Greg Hanner's Blog

How Smart Is It to Buy a Home Today?

4 Ways to Be Ready for a Bidding War

In today's competitive market, the average home for sale receives multiple offers. Let's connect to make sure you're fully prepared as a homebuyer for a potential bidding war.

13 Gravel St, Mystic, CT 06355 - SOLD $880,000
Get the broker who REALLY knows homes!
Greg helps Buyers and Sellers who are seeking efficiency in their home buying or selling experience.
This home wasn't sold by a listing agent practicing the 3 P's
(Put the home in the MLS, Plant the sign in the front yard, and Pray that it sells)
It had Professional Photography
It had an Electronic Lockbox For Maximum Security

It had a Self-Guided 3D/VR Tour:  www.rebrand.ly/3d-13gravel

It had a narrated Video Walkthrough: www.youtu.be/5fbM8nUGoxI
See the Full Listing here:  www.rebrand.ly/13-gravel-listing

Greg Hanner, Broker/Owner, CRS, e-PRO
860-608-8659
email: Greg@GardenRealty.com
web: www.GardenRealty.com/GregHanner

The calendar change to a new year can be an inspiration for resolutions that are often centered on one’s body and mind.  The start of the New Year can also be a catalyst for a homeowner to embark on pruning their homeownership expenses.  The New Year ushers in the time of tax preparation and organizing, so why not expand those activities to giving your homeownership a quick review?  The following is a list of items that one might want to consider if they are interested in saving some money and if they want to be better prepared for future expenses for home maintenance and repairs.

1. Confirm Monthly Costs Are Necessary or Still Desired:
   
   
   1. PMI – Private Mortgage Insurance is a cost that Owners have when their original mortgage exceeded 80% of the house purchase value. If you’ve had your mortgage for a number of years, you might want to check what your mortgage balance is versus the current home value as PMI may be able to be dropped saving you hundreds of dollars per month. Mortgage terms vary widely so checking with your lender as to how and when the PMI costs can be deleted is best. Some Owners get the PMI dropped via their commissioning an independent appraisal and then providing the appraisal to their lender. Check with your lender first on the process for deleting PMI expenses.
      
      
   2. Mortgage – Many homeowners with mortgages having high-interest rates have already refinanced and many of those who were “underwater” (home’s value is less than the amount owed on the home) have taken advantage of refinancing or modification options to reduce their mortgage costs. You might want to confirm your interest rate is competitive with today’s low rates.
      
      If you have a HELOC (Home Equity Line of Credit) loan, you might want to look at when you took out that equity line of credit since they often have initial interest-only terms of 10 years. After that time, one has to pay off the line of credit. Refinancing that debt or extending the term via obtaining a new HELOC loan may be desirable and help provide more time for repayment of the debt incurred on your line of credit.
      
      
   3. Electric Provider – Most homeowners in CT can select their electricity generation provider. Do you know what you are paying / KW for your electric generation fees? You should since the providers available have generation fees that can vary by close to 100% from the cheapest to the most expensive providers. There are fixed and variable rate plans available. More on selecting an electric supplier can be found here: http://www.energizect.com/
      
      
   4. Communication & Entertainment – When is the last time you studied what you are spending on TV, Phone, Internet, and Streaming Alternatives? Do you use all of them? You might find savings in bundling your services OR by deleting services you don’t use. If you haven’t used a monthly media streaming service for months, then why not cancel your subscription to that service? The new streaming hardware devices like Roku / Chromecast / Amazon / Apple TV all tout thousands of streaming providers however they don’t really do a good job at explaining that many of these services require recurring monthly costs.
      
      I’ve seen many of my new custom home clients have even gone as far as not wanting a traditional landline for their phones. There are also inexpensive landline phone options which use your broadband connection for their connection! Two of these services are Ooma and Magic Jack. A pretty good review of these and others can be found here: http://tinyurl.com/opehu9f
      
      
2. Maintenance Review:
   
   Are you putting off maintenance to the point that you are only reacting to items when they become emergency repairs? If your answer to that question is “what maintenance? I just pay my mortgage, taxes and insurance.” then you are probably costing yourself a lot of money for expensive service calls OR you are reducing your home’s resale value when it comes time to sell your home. I wrote a quick post about recurring maintenance items back in April 2013 and you might want to review that post. Here are the most important items that should be checked first to avoid wasting money on emergency repairs:
   
   

   Exterior Inspection:  The winter months bring shorter daylight hours so vacation and holiday time gives the perfect opportunity to go outside on a nice day and take a look around your home.  Looking around your home and yard sounds like a remarkably easy task that many folks never make time for, but for those that do, they can often spot future problems before they become emergencies or before they cause structural damage that’s expensive to repair.
   
   Checklist of what you might want to look at OUTSIDE the home:

   • Roof Condition – Roof shingles last normally 20-30 years. Often, roof plumbing vent flashing “boots” can fail long before the shingles do. If you notice a crack in the rubber plumbing vent pipe flashing, then it will need to be replaced. Making that repair will be much less expensive than repairs needed after water damages the ceiling below.
   • Gutters – Are they clean? Are they secure? Clogged gutters are often root causes for water getting into homes during winter storms that end with rain events. If you notice snow on your roof except down along the gutters, that’s a sign of insulation issues that will often migrate into ice damming problems. If your gutters are tied into underground gutter drain pipes, is the daylight end clear and unobstructed?
   • Siding and Trim – Are there any areas of siding or trim missing or damaged?
   • The ground around the foundation – Has it settled and created low areas against your foundation? Is it properly pitched so that water will run away from your foundation?
   • Driveway – Are cracks sealed? Water entering cracks in paved driveways is increases the ground movement during freezing weather and that movement is a root cause of the need for driveways needing to be replaced.
   • Decks and porches – Are they sealed or painted? Is the framing securely fastened to the building still? Are handrails and steps all still secure and in place?
   • Trees and shrubs – Have the trees grown to the point of overhanging your home? Are tree branches all in good shape? Are bushes all pruned and trimmed so they don’t touch the house?

Checklist of maintenance items you might want to look at INSIDE the home:

• Heating System – Has your heating system been serviced this year? If you have a forced hot air heating system, has the air filter and humidifier pad been replaced?
• Heating Source – A while back, I wrote a review on cost differences between Oil and Propane as heating alternatives. Currently, oil costs have dropped considerably, but I believe this price easing in oil will be short lived and oil prices will rise again over the next few years.
• Wells - Change your sediment filter as needed. Pressure drop is a tell tail sign that your well sediment filter needs to be changed. Water treatment systems often need to be check to be sure that softener salt levels are correct (let them run down to minimum level before refilling). Acid neutralizing media often needs to be replaced once per year. If you have a water treatment system that has an acid neutralizer, not having calcium media present has potential to cause serious damage to your home's water piping due to the aggressive nature that low PH water has.
• Frozen Pipes – Don’t let the mild winter so far lull you into thinking that Old Man Winter won’t have is way with us at some point in the near future. When that time comes, if you find you have Frozen Pipes in your home, you can learn more about how to deal with Frozen Pipes in my post about them here:  http://www.gardenrealty.com/Frozen+Pipes 

I hope these tips and ideas help you save money and start your new year off right!  If you have any homeownership questions or problems that you would like to have my thoughts on, don’t hesitate to let me know.

1. Clean Gutters - Spring & Fall.
2. Lime Lawn - Early Spring and late Fall.  
3. Clean Siding - Remove mildew, mold, or dust from siding and trim
4. Lawn and Garden - Establish a fertilization schedule that includes pest and weed control.  Pick up sticks and leaves ASAP.  Mower heights should be raised in summer.  Water lawns in the early morning instead of late in the day or at night since doing so minimized fungal diseases in lawns.
5. Pool - Opening/Operating/Closing checklists are easy to make and will make your pool a feature that's enjoyable and healthy for your family/friends.
6. Driveway - Patch and repair cracks as they appear and seal your paved driveway every 2-3 years as needed.  Sealing annually isn't needed.  Wear of the surface of the sealer is the indicator that tells you when sealing is needed.

1. Fuel Level Checks - If you are on "will call" and not automatic delivery for home heating oil or Propane gas, setting calendar reminders to check for fuel levels before you run out of fuel is a must to avoid having the unnecessary expense of a service call for emergency delivery or oil burner service after running out of fuel.
2. HVAC system service - Oil burners need to be serviced once per year (filters are changed, burner nozzles are changed, burner efficiency is checked, and combustion chamber and smoke pipes are cleaned).  A/C pressure levels are checked and condensate drain lines are checked for proper operation and confirmation that they are clear.
3. Furnaces - Air filters and humidifiers need to be regularly changed.  Changing from heat mode to A/C mode in the Spring often is the trigger for shutting off your humidifier and turning a damper at the humidifier to a closed position on the humidifier.  The opposite occurs in the Fall when you are done with your air conditioning and resuming heating your home.
4. Well - Change your sediment filter as needed.  Pressure drop is a tell-tail sign that your well sediment filter needs to be changed.  Water treatment systems often need to be check to be sure that softener salt levels are correct (let them run down to minimum level before refilling).  Acid neutralizing media often needs to be replaced once per year.  If you have a water treatment system that has an acid neutralizer, not having calcium media present has the potential to cause serious damage to your home's water piping due to the aggressive nature that low PH water has.
5. Central Vac - Most of the units are located out of view in your basement or garage and it's easy to forget to empty your central vac.  One should empty their central vac unit a minimum of twice per year and don't forget to clean (with compressed air or physically - not with water) any air filter media that might be present up high just below the motor portion of the unit.  If you use a regular vacuum, then knowing when to change or empty the unit should be obvious when performance is lacking or when you can see visually in units that have clear canisters for debris to be collected in.  
6. Dryer vent line - I try to use my vacuum's narrow attachment and vacuum out excess lint that might be visible where my lint filter is. 
7. Refrigerator - There is a fan that moves air across your refrigerator coils and that's how it cools (transfers heat from inside) your refrigerator/freezer into your Kitchen.  Using a special narrow attachment for your vacuum, you can decrease your energy bill by increasing your refrigerator's efficiency by simply making sure the refrigerator coils are clear of dust.  Many of today's refrigerators have grills that are removable at the bottom and you'll see the accumulation of dust under modern units that are easily removable.  Don't forget that many newer refrigerators have water filters that should be replaced a minimum of annually.
8. Tub/Shower and Sink drains - I'm not a fan of using chemicals to clean clogs.  Hair is the #1 cause of clogs and one can easily take apart drain traps at sinks (sink drain tailpipe pop-up mechanisms catch a lot of hair there) and clear them so sinks drain quickly.  HERE is a good article with tips on clearing bathroom sink drains.  Tub/shower drains should flow quickly and if they don't, taking apart the drain overflow will allow one to get the drain mechanism out of the way so hairballs can be removed with a simple coat hanger (yes, it's a nasty job, but easily done).  HERE is a good video on the topic from a master plumber.  Trust me, those who use the tub/shower will appreciate not standing in soapy water after you clear the drain and the tub/shower basin stays cleaner.
9. Smoke Detectors - Smoke detector batteries need to be replaced once per year.  The service life of Smoke and CO detectors is said to be 10 years.  Keep your family safe by remembering to service your smoke and CO detectors.

When buying an existing home that has a well and septic system, many Buyers wonder why they should test these systems if everything seems to work well inside the home.  It is advisable to have both well and septic inspections done by experienced professionals in their respective fields and most Purchase and Sale agreements provide for Buyers to be able to do such inspections/tests. 

I'll add more details so that you understand what you should test for. Remember, the testing is an opportunity for you to confirm that both the well and septic system will provide you with years of trouble-free service and also provide you with not only potable (drinkable) water, but with water quality that YOU want to live with.

On the well, you want to evaluate three issues. I'll speak from the perspective of modern drilled wells as that's what's most common in my area and in the new construction that I deal with:

1. Yield: Should be tested to confirm what its yield (GPM - Gallons Per Minute) is and the records on file should give you an idea of the well depth and static level (the natural level below the surface of the ground that water settles at). These two pieces of info give you an idea of how much water your well will deliver. The deeper the well, the more reserve water you might have available for use. In a well with a 6" casing, there are 1.5 gallons per foot of water column (drill depth - static level - pump distance off the bottom of well = water column x 1.5 = total gallons in ground).

2. Pressure/Output Capacity: This is related to yield because a low yield would limit the best delivery system's capacity to provide you with water on demand. The deeper the well, the larger the pump must be to push the water out of the well when you put stress on it during peak use and when the static level is drawn down. Larger pressure tanks inside the home are generally better in that they will put fewer cycles on the good pump. If you are planning to add an irrigation system, these two issues need to be evaluated by someone knowledgeable so that you can confirm that the existing well has the capacity to support the load that irrigation will put on the well.

3. Water Quality: There is a difference between water that is potable (safe for human consumption) and water that is high quality. Learn more about any treatment system that is already installed. If there is an existing water treatment system, its backwash drain line should NOT be tied into the septic system drain. The current public health code prohibits this. Most well water tests are for all forms of contaminants including but not limited to bacteria, hardness, pesticides, nitrate, VOCs, radon, and metals. After that, the biggest concern I have with water quality is that if the natural water is aggressive, meaning low in PH and other factors are present, that condition needs to be corrected via a treatment system in order to avoid the copper plumbing in the home from getting damaged and failing. If you see a green residue in the toilet tank, that's possibly a sign that the copper plumbing may be negatively affected by the water quality. I'll add one test to Len's list and that you might want to test for fluoride if you have young children knowing what the natural level of fluoride in the water is will allow you to set a proper supplemental level of fluoride to provide your children with should you want to do that (it helps with teeth development).

On the septic system, there are a number of things to look at and consider:

1.  You should obtain is the septic system as-built.  It will provide you with information on where the septic tank is located along with the primary and reserve leaching areas are located.  This is important if you are considering putting on an addition to the home or installing a pool since there are separating distances that must be adhered to and if the back yard is used up by the septic system, you may be prohibited from installing an addition or pool.  You should also look at the Permit To Discharge to see what limitations were set by the sanitarian when the system was installed.  If the system is designed for a 3 Bedroom home and you see the listing for the home saying 5 bedrooms, there may be improvements to the home that were done without permits, or at a minimum, you may want to confirm that the septic system was expanded and improved to accommodate the current homes use and sanitary output.

2.  Modern septic systems have two-compartment septic tanks and then primary and secondary leaching areas.  The tank typically will get pumped when inspected and the pumping costs are normally paid for by the Seller.  Newer systems also have effluent filters that prevent solids from leaving the tank and then ruining the leaching area.  These filters need to be cleaned periodically.  The access to the septic tank is via risers that need to be no deeper than 12" below the surface of the lawn or yard.  If they are deeper, then new risers should be added at the time of septic tank inspection.

3.  Older systems can have a number of issues that can be expensive to fix.  Cesspools are where the tank and leaching is an all-in-one location and these are now prohibited by the health code and some forms of financing.  Single compartment tanks are also a problem in that they often allow solids to run to the leaching area and that plugs up the soil and leads to premature failure.  Another issue with older systems is the problem of seasonal rising groundwater flooding the leaching area since they were originally installed below high groundwater levels or too close to restrictive layers in the soil.  There's a lot to know about how septic systems work.

The bottom line on wells and septic systems in older homes, get them tested and confirm that they have the capacity to accommodate the current home use and any expanded use that you might desire.  Here's a quick video (sorry for the wind noise) of a septic tank inspection:

Are you a HOMEOWNER paying a mortgage and struggling with making your mortgage payment? RENTER and out of work not able to pay your rent? Are you a LANDLORD not receiving rent from some tenants? Then this info may help you during this COVID-19 crisis.  

Here's the best link I've found on assistance to avoid having your credit hurt and outlining options that may be available to you:  https://www.consumerfinance.gov/about-us/blog/guide-coronavirus-mortgage-relief-options/  The Consumer Financial Protection Bureau has a great list of additional info here:  https://www.consumerfinance.gov/coronavirus 

HOMEOWNERS in need:  You MUST take action and you can't sit on your hands without damaging your credit and putting your home at risk. You need to contact your lender! There is the ability to defer making mortgage payments until you return to work. This doesn't mean you don't owe them money, it just means lenders will give you extra time at the end of your mortgage term to pay the months that you don't pay. Great info for homeowners having difficulty with making their mortgage payments: https://portal.ct.gov/DOB/Consumer/Consumer-Help/COVID-19-Mortgage-Relief 

To check if your mortgage is Fannie Mae go here https://www.knowyouroptions.com/loanlookup and if your mortgage is Freddie Mac go here https://ww3.freddiemac.com/loanlookup/

RENTERS:  Call your landlord if you are struggling. The CT governor has issued another executive order 7X, this one:  

1) Prohibits all landlords from issuing a notice to quit or beginning eviction proceedings before July 1, 2020, except for serious nuisances, such as physically harming another tenant or the landlord.

2) For rent due in April 2020, landlords must grant tenants an automatic, 60-day grace period for payment, instead of the existing 9-day grace period.

3) For rent due in May 2020, landlords must grant a 60-day grace period for payment upon the request of tenants. Under this provision, a tenant must notify the landlord that they have lost a job, lost hours, or otherwise lost revenue or faced significantly increased expenses as a result of the COVID-19 pandemic.

4) If a tenant has a paid security deposit of more than one month’s rent, the tenant can apply all or part of that excess to April, May, or June rent. Under this provision, the tenant must notify the landlord that they have lost a job, lost hours, or otherwise lost revenue or faced significantly increased expenses as a result of the COVID-19 pandemic.

LANDLORDS:  If you have many tenants not paying rent and that's making it difficult for you to pay your investment property mortgage, you are also able to seek forbearance. Use the mortgage lookup tools above if you think your investment property mortgage may be with one of those to government entities. Can you do me a favor? PLEASE share this info with as many people that may need help.

Happy Easter!!!

Getting pre-approved for a mortgage is a great thing you can do from your home and it will give you an edge over other Buyers so that you're in the best possible home buying position when this health crisis is over.

Why the Stock Market Correction Probably Won’t Impact Home Values

With the housing crash of 2006-2008 still visible in the rear-view mirror, many are concerned the current correction in the stock market is a sign that home values are also about to tumble. What’s taking place today, however, is nothing like what happened the last time. The S&P 500 did fall by over fifty percent from October 2007 to March 2009, and home values did depreciate in 2007, 2008, and 2009 – but that was because that economic slowdown was mainly caused by a collapsing real estate market and a meltdown in the mortgage market.

This time, the stock market correction is being caused by an outside event (the coronavirus) with no connection to the housing industry. Many experts are saying the current situation is much more reminiscent of the challenges we had when the dot.com crash was immediately followed by 9/11. As an example, David Rosenberg, Chief Economist with Gluskin Sheff + Associates Inc., recently explained:

“What 9/11 has in common with what is happening today is that this shock has also generated fear, angst and anxiety among the general public. People avoided crowds then as they believed another terrorist attack was coming and are acting the same today to avoid getting sick. The same parts of the economy are under pressure - airlines, leisure, hospitality, restaurants, entertainment - consumer discretionary services in general.”

Since the current situation resembles the stock market correction in the early 2000s, let’s review what happened to home values during that time.The S&P dropped 45% between September 2000 and October 2002. Home prices, on the other hand, appreciated nicely at the same time. That stock market correction proved not to have any negative impact on home values.

Bottom Line

If the current situation is more like the markets in the early 2000s versus the markets during the Great Recession, home values should be minimally affected, if at all.