Energy Efficient Mortgages Reduce Your Monthly Housing Expenses

When a lender figures the monthly mortgage amount that a buyer can afford whether it’s a purchase or a refinance, the amount is calculated to include principle, interest, taxes and insurance or PITI.  But there’s another cost that is beginning to be taken into consideration—utilities.  If you buy an older home with old single pane windows, old appliances, an old furnace, poor insulation, etc., the monthly cost to own the home can increase dramatically.  If you don’t have the money to replace some of these items immediately you could spend hundreds of dollars more each month on energy   costs.  And if you decide to make some of the improvements or buy appliances on your credit card that just adds to your debt at pretty high interest rates.

But the FHA 203(b) loan, or Energy Efficient Mortgage (EEM) Program can help buyers and refinancers to make their homes more energy efficient and save a considerable amount on their monthly utility bills.  “The EEM Program recognizes that the improved energy efficiency of a house can increase its affordability by reducing operating costs.  Because the home is more energy efficient, the occupants will save money on utility costs” and significantly reduce the amount of money needed each month to operate the home. So here’s how it works.  When you take out an FHA 203 (b) loan you can add up to $8,000 to the loan amount even if it goes over the FHA maximum loan amount or over what you qualify for.  This additional amount is at the same rate as the original loan.  So if you lock in at say, 4.25%.  The additional amount is rolled right into the loan at the same rate. Here are some of the things you can do to improve your home’s value and energy efficiency: New windows, insulation, passive or active solar improvements, heating and air conditioning systems, appliances.  Now needless to say $8,000 won’t cover all these things.  So the borrowers needs to determine what things they want to do and how much it will cost.

Prior to settlement the borrower submits a home improvement energy package and the costs to the lender.  Then a HERS  (Home Energy Rating System) energy rater has to inspect the property to determine whether the cost savings over the life of the loan will be greater than the loan amount.  The buyer, seller, lender or agent can pay for the cost for the inspection.  Once the rating assessment has been done and a satisfactory rating has been determined, the lender can escrow the amount of money in the proposal.  All work must be completed within 90 days. Most lenders don’t even know about this loan or if they do they don’t offer it.  Don’t ask me why.  So I was very happy when I found a wonderful loan officer at PMG Mortgage who made it his business to research the loan and convince his company to offer it to borrowers. Vince Coyle  is ready and willing to work with borrowers on this loan product.

Given the low interest rates right now this loan is an excellent way to get a lot more bang for your energy efficiency buck.  Plus, after you make some of these improvements most states have some tax credits and incentives that you might be eligible for.  Here are the federal tax credits that are available now.

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Gale10

Gayle Fleming

http://www.goinggreenhomesva.com

gaylefleming48@aol.com

703-625-1358

My purpose is to serve my clients and advocate for their highest and best good, so they attain their real estate goals.

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I Think I Need An “Ask Me About” Button

You’ve seen those buttons that people wear, right?  “Ask Me About” something or other. I think I want an “Ask Me About EcoBrokers” button.  I’ve been an EcoBroker for three years and have had the National Association of Realtors Green Designation for two years. I proudly announce this on my website, on my email signature, on Facebook and Twitter.  But buyers and sellers never ask me about it, or how having these designations make me different from other real estate agents.  Yet they do make me different.  When I’m showing houses buyers don’t tend to ask me about the things that will affect their bottom line once they’re in a home—like “how energy efficient is this furnace or do you think I should replace the windows?”  When I talk about how the home’s orientation will affect their energy use for better or worse that information doesn’t seem to enter the equation.  Likewise, when I discuss walkability and potential resale value there is a clear disconnect.

Yesterday at an open house I had on my name badge and a button that said EcoBroker (not “ask me about” though). I had booklets on energy efficiency and my cards which say I’m an EcoBroker. Not one person asked, “What’s an EcoBroker.  Not one person picked up the energy efficiency booklet or asked about them.  Maybe I’m just nosy, but I would have asked.

Now I’m not expecting buyer and sellers to become tree huggers necessarily.  I mean, they don’t have to build straw bale homes and put solar panels up to bolster their “green” creds.  And I’m perfectly okay with my role as educator—to reach out to my clients and help them to be more informed about the personal environmental consequences of their home buying and selling decisions.  I would like to see the conversation around home buying and selling include questions like “Can you find out if the seller has made any energy efficient upgrades in the past few years or, “Will you advertise the fact that I’ve put in dual flush WaterSense rated toilets and EnergyStar rated appliances?” The answer from me would be YES to both of those questions.

There is no doubt that the future of home building and home renovations are moving toward more sustainable practices, especially in energy and water use.  Buildings make up 40% of all the energy used in the US.  Buyers and Sellers should understand how these new practices will impact their buying and selling decisions. They should also be aware of greenwashing, the practice of making questionable green claims in order to sell a product.  As an EcoBroker and NAR Green Designee, I can help to sort through the new world of thinking sustainably as a home buyer or seller.  So the next time you see me, ask, “What is an EcoBroker?”  Here’s a video of me describing why I became an EcoBroker.

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Gayle Fleming  703-625-1358    www.goinggreenhomesva.com    gayle@goinggreenhomesva.com

The Reduce-Reuse-Recycle Approach To Giving Your Home a New Look

WITH A HOME STAGER

Let’s face it, at some point many people feel their home needs a face lift.  If your first inclination when this happens is to go out and buy new furniture or at the very least all new accessories, pictures, etc., think again.  One of the most important tenets of sustainability is to buy and use fewer things that deplete the planet’s resources or wind up in the world’s landfills.  The fewer things that you are responsible for disposing of in landfills, the lower your carbon footprint will be. repurposing is a powerful word and can also save a lot of cash. A keen professional eye can help us to rearrange furniture, accessories, art work etc. to create a home with a whole new look.

Many people know the concept of home staging either because they watch HGTV or because they’ve sold a home in the last few years.  As a real estate agent I was staging listings long before the recent popularity and profitability of staging.  We think of staging as something you do when we’re selling a home and want it to stand out and shine.  And it works.  Staging a home for sale will almost always cause it to sell faster than an un-staged home.  Often after we staged a home the sellers commented, “maybe we won’t move now” or “will you come and stage our new house.”

So recently I had an idea.  Just because we don’t go out and hire an Interior Decorator when we want a change doesn’t mean we couldn’t benefit from a little professional assistance of a less expensive kind.  Why not have a home stager do exactly what she/he would do if you were selling your home.  The idea of staging is to use what you already but arrange it in a more attractive way.  Sometime stagers will have you add extra lighting or accessories but first they work with what you have. Often they have you remove things that you may love but that make your home look cluttered or don’t necessarily add to it’s attractivness. The stager is not attached.

I asked a stager friend of mine about staging homes for people who are not selling and she thought it was a great idea. I’m going to take my own advice.  I live in a small space and have nice artwork, sculptures, pottery, etc. that I’ve collected over the years–too much, I admit, for my small space. I’m also bored with the the way that I arranged my furniture 5 years ago when I moved.  I don’t really need anything new but I desperately need a new look. So this spring I’m going to just do it.  I’ll let you know how it turns out. I’ll take some before and after photos.

BTW, not all home staging is equal.  A good home stager doesn’t make it obvious that the home is staged.  The home should still look livable and lived in.  Occasionally I go into a staged home with clients and they start laughing–at the table set for four with fake food on the plates, or the outdoor furniture used to “stage” the living room.  All stagers are not equal, so if you want a good one, call me.  If you’re not in my area, ask to see homes they’ve staged. Stagers cost $85-100 per hour for consulting.  They can simply tell you what to do or they can also help you to do it.

The Before and After in the photos above was borrowed from www.homestagingexpert.com

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Gayle Fleming  703-625-1358    www.goinggreenhomesva.com    gayle@goinggreenhomesva.com

Green Building Market Grows 50% in Two Years despite Recession, Says McGraw-Hill Construction Report

A bright spot in the news about the building and real estate market.  It’s heartening to know that even for purely economic gain, there is a growing understanding of the need for a green economy to foster future economic growth.  This is a great article.

http://www.prnewswire.com/news-releases/green-building-market-grows-50-in-two-years-despite-recession-says-mcgraw-hill-construction-report-107547978.html

The End is Near and In With the Old and Out With the New

TAX CREDITS END THIS YEAR

On December 31, 2010 it’s lights out for the federal tax credits for energy-efficient windows, doors, insulation,roofs, hot water heaters and HVAC systems. So if you’ve been putting off making some energy efficient improvements to your home it’s time to stop procrastinating and as the Nike commercial says, “Just do it!”  Until December 31st you can get a tax credit of 30% of your costs up to a maximum of $1500.

Now if you want to really trick out your house with solar panels, residential wind turbines or geothermal heating there is no upper limit to what you can spend to get a 30% tax credit. And this credit is in effect until December 31, 2016.  This link will tell you what you need to know to get the tax credit.

BUT before you rush to do any of these things, have an energy audit.  Getting a tax credit for spending money you don’t need to spend is like buying something on sale that you already have and don’t need just because you’ll save money. When you have an energy audit which will cost you around $300-400, you may find out that you don’t need to spend that $20,000 on new windows–you just need to do some serious air sealing with caulking and insulation.

INSULATION

Speaking of insulation–the best and the most cost-effective insulation aren’t necessarily the same.  In a recent blog on the Green Building Advisor website, Carl Seville, an advisor who certifies green homes, discusses the downside of fiberglass insulation.  This is the insulation that most of us are familiar with and the least expensive choice for insulation. The biggest problem seems to be that it’s hard to install properly. If you’re thinking about doing some insulation before it gets really cold, you might want to check out his post.   Foam and blown in cellulose insulation are considered better choices but do cost more.

REDUCE, REUSE, RECYCLE

This is a motto we would all do well to live by to reduce the burden on our fragile planet.  But this philosophy can do more than save green trees–it can save green backs too.  So maybe you have some home improvements you want to make.  Most people would head for Home Depot or Lowes, right?  Well how about heading for ReBuild Warehouse or ReStore where you can buy new and gently used home improvement products and save more than 50%!  These are both Northern Virginia locations so if you’re reading this blog from another area, check the web to see what’s available in your area.  ReBuild Warehouse is affiliated with a company call Deconstruction, LLC, an environmental company that disassembles homes for builders or home owners doing major rebuilds or remodeling. ReStore is affiliated with and run by Habitat for Humanity

“BABY IT’S (GETTING) COLD OUTSIDE”

I have a great Energy Saver booklet to share with you.  If you email or call me with your address (if I don’t have it) I would be happy to mail it to you.  It has wonderful cost effective advise on energy savings for homes, appliances, cars, electronics, etc.

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Gale10

Gayle Fleming

http://www.goinggreenhomesva.com

gaylefleming48@aol.com

703-625-1358

My purpose is to serve my clients and advocate for their highest and best good, so they attain their real estate goals.

Marketable, Cost Effective, Eco-Friendly Home Improvements

In a volatile and wholly unpredictable real estate market, in order for a home to sell in the fastest time and for the most money it is imperative that the home shows well and is priced correctly.  Nothing new here, right?  We’ve all watched enough HGTV to know this.  Anyone with an ounce of real estate savvy understands this concept…maybe…maybe not.  How much money should you spend, and on what, to get your home ready for the market? Of course that depends on what deferred maintenance and cosmetic updates you might want or need to make.

So let me use a real life example to give you some ideas.  A few months back I listed a 1965 split level home that was solid and in good shape and that had  some upgrades in the ten years since I sold it to the owner.  However it definitely needed some freshening up to put it on the market.  A kitchen addition with an eat in area and butler’s pantry had been added when I sold the house.  But the floor was the same inexpensive vinyl that the owner had talked about replacing when I sold it to her, but never did.  The carpet in two of the bedrooms, although good quality, was stained beyond cleaning and the entire house needed to be painted.

Instead of just saying, “freshly painted, new carpet and flooring”, we wanted to add a more marketable wow factor and use sustainable products.  We wanted potential buyers to feel that the seller cared about their well-being once they moved into the home.  So we didn’t just paint the house with cheap generic off-white paint or put in the cheapest new carpet and kitchen flooring. All of these would have had toxic implications because of the dangerous volatile organic compounds (VOCs) that would no doubt be found in them.  Here’s what we used instead.

Low VOC paint: Just a few years ago buying low VOC paint meant purchasing it from a specialty store or from an online seller.  This of course, meant the paint cost substantially more.  Today, Benjamin Moore, Behr, Sherwin Williams for example  all sell low or no VOC paints.  A couple of years ago Sherwin Williams low VOC paint was about $9 more per gallon than traditional paint.  Now–it’s about the same or maybe even a few cents lower.  So why not use paint that has absolutely no paint smell and that doesn’t expose potential buyers and their families to toxins?  Sherwin Williams and Home Depot’s Yolo brand sell for about $35 per gallon–about the same as any good quality regular paint.

Marmoleum Flooring: Marmoleum is one of the best flooring choices you can make.  You may remember your grandmother’s linoleum. Marmoleum is linoleum 2.0.  It’s a completely natural flooring material made from linseed oil from the flax seed, wood pulp and resin and other natural products.  It’s anti-bacterial, anti-microbial and has is non-allergenic.  It cleans easily, resists stains and burns and comes in beautiful colors and patterns.  And it’s much cheaper than, say ceramic tile.  Ceramic tile can cost between $5 and $15 per square foot plus $6-8 per square foot installation.  Marmoleum costs between $5.50 and $7.50 per square foot and around $2.50 per square foot for installation.

P.E.T Recycled Carpet: This carpet is made from the millions of plastic bottles that the world uses.  It’s naturally stain resistant and doesn’t off gas. It’s unbelievably durable and long-lasting.  And, it’s plush and beautiful. A medium grade regular carpet costs about $2.75 per square foot.  P.E.T costs $3.25.  Installation for either is $6 per yard.

The cost to use these materials is not much more, or is equal too using non-sustainable products. But the marketing potential is huge.  Even when buyers aren’t totally knowledgeable about these products, they are intrigued and appreciative.  The house in this example had a contract within 2 weeks.  There were minimal negotiations or counter offers and the seller will net exactly what she expected. Here are some photos from the house.

If I Want a Green(er) Home Where Do I Start?

There are no national standards for what a “green” home really is.  The USGBC (United States Green Building Council) has the most recognized green building and retrofitting/remodeling  standards in the country.   But there are others—all with different standards.  There’s the National Association of Home Builders (NAHB), Build It Green and Built Green (yes, different organizations).  Then there are local standards such as Arlington, Virginia’s Green Home Choice Program.  Well you get the picture–whose standards do you use.  But here’s the thing—right now, in the Washington Metro area where I do business, there just aren’t a lot of new homes being built to any particular “green” standards.  Many builders are at least building all new homes to EnergyStar standards.  But as I said last week, energy efficiency alone does not a “green” home make.  And with the exception of USGBC, most of these ratings are for new construction.

So most of my clients are just trying to figure out what things they should do to upgrade and retrofit their older existing homes—either the one they’re buying or the one they’re selling—to make them more eco-friendly.  What is the first thing you should do?  Well I believe reducing your energy consumption is one of the most important and cost effective things to do first.  This isn’t necessarily sexy like putting in cork or bamboo floors or ice stone countertops. But it will have a measurable effect on reducing your impact on dwindling and non-renewable resources as well as significantly reducing utility bills.  Even if your home is only ten years old, it probably pretty energy inefficient.

First, insulate. I know—BOOOORING.  Oh well—so use the money you save on utility bills to buy an Ipad or something.  The cost of heating and cooling a home is 50-60 % of the total energy bill.  A few hundred dollars spent on insulation alone can cut a home’s energy bill by up to 20% per year.  There are many types of insulation and I’m not going to discuss them here.  But there are environmental concerns  to some degree for most of them.  So check out this link that discusses the pros and cons.  Some of the cons do have indoor air quality issues.  I will tell you that my favorite insulation is made from blue jeans. It’s the ultimate in reduce (get rid of some of your 10 pairs of jeans), reuse, and recycle thinking.

Second, air seal–also not exciting.  But like insulation, air sealing stops you from paying to heat and cool the outside of  your home. You can find many leaks simply by feeling the air coming in around doors and windows.  However, many leaks that come from spaces holes in attics, basements and crawl spaces.  These can be harder to find and a much bigger energy waster.  You might consider having a professional energy audit.  Energy auditors use equipment, such as infrared cameras and blower doors,  designed to suss out all the leaks in your house.  Some state energy departments have programs that are free or for a nominal fee, will do an energy rating on your home.

Oh, and by the way– there’s a 30% federal tax credit (up to $1500) on energy efficiency purchases until December 31, 2010. So this is the year to give that home you’re buying or selling, an energy makeover.

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Gale10

Gayle Fleming

http://www.goinggreenhomesva.com

gaylefleming48@aol.com

703-625-1358

My purpose is to serve my clients and advocate for their highest and best good, so they attain their real estate goals.