Buying Or Building A Green Home

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Is it worth my while to pay off my 30-year loan early? Q: I’ve heard about various ways to pay off a 30-year mortgage in 12 or 15 years. Do such programs make sense? A: A shorter loan term means a borrower will pay far less interest and get the advantage of greater monthly cash flow once the loan ends. For instance, a $100,000 loan at 6.7 percent over 30 years will have a monthly payment of $645.28. The potential interest cost is $132,300 – more than the original loan amount. To pay off the same amount at the same rate in 15 years, just increase the monthly payment to $882.14. The total potential interest cost for the loan is $58,785 Thus, the idea of a shorter loan term – with reservations – is attractive. What are the reservations? First, before making accelNever give erated payments, always mortgage make sure you have the right to prepay your loan in whole money to or in part at any time and anyone except without penalty. Note that your lender even when loans have prepayment penalties they often allow for accelerated payments.Your lender can explain your prepayment rights in detail. Second, if you have the right to prepay some or all of your loan without penalty, you should not pay anyone other than your lender for prepayment programming. Paying several hundred dollars to set up a prepayment program, or paying $20 or $30 a month for “administration,” simply means fewer dollars are available to pay down your debt. Third, never give mortgage money to anyone except your lender. If a third party does not make your payment or if they do not pay on time, it’s your credit report that will show the late or nonpayments, and your credit costs will rise. Fourth, beware of plans to automatically withdraw money from checking accounts.The problem here is the conflict between an automated payment and an account with insufficient funds. Protect yourself and always get overdraft protection. Three basic acceleration programs look like this: • Biweekly Payment Plans. Instead of 12 monthly payments you make a mortgage payment every two weeks, or 26 times a year. If we say that each biweekly payment is equal to half the value of a regular payment, See ASK OUR BROKER, Page 2

Worry-free: Don’t let a long selling period derail your life. ‘If people have proper expectations ... they’re more likely to reach their goal,’ says one real estate expert.

Don’t Let Selling Leave You Stressed No one said finding a buyer was easy, but keeping your stress level low will make the process all the more manageable BY BARBARA BALLINGER CTW Features

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oving, along with death and divorce, is considered one of life’s three biggest stress producers.And the increased difficulty of selling a home today in many parts of the country only compounds the stress that moving causes. Homeowners, of course, could wait out the downturn before putting their home on the market, but there’s no indication of when that might be, and waiting is not an option if they’re in a must-sell,

must-move situation. Frayed nerves may come with the territory, but they don’t have to sabotage the selling process. Here, some real estate experts, and a psychologist, offer their tips for keeping stress low and optimism high during a tumultuous selling process.

GET YOUR HOUSE IN SHAPE De-clutter and purge belongings so the house looks its best and you don’t have to scurry and put away furnishings, clothing, books and toys each time there’s a showing.

Denny Grimes, owner and broker of Denny Grimes & Co. in Fort Myers, Fla., suggests putting away or eliminating 50 percent of what you own, either by selling, donating or placing items in a garage or storage facility. It’s also important, he says, particularly in a buyer’s market, for owners to consider having their homes staged and professionally cleaned and for brokers or salespeople to hire professional photographers for listing photos. Kalia Rork, a saleswoman with RE/MAX

See SELLING Page 2

How to Go About Going Green Yes, they save money and are energy efficient, but there’s a lot more to know about buying or building a green home BY CHARLES SCUTT CTW Features

WANT TO MAKE THE neighbors envious and save a lot of money

in the process? Then go green when you decide to buy or build a new home, and consider one that is energy-efficient, Earthfriendly and environmentally conscious. “Buying or building a new green home is a wise choice right now because doing so meets the needs of the present without compromising the ability to meet the needs of the future,” says Monica Higgins,

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founder of Renovation Planners, a Culver City, Calif.-based remodel consultancy.According to Higgins,“going green” encompasses maximum use of renewable energy, minimal production of pollution and minimal energy consumption without sacrificing comfort, health and safety. According to the Center of Excellence for Sustainable Development, today there are more than 76 million residential

buildings and nearly 5 million commercial buildings in the United States consuming onethird of all the energy and twothirds of all the electricity.These buildings also significantly damage urban air quality, accounting for 49 percent of sulfur dioxide emissions, 25 percent of nitrous oxide emissions, 10 percent of particulate emissions and 35 per-

See GOING GREEN Page 2

SELLING CONTINUED FROM PAGE 1 Santa Barbara, Santa Barbara, Calif., advises that sellers also have their real estate professionals and stagers prioritize what needs to be done.“Sometimes, they think they have to take care of certain things – paint the exterior or redo the kitchen.That’s not always the case,” she says.And they also need to consider how their house will look online on newspaper and Realtor Web sites and the multiple listing service.

BE POSITIVE, PREPARED, REALISTIC A positive outlook and sufficient preparation also can work wonders. So can a dose of realism.“Accept the fact that you can’t control everything, so focus on what you can control,” says Dr. Terry Lyles, a Miami, Fla., psychologist who focuses on stress reduction and who recently sold a home himself – and survived.

INSPECT BEFORE YOU LIST It’s better to know which systems or repairs to fix in advance, rather than tackle them at the last

GOING GREEN CONTINUED FROM PAGE 1 cent of the country’s carbondioxide emissions – the chief pollutant blamed for global warming. “Improving these statistics has become a strategic focus in the construction industry,” Higgins says. The U.S. Department of the Interior says that 2 million barrels of oil a day are wasted due to insufficiently insulated homes in the United States, which is more than the daily amount the U.S. imports from Saudi Arabia. “We are finally realizing the true costs of our energy,” says Eric Corey Freed, principal of Organic Architect, San Francisco. “Fossil fuels have political, economic and planetary consequences.The threat of global warming has brought this to light.” According to the U.S. Green Building Council’s standards, a green building doesn’t have to cost more than a non-green home, says Freed.“In truth, you cannot afford to not build green,” he says.“The average green building feature will pay for itself 10

minute when you’re all set to vacate.“An inspection will give you a good X-ray of your house and how well it might pass a buyer’s inspection,” Grimes says. Any changes you make will likely benefit your listing and negotiating power. For instance, if buyers see a leaking faucet, they may lead them to think that other parts of the home aren’t in topnotch condition, says Rork. Catching problems in advance benefits you.“Any time you lower a buyer’s stress about the unknown, that’s good,” Lyles says. However, there are exceptions, says Rork.“You may not need an inspection if you recently bought your home and have a report on file or if you live in a new condo building. In the latter case, present minutes from the building’s board meetings to show the condition and whether there have been special assessments, she says.

BE FLEXIBLE ABOUT SHOWINGS Some homeowners feel if they don’t have to have their house on call 24/7, they’ll feel less stressed. Jill Sloane, senior vice president of Halstead Property in New York, tries to remind clients of

times over the life of the building.We build our buildings to last a hundred years, so why are we focusing only on the one-time construction cost? The real costs are during operation, and that is where green building will really save you money.” When shopping for a green home, says Higgins, the important technologies and features that will positively impact you, the earth and energy bills include systems that conserve energy and water, recycle waste and reduce solid waste, and improve indoor environmental quality. “For example, passive solar design that features south-facing windows helps heat the home in the winter and provides natural daylight,” Higgins says. “Xeriscaping – the use of native plants – significantly reduces the need for watering, fertilizing and herbicides.And the selection of appropriately sized heating, cooling and water heaters also saves money.” Solar panels, water reuse systems and geothermal systems that capitalize on the earth’s constant temperature to effectively heat and cool a home are among today’s popular green amenities. Other features growing in demand include closed-cell foam

this, especially those young children at home. But in a crowded market, you may not be able to be as flexible. Grimes encourages sellers to adopt the attitude that “a poor showing with sheets not made exactly right is still better than no showing,” he says.“Most people buying a home where someone still resides aren’t looking for a model home.They seek a good deal.”

opportunity, which benefits both you and your salesperson.You won’t have to keep it neat every day you’re gone, and your salesperson will have total leeway in showing it. In addition, if your home has been showing for a longer period of time, you may want to take it off the market during certain times when buyers are more scarce, like around the holidays, to give yourself some breathing room, Sloane says.

MAKE THE LISTING TIME PLEASANT While it’s sometimes easier to advise this than follow through, consider bribing yourself and family members with rewards for different hurdles, such as flurries of showings over a weekend or several open houses. Grimes thinks the right attitude is another de-stressor.“If people have proper expectations – a fair price – rather than the mentality of greed, they’re more likely to reach their goal,” he says. Hearing back from your agent after each showing keeps you in tune to what’s going on, which can help lessen stress.

PACK BEFORE YOU MOVE Eventually, your house will sell, so start packing what you will keep in advance, which will save you time and future stress. When the house is sold, Grimes helps sellers who move locally avoid stress – and funds – by loaning them a moving van he owns.

AVOID FAMILY STRESS Remaining calm and united throughout will help your family ride out the selling process together.And don’t forget Lyles’ maxim:“All you need is one buyer.”

TAKE A BREAK Get away if you have the

insulation, that offers a higher Rvalue, hybrid septic systems that use a raised sand filter and aerobic digester to reduce the size of the septic field and accelerate the time it takes for waste matter to decompose, and different wrap products to reduce air leakage and energy loss. Robert Wisniewski, senior technical consultant with MaGrann Associates, Mount Laurel, N.J., says that at a minimum, all green homes should be Energy Star-certified and also feature: high-efficiency heating, cooling and lighting; proper mechanical air ventilation coupled with nontoxic finishes and furnishings for improved indoor air quality; water-saving, high-efficiency fixtures and appliances; building products and finish materials that contain recycled content and/or are locally available to help reduce the impact of transportation and environmental degradation. “The building shell, including insulation and windows, should be top priority,” says Wisniewski, who adds that energy-efficient home features can save homeowners a minimum of 15 percent on heating and cooling bills. Above all, says Wisniewski, a green home should be affordable.

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“To be green doesn’t necessarily need to be more expensive,” he says.“But as to be expected, there are high-cost and low-cost green buildings.” Beyond the bottom-line price to buy or build one, a green home constitutes a feel-good purchase for the owner, says Wisniewski. “Although a green building is better built and more efficient compared to a conventionally built home, there are key elements of green building that aren’t valued in terms of dollars,” Wisniewski says.These include “improved efficiencies that reduce pollution and promote fresh air, cleaner, free-flowing rivers and streams and environmentally sensitive site planning that helps provide community development and reduce erosion.” Most green building systems and amenities pay for themselves within the first year, says Freed. Larger items, such as solar panels, average five to 10 years before the costs are recouped. Emma Hamilton, certified ecobroker at The Corcoran Group in Manhattan, on the other hand, challenges these assumptions. “Do you ever recoup your costs on a non-green amenity?”

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Ask Our Broker CONTINUED FROM PAGE 1

then for our $100,000 loan at 6.7 percent you will pay $322.64 every two weeks instead of $645.28 monthly.The result: Instead of 30 years the loan will be repaid in 24 years. Check the numbers and you will see that on a monthly basis you are paying $7,743.36 a year ($645.28 x 12) versus $8,388.64 ($322.64 x 26).The “trick” with the biweekly plan is that you’re simply making the equivalent of 13 payments a year. Instead of issuing 14 extra checks, just increase your monthly payment by 8.5 percent to get the same result. • Escrow Account Payment Programs.These plans have you deposit your paycheck in an escrow account, and after all bills are paid any monthly surplus is then used to pay down your loan. It is claimed borrowers need a third party for such programs because they, the borrowers, lack discipline. Promoters say such plans can pay off loans in 12 years or so, but imagine how much faster a mortgage could be paid off if there were no up-front fees to set up such programs, no monthly charges and no interest collected by someone else. • Investment Offset Plans.With these programs money is invested and the returns are then used to prepay the mortgage.The problem? Fees and charges, of course. But, more importantly, what happens if the rate of return on the investment after all fees, charges and taxes is less than the interest rate on the mortgage? In that case, the borrower is behind and money that could have been used to prepay the loan is lost. © CTW Features Need real estate advice? Peter G. Miller, author of “The Common-Sense Mortgage,” would love to hear from you. Send your questions to [email protected]. Due to the volume received, not all letters may be answered.

Hamilton asks.“Unless the item in question allows you to be completely self-sufficient, it probably won’t ever truly ‘pay for itself,’ but the savings on bills will begin to add up, your impact on the planet will begin to decrease and your pride in yourself for making a step in the right direction will grow, inspire and educate.” Like real estate itself,“the greening of a home is a long-term investment,” Hamilton says.“The initial outlay may be pricier than the ‘regular’ version, but over time you will see the benefits, not only financially but as they relate to your health, comfort level and general well-being.” When shopping for a builder, look for one that is Energy Starcertified, says Wisniewski.An Energy Star home meets the guidelines for energy efficiency

set by the U.S. Environmental Protection Agency, is at least 15 percent more energy efficient than homes built to the 2004 International Residential Code and includes additional energysaving features that typically make it 20- to 30-percent more efficient than a standard home. Wisniewski says you may also want to choose a builder certified with LEED for Homes, a voluntary rating system that promotes the design and construction of high-performance green homes of which benefits include lower energy and water bills, reduced greenhouse-gas emissions, and less exposure to mold, mildew and other indoor toxins.

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