The Energy Conservation Audit and Disclosure (ECAD) ordinance requires that before the sale of their home, owners of a single-family home must have an energy audit performed on the property. This new audit has taken affect today, June 1st, 2009.
If a home needs an audit, the seller must provide a copy of the audit to the purchaser or prospective purchaser. The auditor must provide a copy of the audit to Austin Energy.
Note: Austin Energy has conducted training sessions with many Austin area real estate brokers and agents. These real estate professionals can provide sellers with valuable additional guidance and information about the disclosure requirement and its operation.
Exemptions
Homes meeting any one of the following conditions do not need an audit. The home:
* Is less than 10 years old at the time of sale
* Has received at least three energy-efficiency improvements or a total of $500 in rebates through Austin Energy residential energy-efficiency offerings within 10 years before the sale
* Has received free energy-efficiency improvements through Austin Energy residential energy-efficiency offerings within 10 years before the sale
* Is a condominium
* Is manufactured housing (a mobile home) built on a permanent chassis and designed for use without a permanent foundation.
* Changes ownership and the transfer of the title occurs under one of the following:
o Foreclosure sale, trustee's sale, or deed in lieu of foreclosure
o Pre-foreclosure sale, in which the seller reached an agreement with the mortgage holder to sell the property for an amount less than the amount owed on the mortgage
o Threat or exercise of eminent domain
o Gift from one family member to another family member without consideration
o Court order or probate proceedings
o Decree of legal separation or dissolution of marriage or property settlement agreement incidental to such a decree
Definition of a Single-Family Home
The ECAD ordinance defines a single-family home as a building comprising fewer than five dwelling units. (If your building has five or more dwelling units, see ECAD Ordinance for Multifamily Properties.)
Variances
A home may receive a variance if it meets one of the following conditions:
* No later than six months after the sale, the buyer applies for a permit to demolish the home. The seller and buyer must enter into a binding agreement in which the buyer agrees to apply for a permit to demolish the home no later than six months after the sale. View the Variance Application for Residence Demolition.
* No later than six months after the sale, the buyer applies for a permit to substantially remodel the home. The seller and buyer must enter into a binding agreement in which the buyer agrees to file an application for a building permit to substantially remodel the above-referenced property no later than six months after the sale and in which the buyer agrees to complete an energy audit within a specified time after the remodel is complete. View the Variance Application for Residence Substantial Remodel.
* The buyer qualifies for and agrees to participate in the Austin Energy Free Weatherization Program or an equivalent Austin Energy program, no later than six months after the sale. View the Agreement to Participate in the Austin Energy Free Weatherization Program.
To apply for a variance, email either the the Variance Application for Residence Demolition form or the Variance Application for Residence Substantial Remodel form, or print out the appropriate one and send it to:
Director of Energy Efficiency Services
Austin Energy
811 Barton Springs Road, 3rd Floor
Austin, TX 78704
Energy Efficiency Records
Austin Energy will provide homeowners or prospective buyers with information on the energy-efficiency improvements received by a home through Austin Energy programs. This information includes dates of energy-efficiency improvements or rebates, and dates and details of free energy-efficiency improvements. Call 974-7827 or email Austin Energy with the address of the home and your telephone number.
ECAD Exemption List
Austin Energy also makes available to homeowners a useful ECAD Exemption List.
Single-Family Home Audit
If the home is not exempt or does not qualify for a variance, it needs an ECAD audit.
ECAD Auditors
The ECAD audit must be performed by an auditor who is a certified Residential Energy Services Network (RESNET) Rater or a Building Performance Institute (BPI) Building Analyst Professional. See a list of certified ECAD auditors who have registered with Austin Energy.
What the Auditor Does
An ECAD audit takes about one hour per thousand square feet of property. The ECAD auditor:
* Inspects and measures the attic insulation in multiple areas
* Pressure tests the duct system and assesses its condition and adequacy
* Examines heating and cooling equipment
* Inspects weather stripping around exterior doors, plumbing penetrations beneath sinks, and air tightness of attic entries
* Identifies and measures the amount of glass in windows that receive more than one hour of direct sunlight each day
Audit Costs
ECAD audits are comprehensive and require specialized equipment for testing the duct system. The estimated cost of an audit is from $200 to $300 for a typical single-family home, 1,800 square feet or smaller, with one air-conditioning system. Auditors set their own prices.
Audit Results
After the audit, the auditor provides the homeowner with the audit report. It includes:
* Condition and estimated R-value of the attic insulation
* Percentage of air leakage from the duct system and the system’s general condition
* Age, efficiency, and overall condition of the heating and cooling equipment
* Air leakage around exterior doors, plumbing penetrations beneath sinks, and attic entries
* Total square feet of glass and location of windows receiving more than one hour of direct sunlight each day
* Opportunities for improving the energy-efficiency of the home
Within 30 days, the auditor sends the audit to Austin Energy, and we enter the information into a database. Austin Energy also runs spot checks of ECAD audits to ensure the quality of the program.
Energy-Efficiency Improvements
The ECAD ordinance does not require homeowners to make energy-efficiency improvements. However, Austin Energy offers rebates and low-cost loans to homeowners who want to improve their home’s energy efficiency.
Enforcement
Non-compliance with the ECAD ordinance is a Class C Misdemeanor. Reported violations will be forwarded to the City of Austin Legal Department for review and action.
Monday, June 1, 2009
Wednesday, May 20, 2009
Austin Market News
Anyone looking for real home appreciation in a market that defies the 'bubble burst' reverse trends we hear about in the coastal (big city) markets across the States should strongly consider Austin as a prime Real Estate investment.
We continue to see a solid upward trend in Austin. These are great times to sell as price appreciation is on its way up, but even better to get in on buying a home while there is time. Austin offers an exciting (undervalued) home price scenario (Austin homes were recently ranked about 5% undervalued according to USA Today). The reason investors and buyers from abroad are considering the Austin real estate market as investment and personal ownership is because Austin has been unaffected by the market 'bubble' (in fact it has been undervalued the last 4 years) and promises strong growth with its improving infrastructure and continued investment by high tech companies, the most recent example of which is Samsung who are currently building an enormous headquarters in North Austin.
While new home builders continue to produce at a healthy pace, the rising costs of materials have hurt their ability to compete with resale homes, so we are seeing a push toward buying resale homes as they offer more for less and don't have to worry about increased building costs. It's about time (our sellers are thinking!)
We continue to see a solid upward trend in Austin. These are great times to sell as price appreciation is on its way up, but even better to get in on buying a home while there is time. Austin offers an exciting (undervalued) home price scenario (Austin homes were recently ranked about 5% undervalued according to USA Today). The reason investors and buyers from abroad are considering the Austin real estate market as investment and personal ownership is because Austin has been unaffected by the market 'bubble' (in fact it has been undervalued the last 4 years) and promises strong growth with its improving infrastructure and continued investment by high tech companies, the most recent example of which is Samsung who are currently building an enormous headquarters in North Austin.
While new home builders continue to produce at a healthy pace, the rising costs of materials have hurt their ability to compete with resale homes, so we are seeing a push toward buying resale homes as they offer more for less and don't have to worry about increased building costs. It's about time (our sellers are thinking!)
Thursday, May 14, 2009
Austin Real Estate Gaining Momentum
According to the March 2009 Multiple Listing Service report by the Austin Board of REALTORS®, the volume of single-family home sales in March 2009 was 1,421, down 22 percent from March 2008, and the median price was $180,160, down 4 percent over the same time period. Jay Gohil, Chairman of the Austin Board of REALTORS®, provided some insight, “Sales volumes in March are still down compared to a year ago, but we’re beginning to see the gap in volume close.”
For example, in January 2009, sales volume was down 36 percent compared to January 2008. In February 2009, sales volume was down 28 percent compared to February 2008. In March 2009, the 22 percent decrease in volume compared to March 2008 shows the Austin real estate market is gaining momentum. Chairman Gohil continued, “Looking at the first quarter of 2009, we’re seeing sales volumes improve and home values remain steady – that’s good news for Austin homeowners. Those factors, combined with Austin’s strong economic fundamentals, bode well for our market heading toward the summer buying season.” One of the most important economic fundamentals driving the real estate market is job growth, for which Austin was fortunate in 2008. Looking ahead, a recent study based on data from the U.S. Bureau of Labor Statistics cited Austin among the top 10 metropolitan areas in the country with the highest potential for job growth in 2009.
March 2009 Statistics
• $328,098,953 was the total dollar volume of single-family properties sold
• $180,160 was the median price, a four percent decrease from one year ago
• 1,421 was the number of homes sold, a 22 percent decrease compared to March 2008
For example, in January 2009, sales volume was down 36 percent compared to January 2008. In February 2009, sales volume was down 28 percent compared to February 2008. In March 2009, the 22 percent decrease in volume compared to March 2008 shows the Austin real estate market is gaining momentum. Chairman Gohil continued, “Looking at the first quarter of 2009, we’re seeing sales volumes improve and home values remain steady – that’s good news for Austin homeowners. Those factors, combined with Austin’s strong economic fundamentals, bode well for our market heading toward the summer buying season.” One of the most important economic fundamentals driving the real estate market is job growth, for which Austin was fortunate in 2008. Looking ahead, a recent study based on data from the U.S. Bureau of Labor Statistics cited Austin among the top 10 metropolitan areas in the country with the highest potential for job growth in 2009.
March 2009 Statistics
• $328,098,953 was the total dollar volume of single-family properties sold
• $180,160 was the median price, a four percent decrease from one year ago
• 1,421 was the number of homes sold, a 22 percent decrease compared to March 2008
Monday, May 11, 2009
The Week in Review
Units for Sale:
May 3 - May 9, 2009
(compared to the same week in 2008)
New listings down this week 23.30%
Pendings are up 9.69%
Solds down 22.38%
As for Average Prices:
May 3 - May 9, 2009
The "New Listings" average list price is up 3.49% to 340,555.
Sold average sales prices decreased 31.61% to $231,097. In 2008 it was $337,917 for the same week.
Check it out at
http://www.alamotitle-austin.com/mls_statistics.php
May 3 - May 9, 2009
(compared to the same week in 2008)
New listings down this week 23.30%
Pendings are up 9.69%
Solds down 22.38%
As for Average Prices:
May 3 - May 9, 2009
The "New Listings" average list price is up 3.49% to 340,555.
Sold average sales prices decreased 31.61% to $231,097. In 2008 it was $337,917 for the same week.
Check it out at
http://www.alamotitle-austin.com/mls_statistics.php
How Adjustable Rate Mortgages Work
During the last decade, Adjustable Rate Mortgages (ARMs) have increased in popularity among consumers. These days, few homeowners (especially first-time buyers) remain in their homes for more than seven years. In this case, it often makes sense to get an adjustable rate mortgage with a lower rate, especially one with a 5-year or 7-year fixed portion, since they won't have the loan long enough to be concerned about rate fluctuation.
Adjustable Rate Mortgages have three main features: Margin, Index, and Caps. The Margin is the fixed portion of the adjustable rate. It remains the same for the duration of the loan. The Index is the variable portion. This is what makes an ARM adjustable. Margin + Index = Interest Rate.
It's important to understand that there are many different indices: The 11th District Cost of Funds (COFI), the Monthly Treasury Average (MTA), The One Year Treasury Bill, the Six Month Libor, etc. Each index has its own strengths and weaknesses; some are slow moving, others are more aggressive.
The third and final component of Adjustable Rate Mortgages is Caps. Caps limit how much the rate can fluctuate over time. Annual Caps limit changes to the annual rate, whereas Life Caps provide a worst case scenario over the life of the loan.
Adjustable Rate Mortgages have three main features: Margin, Index, and Caps. The Margin is the fixed portion of the adjustable rate. It remains the same for the duration of the loan. The Index is the variable portion. This is what makes an ARM adjustable. Margin + Index = Interest Rate.
It's important to understand that there are many different indices: The 11th District Cost of Funds (COFI), the Monthly Treasury Average (MTA), The One Year Treasury Bill, the Six Month Libor, etc. Each index has its own strengths and weaknesses; some are slow moving, others are more aggressive.
The third and final component of Adjustable Rate Mortgages is Caps. Caps limit how much the rate can fluctuate over time. Annual Caps limit changes to the annual rate, whereas Life Caps provide a worst case scenario over the life of the loan.
Wednesday, April 29, 2009
Dos and Don'ts Of Home Selling
An energetic real estate agent can have your home on the market in a day. However, to provide the kind of marketing exposure you need to sell in today's market takes a little longer, unless your home is photo-ready when you list.
Ideally, you should start planning for your home sale months before you want your home to be on the market. First find an agent to represent you. Then, create a game plan together for the premarketing phase of the process.
Use your agent as a resource. Walk through your home with your agent to get feedback on work, decluttering and rearranging that needs to be done before the house is photographed for advertising and shown to prospective buyers. If your agent doesn't have a good eye for design, ask for a recommendation of a staging decorator.
HOUSE HUNTING TIP: Preferably, your home should not be submitted to the multiple listing service (MLS) or home-sale Internet sites without photos. Studies have shown that many buyers don't consider a listing that doesn't have photos.
Some sellers have presale inspections done to find out if repairs should be made before the property goes on the market. This wasn't as important several years ago when buyers were enthusiastic about the prospect of making money in the residential real estate market. Now buyers are much more cautious, and property condition is a critical variable.
One seller did a beautiful job fixing up her house for sale. She ordered a termite report and had some of the work done. But she didn't hire a home inspector to inspect the house. The interior was top-notch. In fact, more money was spent on this than was necessary. The listing agent was hired after the work had been done so the seller didn't benefit from the agent's advice about how much to spend and on what.
The house sold with multiple offers. However, the buyer's home inspection report revealed that the house needed a new foundation. Fortunately, there was a backup buyer. But, the price was negotiated down significantly. In hindsight, it would have been better to have fixed the foundation and done a less expensive redo of the interior.
A couple sold a similar home. They worked with their agent for months before the house was marketed. They did presale inspections and got estimates for painting, staging, furnace replacement, making necessary structural modifications and fixing miscellaneous defects referenced in the termite report.
Then, they prioritized, with input from their agent, and had the most critical repairs and enhancements done before the listing hit the MLS. There was no renegotiation necessary with the buyers after they completed their inspections.
Make sure buyers receive copies of proposals and paid invoices for work you did to your home so they know which items in your presale inspection reports have been repaired.
Another couple, who plan to move in a few years, decided to get their home ready to sell now. They put in a new master bathroom, refinished floors and plan to replace a dry-rotted deck. They will enjoy the improvements for the remaining years they stay in the house.
Most sellers wait until the last minute to get their house ready for sale. It can be very stressful trying to get all the work done in a short time frame. Doing work gradually over time is a saner approach. Sadly, most homes never look as good as they do when they're sold.
THE CLOSING: Now is a good time to have work done. A lot of contractors are looking for work. You might receive more competitive bids and be able to have the work done when you want.
Ideally, you should start planning for your home sale months before you want your home to be on the market. First find an agent to represent you. Then, create a game plan together for the premarketing phase of the process.
Use your agent as a resource. Walk through your home with your agent to get feedback on work, decluttering and rearranging that needs to be done before the house is photographed for advertising and shown to prospective buyers. If your agent doesn't have a good eye for design, ask for a recommendation of a staging decorator.
HOUSE HUNTING TIP: Preferably, your home should not be submitted to the multiple listing service (MLS) or home-sale Internet sites without photos. Studies have shown that many buyers don't consider a listing that doesn't have photos.
Some sellers have presale inspections done to find out if repairs should be made before the property goes on the market. This wasn't as important several years ago when buyers were enthusiastic about the prospect of making money in the residential real estate market. Now buyers are much more cautious, and property condition is a critical variable.
One seller did a beautiful job fixing up her house for sale. She ordered a termite report and had some of the work done. But she didn't hire a home inspector to inspect the house. The interior was top-notch. In fact, more money was spent on this than was necessary. The listing agent was hired after the work had been done so the seller didn't benefit from the agent's advice about how much to spend and on what.
The house sold with multiple offers. However, the buyer's home inspection report revealed that the house needed a new foundation. Fortunately, there was a backup buyer. But, the price was negotiated down significantly. In hindsight, it would have been better to have fixed the foundation and done a less expensive redo of the interior.
A couple sold a similar home. They worked with their agent for months before the house was marketed. They did presale inspections and got estimates for painting, staging, furnace replacement, making necessary structural modifications and fixing miscellaneous defects referenced in the termite report.
Then, they prioritized, with input from their agent, and had the most critical repairs and enhancements done before the listing hit the MLS. There was no renegotiation necessary with the buyers after they completed their inspections.
Make sure buyers receive copies of proposals and paid invoices for work you did to your home so they know which items in your presale inspection reports have been repaired.
Another couple, who plan to move in a few years, decided to get their home ready to sell now. They put in a new master bathroom, refinished floors and plan to replace a dry-rotted deck. They will enjoy the improvements for the remaining years they stay in the house.
Most sellers wait until the last minute to get their house ready for sale. It can be very stressful trying to get all the work done in a short time frame. Doing work gradually over time is a saner approach. Sadly, most homes never look as good as they do when they're sold.
THE CLOSING: Now is a good time to have work done. A lot of contractors are looking for work. You might receive more competitive bids and be able to have the work done when you want.
Friday, April 24, 2009
8 Things To Do Before Refinancing
With 30-year interest rates well below 5 percent, and 15-year interest rates between 4 percent and 4.5 percent, it's time to start seriously thinking about refinancing your mortgage.
But before you high-tail it to the nearest mortgage lender and fill out a mortgage application, there are eight things you should do:
1. Check out the interest rate you have on your current loan. When interest rates dip, the natural inclination is to start filling out loan applications left and right. But too many times, homeowners are focused solely on the new interest rate instead of how much they'll save by refinancing. While you may get water cooler-bragging rights, you should refinance only if it's going to save you money.
2. Find out how much your home is really worth. There's no way to sugarcoat it: Home values have sunk around the country an average of about 20 percent in the past year. In some places, such as Las Vegas, Miami, Phoenix and the San Francisco Bay Area, the decline has been twice as steep. It's vital to assess whether your home still has any equity (the difference between what you owe and what the home is worth) or if you are "underwater" with your mortgage (meaning that you owe more to your lender than the property is worth. Whether you have equity will determine what kind of refinance is open to you.
3. If you're underwater with your mortgage, assess how far underwater you are. While federal requirements have changed with regard to refinancing loans owned or serviced by Fannie Mae, Freddie Mac or FHA, if your loan is more than 105 percent of the value of the property, you may not be able to refinance without bringing cash to the table. (You may still be eligible for a loan modification, however.)
4. Get a copy of your credit history and credit score. Since the credit crisis began, lenders have raised the credit scores required to get approved for the best loan programs and best interest rates. The best place to go for a copy of your credit history and credit score is AnnualCreditReport.com. It's the only place where the three credit reporting bureaus provide a free copy of your credit history each year, plus you can pay $7.95 for a copy of your credit score. Choose the Equifax credit score, since it's the one closest to the score used by most lenders. (You can also go to MyFico.com, and purchase your credit history and FICO score for $15.95. You may also find their online community to be helpful in terms of suggestions on how to raise your credit score.)
5. Start identifying potential lenders. Shopping around for a loan takes a little more planning and effort than it used to, as lenders have jacked up the fees they charge to underwrite and process the loan. Your best bet is to talk to a national lender, a credit union (if you belong to one or can join one), a local mortgage broker (call your real estate agent if you don't know one and ask for several recommendations), and perhaps an online lender.
6. Find out if your second lender will subordinate to your first lender. If you have a first and a second mortgage (also known as a home equity loan), find out whether the second lender will subordinate to the new first lender. That will allow you to refinance your first mortgage, while leaving your second loan in place. Many second lenders will not agree to this, and if yours doesn't, you may not be able to refinance at all unless you pay off the second loan. One possibility is to refinance your first mortgage with the lender who owns your second loan.
7. Focus on the big picture, not just the interest rate. While the interest rate you'd get is important, it's also important to calculate how much you'd pay in fees, and how long it will take to pay yourself back the cost of the refinance with your monthly savings. For example, if you're going to save only $50 per month, and it costs you $5,000 to refinance, it'll take you 100 months -- or more than eight years -- to pay back the cost of doing the loan. You won't start saving until well into the eighth year of paying down the mortgage. So, unless you're cutting the term of the mortgage significantly (going from a 30-year to a 15-year), or you're able to pay off the costs in a relatively short period of time (say, less than a year or 18 months), it may not pay to refinance.
8. Get your paperwork together ahead of time. Before the housing crisis, you could almost do a refinance over the phone. In fact, you could call the loan officer you worked with regularly and put in your order for a refinance. You could do a no-cost refinance without providing much in the way of proof of earnings, or account statements or copies of tax returns. The forms would be delivered to your home, and then you'd sign them and send them in. Today, you've got to have your paperwork in order before you can refinance. Gather your W-2, a current paycheck, copies of your last two federal and state tax returns, copies of your bank accounts, retirement accounts, and other assets. Then call the lender.
But before you high-tail it to the nearest mortgage lender and fill out a mortgage application, there are eight things you should do:
1. Check out the interest rate you have on your current loan. When interest rates dip, the natural inclination is to start filling out loan applications left and right. But too many times, homeowners are focused solely on the new interest rate instead of how much they'll save by refinancing. While you may get water cooler-bragging rights, you should refinance only if it's going to save you money.
2. Find out how much your home is really worth. There's no way to sugarcoat it: Home values have sunk around the country an average of about 20 percent in the past year. In some places, such as Las Vegas, Miami, Phoenix and the San Francisco Bay Area, the decline has been twice as steep. It's vital to assess whether your home still has any equity (the difference between what you owe and what the home is worth) or if you are "underwater" with your mortgage (meaning that you owe more to your lender than the property is worth. Whether you have equity will determine what kind of refinance is open to you.
3. If you're underwater with your mortgage, assess how far underwater you are. While federal requirements have changed with regard to refinancing loans owned or serviced by Fannie Mae, Freddie Mac or FHA, if your loan is more than 105 percent of the value of the property, you may not be able to refinance without bringing cash to the table. (You may still be eligible for a loan modification, however.)
4. Get a copy of your credit history and credit score. Since the credit crisis began, lenders have raised the credit scores required to get approved for the best loan programs and best interest rates. The best place to go for a copy of your credit history and credit score is AnnualCreditReport.com. It's the only place where the three credit reporting bureaus provide a free copy of your credit history each year, plus you can pay $7.95 for a copy of your credit score. Choose the Equifax credit score, since it's the one closest to the score used by most lenders. (You can also go to MyFico.com, and purchase your credit history and FICO score for $15.95. You may also find their online community to be helpful in terms of suggestions on how to raise your credit score.)
5. Start identifying potential lenders. Shopping around for a loan takes a little more planning and effort than it used to, as lenders have jacked up the fees they charge to underwrite and process the loan. Your best bet is to talk to a national lender, a credit union (if you belong to one or can join one), a local mortgage broker (call your real estate agent if you don't know one and ask for several recommendations), and perhaps an online lender.
6. Find out if your second lender will subordinate to your first lender. If you have a first and a second mortgage (also known as a home equity loan), find out whether the second lender will subordinate to the new first lender. That will allow you to refinance your first mortgage, while leaving your second loan in place. Many second lenders will not agree to this, and if yours doesn't, you may not be able to refinance at all unless you pay off the second loan. One possibility is to refinance your first mortgage with the lender who owns your second loan.
7. Focus on the big picture, not just the interest rate. While the interest rate you'd get is important, it's also important to calculate how much you'd pay in fees, and how long it will take to pay yourself back the cost of the refinance with your monthly savings. For example, if you're going to save only $50 per month, and it costs you $5,000 to refinance, it'll take you 100 months -- or more than eight years -- to pay back the cost of doing the loan. You won't start saving until well into the eighth year of paying down the mortgage. So, unless you're cutting the term of the mortgage significantly (going from a 30-year to a 15-year), or you're able to pay off the costs in a relatively short period of time (say, less than a year or 18 months), it may not pay to refinance.
8. Get your paperwork together ahead of time. Before the housing crisis, you could almost do a refinance over the phone. In fact, you could call the loan officer you worked with regularly and put in your order for a refinance. You could do a no-cost refinance without providing much in the way of proof of earnings, or account statements or copies of tax returns. The forms would be delivered to your home, and then you'd sign them and send them in. Today, you've got to have your paperwork in order before you can refinance. Gather your W-2, a current paycheck, copies of your last two federal and state tax returns, copies of your bank accounts, retirement accounts, and other assets. Then call the lender.
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