Questions on forclosures and Auctions

I have been fielding a lot of questions about buying foreclosures and buying auction properties and have heard that there are a lot of Super-Duper deals that "some" people, never the party I am talking too, have gotten.  Auctions are a great environment but only for the prepared.  If you don't do your home work you can get stuck with unexpected expenses. Generally, the houses that are going to auction will be available to view and inspect 2 weeks prior to it hitting the auction block. If you don't do you due diligence there could be unexpected expenses that crop after you take title. Also, lets say you're the winning bidder and it appears that you got an excellent deal - "A Super-Duper Deal", the bank still has to approve the sale if it does not meet the minimum reserve which could mean - No Deal!  My advise is to stick with a qualified agent - buy your homes when they are short sales or REO's (Real Estate Owned)  and do your homework.

Are there rearlly any deals at Real Estate Auctions

I have been to auctions in the past where is was difficult to get an average deal. All of the market values is checked in the auction catalog were inflated by $100,000 to $200,000.  With the buyers premium of 5% added to the closing price and the environment of the auction, it is my impression that most folks will probably pay more for the home at auction than they would if they tried to purchase during a short sale or as an REO.  Antoher benefit of short sale or REO's are that the buyer has additional time to inspect/evaluate the property. The due diligence time reduces the buyers risk. Since the buyer is taking on additional risk at the auction there should be a monetary compensation in a reduced price - which never seems to materialize. Another thought is that there will be others in the crowd that may or may not have properly evaluated the subject property and they bid up the home. So I feel that the frenzy that takes place during real estate auction will only benefit the banks and the very sophisticated real estate investor.

Energy Efficient Appliances

Technology Snapshot & Benefits:
Both immediate and indirect economic savings can come from energy-efficient appliances such as refrigerators, horizontal-axis washing machines, clothes dryers, dishwashers, etc. Immediate and continuing savings accrue from lower utility bills for electricity and/or water. The performance levels of these appliances meet, and generally exceed, those of industry �standard� models. As a case in point, consider household refrigeration. By the late 1970s, refrigerators reached their most inefficient performance by requiring about 1750 kiloWatt-hours per year to operate. Modern energy-efficient refrigerators provide the same or better service at 450-550 kiloWatt-hours per year, and they are much quieter in operation.

Estimated Cost Savings:
The direct economic savings achieved by efficient appliances are a function of how much the appliance will be used, the performance level of the equipment being replaced, and local costs for utilities. When you replace older equipment, it is not uncommon for electricity consumption for that appliance to decrease by 50% or more. In general, if the appliance being replaced is more than 15 years old, and it is replaced with a state-of-the-art unit, you may expect utility savings of 20%-60% compared with the energy required by the previous appliance. Horizontal-axis washing machines typically save consumers 50% in both electric and water utilities. Additional savings come from reduced quantities of detergent.

Your monthly electrical bill is for all electricity used by all electrical loads in the building, so changing a single appliance will lower the bill, but in proportion to the amount of electricity formerly used by that appliance. If refrigeration represents 15-20% of your electric bill, a new refrigerator that is twice as efficient as the unit being replaced will lower your total bill by about 7-10%.

Any increase in initial cost is usually more than made up in monthly savings. See ACEEE's Most Energy-Efficient Appliances for more detailed information on appliances and savings.

Issues:
Availability of the most energy-efficient appliances may be an issue. Sometimes the best equipment is in demand, which can mean that discounts and sale prices are either unavailable or of lower value. Over time, as manufacturers and suppliers clear inventories of less efficient models by offering discounts, expect the price of efficient appliances to come down as well.

Regional Issues:
Primarily, regional issues involve supply, delivery, and installation.

Installation (Getting It Done):
Be sure to price shop and to get two or three (or more) prices. Inquire about installation and removal of your old unit. For any refrigeration unit, be sure that the refrigerant will be removed and recycled responsibly. Refrigerants are very potent greenhouse gases and must be captured and contained. Shopping for price and availability will give you perspective on the true costs of equipment and installation in your area.

More Information on This Topic:

U.S. Department of Energy's Office of Energy Efficiency and Renewable Energy: Energy Savers - Appliances

U.S. Department of Energy's Building Technologies Program: Dishwasher Tips

U.S. Department of Energy's Building Technologies Program: Laundry Tips

U.S. Department of Energy's Building Technologies Program: Refrigerator/Freezer Energy Tips

Energy Efficient Mortgages

Technology Snapshot & Benefits:
Energy-efficient mortgages are one of the most beneficial and under-utilized programs the consumer can find and capitalize upon in today's real estate market. An energy-efficient mortgage can add an additional 15% of a home's appraised value to the principal of a new loan or a refinance, often at no additional cost, no compromise in the loan-to-value ratio for the borrower, and sometimes at a better rate. Yes, one pays a bit more in principal and interest, at today's rates, roughly $30-50 dollars per month, over the course of the loan. However, when this extra principal is used to install energy efficiency measures, it is not uncommon for the property owner to realize $75-100 per month in energy cost savings. When working with a lender who offers and understands the energy-efficient mortgage programs available, the steps for the borrower are very straightforward.

Estimated Cost Savings:
There are no additional costs associated with many energy efficient mortgage options, other than the cost of the additional $15,000 in amortized principal and interest (PI). By definition, the savings created by the energy efficiency measures are greater than the additional PI. This provides the assurance lenders need to conclude loans of this nature are good business.

In fact, the attractiveness of the energy efficient mortgage options also extends to lenders. What happens is that as the borrowers make the stated energy efficiency improvements and create monthly utility bill and other savings, their monthly cash-flow improves. This improvement in monthly cash-flow makes the borrower an even more stable and reliable customer, less likely to present the prospect of default.

Issues:
Most energy-efficient financing programs require that the borrower has an energy rating on their existing or new home. A rating typically involves an inspection by a professional energy rater who is certified under a nationally or state accredited home energy rating system (HERS). The Residential Energy Services Network (RESNET) provides a database of Certified Home Energy Raters by state.

Regional Issues:
Energy-efficient mortgages and other financing options for energy efficiency improvements are available throughout the U.S. and internationally.

Installation (Getting it Done):
The first easy step is to talk to a few lenders, such as the affiliates here on the site, and then prepare to have a certified energy rater come and conduct the analysis of your property. Your lender will also have suggestions as to energy raters who work with them on energy efficient mortgages, just as your lender has an appraiser with whom he/she works to conduct appraisals.

For more information on energy efficient mortgages, see the links below and the Web sites of our ECOBROKER Affiliates in the lending industry. 

More Information On This Topic:

U.S. Department of Energy's Energy Efficiency and Renewable Energy Clearinghouse: Financing an Energy-Efficient Home

U.S. Department of Energy's Consumer Energy Information: Elements of an Energy-Efficient House

U.S. Department of Energy's Consumer Energy Information: Professional Home Energy Audits

RESNET'S Home Energy Rating System Information

Going Green - Natural Daylighting

Technology Snapshot & Benefits:
Both obvious and hidden economic savings come from building designs that rely on natural lighting. Throughout much of the day, owners and occupants can easily benefit from natural lighting and avoid electrical consumption otherwise required by artificial indoor lamps. Not so obviously, considerable economic gain may be achieved through increased productivity of workers and occupants. Studies have repeatedly demonstrated that natural illumination is the �gold standard� by which the efficacy of artificial lighting technologies is gauged. Further, studies show that workers with access to windows and natural light are happier, more productive, and suffer fewer health problems than workers resigned to artificial lighting. 

Technologies include efficient windows, skylights, light shafts, and many architectural features that allow natural light to penetrate into the building. Newer technologies are used as well. Over the past decade, some Japanese shoppers have benefited from natural light delivered to the interior of shopping malls via fiber optic cables originating on the roof.

Estimated Cost Savings:
The direct economic savings achieved by �daylighting� must be balanced against any potential heat loss associated with any window or skylight. For maximum cost effectiveness, only the most efficient windows and skylights should be considered.

Actual savings will depend upon how much you rely on artificial lighting, your local climatic conditions, etc.  It is a good idea to check with local builders and energy offices to better calculate energy savings.  However, it is unlikely that any consultant will be able to quantify the true value of access to daylight� as measured by satisfaction with the building, increased productivity, and improved health.

Issues:
Daylighting technologies are relatively easy to incorporate in new construction. Opportunities in existing buildings may require a little creativity or the advice of an architect or builder.  For more information, see http://www.daylighting.org/.

Regional Issues:
Brighter climates may offer more resource to work with, but consider issues of heat gain and loss in addition to increased illumination. Daylighting in northern climates may provide disproportionately greater benefits to morale and human health because these regions often are subjected to prolonged cloud cover during winter months.

Installation (Getting It Done):
Be sure to get bids from two or three (or more) installers and/or building contractors specializing in windows and skylights to gain immediate perspective on the true costs of equipment and installation in your area.

More Information On This Topic:

Buildings.com: Solar Gains - Reaping the Energy-Saving and Productivity-Boosting Benefits of Daylighting

National Renewable Energy Laboratory: Introduction to Passive Solar Heating and Daylighting

U.S. Department of Energy's Office of Energy Efficiency and Renewable Energy: Passive Solar Heating, Cooling and Daylighting

City of Hollister Calendar of Events for April

Building Green

Technology Snapshot & Benefits:
You can save a lot of money and avoid future headaches by choosing and installing building materials that are safe and appropriate. There is no specific cookbook path to success with building materials. However, your decisions may be usefully guided by asking the following questions:

• How well do the alternatives stack up in terms of performance?  How well do they do the job for which they are intended? [Recall the sort of discussion found in the roofing industry about sheathing materials � the lower cost of particle-board vs. the superior nail-holding ability of more costly plywood]
   

• What unexpected result might occur from each alternative building material?  Consider safety issues such as off-gassing of glues from composite building materials and potential radon-emissions of some rock- or earth-based materials.
   

• What toxic effects might be associated with each alternative? Remember that lead in paint was great as an inhibitor of mildew (before its use was banned), but also that lead is linked with blood and bone cancers and other maladies � and that a primary exposure pathway to humans was via lead in paint.
   

• What waste streams are associated with the manufacture of alternative building materials?
   

• How recyclable will the material be at the end of its useful life? For example, steel or tin (terne) roofing may be easily recycled into other uses, while asphalt shingles are usually landfilled because recycling is difficult.

To the maximum extent possible, you should think through design options and be mindful of potential consequences (both good and bad) of the choices that you make with building materials.

Estimated Cost Savings:
The framework that you use to evaluate costs and benefits is very important. Generally, the building trades focus on initial cost, but increasingly groups (like the American Institute of Architects) promote broader and more systematic thinking about true life-cycle costs and benefits.

For new construction, your architect or builder may have information that will be useful to you. In fact, you will be able to tell a lot about a builder by how he or she responds to questions like those presented above. For existing buildings, you may be much more in control over the choice of building materials.

Issues:
A plan will help you with decisions. Many builders and some architects remain generally uninformed about choices that are available. Suggest that your builder visit the websites and other resources that you suggest. Discuss findings and options before committing money to a design or an approach.

Regional Issues:
Building materials vary regionally. For example, slate roofing may make a lot of sense within several hundred miles of a quarry, but less so at great distances. Terra-cotta roofing makes sense in the Southwest and South, but may present issues with repeated freezing and thawing cycles experienced in the wetter North and Northeast.

Be mindful of building materials that are appropriate to your region of the country.

Installation (Getting It Done):
Be sure to consult with two, three or more builders, architects or suppliers. Multiple bids will allow you to gain immediate perspective of options and the true costs and value of various building materials in your area.

More Information On This Topic:

U.S. Environmental Protection Agency - Environmentally Friendly Design

Rocky Mountain Institute - Environmentally Friendly Building Materials

FacilitiesNet - Low-VOC Paints are More Than Just "Green"

BuildingGreen.com - Getting the "Right Stuff": A Guide to Green Building Materials Retailers

Does Your Landscape Save You Money?

Technology Snapshot & Benefits:
Perhaps the most pleasant economic savings can be derived from judicious and mindful planting of trees and shrubs. The value of traditional plantings serving as windbreaks is well known. Additionally, well-placed deciduous trees can shade a building during hot summer months yet allow warming sunshine to enter a building when warmth is needed in the winter. The summer shading feature of trees is particularly important for the following reason. Most homes are cooled with traditional window- or central- air conditioners using fractional horsepower single-phase electric motors and modern refrigerants (chlorofluorocarbons that are less potent greenhouse gases than their predecessors). The electro-mechanical efficiency of air conditioner components ranges from 35-50% based upon the electrical energy available at the plug. But that electricity is arriving at your building with an overall efficiency of about 30% based upon the energy content of the fuel going into the central electrical power plant. So, when the overall fuel cycle is considered, building air conditioning is about 10-20% efficient, on the basis of energy flow. Fortunately, humans feel a �cooling effect� from simple air movement that increases evaporation from the skin. Most air conditioning rating systems incorporate this �cooling effect�, so their efficiency numbers do not appear quite so grim. However, when shade trees cool a house such that one unit of air conditioning energy is avoided, 5 to 10 units of primary energy are avoided at the power plant. This is not only an important economic savings to you, but also a very important environmental savings to the community.

Estimated Cost Savings:
Air conditioning in buildings represents 13-15% of your annual electricity budget, and a larger fraction during summer months. By reducing the amount of air conditioning required, shade trees directly affect your bottom line. The cost of quality shade trees ranges from a few dollars for a seedling to several hundred for a much larger tree. It�s a good idea to get at least an 8-10 foot high tree if possible. The sooner the tree grows shading capacity, the sooner you can enjoy savings. The amount of savings can vary widely due to local circumstances but typical savings are on the order of 10-20% of a summer electric bill. Similar savings from a windbreak will be realized in winter during the heating season.

Issues:
Consider planting several varieties of trees: some fast-growing species (such as ash or aspen) for quick shade and more durable, slower-growing and longer-lasting trees (such as maple or oak) that will eventually dominate. Shop around for the best warranty on trees. Many nurseries provide planting and care instructions and will offer a one-year replacement guarantee.

Regional Issues:
Plant varieties appropriate to your climate. Some species of trees grow more slowly than others so you need to get started as soon as planting season arrives.

Installation (Getting It Done):
Spring and fall are the best times to plant. Be sure to follow planting instructions and err on the side of digging too large a hole. Be sure to incorporate organic material in the planting soil and to stake trees to provide mechanical support. Mulch heavily and water thoroughly during summer dry spells.

Be sure to get bids from two or three (or more) nurseries and/or landscaping contractors if you choose not to plant the trees yourself. Multiple bids will allow you to gain immediate perspective on the true costs and value of trees in your area.

References:
Cooling Our Communities, A Guidebook on Tree Planting and Light-Colored Surfacing, US EPA 22P-2001, January, 1992.

More Information On This Topic:

U.S. Department of Energy's Office of Energy Efficiency and Renewable Energy: Landscaping 

U.S. Department of Agriculture's National Resource Conservation Service: Windbreaks

Happy Easter

Just a quick note to wish everyone, "Happy Easter!" I can't believe what beautiful weather we're blessed with year. In Hollister it should be around 75 degrees! Enjoy the sun, enjoy your families and be thankful for all the good around us!

Hollister Downtown Clean-up!

Bring your brooms, dustpans, garden gloves and shovels and help us get our downtown in tip-top shape!

A community supported cleanup of downtown, including pulling weeds, planting, scrubbing and painting. Volunteer for this annual event and help beautify our downtown!  Groups are welcome.

Spring Clean-up ~ Saturday, April 12, 2008

Fall Cleanup ~ Saturday, September 13, 2008