“Out of sight, out of mind” is a phrase that can certainly be applied to the heat duct system that runs under your floor or through your attic. But just because you can’t see the ducts — and there still seems to be heat coming out of the registers — doesn’t mean that your heating system is working as well as it could. And since your heating system is typically the single biggest energy user in your home, small problems with the duct system have the potential to translate into big dollars being wasted each month. There are four basic steps that you’ll want to undertake in this order: inspect, repair, insulate and clean. Any or all of these steps can be taken by the ambitious do-it-yourselfer, or can be hired out to the pros.

The first step in the process is to inspect the system, which is going to mean some crawling around. With a strong light source — preferably a cordless one so you don’t have to worry about dragging cords behind you — work your way along each of the ducts. Look for areas where joints have come loose, or where support straps are missing, sagging or otherwise not providing adequate support for the ducts. This is especially important with flexible ducts, as large sags or kinks in the ducts can impede air flow. Pay particular attention to the joints where the ducts come together — the tape used to seal the joints can come loose over time, allowing air leaks to occur that waste heat. Since the joints may be partially or completely covered with insulation, it’s a good idea to have the heat on while you’re making your inspection. Feel along the ducts for air leaks, and also listen for any sounds of escaping air. (more…)

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Winter’s finally given the rooftops their first dusting of snow. But if every falling flake made you wonder whether your roof would survive another season, it’s time to consider these points, brought to you with help from the Department of Energy and roofing-material manufacturers. You need to know which kind of roof you have — flat, sloped or peaked — and what weight it will bear. This will determine the most appropriate roofing material. (Asphalt shingles aren’t right for a flat roof, for example).

Metal roofs, common long ago, are making a comeback — in steel, aluminum and copper, among other types. To reduce the corrosion rate, steel is galvanized with a zinc or zinc/aluminum coating. Metal is available as traditional seam-and-batten roofing, tiles, shingles and shakes. New metal roofs last two to three times longer than asphalt. Wood shakes look different on every roof. But in addition to a distinctive appearance, they can help insulate your attic and allow your house to breathe, circulating air through small openings under the felt rows on which the wooden shingles are laid. Traditional roofing tiles are made from clay. They are durable and low-maintenance, save energy and are environmentally friendly. Because the longevity of a tile roof also depends on the quality of the subroof, manufacturers are working to improve flashings and other aspects of the underlayment system. (more…)

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Instead of refinancing to get their hands on quick cash, many homeowners are finding themselves in financial trouble with little or no equity in their homes, and are walking away and letting the lenders foreclose. According to RealtyTrac, the nation’s leading online marketplace for foreclosed properties, 318,355 properties entered some stage of foreclosure nationwide during the third quarter of 2006, a 17 percent increase from the previous quarter and a 43 percent yearly increase from the third quarter of 2005. But the news is not all bad. Foreclosed properties have turned into a windfall for savvy investors.

Johnson and a partner bought a foreclosed property for $39,000, using financing from their credit cards; then with the title in hand, went to the bank and took out a $40,000 loan for an extensive rehab. A short time later, the home appraised at $115,000, $35,000 more than they had invested in it. Johnson’s next move was to try another technique, he sold the equity in the home to a new investor, then used the cash he got to buy another foreclosed property. How did Michael Johnson find the properties he ended up buying? He established relationships with some of the lenders in town, letting them know he could step in and take foreclosed properties off their hands. He also regularly goes down to the country courthouse to review foreclosure notices, then spends a lot of time doing research. In addition to determining the stability of properties that have been foreclosed on, he also has to take the amount of delinquent taxes and other charges into consideration. Recent reports indicate that four percent of all homes sold in the U.S. will eventually end up in foreclosure. And when a foreclosure is imminent, lenders are willing to be creative in order to avoid a prolonged legal process and unfavorable public relations.
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A Wall Street Journal analysis of 1,000 recent home sales shows that Zillow’s “Zestimates” often are very good, frequently within a few percentage points of the actual price paid. But when Zillow is bad, it can be terrible — off the mark by more than 25% on one in 10 homes. In one case it was off by $2 million. Zillow, based in Seattle, operates a Web site that offers free estimates and other online tools for real-estate buyers and sellers. It draws revenue from online advertising.

Zillow’s estimates come from a proprietary computer program that takes into account sale prices for nearby homes that appear comparable, the size and other physical attributes of the home, its past sales history and tax-assessment data, says Stan Humphries, vice president of data and analytics. Zillow tends to work best for midrange homes in areas where there are a lot of comparable houses, he says. It is less accurate for low- and high-end homes because there are fewer of those and thus less data available from comparable sales, known as “comps.” Values of rural homes are hard to gauge for the same reason. Partly for that reason, none of the Web sites can offer 100% coverage of U.S. homes; Zillow says it has estimates on about 57% of all homes. (more…)

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Federal investigators have uncovered what’s described in court documents as a multimillion-dollar mortgage scheme involving real estate prices, in a case that industry leaders believe could have wide implications. The scam, uncovered by the Internal Revenue Service, concerns more than 60 real estate transactions in Minnesota, all of them involving Jill Lehn, a former mortgage loan closing agent in Prior Lake.

Between December 2004 and August 2006, Lehn prepared loan documents that overstated the purchase price of properties and then concealed overpayments from lenders, according to the U.S. attorney’s office in Minnesota. In December, she pleaded guilty to one count each of wire fraud and money laundering in U.S. District Court, and is awaiting sentencing. The scam allowed buyers to pocket the difference between the actual purchase price of the property and the inflated mortgage amount. Lehn was the buyer in a half-dozen of the transactions. In all, buyers netted more than $3 million in fraudulent payments. (more…)

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As interest rates rise, more homeowners are falling into foreclosure. That is what is prompting the wave of bargain-hunting investors now descending on courthouse auctions across the country. “It’s just crazy. We have 100 houses [at auction] each week, when we used to have 10 or so,” says Elaine Began, a deed clerk in Macomb County, Mich. Three years ago, the Montgomery County (Ohio) Sheriff’s Office was “lucky to get 50 people to an auction,” says Laura Wright, a foreclosure clerk there. Today, 120 often show up. Some may be sorry they did. Novices face a host of risks.

The process usually begins when mortgagees fall three months behind on payments. The lender sends a default notice to the homeowner and to the county. If the homeowner can’t pay up, a foreclosure date is set. County officials handle the auction and use the proceeds to pay off the mortgage and any other debts secured by the house. Leftover money goes to the foreclosed homeowner; leftover debt, in some cases, is the new owner’s responsibility. The mortgage lenders typically bid up to the remaining principal amount plus any foreclosure fees. Their goal is to recoup what they are owed, either from investors bidding more or by buying the home and reselling it. Foreclosed homeowners sometimes join the bidding and win the auction, even though they don’t have the money, effectively delaying their eviction until another auction is held. Investors can get in the game before or after auctions, too. They can try to buy directly from homeowners beforehand or from lenders who win the auction. (more…)

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The U.S. housing market has not reached bottom and will likely not begin to recover until the middle of this year, three housing economists said this week. The weakness will extend to existing-home and new-home sales and housing starts as well as to home prices, which are likely to show their first full-year decline nationally since records have been kept, the economists told home builders at their annual convention here.

The biggest problem the housing market faces is “a seriously large inventory situation,” said David Seiders, chief economist for the National Association of Home Builders, which is hosting the International Builders Show here this week. Seiders said the housing boom in 2004 and 2005 produced at least 400,000 more housing units than demand could support, and builders are having to push hard to move those homes off the market. Seiders said, though, that he believes home sales did hit bottom in the fourth quarter and that housing will make a “gradual recovery” over the next two years. He said housing could actually begin to make a positive contribution to economic growth again starting in the second half of this year. (more…)

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When asked about the “dismal science” and what exactly economists do, most people think they study money. In fact, economists use various analytic tools to predict behavior. But, the public is partially correct because the majority of economists’ predictions deal with financial matters. When economists talk about new houses, for example, their focus is invariably on the factors that determine housing prices, such as mortgage interest rates.

In a recent interview, Rayo discussed their research on happiness as it applies to the purchase of a new house, an enterprise that most buyers find is fraught with emotion. Before you fall off your chair guffawing, insisting that you know happiness when you see it and that some pointy-headed economist couldn’t possibly say anything that would be helpful, listen up. You’re likely to find that much of Rayo and Becker’s research resonates with your own experience. Rayo began our conversation on a philosophical note. “What is happiness, exactly? Much of what we call ‘happiness’ is relative and based on comparison,” he said. “We are always comparing what we have to something else. But, we’re not anticipating that no matter what we have we will always be comparing it to something else. In fact, we’re not even aware that we are doing this.” (more…)

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Probably the biggest advantage that comes from having a good credit score is being able to get lower interest rates on loans. The reason you have a good credit score is because you know how to manage your credit wisely. You pay back your loans and make payments on a timely basis. Lenders know by your credit score that you’re less of a credit risk–you’re less likely to default on your loan, so they’re more willing to give you a cheaper interest rate. And the lower your interest rate, the lower your monthly payment. In essence, having good credit saves you money.

As a result of your good credit score, the more freedom you have to shop around–for loans and for lenders. You can shop around for more types of loans since you qualify for more. You don’t have to go with the first one you find. It’s better to shop around for the loan that best suits your financial goals and your individual situation. For example, let’s say you just accepted a new permanent position and were moving with your family. You want your kids to grow up there and didn’t plan on moving. You might go with a 30-year fixed-rate mortgage. But, in contrast, let’s say you wanted to invest in a rental property and needed some flexibility in payment. You might then go with an option ARM that allows you to make different types of payments at different times. (more…)

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Renting a home — apartment, condo, townhouse or single family — is the first real estate transaction for many residents. About one third of residents in the U.S. are still tenants in a country dominated by homeownership at 67 percent. The Deed of Lease lays out the responsibilities and rights of both the landlord and the tenant. Even though a landlord owns the property, some of his or her rights to the property are limited once the house is rented to another person. While he may have the right to enter the property as the owner, for instance, it’s not at will. Most leases spell out how the landlord may gain access to the house.

The Landlord Maintenance clause makes it clear that the landlord is to keep the property in good repair and “tenantable” condition. Pretty much that means keep the appliances working, plumbing flowing and electricity safe. Equally important is the Tenant Obligations clause, which stipulates that while the landlord is there to keep the house tenantable, the tenant is supposed to take care of the daily routine stuff, such as: use appliances as directed; furnish and replace light bulbs; maintaining caulk around tubs and showers; and promptly reporting in writing any defects, damage or breakage. If a tenant does the notification and the landlord doesn’t fix it, there may be the opportunity for the tenant to institute the “repair and deduct” regulations in the state to repair the unit and deduct those repairs from the rent. (more…)

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