Archive for May, 2008

Green Lending in Cincinnati?

Green lending practices have been slow to make their appearance locally.  If you are considering building an eco-friendly home or doing a green remodel, you will very likely have your work cut out for you in order to find assistance in the mortgage market.  Jami and I have been working with several local lenders who are interested in becoming resources for environmentally conscious homeowners – we’ll keep you posted as this work progresses.  As with other green resources, we are constantly expanding our network and have new information and updates weekly – call anytime to find out the latest.

For now, consider the following in your search for green lending:

Energy Efficient Mortgages

Homes account for nearly 20% the world’s energy comsumption.   We can be proud that Cincinnati was the first city to vote in an aggressive 15-year, 100% tax abatement for LEED-certified homes, but lending institutions are lagging far behind our local government’s enthusiasm for the green revolution.  If you are buying, selling, refinancing, or remodeling a home, you can increase your comfort and save money by using an Energy Efficient Mortgage (EEM) – one can be applied to most home mortgages. This gives the borrower special benefits when purchasing an energy-efficient home or a home that can be made efficient through the installation of energy-saving ugrades.

Funding home energy improvements through an EEM provides the following benefits:

  • Cost-effective energy-saving measures may be financed as part of the mortgage.
  • Make an older, less efficient home more comfortable and affordable. Increase your buying power.
  • Stretch debt-to-income qualifying ratios on loans for energy-efficient homes.
  • Qualify for a larger loan amount. Buy a better, more energy-efficient home.

Home Energy Rating and Energy-Efficient Mortgages

One of the keys to getting an energy-efficient mortgage is having a certified home energy rater conduct an energy audit of your home before your financing is approved. HERS (Home Energy Rating System) -certified homes assure the lender that the home is efficient, as well as noting areas that need improvement to save money on monthly energy bills. The cost of these improvements then can be added to the mortgage. Visit the Department of Energy’s Energy Efficient Mortgage Home Owner’s Guide for additional information.  If you would like to know more about local HERS and LEED rating and certification, call us at (513) 260-9632.

Refinancing

If you’re planning to refinance your mortgage with the intention of making enery-saving improvements, consider borrowing more than the amount needed to pay off your existing mortgage, useing the extra money to make energy-efficient upgrades.  There are two obvious benefits to this, interest paid on your home mortgage or equity loan is usually tax deductible and energy-efficient home improvements will immediately lower your monthly energy bills.  Be certain you talk over the new monthly payments with your loan officer so that you are sure it falls well within your budget until the cost-benefit can be realized.

Financing – Goverment Insured

Currently the Department of Housing and Urban Development does not offer EEM’s.   If you qualify for VA, though, read on:

U.S. Department of Veterans Affairs

The U.S. Department of Veterans Affairs (VA) guarantees mortgage loans for veterans with active duty service and qualified reservists. Its EEM can be used to purchase or refinance a home along with the cost of making energy-efficient improvements. To cover the cost of the improvements, the loan amount can be increased:

  • Up to $3,000 based solely on documented costs;
  • Up to $6,000 if the increase in the mortgage payment is offset by the expected reduction in utility costs;
  • More than $6,000 based on a value determination by VA.

A VA refinancing loan may not exceed 90 percent of the home’s appraised value plus the costs of the improvements.

Interested customers should go through the normal home loan application procedure, inquiring the lender about an EEM at the beginning of the process.

Additional information available from
U.S. Department of Veteran’s Affairs
810 Vermont Avenue, N.W.
Washington, DC 20420
1-800-827-1000
http://www.homeloans.va.gov/rlcweb.htm – This webpage lists the regional offices for the U.S. Department of Veteran’s Affairs, ideal for applying for a home loan.

Conventional Lending

At the current time Fannie Mae’s Energy Efficient Mortgage program is under review and not accepting applicants. Interested customers are advised to contact Fannie Mae periodically for updates.

  • Additional Information Available from:
    Fannie Mae Resource Center
    Telephone 1-800-7FANNIE (1-800-732-6643)
    www.fanniemae.com

Freddie Mac

  • Freddie Mac is a stockholder-owned, congressionally chartered corporation that works to create a continuous flow of funds to mortgage lenders in support of homeownership and rental housing. It purchases mortgages from lenders and packages them into securities that are sold to investors, providing homeowners and renters with lower housing costs and better access to home financing.
  • Freddie Mac provides incentives and criteria, as well as flexible guidelines, for EEMs that it’s willing to buy, which encourage lenders to offer them. However, the EEMs are limited to purchasing existing energy-efficient homes or those to be retrofitted or renovated for energy efficiency.
    • Several home energy rating methods and/or documentation, not just a HERS report, are acceptable.
    • Lenders can exceed the standard 2 percent debt-to-income stretch at their own discretion.
    • It allows a broader range of energy-efficient improvements than most EEM programs.
  • Additional Information Available from
    Freddie Mac Investor Inquiry
    1551 Park Run Drive, MS D5O
    McLean, VA 22102
    800-373-3343
    Email: investor_inquiry@freddiemac.com

US Energy Efficient Improvements

Check back soon for more to come on energy tax credits and rebates available at the local and state level, or call Jami or myself for more information.

May 16, 2008 at 10:19 pm 1 comment

Why Isn’t My Home Selling?

In this tight real estate market, many homeowners are fearing that their dreams of moving up, transferring out of state or downsizing will not be as easy to realize as they had hoped.  As realtors, we talk to individuals every day who are facing the tough reality that it will take a very competetive edge to get your home sold for the best price in the shortest amount of time.

“What does this have to do with going green”, you might ask?  Eco-friendly features can play a large role in the way you update and market your home.  Looking at the top reasons that homes don’t sell, we can find an environmentally conscious benefit in each category:

1.  Price

Over-priced homes take much longer to sell, if they sell at all.  Let’s face it, the economy is slow and homebuyers are more nervous.  The days of 100% financing are over; first-time homebuyers are not spoon-fed easy, no-money-down loans and sales volume across the nation is down.  So why is this good?  The euphemism “market correction” comes to mind – and it’s true.  Historically speaking, housing prices have kept pace with income rates on a national level.  Tracking the median for each on a grid, the lines slowly march upward with inflation in nearly parallel paths.  For over 7 years, however, housing prices have steadily risen above the median income – home buyers have been paying a higher perentage of their salaries for property, using increasingly risky loans while eating up more readily available credit.  This lethal combination has pushed many consumers over the brink of financial collapse and foreclosure, as the media tells us on a daily basis.  As tough as it sounds, the market needed to stabilize, even here in Cincinnati where we are relatively insulated from the bubbles seen in Florida and California.

In short, real estate prices are naturally slowing to realign with average income levels.  This is a fundamental part of the stability of our economy; it’s part of the natural balancing act.  No need to panic, homesellers – what is necessary to sell your home effectively these days is a bit of savvy and a great marketing plan.  You don’t need to drop the price of your home exceedingly low to get it sold, but you do need to be realistic.  We’ll discuss the other strategies below, but regarding price it is in your best interest to understand all you can on comparable sales and active listings in your area, pricing your home just below the closest competitor.  Don’t play games with the price – testing the market at a high price with the intention of later reducing it if an offer doesn’t materialize is a waste of your time.  The higher the price, the fewer buyers will see it on the internet – it becomes invisible to many house hunters.   Most sellers have an idea of the price they will accept for their home so do your research, determine your lowest reasonable price and then choose a list price that is just slightly higher.  Buyers typically want to negotiate the price down, so a small amount of wiggle room gives them the satisfaction of getting a better deal.  Take heart, the buyers are still out there, but they are better educated and more discriminating  than ever before and home sellers need to be just as informed if not more so.  Rising energy costs, shrinking consumer confidence and economic fears affect real estate just as much as any other market but you can stay competetive with your listing by following the few simple ideas outlined here.   As buyers become more and more aware of enery saving features, carbon footprints and wasteful spending they are going to be less apt to impulse buying and overpaying just because they love certain features of the home.  There’s a lot of competition out there, and setting a reasonable price for your home (with the guidance of a qualifed realtor, ideally!) is the first major step in getting it sold.  Read on to see how you can save green by going green:

2. Condition

Ugly, smelly, oudated houses don’t sell unless they’re dirt cheap; nobody else wants smell your cat, let alone pay top dollar for it.  This brings us back to that competetive edge… When you sell a home, you are selling a product.  We find homes in all types of conditions for sale, so what makes a home the most attractive and results in a quick sale?  Price and condition.  No two ways around it, make your home the best product on the market or lower the price to increase its appeal.  We are force-fed the line about location, location, location and yes, of course the location matters.  But we can’t change the location, so it is reflected in the price… or should be.  So let’s move on to the home’s physical condition.  Why sell an inferior product?  Or better yet, ask yourself the question:  Why would a buyer buy an inferior product?  They’ll buy if it’s a steal, but most of you aren’t ready to give your house away.  As a seller, you need to find the objectivity to give your home the critical once-over and ditch the rose-colored glasses this time.  Buyers aren’t sentimental about your home; they don’t love the wear and tear the kids put on the walls over the years or enjoy your first trials – and errors – with faux finishes.  Visit other homes for sale in your neighborhood that are similar to yours.  Pay attention to the ones that appeal most to you and those that sell quickly.  Now go home and copy what the successful ones are doing – neutral paint, new carpet, new countertops, new hardware, staging, fresh landscaping and clean, clean, clean.  But why not go a few steps further than this, give the environment a much-needed break and add a few eco-friendly touches to the mix?  You can enjoy the benefits of increased energy savings (try lowering blinds every day to keep the sun out this summer and getting a programmable thermostat), lower the toxicity in your home (part with the moldy, allergenic carpet and bring the wood floors back to life), and environmental sensitivity (add a rain garden with native plants to help that excess run-off that ends up in your basement after heavy rains).  Equally as important, market those green upgrades to make your house stand out as unique, desirable AND eco-friendly.  Jami and I have an information available to homeowners on green improvements ranging from nearly free to large updates such as HVAC or quality replacement windows – email us with your specific needs and we’ll be happy to help.  If you do any major renovations and need to get rid of large items that are still intact and can be useful, consider recycling them – contact Building Value for more information, they even do deomolition work and will haul away the usable leftovers:  http://www.buildingvalue-cincy.org/index.html.

3. Marketing

Cast the widest net possible to catch potential buyers.  If your home has been on the market and isn’t selling, and you can honestly tell me you’ve passed the price and condition tests, take a good, hard look at the marketing used to sell your home.  Is there a realtor involved?  Did they put a sign in the yard and jump ship, never to be heard from again, or are they putting forward a consistent marketing plan to get your property noticed?  In this market, you need a lot more than an MLS listing to grab buyer’s attention.  Just as you scrutinize the condition of your house as a buyer would , try to find your house in the various ways that buyers do – the MLS is the obvious first choice, but how does your home look on the internet?  Were the photos done by a professional?  Is each room in the home well represented?  What about the sign out front – is there literature readily available for drivers-by to grab, or a 24-hour information line that buyers can call anonymously to get more information?  Print advertising is out – research shows that less than 2% of buyers look for homes in the newspapers.  Brokerages spend their advertising dollars in print media to direct buyers to their websites – visit your realtor’s site, see how easy it is to navigate and judge how much you would use it if you were a buyer.   In particular, if you do have green features to your home – even the more common items like a newer furnace (high efficiency?), enery-star appliances or good replacement windows, be certain your realtor is drawing attention to these bonuses, both in the online marketing and when showing the home.   If you are selling on your own, contact us for free information that can help you market and sell your home (no, there’s no sneaky sales pitch involved, just call for some good free advice – and who knows, maybe we have buyers looking in your area…).

May 14, 2008 at 3:42 am 1 comment

Cincinnati’s Air Quality

According to the latest American Lung Association “State of the Air” report. One in 10 people still live in areas with unhealthy air, according to the report.  How did our fair city do?  In Hamilton County we got a big fat F.  Check us out on the full report

Top Ten U.S. Cities Most Polluted by Year-Round Particle Pollution

  1. Los Angeles/Long Beach/Riverside, Calif.
  2. Pittsburgh, Pa.
  3. Bakersfield, Calif.
  4. Birmingham, Ala.
  5. Visalia/Porterville, Calif.
  6. Atlanta, Ga.
  7. Cincinnati, Ohio
  8. Fresno/Madera, Calif.
  9. Hanford/Corcoran, Calif.
  10. Detroit, Mich.

This is a list we should not be proud of being on.  What can we do to clean up our air?

Top 5 things to do to help control Air Pollution

1. Drive Less, Drive Smart – Consider alternate means of transportation – walking, biking.  Or carpool with someone at work!

2. Fill up your gas tank after dark – Gasoline emissions evaporate as you fill up your gas tank and contribute to the formation of ozone, a component of smog. Fill up after dark to keep the sun from turning those gases into air pollution.

3. Avoid Aerosol -try solid, gel and liquid forms instead.

4. Avoid Gas Powered Lawn Tools – Use hand-powered or electric lawn care equipment rather than gasoline-powered. Two-stroke engines like lawnmowers and blowers often have no pollution control devices and can pollute the air even more than cars.

5. Help out at Home – Don’t burn wood or trash. Burning firewood and trash are among the major sources of particle pollution in many parts of the country. If you must use a fireplace or stove for heat, convert your woodstoves to natural gas, which produces far fewer emissions.

May 2, 2008 at 1:34 pm Leave a comment


Who Are We?

Libby Hunter and Jami Stutzman are local Cincinnati Realtors and members of the U.S. Green Building Council who have a passion for sustainable living. Environmental responsibility lies at the core of our business practice - let us show you how we can help with ecologically-minded real estate needs. Please browse our blog, visit our local green vendors' websites and if you are in the market to buy or sell a home, let us show you how green features can make all the difference in your experience!

Contact Us

Jami Stutzman: 513-515-0689
jstutzman@comey.com
Libby Hunter: 513-260-9632
lhunter@comey.com

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