Feb 7, 2014 | Around The Home
If your monthly energy bill has started to make you cringe, then it might be time to conduct an energy audit on your home. Hiring a professional can cost you a pretty penny. So save the dough and examine your home yourself.
With a few tools and the tips below, you can identify problem areas that could be costing you every month.
Energy Bills
Analyze last year’s energy bills. Each statement should itemize the energy you use each month in kilowatts. Note any spikes that could indicate problems with one of your appliances or the structure of your home.
Call your energy provider and ask what the average cost is for a home of your size in your area. Then determine how extensively you need to conduct your energy audit.
Air Leakage
Warm or cool air escaping from your home can cost you more money and overstress your appliances. To search for cracks that air might be seeping through, light an incense stick and walk into each room of your home on a windy day. The smoke from the incense stick will highlight problem areas and you can mark them with painters’ tape.
Heating And Cooling System
Thoroughly inspect your heating and cooling equipment. Most homeowners neglect to follow appliance manufacturers’ recommendations of doing this once a year. Make sure your system is working properly.
Change filters and examine ductwork. If your appliances are older than 15 years, consider replacing it with a newer, more energy-efficient model.
Insulation
Go up into your attic and check for insulation. If the insulation covers the joists, then there is probably enough to protect your home. Remove light sockets and use a flashlight to see if your walls have been insulated.
If not, you might want to have insulation blown in. Look for any stained or damaged insulation. This could be a sign of exterior leaks that need to be fixed.
Lighting
According to Energy.gov, lighting accounts for around 10% of energy usage. As part of your energy audit, reduce your use by replacing inefficient bulbs with incandescent or light-emitting diode (LED) bulbs.
Consider using lower-wattage bulbs in rooms that get a lot of sunlight and only turning on table lamps instead of overhead lighting at night.
Feb 6, 2014 | Uncategorized
The Mortgage Bankers Association forecasts $1.2 trillion in mortgage originations during 2014, a 32 percent decline from 2013. Here’s a look at more key stats projected for 2014.
- Originations: Purchase originations are projected to increase to $723 billion in 2014, up from $661 billion in 2013. In contrast, refinances are expected to drop to $463 billion, which will result in total originations of around $1.2 billion. For 2015, MBA is forecasting purchase originations of $796 billion and refinance originations of $433 billion as total volume holds steady. The MBA expects a decline in the share of sales paid for with cash, and higher average LTVs on purchase mortgages, due to the rise in home prices.
- Mortgage Rates: The MBA estimates mortgage rates will increase above 5 percent in 2014 and then increase further to 5.5 percent by the end of 2015. As a result, mortgage refinancing will continue to drop, and borrowers seeking to tap the equity in their homes will be more likely to rely on home equity seconds rather than cash-out refinances. The market will potentially see a small increase in refinances toward the end of 2015 as the Home Affordable Refinance Program 2.0 expires.
- Existing Home Sales: Sales are forecasted to hold fairly even with 2013— which should finish around 5.13 million—at about 5.12 million in 2014. The average median existing-home price is projected to be about $209,000, up 6 percent from 2013 year-end estimates.
- New Home Sales: Likely to grow to 508,000 in 2014, housing starts are forecast to reach 1.13 million in 2014 compared to an estimated 917,000 in 2013.
- Real GDP: Growth will remain relatively weak through early 2014, at around 2 percent, due to a variety of uncertainties, particularly over U.S. spending and tax policies linked to the debt limit debate. The MBA expects the economy will grow somewhat faster in the second half of 2014 as some of these issues are resolved.
- 10-Year Treasury Rate: The 10-year Treasury rate is expected to stay below 3 percent into early 2014, but then increase more rapidly in the second half of 2014 as the Fed tapers its asset purchases and subsequently phases out the third round of quantitative easing (QE3). The MBA expects the Fed to begin tapering its asset purchases in early 2014, and ending QE3 in September 2014. The Fed funds rate will be kept near zero until mid 2015.
- Unemployment: The unemployment rate is expected to continue on a downward path due to falling labor force participation and job growth in the range of 150,000 to 170,000 jobs per month. The MBA expects the unemployment rate will decrease to 6.9 percent in 2014 and 6.5 in 2015.
Source: Mortgage Bankers Association, National Association of Realtors and American Land Title Association.
Feb 6, 2014 | Home Selling Tips
Oh, the dreaded/happy DOM question: “How long has this house been up for sale?” If it’s your home for sale we’re talking about, you’re probably wondering about the split “dreaded/happy” bit. For that matter, whether you’re a buyer or a seller, you’re probably asking, “what the heck is ‘DOM’?”
Days On Market
“DOM” is the shortened industry term for Days On Market, used by the multiple listing services. It’s exactly what it sounds like: the number of days your home for sale has been on the market. This metric covers the time it actually goes on sale to the time the deal is closed.
Why Is DOM Important?
Remember the “dreaded/happy” part at the beginning of this article? As a buyer’s agent, I might gleefully answer, “Fifty days.” I say “gleefully,” because a house that has sat on the market for a long time is a good thing for my client.
The seller is probably more eager to sell than a month before, and is most likely willing to work a deal. An eager seller makes a happy buyer in most cases.
On the other hand, as a seller’s agent, I might not be so happy about it, and for the same reason. My seller is now an eager seller. I want to get the best deal for my client, but I know the buyer has the upper hand. It is then up to me to help my client get the home sold without giving away the barn, the pool, the tool shed and the tools.
Already, you may be beginning to understand how the DOM metric can affect the sale of your home.
The problem with the DOM metric is that it causes buyers and agents to build false assumptions. If a home has been on the market for an above-average length of time, we start to wonder, “what’s the matter with that listing?” Even though I know there are other reasons for a home to go static and not sell, many people automatically think there’s something wrong.
Reasons For An Extended DOM Metric:
- The Home May Be Overpriced – Nothing is wrong with the property itself; it’s just priced too high.
- Testing The Market – Although it’s a big mistake and agents will tell you so, some sellers test the market by throwing a high price on a home they don’t care if they sell – just to see if somebody is foolish enough to take it.
- Sticking To Your Guns – Often, sellers get fixed on a price and won’t budge, come hell or high water. They figure they can wait around until the market can meet their price, not the other way around.
- Renovations – Sometimes, a home will go on the market in the middle of renovations. The sellers aren’t ready to let the home be seen, so it just sits there.
- Availability – A growing problem is the lack of access to a home for sale. Sadly, agents and FSBOs alike seem to be unavailable when a buyer wants to view the home. Obviously, no viewing means no sale.
Don’t let your DOM get high because of simple mistakes. If you’re serious about selling your home, remember the five reasons above and make sure you aren’t doing them.
If you’re ready to sell your home with a professional who understands how to keep the DOM to a minimum, contact your real estate professional today.
Feb 5, 2014 | Homebuyer Tips
You’re ready to purchase a home, but you’ve looked at everything on the market and can’t find the perfect place. You’ve researched the school districts, neighborhoods and nearby amenities, and you know exactly in which area you want to live.
However, anything that comes on the market in that part of town gets snapped up immediately.
It’s time to get creative when it comes to buying a home. Start looking at places that are not currently for sale. You might have driven past your dream home, but you never thought of going the unconventional buying route.
Well, take a look at the tips below to see how you can close on a home without any other buyers knowing.
Look At Previously Listed Homes
Search homes that were on the market, but the owners took them off. Many homeowners let their listing expire and are waiting until the market improves. This is fortunate for you, because you know they are already interested in selling.
Research Online County Records
If you see your perfect home, but you don’t want to just walk up to the door and demand they sell their house, you can find their contact information online. Property records include the owners’ name, address, and, sometimes, their contact information. This will allow you to go through the proper channels of proposing an offer.
Consider A Real Estate Agent
A seller is more likely to take you seriously if a real estate agent brings the offer to them. Agents deal with sellers all the time and will be able to gage if the homeowners are interested.
They’ll also be able to tell you the right price to offer and how you should go about it. You’ll also have piece of mind that all the paperwork that comes with buying a home is completed correctly.
Write A Personal Letter
While all the guidelines say to keep personal feelings out of the home selling process, it’s practically impossible. A home is the place where you raise your children and make memories.
So write the homeowners a heartfelt letter about how you’d like to build a life in their current house. If they think you’ll care for their place as much as they do, they might entertain an offer.
Offer A Fair Price
Many homeowners are ready to upgrade, but hate the idea of getting their current residence ready to sell. They’d have to clean, clear clutter, stage and keep everything looking spotless until they close the deal — which can be quite a hassle.
So, make it convenient. Offer a price that won’t offend and will have them thinking how this could be a stress-free transition.
Feb 4, 2014 | Federal Reserve
According to a statement provided by the Federal Open Market Committee of the Federal Reserve, the committee has approved another reduction of the Fed’s monthly asset purchases.
The adjustment will be made in February and cuts monthly purchases of mortgage backed securities from $35 billion to $30 billion and monthly purchases of Treasury securities from $40 billion to $35 billion.
FOMC began reducing its asset purchase under its quantitative easing program in January, when the monthly purchases of mortgage-backed securities and Treasury securities was reduced from $85 billion per month to $75 billion.
Citing its goals of maximum employment and price stability, the FOMC said that it has seen consistent improvement in the economy and specifically mentioned a lower, but still elevated unemployment rate. The statement also indicated that the FOMC expected labor markets to improve.
FOMC Asset Purchases: How They Impact Mortgage Rates
The Fed initiated the QE program in an effort to control rising long-term interest rates, which include mortgage rates. Yesterday, the FOMC statement said that Fed expects its purchases of longer-term assets will continue to control long-term interest rates and mortgage rates while supporting mortgage markets.
FOMC’s statement reported that it sees the risks to its economic outlook and the labor market as having become nearly balanced. The FOMC is still looking for inflation to reach its 2.00 percent goal.
Fed Monetary Policy To Remain “Highly Accommodative”
The Fed intends to maintain a highly accommodative stance on monetary policy after the QE asset purchases end and the economy is significantly stronger. The current Federal Funds Rate of between 0.00 and 0.250 percent will be maintained at least until the national unemployment rate drops below 6.50 percent.
FOMC members reaffirmed their commitment to monitoring economic indicators as part of any decision to alter current QE measures or the Federal Funds Rate.
Indicators Mentioned In The FOMC Statement Include:
- Additional indicators of labor market conditions
- Inflationary pressures and expectations
- Readings on financial developments
FOMC statements have consistently included the committee’s assertion that no arbitrary benchmark alone will be sufficient for the committee to change either QE asset purchases or the Federal Funds Rate.
FOMC stated that it will seek a “balanced approach consistent with its longer-run goals of maximum employment and inflation at two percent.”
Although fears of tapering the Fed’s monthly asset purchases may persist, it appears that each FOMC decision to reduce asset purchases under the QE program indicates economic growth.
