Consumer Real Estate Blog

I showed a property this past week and the heat pump looked like this:

I then decided to post this guide for people having trouble with their heat pumps, during these harsh winter months. However, if your heat-pump looks like the one in the photo above, you should call an expert in your area immediately. It is not supposed to look like that! Notice the entire area around the pump is not covered in ice/snow either. Please read: 

A Guide to Heat Pumps

Heat pumps make use of the same basic technology utilized in air conditioning systems to provide for both the heating and cooling needs of a house. In cold weather, a heat pump uses the heat present in outdoor air or stored in the earth to provide heat to the inside of a house. In warm weather, the same equipment works in a reverse manner, removing heat from indoors and transferring it to the outdoors. For this reason, heat pumps are sometimes referred to as reverse-cycle air conditioners. Heat pumps are very energy-efficient heating systems. Since they do not generate heat like conventional fuel-burning systems, but only transfer it from one location to another, they require much less energy to produce the same amount of heat as other heating systems. While it may be hard to comprehend, there actually is enough “heat” in outdoor air or below the frozen earth surface to heat a house during the winter months. However, the amount of available heat decreases dramatically at lower temperatures. Consequently, the efficiency of a heat pump also decreases significantly as the temperature of the heat source drops below moderate levels; a factor that indicates heat pumps are not well suited for all climates. Most houses with heat pumps also need a supplemental source of heat for low-temperature conditions (typically when air temperatures fall below about 40º F or 4º C). Heat pumps are able to transfer heat by the movement of a refrigerant through an alternating cycle of evaporation and condensation. An electric-powered compressor drives the refrigerant through the cycle – as it does in most residential air conditioning and refrigeration systems – allowing it to absorb heat at one point and give it up at another. The primary components of a heat-pump system are basically the same as those found in air conditioning and refrigeration systems. But a heat pump uses a special four-way (reversing) valve that automatically changes the direction of the refrigerant flow – allowing the system to remove heat from outdoors in winter and from indoors in summer. There are two basic types of heat pumps: (1) air-source and (2) geothermal heat pumps. The majority of heat pumps are air-source systems, which use outdoor air as a heat source in winter, and air as the medium to which heat is transferred to in the summer. Geothermal systems make use of the heat available year round in the earth or water. There are two types of geothermal systems: (1) open systems, which use the water from a well as a heat source, and (2) closed systems, which use a liquid run through a continuous loop of piping buried in the ground or installed in a body of water. Geothermal heat pumps are very efficient systems but also very expensive to install. In cold weather, a fan draws outdoor air across a coil containing an even colder refrigerant. The refrigerant absorbs the heat in the air (as heat moves from hot to cold) and is drawn as a gas into the compressor where a pressure increase creates a temperature increase. The refrigerant is then pumped to the indoor coil where a fan blows air across the coil (condenser) and the refrigerant’s heat is transferred to the cooler household air. The resulting warmed air is distributed throughout the home via a duct system. Meanwhile the refrigerant, which has condensed to a liquid, travels back to the outdoor coil where the cycle begins again. In warm weather, the reversing value automatically changes the direction of the refrigerant flow and heat from indoors is transferred outdoors. When the outdoor air temperature dips appreciably, a supplemental heating system (often electric resistance coils) provides the needed heating boost. As in all electrically heated homes, adequate wall and ceiling insulation, as well as insulated windows or storms, is a necessity if utility bills are to be kept reasonable. One issue to note: The temperature of the heated air provided by a heat pump (90°-100°F, 32°-38°C) is lower than that provided by a conventional warm air system (+120°F, +99°C), and may even be lower than body temperature. For this reason, a high volume/low velocity duct system with properly placed supply outlets is required to maintain heating comfort. Heat pump manufacturers recommend homeowners consider the following operational and maintenance issues: Air filters should be cleaned or replaced on a regular basis (typically monthly in season). A heat pump works most efficiently when it maintains room temperature; avoid large temperature setbacks overnight or during the work day. While it may seem cold air is coming from the supply outlets during the heating season, this is a factor of heat pump design; comfort heating should still be attainable with a properly designed and used system. The system will periodically go into a defrost mode to remove any ice build-up on the outdoor coil in the winter. The outdoor unit should be positioned above the prevailing snow line with suitable clearance around the unit maintained year round. Expect the unit to run continuously at low outdoor temperatures, or a switch over to the supplemental heat system. Modern heat pumps have an expected economic life span of 6- 12 years, with annual servicing and proper use. Remember, these tips are only general guidelines. Since each situation is different, contact a professional if you have questions about a specific issue. More home safety and maintenance information is available online at housemaster.com.

Winterizing Your Home

Whether you are buying or selling a home, you should have a professional home inspection performed by an experienced inspector.

A home inspection will look at the systems that make up the building such as:      

•     Structural elements, foundation, framing etc
•     Plumbing systems 
•      Roofing
•      Electrical systems
•     Cosmetic condition, paint, siding etc 

If you are buying a home, you need to know exactly what you are getting. A home inspection, performed by a professional home inspector, will reveal any hidden problems with the home so that they may be addressed BEFORE the deal is closed. You should require an inspection at the time you make a formal offer. Make sure the contract has an inspection contingency. Then, hire your own inspector and pay close attention to the inspection report. If you aren't comfortable with what he finds, you should kill the deal.

Likewise, if you are selling a home, you want to know about such potential hidden problems before your house goes on the market. Almost all contracts include the condition that the contract is contingent upon completion of a satisfactory inspection.

And most buyers are going to insist that the inspection be a professional home inspection, usually by an inspector they hire. If the buyer's inspector finds a problem, it can cause the buyer to get cold feet and the deal can often fall through. At best, surprise problems uncovered by the buyer's inspector will cause delays in closing, and usually you will have to pay for repairs at the last minute, or take a lower price on your home.

It's better to pay for your own inspection before putting your home on the market. Find out about any hidden problems and correct them in advance. Otherwise, you can count on the buyer's inspector finding them, at the worst possible time. Old Man Winter is settling in for a long chilly season. Before the temperatures dip too far south, follow these simple guidelines to winterize your home and save money on utilities.

Inside Your Home

• Have your furnace system serviced to ensure it's working efficiently and not emitting carbon monoxide.
• Clean permanent furnace filters and replace paper or disposable filters.
• Replace the batteries in smoke and carbon monoxide detectors.
• If you have a wood stove or fireplace, have your chimney swept thoroughly. It should be cleaned before the soot build up reaches one-fourth inch thickness inside the chimney flue.
• Check your hot water heater for leaks and maintain proper temperature setting (120 degrees recommended by Department of Energy). On older water heaters with less insulation, for every 10 degrees Fahrenheit you lower the temperature, you save 6 percent of your water heating energy.
• Check the attic to see if insulation needs to be added or replaced. This is the most significant area of heat loss in many homes, so it is also important to see that it has proper ventilation. Inadequate ventilation could lead to premature deterioration of the insulation materials. You may also need to check insulation in exterior walls, crawl spaces and along foundation walls.
• Check all windows and doors for air leaks. Install storm windows and putty, caulk or add weather stripping as needed.
• Check basement and cellars for seal cracks or leaks in walls and floor.
• Make sure all vents are clean and operating properly.
• Clean and vacuum baseboard heaters, heating ducts and vents.
• Remove or winterize air conditioning units.

See the following chart on common air leaks:

Click here to find the US Department of Energy's web site on saving $$(energy): 

Outside Your Home

• Store or cover outdoor furniture, toys and grill.
• Purchase rock salt for melting snow and a shovel or snow blower if you don't already have one. Make sure you have the right kind of gas and oil on hand for your snow blower in the case of an unexpected snowstorm.
• Caulk joints and minor cracks on exterior walls and siding.
• Look for deteriorating finishes. Minor problems can be patched to preserve the wood. Put bigger jobs, such as scraping and refinishing painted or stained areas, on the calendar for next spring or early summer.
• Drain and shut off sprinkler systems and other exterior water lines to avoid frozen and broken pipes. Leave all taps slightly open.
• Insulate exterior spigots and other pipes that are subject to freezing but can't be drained or shut off.
• Rake and compost leaves and garden debris, or put out for yard-waste pickup.
• Clean storm drains, gutters and other drain pipes.
• Check the foundation for proper drainage. To do this, spray yard with a hose to see if water runs away from the house. A little shoveling to reshape the earth next to the house may make the water run away from the foundation.
• Make sure dirt or piles of wood don't come into contact with or touch siding, inviting termites and carpenter ants into the house.
• Seal driveway and walkway cracks, if needed, before ground freezes regularly.
• Inspect the roof for loose, damaged or missing pieces.
• Check attic vent openings for nests or other blockages.

Lane Midgett

Associate Broker, ABR®, e-PRO®

1776 Real Estate Group

901 Register Parkway Suite A
Richmond, Va, 23226

Work: 804-565-1776

 Fax:    800-618-0383

lane@lanemidgett.com

www.lanemidgett.com

"I work for your trust and referrals, not for the commission"

Rather, a home inspection is an assessment of the condition of the major accessible elements of the home by a professionally trained inspector. Issues may arise based on a buyer’s specific concerns regarding the home inspection report findings, their particular expectations and the specific terms of the sales contract. But there are things you can do to help the home inspection go smoothly, ensuring the best possible outcome for all parties and the least inconvenience to you. Confirm utilities (electric, water, gas, fuel oil, etc.) are all on Pilot lights for water heaters, fireplace logs etc. should be lite. Inform the inspector of any non-functioning systems.

To ensure this can occur, here are a few hard fast rules for preparing your home fThe Basics:

• Unlock or remove locks from gates on fences, closets, or panel doors
• Move any stored items away from garage or basement walls
• Clear under cabinet areas and sinks for plumbing fixture inspections
• Remove items that may restrict access or movement in attic or crawlspace
• Make sure the electrical panel is accessible — the electrical panel cover will be removed during the inspection
• Deactivate all security alarm systems

• Don’t use fireplaces/woodstoves the evening before or the day of the inspection. They should be cool and cleaned for inspection.
• Pets in the house should be confined or removed for the duration of the inspection. If they must remain in the home,notify the inspector of their presence. They should not be left in a room or area that needs to be inspected.
• Leave dirty dishes in the dishwasher with detergent, ready to go. The inspector will run the dishwasher during the inspection — why waste energy and water?
• Turn off any sensitive electronic equipment before the inspection and confirm all pre-programmed electronics and alarms are reset afterwards.

In addition to making sure there are no defects of which they are not aware, a professional HouseMaster home inspector will show the buyers how to operate many of the systems in the home and provide helpful suggestions on maintaining it.

©DBR Franchising, LLC. HouseMaster® is a registered trademark of DBR Franchise Systems, Inc. Each HouseMaster Franchise is an Independently Owned and Operated Business.

Share To:
 

This is one of the most descriptive and informative links on Richmond Virginia Real Estate, that I have seen in a while. If you own a home, are in the business or are thinking about buying, you should read this: 2009 RE VCU Conference Notes

Share To:

In real-estate land it's price cutting season

 

More than a quarter (25.6%) of homes currently on the market in the United States have experienced at least one price cut, according to new research by online real-estate company Trulia.

The total amount slashed from home prices as of October 1 is $28.4 billion -- a $967 million increase from June 2009 -- and the average discount for price-reduced homes continues to hold steady at 10% off of the original listing price.

Thanksgiving is commonly seen as the cut-off point for sellers in the real estate market, so aggressive price cuts go into play now. After that there is a significant drop-off in fresh listings and the market tends to pick up again in January. "We are seeing the beginning of this trend in the Northeast and Western United States with discounting happening at all price points, and expect it to continue," says Trulia co-founder and CEO Pete Flint.

Seven of the ten states leading the country with the biggest listing price cuts are in the West. Significant number of foreclosures have made their mark in Nevada, Idaho, Arizona, Wyoming, Hawaii, Utah and California where cuts are an average of 13% off the original list prices.

**Richmond indicates a less than 6% drop in resales.

Fed Frets About Commercial Real Estate

With Banks Slow to Take Losses, Fears of a Residential-Bust Repeat; 'More Pain Likely Lies Ahead'

Banks in the U.S. "are slow" to take losses on their commercial real-estate loans being battered by slumping property values and rental payments, according to a Federal Reserve presentation to banking regulators last month.

The remarks suggest that banking regulators are girding for a rerun of the housing-related losses now slamming thousands of banks that failed to set aside enough capital during the boom to cushion themselves when the bubble burst. "Banks will be slow to recognize the severity of the loss -- just as they were in residential," according to the Fed presentation, which was reviewed by The Wall Street Journal.

A Fed official confirmed the authenticity of the document, prepared by an Atlanta Fed real-estate expert who is part of the central bank's Rapid Response program to spread information about emerging problem areas to federal and state banking examiners throughout the U.S.

While the Sept. 29 presentation by K.C. Conway doesn't represent the central bank's formal opinion, worries about the banking industry's commercial real-estate exposure have been building inside the Fed for months. "More pain likely lies ahead for this sector and for those banks with heavy commercial real estate exposures," New York Fed President Bill Dudley said in a speech Monday.

In another sign that many U.S. financial institutions are inadequately protected against potential losses on commercial real-estate loans, banks with heavy exposure to such loans set aside just 38 cents in reserves during the second quarter for every $1 in bad loans, according to an analysis of regulatory filings by The Wall Street Journal. That is a sharp decline from $1.58 in reserves for every $1 in bad loans from the beginning of 2007.

The Journal's analysis includes more than 800 banks that reported having more half of their loans tied up in commercial real-estate, ranging from apartments to office buildings to warehouses.

Loan-loss reserves typically rise and fall during any credit cycle, being drawn down as losses mount. Some analysts and investors say the recession combined with inadequate loan-loss provisions when times were good have left banks dangerously vulnerable to the deteriorating commercial real-estate market.

Mr. Conway's presentation painted a bleak picture of the sliding real-estate values and enormous debt that will need to be refinanced in the next few years. Vacancy rates in the apartment, retail and warehouse sectors already have exceeded those seen during the real-estate collapse of the early 1990s, Mr. Conway noted. His report also predicted that commercial real-estate losses would reach roughly 45% next year. Valuing real estate has always been tricky for banks, and the problem is particularly acute now because sales activity is practically nonexistent.

Some of the banks with especially low levels of loan-loss reserves are teetering. Capmark Bank, based in Midvale, Utah, and owned by commercial real-estate finance firm Capmark Financial Group Inc., had 11 cents in reserves for every $1 in bad loans it reported in the quarter ended June 30, the Journal analysis shows.

A Capmark spokeswoman said in a statement that the amount of loans written off by the bank, totaling $357 million as of June 30, "should be taken into account when evaluating possible future losses."

Capmark's parent company, owned by investors led by private-equity firm Kohlberg Kravis Roberts & Co., warned last month that a bankruptcy filing could be imminent and said regulators intend to order Capmark Bank to raise capital and improve its liquidity. Capmark Bank got a $600 million capital infusion from its parent company in late September.

These days, many U.S. banks have adopted a policy of extending loans when they come due even if they wouldn't make those loans now. In some cases, values of the underlying property have fallen below the amount of the loan.

"There's been an extend-and-pretend philosophy by banks to forestall hits to their balance sheets that might occur," says Patrick Phillips, new chief executive of the Urban Land Institute, a real-estate industry group.

Matthew Anderson, a partner at research firm Foresight Analytics, adds: "It's like taping paper over a hole in the wall."

Last month's Fed presentation supports criticisms that banks have been slow to take losses on bad commercial real-estate loans. The value of commercial real-estate loans as recorded by banks has declined at a much slower rate than property values since 2005. But banks have been slow to absorb losses on their loans partly due to "capital preservation" concerns, the report states.

Bank examiners are stepping up their scrutiny of commercial real-estate portfolios at U.S. banks. Michael Stevens, senior vice president of regulatory affairs at the Conference of State Bank Supervisors, said regulators are reviewing greater volumes of commercial real-estate loans than they did before the financial crisis erupted.

Commercial real-estate loans are the second-largest loan type after home mortgages. More than half of the $3.4 trillion in outstanding commercial real-estate debt is held by banks.

The Fed presentation states that the most "toxic" loans on bank books are so-called interest-only loans, which require borrowers to repay interest but no principal. Those loans "get no benefit from amortization," the report states.

"Today, most of the borrowers are paying because interest rates are so low, but the question is whether the loans will get paid off when they come due," said Michael Straneva, global head of Ernst & Young's transaction real-estate practice.

Regulators are zeroing in on banks that use interest reserves to mask bad construction loans. When such loans are made, banks typically calculate interest that would be paid and set that money aside, basically paying themselves until the loan becomes due or the property generates cash flow.

Regulators want to make sure banks don't have a false sense of security only because the interest reserve is paying the loan. Banks need to look at "the sources of repayment" to determine whether the loan will get repaid, says Darryle Rude, supervisor of industrial banks at the Utah Department of Financial Institutions.

According to Foresight Analytics, more than 40 U.S. banks have been hit so far this year with enforcement actions by regulators that include alleged misuse of interest reserves.

Some banks with unusually low levels of loan-loss reserves based on the Journal analysis said those figures reflect their decision to aggressively write off hopeless loans. "We've tried to both build up our charge-offs and reserves," says David Shearrow, chief risk officer of United Community Banks Inc. About 80% of the Blairsville, Ga., bank's problem loans have been charged down to a level where the bank thinks it can sell them.

Original Post: http://online.wsj.com/article_email/SB125487629495569591-lMyQjAxMDI5NTA0NzgwNzc2Wj.html