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Two items came to my attention recently in regards to solar power for your home that I thought you should be aware of.

The first is that the federal tax credit that was set to expire at the end of 2016 was just extended for five more years. I’ve heard VERY little mention of this in the news so I’m guessing this will be news to most of you. I’m still hearing some ads for solar that tell you to “hurry up” before the federal tax credit expires, but I’m sure they’ll update their ads soon. (FYI: The California tax credit is long gone.)

Here is a quote from a website called The Simple Dollar, “The extension means a 30% federal tax credit offered by the EPA and Department of Energy to encourage Americans to use solar power for the next five years. If you install Energy Star-approved solar power systems, the credit allows you to claim 30% of the cost as a tax credit for the year you installed it. That amount is taken directly off your tax payment, rather than as a deduction from your taxable income.”

The other item is that you can now buy solar power through PG&E. You can choose to have either 50 or 100% of your power come from solar. The catch is that you aren’t saving money with this program, but the argument is that it’s better for the environment. There are no panels required, nothing to buy, no long-term leases to sign, etc. So this may be a good option for people or businesses who are renting, or their building doesn’t allow for a good solar system installation due to the size or direction of the roof, but you still want to go solar for environmental reasons. You can find out more at pge.com/solarchoice.


“What the heck is a GFCI?” GFCI stands for ground fault circuit interrupter. This is the type of electrical outlet that you should have wherever a water source is close to your outlet. For example, in your kitchen, bathrooms, laundry, etc. They are designed to prevent electrocution in the event that you were to drop your running hair dryer into a sink full of water (for example). The GFCI will detect the interruption in the flow and shut off the current.


However, some GFCIs (even in new homes) are defective, and it’s a common problem. Seems like we see defective GFCIs come up in many home inspections reports, and this is a potentially dangerous situation. There is an inexpensive device you can buy at a hardware store to test them, but here is an even easier way.


You can locate the GFCI by two small buttons on the face of the outlet. One is labeled “test” and the other is labeled “reset.” Press the “reset” button to make sure that the unit is ready. Then plug a nightlight, or any other portable appliance, into the outlet and turn it on. Push the “test” button and the nightlight should turn off. Press the “reset” button again and the nightlight should come back on. If the nightlight doesn’t go out, then the GFCI isn’t working properly. You should have a licensed electrician come out and check all of your GFCI’s.


Not every outlet that is GFCI protected will have the two buttons on them. There will be one with buttons on it that will often protect several other outlets close by. On a new home there will be a little white sticker on the protected outlets, but it often falls off with use.


The Federal Reserve recently raised interest rates. That is the first time they’ve done that in about 10 years. Gasp! That must mean that we’ll all be paying higher interest rates and our hot real estate market will cool down, right? Actually, since the Fed raised rates, actual mortgage rates haven’t changed that much. Maybe up a little. So what gives?


One of the biggest myths in the financial realm is that the Fed controls mortgage interest rates. They absolutely do NOT. They do control some of the levers that influence mortgage rates. However, the rate your lender quotes you depends most heavily on what the bond market is doing. The bond market looks forward 5, 10, 20+ years in the future. At the moment, the bond market isn’t betting on big increases in rates, so mortgage rates are still down near historic lows.


The threat of a global economic slowdown is still looming large in many investor’s eyes. As I write this article, stock indexes across the world are tanking to start out 2016. Historically when this happens, there is a “flight to safety” as investors move their money from stocks to US government bonds. This means the government can offer lower rates of return and still get investors to buy their bonds.


On the flip side, China is having major problems right now with their economy and their currency value. Over the last few years they were buying billions of dollars of Treasury bills, which helped keep rates low. But now, in an effort to prop things up, they have started selling billions of dollars of Treasury bills. That may have some upward pressure on rates if that continues. So we very well may see interest rates creep up this year, but most “experts” don’t think it will be a big increase.



Some people say, “Never pay full price, always come in under!” while others say, “If you are serious, you have to pay them their list price.” I disagree with both of these statements.


Whether or not you pay full price for a home depends on several variables. The first is the list price. If the home is listed at $25,000 above market value, then you probably should not offer them full price. If the home is listed for $25,000 below market value, then full price doesn’t sound so bad now, does it?


Another variable is market timing. If there is an abundance of homes for sale, with few buyers actively looking, then all homes should be considered “open to any offers.” The opposite would be true in a seller’s market where list price is the minimum you’d want to offer (subject to variable #1 above).


The third variable is your motivation. Let’s consider two couples out looking for a home. Couple A already lives locally and would like to move up to a slightly larger home. They don’t really “have” to move. Couple B just moved from out of state and are in a hotel with three kids and two dogs. They both spend the day looking at homes, and they both fall in love with the same house. Couple A wants to get “a good deal” so they offer less than list price. Couple B writes a full price offer and gets the home.


Both couples did the right thing, based on their circumstances. They wrote an offer based on what the home is worth to them. Couple A has time on their side; they’ll just keep looking until the right situation presents itself. Couple B was willing to pay full price to get their lives started in their new home ASAP.

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