You’ve made the decision to finally remodel the outdated kitchen and living room of your home. But if you live in a house built before 1978, a federal law regulating the removal of lead paint will affect your home remodeling project if you hire a professional remodeler.
In 1978, the use of lead paint was officially banned from residential construction. Before that, however, lead paint was used in more than 38 million homes, according to the U.S. Environmental Protection Agency (EPA).
Since 2010, contractors performing renovation, repair and painting projects that disturb lead-based paint in homes built before 1978 have been required to be trained and then certified by EPA and must follow specific work practices to prevent lead contamination. Make sure your home is tested for the presence of lead-based paint before you begin any work – and don’t take chances by hiring a contractor who says that testing isn’t necessary and skipping the required practices can cut you a break on costs. That contractor is breaking the law.
The Dangers of Lead Paint
During a renovation or remodel, lead-paint dust can fill the air and be inhaled. Small children could ingest lead paint chips that fall from the wall. For young children, lead poisoning can cause learning disabilities, hearing loss and behavior problems. In adults, lead poisoning can lead to hypertension and high blood pressure. Pregnant women run the risk of passing the poison on to their unborn child.
What are Lead-Safe Work Practices?
EPA has a free brochure on its website called “Renovate Right” that provides guidance to home owners and contractors about the safe removal of lead paint. An EPA-certified contractor will follow these specific work practices:
Contain the work area so that dust and debris do not escape. Warning signs will be put up, and heavy-duty plastic and tape will seal off doors and heating and cooling system vents, and also cover the floors and any furniture that cannot be moved.
Minimize dust. There is no way to eliminate dust, but some paint removal methods create less dust than others. Some examples include using water to mist areas before sanding or scraping, scoring paint before separating components, and prying and pulling apart components instead of breaking them. Methods that generate large amounts of dust and therefore should not be used include open flame burning or torching, sanding, grinding, planing, needle gunning, blasting with power tools and equipment not equipped with a shroud and high efficiency particulate air (HEPA) filter vacuum attachment, or using a heat gun at temperatures greater than 1100°F.
Clean up thoroughly. When all the work is done, and before taking down any plastic that isolates the work area from the rest of the home, the area should be sanitized using special cleaning methods. These methods include using a HEPA vacuum to clean up dust and debris on all surfaces, followed by wet mopping with plenty of water.
How Do I Find a Certified Remodeler?
To become certified, a firm and a contractor within that firm must submit an application to the EPA and complete a federal or state-administered eight-hour class with two hours of hands-on training.
To find a lead-safe certified contractor or firm near you, visit www.epa.gov/lead.
The average consumer’s life is filled with financial milestones, and buying a home is a major one. But when do most people reach the milestone of homeownership? Researchers at Comet Financial Intelligence, a student loan refinancing resource, surveyed 1,200 Americans on how long it took them to complete their financial “rites of passage” with homeownership and other savings hurdles. Among their findings:
- The millennial respondents surveyed say they expect to purchase their first home three years before paying off their student loans. As such, millennials may be prioritizing paying down their student loans before buying a home, and that may explain some of their delay into homeownership compared to previous generations, the survey says.
- The average age at which people buy their first home is 29.1 years old. Regardless of which generation they belong to, most Americans will be homeowners by age 35.
- Three-quarters of millennials surveyed do not yet own homes, and they will be 34.4 years old, on average, by the time they take out their first mortgages.
When consumers do become homeowners, they tend to feel a happy sentiment toward homeownership. Female homeowners surveyed showed greater feelings of excitement about a place to call their own. However, men surveyed expressed pride in their homes more often, the survey found. Recent studies have shown single women are buying homes at a faster pace than single men.
Source: “The Typical American Financial Life,” Comet (February 2018)
The Not-So-Obvious Benefits of Buying a New Home
Home buyers have the choice of two types of houses on the market: resale or new.
Home buyers planning to buy a brand-new house or condominium often cite energy efficiency, open layout, a warranty, and being able to select appliances, flooring, paint colors and other design elements as factors driving their choice.
But builders say that buyers can be drawn to a new house for reasons that aren’t so obvious. Here are a few more benefits of a brand-new home that you may not see in the sales brochure.
Building a Community Together
A brand-new community is one of the built-in benefits of many new homes. When families move in to a subdivision at the same time, they often form lasting bonds of friendship and neighborliness right away. Nobody is the “new kid on the block,” and many home builders host community parties in new developments to help owners meet and connect.
Popular amenities like pools, walking trails and tennis and basketball courts offer additional opportunities for interaction among neighbors of all ages. Often new communities are comprised of home owners in the same stage of life, such as young families or active retirees, so neighbors can get to know each other through carpools, PTA meetings, tennis matches or golf games.
Throwing a party in an older home can be a challenge because smaller, distinct rooms make it difficult to entertain guests in one large space. Today, new home layouts feature more open spaces and rooms that flow into each other more easily. While you are preparing dinner, you can still interact with guests enjoying conversation without feeling closed off. The feeling of spaciousness in today’s new-home layouts often is enhanced with higher ceilings and additional windows that bring in more light than you would find in an older home.
A Clean Slate
or some buyers, parking the car in a sparkling-clean garage or being the first to cook a dinner in a brand-new kitchen is part of the appeal of new construction. In addition, you won’t have to spend time stripping dated wallpaper or repainting to suit your own sense of style — creating your own home décor from the get-go!
The advantages of being the first owner extend to the outdoors. Instead of inheriting inconveniently or precariously placed trees, or having to tear up overgrown shrubs, you can design and plant the lawn and garden you want.
Outlets, Outlets Everywhere
Homes built in the 1960’s and earlier were wired much differently than houses today. Builders had no way of anticipating the invention of high-definition televisions, DVRs and computers that we enjoy today — and the very different electrical requirements they would introduce. New homes can accommodate advanced technologies like structured wiring, security systems and sophisticated lighting plans, and can be tailored to meet the individual home owner’s needs.
Anyone who has ever lived in an older home can also attest to the fact that there are never enough outlets, inside or out! Today, home builders plan for the increased number and type of electronics and appliances used by today’s families, so you can safely operate a wine cooler, Christmas lights and your laptop — and more.
Open Floor Plans Remain a Top Pick for Consumers
Whether looking for a new home or revamping a current residence, home owners continue to be drawn to the feelings of spaciousness, easy flow and welcoming togetherness evoked by an open floor plan.
Pioneered in the early 20th century, open floor plans remain popular today, according to a recent survey from the National Association of Home Builders. The survey found that 70 percent of buyers want a kitchen-family room area that is either completely or partially open, with 32 percent wanting it completely open.
And owners of existing homes are choosing to open things up, too. Remodelers reported that 40 percent of their projects involve opening existing homes’ main floors by removing interior walls entirely or by using countertops, cut-throughs or archways, rather than full walls, to define separate areas in a more open way.
Main floors with few or no interior walls between areas for cooking, eating, relaxing and entertaining allow cooks to chat with family members or guests, provide easy flow for entertaining and enable parents to keep an eye on children from different areas.
Open floor plans not only maximize space and flow, they optimize natural light. Windows serve more than their immediate area, illuminating the entire space.
With the increasing focus on accessible design, open floor plans meet another of today’s needs— with fewer doorways, they are easier to navigate in a wheelchair or with a stroller.
To find a builder or remodeler in the Southwest Suburbs of Chicago, contact the SouthWest Suburban Home Builders Association or visit sshba.com.
Increasingly Affordable Rooftop Solar Boosts Home’s Value
Once seen as a pricey alternative for only the most committed environmentalists, rooftop solar electric systems have quickly gained popularity among value-conscious home owners.
Today, 1.3 million homes and businesses have solar systems, according to the Solar Energy Industries Association, and in 2016, solar was the top source new electric generating capacity in the United States.
The cost of solar panel systems has decreased dramatically – more than 60% in a decade. Federal and state incentives, along with Energy-Efficient Mortgages (EEMs) – which factor in lower energy costs when calculating how much a buyer qualifies to borrow – have helped home owners see the value of investing in this renewable technology.
As more and more home buyers are looking for both new and existing homes that offer solar power systems, home appraisers are incorporating the value of a home’s green features – including solar power systems – into their appraisals.
That means that installing solar panels now will not only help you save on your electric bill, it may make your home more valuable when you are ready to sell.
And, if you don’t like the look of traditional solar arrays, you can now buy solar-powered rooftop shingles that blend seamlessly into your existing roof.
If you’re considering installing solar panels on your home, here are a few things to keep in mind:
- Calculate how much energy your household uses now – and will use in the future.
Before installing solar panels, you need to know your household’s energy usage now and figure out how that will change in the future. A young family can expect their usage to increase as the family grows, while families with older children may see their consumption decrease as their kids leave home. Talk to your solar installer about these changes so that they can determine the system that’s right for you.
- You will still receive a bill from your power company.
Although your solar panels produce energy for your house, you are still using the electric grid for some of your electricity and will receive a monthly electric bill. Check with your local power company to learn how they will calculate your bill. Some electric companies allow solar customers to sell any unused excess solar power to the grid for a credit on their monthly bill.
- Check out the incentives in Illinois.
A database of solar energy incentives such as tax credits and grant programs is available at www.dsireusa.org. Click on Illinois to see a list of incentives that may make rooftop solar even more affordable.
- Protect your solar power investment.
Before your solar panels are installed, learn about the different types of warranty coverage offered by both the panel manufacturer and the panel installer. Manufacturers typically offer 20- or 25-year warranties, while solar installers offer shorter warranties for their work. It’s important to understand who is responsible for the various components of the system.
After the system is installed, you’ll want to protect this major home investment, too. Talk to your home insurance provider about adjusting your property insurance to ensure the panels are covered from any damage caused by fire, storms, etc.
For more information on installing solar panels in the southwest suburban area , contact the SSHBA at 708-349-4242.
Much to Celebrate About Home Remodeling
Home owners remodel their homes for many different reasons, with an eye toward their own enjoyment as well as the eventual resale value.
Some want to give new life to a house with an out-of-date floor plan. Baby boomers who want to stay in their homes as they age — as well as younger home owners who are looking ahead — want to enhance accessibility. And, many home owners want to add sustainable home features that also save money on utility bills.
Open up to new spaciousness
Open floor plans remain as popular as ever, and more and more home owners are choosing to take out an interior wall or two to make the space feel larger and more connected.
Remove a wall between the kitchen and a formal dining room and the newly opened space can breathe new life into the entire floor. Natural light enters from more directions and family members working in the kitchen or eating at the counter can interact with others watching television or doing homework. Entertaining takes on a new ease, as friends can gather and move about more freely in the space.
Design for aging in place
Enhancing your home to better accommodate aging in place can also be an upgrade in style, ease of use, and comfort for everyone.
A bathroom upgrade where luxury meets universal design might include a large walk-in shower with zero-threshold, a built-in teak bench or tile corner seat, and multiple shower heads, including a waist-high sprayer.
A new kitchen island may add an eye-catching look and adaptive conveniences with multi-level countertops of an easy to maintain, durable and attractive material such as engineered quartz, a deep drawer for dishes and another for the microwave, and a sink with hands-free faucet.
Remodeling your home can not only fulfill your family’s dream of a more comfortable and stylish home, but depending on the upgrades you choose, you can also realize savings on utility costs, improve air quality for better health and strengthen the long-term value of your home.
Some of the top upgrades that can make a home more energy efficient include putting in high-efficiency windows and low-flow water fixtures, replacing appliances and water heaters with ENERGY STAR®-rated models, increasing or upgrading the quality of insulation, and installing a high-efficiency HVAC system that is appropriately sized for the area that is to be heated or cooled.
To learn more about remodeling or to find a remodeler in your area, contact the SouthWest Suburban Home Builders Association or go to www.sshba.com.
Homeownership: Opportunity is Knocking
Written by the National Association of Home Builders
Homeownership is an important part of the American way of life. Today there are many opportunities in the housing market – including low mortgage rates and new homes that are built to fit your lifestyle – to find a home that is right for you. But market conditions can change, and these opportunities may not be around for long, so home buyers shouldn’t wait.
Low Interest Rates
Today’s low interest rates are helping home buyers find affordable housing options. But, it’s important to keep in mind that interest rates are sensitive to market forces and can change quickly. Even a slight rate increase can push monthly payments to the point that a buyer might miss out on their first choice for a new home.
How Interest Rates Affect Mortgage Payments:
Large Downpayments Not Necessary
While lenders are looking more closely at borrowers today than in recent years, there are options for purchasing your home without a 20% downpayment. For example, the Federal Housing Administration (FHA) offers loans to first-time home buyers with downpayments as low as 3.5%. However, these loans require mortgage insurance.
To ensure that the process goes smoothly, buyers should consider pre-qualifying for a mortgage and having financing in place before shopping for a new home. Buyers also may find that some home builders have arranged favorable financing for their customers or offer financial incentives.
Built to Fit Your Lifestyle
Designed to accommodate today’s busy lifestyles, new homes – including urban condos and single-family homes – feature open floor plans, flexible spaces, low-maintenance materials and other amenities that make them more appealing than ever before.
With energy costs near the top of consumer concerns, it’s good to know that new homes can be more energy efficient than ever. Innovative materials and construction techniques mean that today’s new homes are built to be much more energy efficient than homes constructed a generation ago. Not only can they be more affordable to operate, new homes also are significantly more resource efficient and environmentally friendly.
And in many areas, prospective home buyers who wish to live in age-qualified communities for those 55 and older will find a large selection of homes tailored to the evolving lifestyles of the baby boom generation.
Benefits for Home Owners
Homeownership also provides important benefits to owners.
Tax Benefits: For Home Owners Only
Unique tax benefits that apply only to housing help lower the cost of homeownership. Both mortgage interest and property taxes are deductible. Moreover, for married couples, profits of up to $500,000 on the sale of a principal residence ($250,000 for single taxpayers) are excluded from tax on capital gains.
The Advantage of Leveraging
Leveraging is another advantage of homeownership. A buyer can purchase a home and receive the full benefit of homeownership with a cash downpayment that is only a fraction of the total purchase price. This is called leveraging, and it makes the rate of return on a home purchase greater than on other purchases with the same value, such as stocks, where the buyer must put up the entire price.
Building Personal Resources
For most Americans, homeownership is a primary source of net worth and an important step in accumulating personal financial assets over the long term. For most families, home equity represents the largest share of net worth.
There Really is No Place Like Home
Although there are many positive financial aspects to homeownership, a home cannot be valued in monetary terms alone. Not only can homeownership be a stepping stone to greater financial well-being, it provides a permanent place to call home and great personal satisfaction.
Academic research also shows that homeownership provides a wide range of social benefits and strengthens the nation’s people and its communities.
Homeownership is truly a cornerstone of the American way of life.
Don’t Get Scammed: Find a Qualified Contractor
There are thousands of legitimate, ethical contractors in business around the country. Unfortunately, there are also scam artists looking to cheat you out of your money who pose as legitimate contractors. These “fly-by-night” operators often show up in communities impacted by natural disasters to try to scam distressed home owners into paying for shoddy repairs or work that they will never show up to perform.
Here are some warning signs to look out for:
- Doesn’t have license and insurance. All professional contractors should be insured and able to show their certificate proving such insurance. Although all states do not require licensing, contractors in states requiring licenses should have it and be able to provide a copy.
- Asks you to sign anything before you’ve hired them. If they want you to sign an “estimate” or “authorization” before you’ve made the decision to hire the contractor, look out. They may be trying to get you to sign what is an actual binding contract.
- Doesn’t write contracts. Professionals have clear contracts that outline the job, process, the cost, and helps clarify how problems will be managed. If you don’t have a contract, you are not protected when something goes wrong. Don’t hire anyone who tells you a contract “won’t be necessary.”
- Requires cash or payment in full before starting the job. Shady contractors demand cash and then run with the money. Many home owners have been stranded by paying in full up front. A deposit towards materials is common, but only pay it once you have a contract signed by both you and the contractor. It’s also suspect you’re asked to pay cash to a salesperson instead of a check or money order to a company.
- Vastly underbids all other contractors. They may have the best price, but that doesn’t guarantee the best work. Such contractors may cut costs on quality, which can end up costing you more when you have to have the substandard work redone.
- Offers “special” pricing. If you’re told you’ve been “chosen” as a demonstration project at a special, low price, or you’re told a low price is good only if you sign a contract today.
- Cannot provide customer references. Professional contractors should have current references they can provide from current and past clients — and you should be able to reach those references, not just an answering machine.
- Difficulty contacting the contractor. Professionals have a physical office, mailing address, phone, and email. They should respond to your queries in a timely manner. Make sure you can verify the contractor’s business address. If they only have a p.o. box, be wary.
- Tells you to obtain the building or remodeling permits. Professional contractors go to the county or state offices and get permits for their work themselves. Asking the home owner to do it is a sign that they are not a legitimate contractor.
Your best bet is to take your time, do your research and choose someone you feel completely comfortable with. If your state requires contractors to be licensed, look them up on the state licensing website even if you’ve seen a piece of paper that looks like a license. Make sure they don’t have a record of consumer complaints lodged with your local Better Business Bureau. You can also visit your local home builders association: SouthWest Suburban Home Builders Association, www.sshba.com to find reputable contractors in the Southwest Suburbs of Chicago.
Closing On Your Home
Written by National Association of Home Builders
Settlement (or closing) is the process that passes ownership of a property from seller to purchaser. Going to settlement on a new home can be bewildering. Home buyers are usually required to sign a seemingly endless pile of documents, most of which are written in terminology not used outside of the housing industry and that can be complicated to understand.
Before You Go to Settlement
Before closing day, there are certain important items you should know about so that you can achieve the best possible terms for yourself in the transaction.
- Ask a lender for a copy of the HUD pamphlet, “Buying Your Home: Settlement Costs and Helpful Information,” or access itHud Website. Most lenders are required to provide their loan applicants with a copy of this document under the Real Estate Settlement Procedures Act (RESPA), but you will be able to shop more wisely for settlement services if you have read the pamphlet before you apply. It provides a good description of the settlement process and explains most of the expenses you will encounter.
- When you apply for a loan, the lender is required by law to provide you with a good faith estimate of settlement costs. Shortly before settlement, you will be told exactly how much you owe so that you can get a bank check. A personal check is generally not acceptable. In some instances, you may have money returned to you instead of having to pay.
- Before you go to settlement, familiarize yourself with important settlement terms.
Important Settlement Terms
Appraisal Fee. An appraisal is an estimate of the fair market value of your home. Appraisals help both the lender and the buyer to determine if the sales price is consistent with the actual value. An appraiser inspects the house and the neighborhood and makes an estimate based on the price of comparable houses and other factors. The appraisal provides no guarantee that the property is free of defects. Lenders insist on an appraisal to see how much they could recover by selling your house if you default. The fee for this service may vary considerably depending on the specific characteristics of your house.
Attorney’s Fees. If the lender requires an attorney to draw up any of the settlement documents, you may be charged a fee – a flat amount or a percentage of the loan. If you hire a lawyer to assist with the settlement, you will have to pay an additional fee at or immediately following settlement.
Credit Report. The lender may charge a fee for investigating your credit history.
Earnest Money. Earnest money is a deposit paid to a seller to show you are serious about buying a house. Your receipt for this payment is called a binder. If you later buy the home, the earnest money is applied to your downpayment. If not, the earnest money is returned, minus expenses for processing. Be sure that you understand the refund procedures before you make a deposit.
Escrow Fees and Accounts. Escrow involves having a third party hold funds and/or documents until you and the seller complete settlement. Depending on the circumstances of your loan, you may be asked to make monthly payments to an escrow account after you purchase your home. Money in the account may be used to pay taxes, insurance, and any other regular assessments as they fall due. Such accounts serve a similar purpose to withholding income tax from your paycheck; by putting aside money each month, you avoid large annual or semiannual payments. You may be charged a fee for the service. In some states, escrow accounts draw interest.
Sometimes, escrow agents handle settlements. Rather than you and the lender meeting to sign all of the documents and transfer money, the agent works with you and the lender separately to ensure that everything is done properly. Once again, a fee is required for this service.
Loan Origination Fee. A lender will charge a fee for the cost of processing the loan, usually calculated as percentage of the loan amount.
Loan Discount (Points). The largest of your settlement cost may be the “points” lenders require to make the yield on your loan more profitable. A point is one percent on your loan amount. If you are borrowing $50,000, one point equals $500. Points are tax deductible if they are paid separately and not deducted from the loan amount. For VA loans, you can be charged a maximum of one point, but the number of points can be higher for FHA and conventional loans.
On a 30-year loan, each point that you pay reduces your interest rate by roughly 1/8 of a percent. You may be faced with a choice between two mortgages in which one has lower monthly payments but involves paying more points up front. Annual percentage rate calculation include buyers’ points, so ask for the APR to help you make your assessment. Keep in mind that an APR is calculated on the basis of the total life of the loan. For a 30-year loan, the APR is a 30-year composite figure. If you sell your new home after a few years, the average annual cost of your points will be much higher than is reflected in the APR. If you plan to move soon, you might be better off with a loan that has a slightly higher rate but fewer points.
Property Survey Fee. You may have to pay to have your lot surveyed, especially if there is a question about the boundaries. The cost will depend on the complexity of the survey.
Recording Fee. Because the title is changing hands, the transaction must be recorded with your city, county, or other appropriate branch of government. The fee covers administrative costs.
State and Local Transfer Taxes. Some jurisdictions levy taxes on the transfer of property or on real estate loans.
Settlement Costs Between Buyer and Seller. Your builder may have already paid the annual property taxes on your new home or “filled up your fuel tank.” When the title changes hands, you must reimburse the builder for a proportional share of the taxes, any fuel that remains in the tank, and any other prepaid costs.
Title Search and Insurance. A title search involves having someone look through public records to see if anyone else has a claim to your property. A lender does not want to lend you money only to learn in the event of foreclosure that somebody other than you has a prior claim to the property.
You will normally be required to purchase lenders’ title insurance to guard against a faulty title search as well as hazards that even the most thorough search will not reveal – such as a forged deed that does not transfer title, a claim by a previously undisclosed relative of a former owner, or a mistake in the records. For a one-time premium at closing, title insurance will clear up title problems, pay the lender’s legal expenses for defending against an attack on title, or pay claims on property the lender may lose.
Lenders’ title insurance does not compensate buyers for any legal expenses they might incur, or the value of property they might lose. A separate owners’ title insurance is available to safeguard the buyer. Whether the seller or the buyer pays for owners’ title insurance depends on local custom.
This list of settlement terms is not all-inclusive. You may also be charged fees for notarizing documents and other miscellaneous items.
Key Settlement Documents
Once all the forms have been signed, you can move into your new home. But before ending the settlement session, make sure that you have received or will be sent copies of all the important documents, including:
· Sales contract
· Land survey
· Warranties and instruction booklets from manufacturers for equipment in the house
· All tax payment receipts
· Certificate of occupancy (required in some areas)
· Certificates from the health department for plumbing and sewer installations (required in most areas)
· Other certificates of code compliance (required in most areas)
· All insurance policies (some might be sent later after they have been properly endorsed)
· The note and deed to your property (which will probably be mailed to you after being placed on record in your local registry of deeds office)
· Home maintenance and care instructions from your builder