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You are here: Home » 2014 » May

ARE CEILING FANS WORTH IT?

You can find ceiling fans in most homes nowadays. Real estate agents tout them in their flyers and point them out at open houses. Buyers often ask about them and are disappointed if the home doesn’t have fans. Why do we like fans so much? Most people think they are energy-efficient. I would argue they are only energy-efficient when used correctly.

Here is a surprising fact that most people don’t understand—Fans don’t cool rooms, they cool people. It is the air moving across your skin that cools you. The air itself doesn’t get any cooler. You can test this yourself: Sit in a chair underneath one of your fans and you’ll notice that you will feel cooler within seconds. Then move your chair to another spot in the room out of the reach of the fan and you will feel warmer.

The trick to using fans is to turn the fan on, and then raise your thermostat a few degrees. That will mean your fan is keeping you comfortable, and your air conditioner is now in a more energy-efficient mode. You will save about 8 percent of your cooling costs for every degree that you raise your thermostat. Or, if you can turn your fan on and keep your air conditioner off, that is even better!

If you turn all the fans on in your home every day, but leave your air conditioner on and don’t raise your thermostat, you are actually using MORE energy. Fans themselves use electricity, although not much. However, the motor of the fan generates heat, which means your air conditioner will have to work harder to cool the room. So turn those fans off in the empty rooms!

NEW WAY TO SEARCH FOR HOMES

If you are looking for a home to buy, you are probably frustrated a bit by all the different places you have to look for homes. Not all homes show up in all websites, unfortunately. Usually what happens is if a local real estate agent lists a home in their area, their put it in the local MLS that covers that area. But if a home seller hires an agent from out of the area, they may not have access to that local MLS system. There is some “data sharing” that is going on, but sometimes that just means that the info is available if the buyer’s agents look in a special website, not the normal MLS system.

I’ll have clients that ask me about a certain home that they found on Zillow.com, or Trulia.com, or even Realtor.com, but I can’t find it anywhere in the local MLS. Usually it’s listed in some other MLS system so it’s being broadcast to the world, but not to the local real estate community where the home is located!

There is a new website that may help a bit. It doesn’t search all these sites for you, but at least when you find a home you like, you can save it to one website and build a list of prospective homes to buy in one spot. The website is www.lasso.net. At the moment it’s free, so give it a try. Let me know how it works out for you. As with all things new, there may be some bugs, and they may fold in a few months. But for now, may be something that can help in your home search!

Note, this tool also works with rental properties, where the data is even MORE scattered across lots of different websites, so that may be where this tool really shines!

FHA LOAN ISSUE WHEN SELLING

FHA stands for the Federal Housing Administration. They specialize in guaranteeing loans for lenders when the buyer is only putting 3.5% down. When I first got into real estate many years ago, we didn’t run into many FHA loans because they had a fairly low cap on the amount of loan they would insure. All that changed a few years ago when real estate bubble burst and many lenders either went out of business, or just stopped lending altogether. The loan limits for FHA loans were increased significantly in some areas during this time to keep mortgage loans flowing. It seemed like overnight FHA became the lender of choice for most buyers for several years. So that means there are a lot of loans on the books right now that are FHA loans. And many of those homeowners are now thinking of selling their home.

In a “normal” real estate transaction, we have a scheduled close of escrow date. Sometimes we close on time, other times it closes a day or two late. Besides the frustration that comes with adjusting moving trucks and moving help, or funding the next purchase, the buyer and seller just complain a bit and put up with these delays. The payoff on the seller’s loan just adds another day or two and that’s about it.

However, if the seller has an FHA loan, then they need to keep a close eye on the calendar. If the closing date moves into the next month, FHA will expect to get paid for the FULL month’s worth of interest, even if you close on the 2nd or 3rd of the month! This is a big, expensive “gotcha” that you want to avoid! So plan your closing towards the last week of the month, but leave a couple of days cushion in case there is a delay. And if you are the buyer, don’t be surprised if the seller gets quite upset if you close “only” a day or two late if it carries over into the next month because this could cost them thousands of dollars in interest!

WHEN CAN I BUY AGAIN?

So there are a LOT of people who went through a foreclosure, short sale or other negative event the last few years. They are watching prices go up and are wondering when they can get back in and buy a home again. Unfortunately, there is no one simple answer. I’ll try to describe some of the basic waiting periods below, but there are a LOT of variables, so contact me or your favorite lender to research your situation. Also keep in mind that different lenders may have different rules. I know of one lender where you can get a loan RIGHT after many of these events, but rates and fees are higher than normal, and it’s an adjustable rate loan, not fixed. Below I’ll look at the two main types of loans, conventional (20% down) and FHA (3.5% down).

Ch 7 bankruptcy: Conv – 4 years from discharge, FHA 2 years from discharge. Ch 13 bankruptcy: Conv/FHA – 2 years from discharge, 4 years from dismissal.

Foreclosure: Conv – 7 years, FHA – 3 years.

Short sale/Deed-in-lieu – 2 years, FHA – 3 years (although possible to do right away if no late payments and you had to do short sale due to job relocation).

Loan modification: Conv 2 years, FHA – 3 years.

There is also a fairly new FHA program called “Back to Work” where you may be able to get an FHA loan in as short as one year after a bankruptcy, foreclosure, short sale or deed-in-lieu if you had job loss or at least 20% loss of income. Lots of fine print and further qualifications on this one.

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