be advised to contact a qualified HVAC professional and have them come to the property and take a closer look. If you have a wood-burning fireplace you may need to call a chimney sweep or a masonry contractor who specializes in fireplaces.
Keep in mind the scope of a typical home inspection may not cover an in-depth investigation of components such as furnaces and chimneys. That’s why many times the report will recommend that you seek help from a qualified professional who is trained to evaluate those kinds of issues.

After the Contractors Come
If repairs are warranted, the buyer and seller need to decide whether they need to be done prior to closing or whether they can be postponed. They will also need to negotiate regarding any costs related to consultation with the HVAC expert or any repairs that are necessary. Normally either the buyer will pay them or they will give a discount to the seller to offset that expense, unless both parties agree to another financial arrangement.

If the mortgage company, for example, finds that the heating system is inoperative then you will most likely be required to fix it before they will approve and fund the loan. But if it is a relatively minor issue then you may prefer to take care of it later in order to facilitate a faster closing with no annoying delays.

Real Estate Insight: Now may be the time for your clients to lock in their mortgage rates and refinance.

Filed under: Real Estate — Chuck @ 9:21 am

It has been a long time since “refi fever” reached epidemic levels, but according to a recent news report from Bloomberg homeowners are again rushing to refinance. The trigger that set off the surge of loan applications was a drop in fixed 30-year mortgage interest rates below the 4% level. With rates that cheap it can make a lot of financial sense for some homeowners to shift out of higher-interest loans or those with unpredictable variable interest rates.

• Freddie Mac, one of America’s mortgage industry leaders, announced that within the past few weeks rates on 30-year fixed mortgages dropped to the lowest levels since last summer.

• That happened after a brief rise in rates during the month of September. When rates headed higher, many borrowers assumed that they had missed their last good opportunity to refinance, since most economists expect rates to go higher and higher as we head into 2015.

• Some lenders have seen the number of loan applications they are handling increase more than 100% within the last month, as rates have hovered at or below the 4% benchmark for four consecutive weeks rates.

• Many borrowers are capturing rates of just 3.85%, and some are getting even better bargains. One jumbo loan lender told reporters that he had processed a jumbo for just 3.63%. That’s a fantastic rate, particularly since jumbo loans generally cost considerably higher than conventional loans.
There is the potential for rates to move quickly, however, since lenders are competing fiercely to lure customers from their competitors and global economic factors are rather volatile right now. Oil prices are low, for example, but the situation in oil-rich countries in the Middle East remains volatile. The economy in North America is doing well, too, but in other places like China and Europe there are fears of recession. Some lenders are having to change their rate sheets as many as five or times a day, since rates are fluctuating so fast. What this means for real estate agents and their clients is that if they want to take advantage of the low-rate environment, they should act without delay.

• Even waiting a day or two can mean losing the rate a customer wanted in order to accomplish a refinance or to borrow with a new loan to buy a home and still qualify with manageable monthly payments.

• Lenders are already backlogged, too, because after trimming their staff to save money during a sluggish real estate economy they are now understaffed, overworked, and unable to speedily process applications.

Each of your clients will have to decide for themselves whether or not this is a good time to refinance, because everyone’s financial situation is unique. But a good way to help them figure it out is to have them sit down with a lender and crunch the numbers. They need to be sure to factor in the cost of refinancing, too, including any points and fees they have to pay the lender as well as expenses for things like appraisals.
Here’s a simple example:
• Let’s say that the homeowner can lower their monthly payment by $100 by refinancing their existing mortgage, and that the total cost to refinance will be $1,500.

• That means that it will take them 15 months just to break even ($100 saved each month X 15 months = $1,500). So if they are planning to sell their house and move two years from now, it may not be worth the trouble to refinance.

• But if they plan to live in the home and pay on that new mortgage for another 10 years, then after the first 15 months they will start saving $1,200 a year. Over a period of 8-9 years that adds up to savings of more than $10,000.

Keep in mind, too, that banks are requiring more documentation these days, so you need to encourage your clients to get their paperwork in order and start the application process as soon as they can. Otherwise delays beyond their control at the lender could mean that they miss the boat in terms of getting a cheap loan before interest rates move higher.

Homeowner Tips: 6 Chores to do before the holidays get too busy.

Filed under: Home Owner Tips — Chuck @ 9:20 am

Since weather never takes a vacation and homes continue to be impacted by the passage of time that cause them to gradually deteriorate, home maintenance needs to be done all year ‘round. But many homeowners want to take a break from those weekend chores during the holiday season. November offers one of the last good chances for you to catch up on home maintenance tasks and try to get ahead at bit, so that you can then get away with doing less between Thanksgiving and New Year’s Day.

What to Do Right Now
Snow is already falling in many parts of North America, and once winter takes hold there are some important kinds of home maintenance tasks that will become nearly impossible. You’ll have to wait for springtime to do some of them, so don’t procrastinate on these.

Here are half a dozen items for you to-do list to get taken care of right away:

• Clean the Gutters

With autumn leaves now down, do not put off cleaning out your gutters any longer. Otherwise those twigs and leaves that are clogging them now will block them when winter rain, sleet, and snow arrives. That precipitation will seep into places where once it freezes and expands it will become a damaging wedge.

• Stock Up on Supplies

When December comes you will probably want to reserve your free time for shopping for gifts. So do the home maintenance project shopping now, stock up, and get those trips to the hardware store out of the way. You’ll probably want deicer, pipe insulation material, caulk to seal windows and doors. Need a new space heater, fire extinguisher, or kerosene for your back-up generator? Add that to the shopping list.

• Check Your Snow Removal Equipment

Do you need a new snow shovel? Have you done the routine maintenance on your snow blower? Do you need filters, spark plugs, fuel, or a heavy duty extension cord? Check those inventories now. You do not want to be in short supply when an early snowstorm hits, because that’s when everyone who failed to plan ahead will be buying all their items and clearing the shelves.

• Call Your Suppliers and Contractors

If you have a chimney or stove pipe that needs to be cleaned, you should have already booked an appointment with your chimney sweep. Consider this your last chance before their calendar gets booked-up for the season. The same goes for your firewood supplier or the company that services your furnace or boiler.

• Wrap Your Pipes

The same goes for wrapping pipes with insulation. If you haven’t done it, don’t delay another day or it could leave you with a burst pipe and lots of regrets. Be sure there are no open or broken windows in unheated basements, too, and if you have not yet put away the garden hoses that’s a great idea. Otherwise freezing could rupture them and that is a real waste of money if you have a perfectly good hose.

• Check Your Emergency Supplies

Last but not least, be sure to double check all your “go-kits” and emergency back-up supplies this weekend so that you can relax and really enjoy the holidays – even if you do wind up going off the grid involuntarily during a surprise storm or electrical outage. All homes need a stash of candles, flashlights, batteries, food, and other emergency provisions stored away “just in case.”
Who knows? Your kids may even enjoy a power outage as a fun adventure, like an indoor camping trip. But if you forgot to check your emergency rations and supplies you could be in serious trouble. Don’t wind up on the floor of a Red Cross shelter just because you didn’t run a few easy errands during the nicer weather of November.