Going solar: Is it right for your home? #realestate

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Just a short time ago, saving the planet took precedence over saving a dollar. Times have changed, but in today’s economy homeowners are still trying to find ways to do both. Just ask John Shipman, an energy analyst at Energy Efficiency Management (http://www.energyefficiencypro.com/) and a green home performance contractor with Energy Star (http://www.energystar.gov). Shipman states that his company’s “whole-house energy audits have increased three folds” since President Obama has taken office. The President’s stimulus package has made energy conservation a priority with initiatives that focus on energy-efficiency upgrades to homes and businesses.

One of the most hyped government energy-conservation initiatives is the use of solar energy. In fact, the stimulus package was signed after the President visited the Denver Museum of Nature & Science, which boasts 465 solar panels on its rooftop. The federal government’s stimulus package helps with the cost to install solar panels on existing homes, with the hope that this cost savings will help stimulate energy conservation and boost employment in the industry. With the new stimulus package, homeowners will receive a federal tax credit of 30 percent off the total cost of installing solar panels on their homes. According to the Energy Star Web site, the tax credit is also good for geothermal heat pumps, solar water heaters, small wind energy systems, and fuel cells.

This federal tax credit is in addition to any tax credits or discounts a homeowner might receive from the state. Each state has its own rebate programs, including California. If a homeowner in California wants to install solar panels, a good place to start is by checking out the website created by the California’s Public Utilities Commission and Energy Commission. The California Solar Initiative Web site (http://www.gosolarcalifornia.org) “provides consumers a ‘one-stop shop’ for information on rebates, tax credits, and incentives for solar energy systems in California.” In a nutshell, existing homeowners that choose to install solar panels would receive an up-front rebate from the state government. The rebate would be “based on expected performance, and calculated by equipment ratings and installation factors (geographic location, tilt and shading).”

What does that mean to the average homeowner? If you live in the Pacific Gas and Electric Co. (http://www.pge.com/myhome/saveenergymoney/solarenergy/) area, for example, the state rebate would be $1.55 per watt for existing homeowners (you can check out your local electric company’s Web site for their cost savings). According to Vote Solar (http://www.votesolar.org), a non-profit initiative, “a typical home solar system generates about 3 kilowatts of power.” The installation cost in California averages roughly $8.10 per watt. The state rebate is currently $1.55 per watt for homeowners in Pacific Gas and Electric Co. territory. Therefore, the average state rebate is worth $4,650, in addition to the 30 percent cost savings from the federal government. That means the original estimated cost would be around $24,000, but after the rebates a homeowner could pay under $14,000.

Shipman thinks homeowners need to go one step further before going solar. “Solar is a fantastic renewable energy and there are a lot of advantages to it, however you need to do the basics before you put solar panels on a house. It’s like cooking the turkey with the oven half open.” What he and others in the industry believe is the first step to energy conservation in existing homes is to consider the “whole house approach.” For instance, installing energy-efficient windows is just one of the many ways a house can conserve energy before going solar. The effort to save money and the planet by a well-intentioned and discounted solar installation can be thwarted by old windows that leak heat and cool air.

If any homeowner is thinking about installing solar panels or doing any type of energy-efficiency upgrades, it is important to do the homework. There are several companies, both profit and non-profit that can do a home evaluation, as well as Web sites that discuss solar installation. For more information, visit the CALIFORNIA ASSOCIATION OF REALTORS® Green Web Site (http://green.car.org/).

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RENTERS REJOICE: Consumer Price Index Drops; No (0%) Annual Rent Adjustment for 2009-2010 #realestate

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At its June 25, 2009 meeting, the Rent Stabilization Commission announced that the annual rent adjustment for West Hollywood tenants subject to the City’s Rent Stabilization Ordinance is 0% (no allowed increase) for the period beginning September 1, 2009 and ending August 31, 2010.

The 0% (no allowed increase) amount was required under the City’s Rent Ordinance, which sets the annual general adjustment by looking at the change in the Los Angeles-Riverside-Orange County Consumer Price Index for all urban consumers from May to May each year.

As of May 2009, the Los Angeles CPI, which is calculated by the Department of Labor’s Bureau of Statistics, showed a decrease of 1.82% over the May 2008 number.

West Hollywood Municipal Code Section 17.36.020 states that: “In the event that the CPI decreases, no increase or decrease in rents shall be authorized pursuant to this chapter.”

For more information about the CPI, visit the Department of Labor, Bureau of Statistics web site: www.bls.gov/cpi or call (202) 691-7000.

“No rent increases may be given to any tenants between Sept. 1, 2009 and Aug. 31, 2010.”

General Adjustment: Questions & Answers

Q. With the 0% general adjustment, can rent be raised for any tenants?

A. No. No rent increases may be given to any tenants between Sept. 1, 2009 and Aug. 31, 2010.

Q. What if the landlord missed a general adjustment in the past. Can it be taken now?

A. Since 1996, annual adjustments are available on a “use it or lose it” basis. They are forfeited if not given during the year they are available. Any post 9/96 adjustments not given have been lost.

Q. Do landlords need to give tenants any written notice even though the rent isn’t going up?

A. No notice is necessary, that is why the Department did not enclose the blank rent increase form as is the standard practice.

Q. Can rent increases be given if the effective date is before Sept. 1, 2009?

A. Only if the tenant has lived in their unit at least 12 months and at least 12 months have passed since the last rent increase, if one was given. The increase available through August 31, 2009 is 2.75%. Remember, tenants must receive at least 30 days written notice under California law for any rent increase to be legal.

Q. Why is the West Hollywood general adjustment 0% when other rent control jurisdictions allow different amounts? Doesn’t everyone look at the same CPI statistics?

A. The rent ordinance for each rent controlled district determines what CPI data is used and how the data translates into the annual adjustment. West Hollywood takes 75% of the rise in the CPI from May to May and rounds to the nearest 1/4 of 1%, unless the CPI decreases, then no increase is allowed. Los Angeles Rent Stabilization averages the monthly CPI increase from September to September each year to determine the increase allowed the following July. Los Angeles also has a minimum adjustment of 3%, even when the CPI data is below that amount. Santa Monica does an annual study of landlord expenses. CPI data is included in the study, but not relied on as the sole determiner of the increase amount.

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Your Money: A Day to Tackle the Financial To-Do List: Excerpts for VRN Readers

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Your Money

A Day to Tackle the Financial To-Do List

By RON LIEBER

Published: July 4, 2009

Taking time, 10 or 12 hours, to tackle ever-postponed money tasks and clear the books can be lucrative.

• HIGH-YIELD SAVINGS ACCOUNT Though Internet savings accounts that pay above-average rates have been around for some time, I haven’t needed one. Now that we’re keeping more cash around in case we want to buy a new place to live, however, it makes sense to enroll.I put our money in an account via SmartyPig, a Web-based savings program. It pays an industry-beating 2.75 percent, though it comes with certain restrictions, like the requirement that you put at least $10 in your account each month.

• INSURANCE PAPERWORK If you’re lucky enough to have health insurance, you’re probably constantly adrift in a sea of forms that make no sense. We’re no different, but a major snafu caused us to have to switch plans a few months into 2009, throwing everything into utter disarray.

On fiscal health day, I got all of the paperwork divided into about a dozen piles to begin our assault on the benefits office and the various insurance companies involved.

• CASH-BACK CREDIT CARD The new Charles Schwab Bank Invest First Visa pays a straight 2 percent back into our Schwab brokerage account. That’s 0.75 percentage points better than we were earning with our Capital One card. The Schwab card also levies no foreign exchange fees for use outside the United States.

SHOPPING SPREE Yes, you get to have fun on fiscal health day. Gather up all of your gift cards and spend the money that’s left on them. The longer they sit, the more interest Apple or Borders or the department store will earn from your money and bigger the chance you’ll misplace the card.

Read more

Seems that I do this once a week lately, but with everything on AutoPay; I am so much less stressed and able to focus on making commissions and fighting the good fight. – Carlo.

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$100 million new CA home tax credit nearly gone

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$100 million new home tax credit nearly gone

The Franchise Tax Board (FTB) recently announced that the $100 million allocated by the state in new home tax credits will soon be gone. The FTB has received more than 9,800 applications, claiming nearly $95 million as of June 17, and plans to accept 12,000 applications to allow for duplicates, revisions, or invalid applications.

This tax credit is available for qualified buyers who, on or after March 1, 2009, and before March 1, 2010, purchase a qualified principal residence that has never been occupied. The buyer must reside in the new home for a minimum of two years immediately following the purchase date. To apply, an application for new home credit must be completed by the buyer and seller within one week after the close of escrow and faxed by the escrow person to the FTB at (916) 845-9754.

The FTB will continue to report the certificates issued on a weekly basis until the full $100 million has been allocated. FTB expects to complete processing all certificates in August. Each applicant will receive a notification indicating the amount of credit allocated or denied.

Requirements of the credit

* The home must be a “qualified principal residence” as defined under California Revenue and Taxation Code Section 17059(b)(1). The home must:
o Be a single-family residence, whether detached or attached.
o Never have been previously occupied.
o Be occupied by the taxpayer for a minimum of two years.
o Be eligible for the property tax homeowner’s exemption under California Revenue and Taxation Code Section 218.
* For over three successive taxable years, the total credit allocated among owners that occupy the home must not exceed $10,000. (Multiple qualified buyers that occupy the home will be allocated credit based on the amount paid and their percentage of ownership.)
* Any credit that reduced tax on a tax return must be repaid if the buyer does not occupy the home for at least two years immediately following the purchase date.
* FTB may request documentation to ensure buyers have complied with the requirements of the credit.

Contact FTB

Phone:

* 888.792.4900 (press 5)
* 916.845.4900 (not toll-free)

Email: wscs.gen@ftb.ca.gov
This is not a secure email address. Please do not send confidential information.

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Everyone Wants a Lower Price, But What About the Impact of Interest Rates?

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When shopping for a home, the natural tendency of any buyer is to want to pay the lowest price possible maybe even buying a foreclosure. It’s important to keep in mind, however, that the sales price is not the only factor that determines what the monthly payment will be. In fact, the impact of higher interest rates can easily nullify any benefit of waiting for a lower price.

Why Should I Rush to Buy?
While you may have heard discussions in the media about the decline of property values in many markets, the rate of decline appears to be stabilizing.

That being said, it would not be unreasonable for buyers to want to hold out for an additional decline of 10%, hoping to capture the best possible price. However, as property values have declined in many areas to 2003 levels or lower, waiting longer to pull the trigger could be a mistake. Many markets are reporting that lower property values have been bringing out investors and the result has been multiple offers on many properties. Properties priced correctly are not declining and, in fact, are creating a lot of interest.

Interest Rate Complacency
The problem is that many home buyers have been lulled into a sense of complacency because of extremely low interest rates. Since the Federal Reserve initiated its program of buying mortgage-backed securities, which control the rates people pay for their home loans, rates had been range bound, bouncing between 4.50% to 5.00% for a 30-year fixed-rate loan.

But buyers shouldn’t be confused by this. These rates are artificially low! Historically, interest rates have been above 6.00%. And any rate obtained below this number is a great deal, especially on homes with price tags from 2003!

Markets are Unforgiving
The last two weeks of May showed just how unforgiving the markets can be for people who choose to procrastinate. In just five days, interest rates from many lenders increased anywhere from .50% to 1.00% as fixed-income investors demanded more for their money.

For anyone who was waiting for prices to drop even more, a 1.00% increase in interest rate would bring a higher monthly principal and interest payment on a home, even if the price of that same home had fallen an additional 10% in value.

If you are waiting for prices to fall even lower, be aware that while holding out for a lower price may help you win the battle, you could lose the war in terms of monthly payments and overall affordability. With the Federal Reserve scheduled to end its buying of mortgage-backed securities this year, rates only stand to go higher for those that wait. In fact, interest rates are already on the rise and could go higher from here.

Clock is Ticking on Free Money
If you have clients who are planning on purchasing their first home this year, be sure to let them know that they need to take possession before 12/01/2009 to be eligible for a tax credit of up to $8,000. In a survey conducted in March by Move.com, nearly 50% of home buyers are currently unaware that this free money exists in the marketplace. And since over 50% of all buyers are first-timers in today’s market, this could impact a lot of your clients.

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Unmarried co-titled adults fulfilling 24-out-of-60-month occupancy eligible for 250K exemption

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DEAR BENNY: My partner and I have a very serious decision to make quite soon. Can unmarried, co-titled adults on a property, having fulfilled the 24-out-of-60-month occupancy requirement each be eligible for the $250,000 exemption? –Pamela

DEAR PAMELA: The answer is yes. So long as both of your are on title, and have owned and lived in the property for two out of the five years before the property is sold, each of you is entitled to take the up-to-$250,000 exclusion of gain.

For more general information, I suggest that you go to http://www.irs.gov, click on Publications, and access and print Publication 523, entitled “Selling Your Home.” In fact, the Internal Revenue Service has a number of publications on many aspects of real estate, and all are free and worth reading.

Benny L. Kass is a practicing attorney in Washington, D.C., and Maryland. No legal relationship is created by this column.

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#Tuition and Housing: As the next high school graduating class gets ready for #college

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As the next high school graduating class gets ready for college, tuition has never been a more important issue because of today’s tough economy. If you’re looking for ways to offset tuition for your kids, private scholarships are still available that don’t require perfect grades, a musical genius, or a great 3-point shot.

For example, www.FastWeb.com lists more than 1.5 million scholarships worth more than $3.4 billion, matching opportunities to your child’s unique profile. It’s important to note that you should never pay any application fees for scholarships.

Begin your search with your child’s guidance counselor. The financial-aid representative at the schools you’re applying to can also lead to you to other legitimate scholarship opportunities. And for a list of schools and universities in L.A. county with tips about student housing then click here.

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Veterans’ Educational Assistance Act (signed by Bush in ’08) is biggest education program since 1944

In August 2009, the Post- 9/11 Veterans’ Educational Assistance Act (signed by President Bush in 2008) kicks in for qualifying members of the military on active duty since September 11, 2001. The , this law is designed to provide veterans with a similar level of educational benefits provided to service members at the end of World War II.

Under the new law, qualifying veterans could receive payment up to the full cost of tuition and fees at the most expensive public school in the state in which you enroll. This basically guarantees a free education if you attend your state institution and qualify for the full amount. Under the new law, the current $1,200 program enrollment fee will also be waived.

According to the U.S. Department of Veterans Affairs, the maximum basic benefit is earned after serving an aggregate of 36 months of active duty service or after 30 days of continuous service for those individuals who were discharged for a service-connected disability. Individuals serving between 90 days and 36 months of aggregate active duty service will be eligible for a percentage of the maximum benefit.

Unlike previous bills, the new law extends equal benefits to activated members of the National Guard and the Reserves. The Veterans’ Administration has advised that clarification and possibly revision may occur until the law takes effect. To learn more about this important bill, visit http://www.gibill.va.gov.

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