As part of every home inspection, I open up the electric panel to see what’s going on inside. I’m looking for any problems with the wiring or panel itself. One problem I come across quite often is double tapped neutrals. There seems to be confusion surrounding this issue, and I’d like to help clear that up.
What Are Double Tapped Neutrals?
For starters, let’s talk about what a double tapped neutral is. “Double tapped neutral” is a slang term used when 2 neutral wires (the white wires) are terminated under the same screw on the neutral bus bar. This has been an unacceptable practice for many years for a couple of reasons.
Why are double tapped neutrals bad?
The first reason “double tapped neutrals” at the breaker panel are a bad idea is because it prevents circuits from being able to be isolated when working on them. Schneider Electric provides great formation about this in their Electrical Shortz article: “Can Multiple Neutral Conductors Be Terminated In A Panelboard Termination?”.
The second reason they are a bad idea has to do with the natural expansion and contraction of the copper wire as it heats and cools. When current flows through a wire, it heats and expands. When current flow stops the wire cools and contracts. Double tapped neutrals can expand and contract enough to the point where the connection becomes loose. The loose connection could overheat and cause a fire. Check out these double tapped neutrals I found during an inspection. These connections loosened up over time causing arcing and overheating. Notice the charred wire insulation?
Not A New Problem
For many years, double tapped neutrals were common practice among many electricians. This was most likely due to the fact that early editions of the NEC (National Electrical Code) did not specifically address double tapping neutrals. These electricians must not have known about UL 67.
UL 67 is the safety standard to which electrical panels must be built if they are to be considered “UL listed” panels. For many years, most every reputable electrical panel manufacturer has built panels in accordance with UL 67. UL 67 is very specific when it comes to neutral wire terminations in the electric panel. The standard states, “An individual terminal shall be provided for the connection of each branch-circuit neutral conductor.” Therefore, any panel bearing the “UL 67 Listed” sticker should not have double tapped neutrals.
The confusion about double tapped neutrals stems from the fact that it wasn’t until 2002 that the NEC accepted a change to the code regarding double tapped neutrals. The 2002 NEC and all subsequent versions now specifically state that double tapped neutrals are a no-no. Many people mistakenly believe the date the requirement was added to the NEC to be the origin of the requirement. As you see now, it has been a requirement for many years thanks to UL 67.
It's An Easy Fix
Have no fear though, if your electric panel has double tapped neutrals, it is an issue that a licensed electrician (or you, if you're so inclined) can usually take care of in about 10 minutes with nothing more than a screw driver. It’s quite simple. One screw, one wire.
Lights generate a lot of heat when they are in use. This heat can be a safety hazard in certain situations where recessed lighting is used. Understanding the difference between IC rated and non-IC rated recessed lighting will help you identify possible fire hazards in your home.
Recessed lighting is a great way to light up your home if you don’t want light fixtures protruding from the ceiling, but there are special considerations you should take into account. There are 2 types of recessed can lights: IC rated and non-IC rated. The IC stands for Insulation Contact, which means just what it sounds like. IC rated fixtures are designed to be installed in areas where they will be in direct contact with insulation. This is important as non-IC rated recessed lighting in contact with insulation creates a fire hazard. The difference between the 2 types of fixtures can be seen in their construction.
IC Rated Fixture Construction
IC rated fixtures are constructed with a double can design or a “can within a can” if you will. The air gap between the 2 cans creates an insulating effect that keeps the outer can cooler. This cooler outer can allows the fixture to be installed in direct contact with insulation without the risk of combustion. IC rated lights provide the proper housing for use with blown in insulation commonly seen in attics today.
Non-IC Rated Fixture Construction
Non IC rated fixtures are built with only a single can or housing and holes in the housing for ventilation. These lights are great for areas where insulation isn’t necessary. The open air surrounding the fixture allows for heat dissipation into the space. These fixtures were traditionally preferred because of their compatibility with higher wattage/brighter light bulbs. They are easily distinguishable from their IC rated counterparts. Non IC rated fixtures usually have a white housing and light can be seen shining through vent holes in the housing, whereas IC rated fixtures have a silver outer housing and no gaps for light to shine through.
Clearance requirements for Non IC Rated fixtures
Non IC rated light fixtures can be installed in areas where insulation is present. There is a stipulation however. There should be 3 inches of clearance between the fixture and any insulation. This is counter-intuitive though, as that 3 inch gap in the insulation would defeat the purpose of insulation by creating large amounts of uninsulated space. One way to remedy this is to build a box style cover to go over the fixture on the attic side. This box can be made of foil-faced foam insulation or drywall. Once the cover is installed, it can be covered in insulation for peak efficiency. The US Dept of Energy has a great write up on how to properly construct these enclosures that can be found HERE.
How to Identify Non-IC Rated Lights In Your Home
Wondering if the you have the proper recessed lighting installed in your home? Let me show you what to look for so you can perform your own recessed lighting inspection.
While inspecting homes, I find non IC rated can lights buried under insulation from time to time. They are fairly easy to spot as the insulation around them will be glowing. The insulation glows due to the light shining through the ventilation holes in the housing. If you don't have access to the attic space where the lights are located, such as in vaulted ceilings, you can take the light bulb out and look inside the fixture. The inside of the housing on non-IC rated lights will usually be white just like the outside as opposed to silver on the IC rated lights.
As one of the fastest growing cities in the nation, families are flocking to Hernando, MS at a record pace. With a population estimated at nearly 15,500 people and counting, homes are selling like hot cakes, sometimes within less than 24 hours of listing. Every agent I talk to says existing home inventory is as low as they have ever seen it. This low inventory is driving more and more buyers to new construction.
With so many buyers wanting new construction, builders are scrambling to get houses built to sell. Many homes are being pre-sold before the first shovel of dirt is even moved on the site. This is great for the local construction industry, but the current warp speed pace of construction does have its downsides. One of the first areas to falter is quality of construction. This can be due to poor workmanship, cheap materials, or even simple oversight. For this reason, it is more important than ever to order a home inspection on a new construction home built in Hernando.
When I say home inspection, I don’t mean the inspection required by the local building code official. You should have a home inspection performed by a private home inspector. Many times building code inspectors are overworked and don’t have the time to inspect every single aspect of the home. This is where the private inspector is beneficial.
When I inspect a home in Hernando, or anywhere for that matter, I inspect all the major systems of the home with a fine toothed comb. From the rooftop to the foundation, I spend 2-3 hours on average at each inspection. Most building code inspectors are lucky if they can spend 30 minutes on site. This time allows me to analyze even the smallest details of your home. I look for any deficiencies or safety issues that may affect your or your family’s well being.
If you are needing a home inspection in Hernando, MS, whether it’s new construction or an existing home, give me a call. I’d be honored to inspect your home. I’d hate for the home of your dreams to turn out to be a nightmare!
This weeks post comes from my friend Jeff Antila over at Redfin.com. Jeff is a frequent guest author here on the blog. This blog is a follow up and contrast to his last post: What You Need To Buy A House In 2019. He provides great information about how to successfully sell your home, and I couldn't agree more with his first tip. A pre-listing home inspection is a great way to make the buying and selling processes go much smoother for all parties involved! If you are thinking about selling, call me anytime to schedule your certified pre-listing inspection. Now, let's hear what Jeff has to say. Enjoy!
How To Sell Your House In 2019
So, you have found yourself at that point of selling your house and moving on. Maybe you’re downsizing to a smaller house because the kids have finally left the nest, or you got a job in a new city and need to relocate, or finally, you retired and want to head south to warmer climates. Whatever your reason, you’re ready to sell you home. Luckily for you, we put together a comprehensive guide for first-time and seasoned home sellers. Continue reading to find out how to sell your house this year.
1) Hire a Home Inspector
You’re probably thinking wait, isn’t that what the buyer is going to do? You’re not wrong. When a buyer has made an offer and you’ve accepted it, the buyer will most likely hire a home inspector of their own. So, why would you hire a home inspector? First, if a home inspector turns up something that’s in need of repair, wouldn’t you prefer to resolve it long before entering into negotiations with a potential buyer?
In fact, if you end up needing to make repairs expected to take weeks to fix, you may lose that buyer altogether. Hiring a home inspector is a proactive approach to getting your home ready to sell. Known as a pre-listing home inspection, you can find out the exact condition of your property, what repairs need to be addressed beforehand, fix them, then focus on the next task to get your home sold fast.
Also, knowing the condition of your property will further assist you during the negotiation phase with potential buyers. As you may already be aware, since you’ve already bought a home yourself, buyers often use their home inspection as a way of getting concessions from sellers, such as asking you to drop your list price. If you’ve already addressed any repairs that turned up in an inspection report, it is less likely that any new repairs will come up and impact your position during negotiations.
2) Make Repairs and Small Upgrades to Your Home
After your inspector makes a comprehensive list of repairs you should make, it’s time to get started either making the repairs yourself or contracting the right person to do them. This is may also be a great time to make small upgrades to your home that will help your house to sell fast. You don’t need to renovate your kitchen or anything, but that red accent wall that was extremely popular a decade ago might need a fresh coat of paint more neutral in color.
Understand Your Homes Selling Points
First, try understanding your home’s selling points and then try to highlight those features to make them really stand out. Not sure what those features are in your home? Just think about what sold you on your home when you first toured it. Was it the kitchen, the open floor plan, or that personal studio space? These are the features you want to concentrate on because they are most likely to sell your home again.
Brighten Your Home
You also want to think about ways to brighten your home and improve your curb appeal. Simple ways to brighten your home is painting your ceilings white and choosing a wall color that is brighter and more neutral. Though you may have enjoyed that accent wall, not everyone has the same taste as yourself. You want to make your house appeal to the largest audience possible to not only sell your home fast but to also invite more offers.
Improve Your Curb Appeal
Furthermore, improving your curb appeal is crucial for future homebuyers. You only make a first impression once, and the curb appeal of your home is the first impression of your home for potential buyers. Though you may not necessarily have to paint the exterior of your house to impress homebuyers, simple things like trimming your hedges, freshly mowed lawn and making sure any exterior lights aren’t burnt out can go a long way. Even freshly laid beauty bark and newly planted flowers can really make your yard pop!
Though this can be a lot of work, you will be happy that you did it because homes often sell faster and for more money when these small upgrades are done. If you don’t want to do all that work yourself, don’t know how to, or just don’t have the time, there are concierge type services that can do it all for you. This way you can focus on moving to your next home.
3) Declutter and Prep Your House to Sell
There’s an expression in real estate, “clutter can cost a sale.” Decluttering and prepping your home is something you want to really focus on. Especially if you’ve lived in your house for five years or more, there is a good chance you’ve collected a lot of stuff. Don’t worry it happens!
Renting storage units are becoming an increasingly popular method to decluttering one’s home before selling it. The idea is to limit the amount of stuff in your house so that potential buyers can envision themselves (and their stuff) in that space. Even removing photos is a great way to allow people touring your home to think about what they would hang on those walls or what they’d place on that fire mantel. Basically, you’re trying to present your house as a canvass from which potential buyers can create the next chapter of their lives.
Furthermore, by eliminating the majority of your stuff in your house earlier you can start deep cleaning your home more easily. And yes, you want to deep clean your home. If you sold your car to someone (not a dealership) you would probably wash it and vacuum the inside of it before you let someone test drive it, right? Well, the same goes for selling your house. You want to present your home in its best possible light so that it sells fast and you get competing offers.
Also, don’t just focus on deep cleaning just the inside of your home. You can use a pro wash to clean the outside of your home as well. These products typically attached to your garden hose and then you just spray your house down. It’s kind of like washing your car, just without the scrubbing.
4) Find a Real Estate Agent
Finding a real estate agent is easy, finding a great real estate agent can be more of a challenge. Getting referrals and reading online reviews is a great way to start narrowing down your options, and hopefully, you’ll end up with a couple of good potential candidates to interview.
You’ll want to understand what you’re looking for when hiring a real estate agent to represent your best interests. Here are some questions to consider asking any potential candidate:
After you decide on a real estate agent, you and your agent should come up with a plan of action. This plan should include a timeline, from the pricing of your home and getting it listed on MLS to open houses. It should also include when a price reduction strategy needs to take effect to get your home sold. You and your agent should be on the same page at all times and a plan of action will help ensure that.
5) Price Your Home to Sell
Now is the time to find out what price you should list your home! You can start by using online tools to help you get an idea of what your home is currently worth. This is a great starting point to get an idea of your home’s worth, but you should never set your sights on a single number and expect it to happen. Market conditions change all the time and so too does buyer behavior. Being open-minded about pricing your home as well as adjusting price is key to get your home sold.
Another option that many homeowners do to get a list price for their home is to hire a home appraiser. Home appraisers are licensed professionals that will assess the value of your house based on the state of your property and overall housing market conditions. They will look at the size of your property, the interior and exterior conditions of your house, any upgrades, additions or home improvements you’ve done, and then calculate your home's worth based on the local market conditions.
Looking at comparables of recently sold homes in your area will also help you settle on a price with your real estate agent. These homes should be similar in size, location, and sold within the last few months. Anything outside of those parameters would not be considered true comparables and could give you false information for pricing your home.
Furthermore, you want to be strategic about your pricing. You want your house to sell fast while being competitive for current market conditions. Instead of lumping the price of your house in with others in the area, strategize your pricing based on your home’s selling features. In other words, if there are three houses for sale in the same area as your own and priced at $350,000, you might be able to justify $360,000 or more because you have a larger lot size or maybe you’re located in a popular neighborhood.
6) Get Professional Photos Taken of Your Home
Nothing sells a home faster than professional photos. Put yourself in the buyer’s shoes. They are searching online, looking at every home that comes up for sale within their filtered interests the moment it’s listed. If your house is being represented online by poorly shot photography, your listing will see very little traffic. Not to mention, it has been widely observed that listing your house with professionally shot photos, on average, sell for more money than other listings.
Furthermore, 3D walking tours along with aerial photography that show a bird’s eye view of one’s home and its surrounding area have become increasingly popular with buyers looking online. Many agencies include some or all of these services as a component of their overall services to you as a seller. However, you should ask while interviewing your real estate agent what services are provided, so you don’t find yourself paying out of pocket later. Just remember, the better you represent your house online, the faster it will sell.
7) List Your Home to Sell
Your real estate agent will get your home listed online on MLS (Multiple Listing Service), in order to l start showing up on real estate search platforms to potential buyers.
You may be wondering when is the best time to list your home? If you’re thinking about waiting for a specific season, then you might be waiting for nothing. In 2016, Redfin analyzed more than 7 million home sales to identify specific seasonal trends in homes being sold. What was determined was that though spring was slightly better for homes that sold within 30 days and for above asking price, winter was surprisingly a close second. What plays a bigger role in a house being sold quickly and/or above asking price has more to do with current market conditions than the season a house is sold.
Also, don’t limit the marketing of your house to your real estate agent and online search. Market your house yourself! Spread the word through your family and friends, share your listing on social media, send out emails asking people to share your listing with others, and even advertising with online ads are ways of getting your house in front of more people and increase the chance of selling your home faster.
8) Have Open Houses and Personal Showings
Your first open house is what you’ve been working towards and now it’s about to happen. It’s time to step up your game and stage your home to sell. Here is a list of things to consider that will really help you make your house shine:
Unlike open houses that are planned in advance, personal showings can happen at any point during the home selling process. The key is to be flexible and maintain your home’s cleanliness to make it easier on yourself in case of unexpected tours that may just pop up at moment’s notice. You want to make a great first impression every time!
10) Have a Plan in Case Your Home Doesn’t Sell Quick Enough
You and your real estate agent should have already gone over this beforehand, but not every house sells after the first open house. There are many factors at play and depending on the condition of the housing market for your area, your real estate agent may have to use some other strategies in their arsenal to get your house sold.
If it’s lowering the price of your home or holding more open houses, you’ll want to agree on what the next steps should be in case your house isn’t seeing any offers.
11) Negotiate the Selling Price of Your Home
One thing to consider is that the buyer is trying to get the absolute best price they can, while you’re doing the exact same. There will be multiple factors to consider as each home sold and purchased is different. For example, if it’s a buyer’s market that means the buyer has the upper hand because there are multiple listings with fewer offers being made. But that doesn’t necessarily mean you have to make huge concessions in order to sell your home.
This is where your agent really steps up. They will help you navigate the negotiation process, and will give you their advice on how to proceed when offers are being made. Luckily, you interviewed and hired the right agent, so you know they have your best interests in mind. There are several factors and tactics to consider when entering this phase. Your agent will help you every step of the way as you navigate through the negotiation process.
You most likely have made many great memories in your home. Your children may have grown up in your house and marks of their heights years past still scar the wall near the kitchen. It’s difficult, but try to separate yourself - emotionally - from your house. Whatever your memories may be, just remember they are not lost, but they also have no place in negotiations. Try to remain objective during this process and rely on your real estate agent for advice and how to proceed.
12) Sign and Close
This is the moment you and your agent have been working towards. You’ve agreed on a price with the buyers, any and all inspections and appraisals of your home have been completed, and you are now signing the papers to sell your house. Congratulations, you’ve done it!
Natural gas has been fueling appliances installed in homes across America since the early 20th century. The piping most commonly used to supply the gas to these appliances is rigid black iron pipe. One of the downsides to using rigid black iron pipe it right in the name, “Rigid.” Rigid black iron pipe isn’t meant to be bent, therefore, installing black iron pipe in a home requires many fittings to make turns and special tools to cut and thread various lengths of pipe. Skilled plumbers install this pipe everyday with incredible precision, but there’s a new kid on the block that is changing up the gas distribution game. Enter CSST.
History of CSST
CSST stands for Corrugated Stainless Steel Tubing. CSST is a flexible gas line that can be used to distribute LP and natural gas. It was developed in Japan the 1980s. The Japanese had trouble with rigid black pipe breaking during earthquakes, so they came up with a flexible alternative that could withstand the movement without breaking. CSST was first sold in America in 1990 and has been gaining popularity ever since. CSST’s flexibility and ease of installation are the reasons more and more contractors are making the switch. Rather than going through the pain of measuring, cutting, threading, cleaning, and fitting black iron pipe, contractors simply pull the CSST from the gas meter to its destination (just like an electrician with wire), cut to desired length and attach a fitting to each end. It’s no wonder why contractors love CSST!
CSST looks very similar to a gas appliance connector. They are often confused for one another. One feature that makes CSST easily distinguishable from a gas connector is its flexible outer jacket. This polyethylene jacket or “sleeve” is usually yellow, but some brands use a black jacket. Gas connectors are also yellow, but this is just a protective coating on the tubing itself. You’ll also notice in the photo below the ridges you can see on the gas connector vs the smoothe jacket on the CSST. There will also be labeling on the outer jacket of the CSST. A popular brand of CSST I often see installed is WARDFlex® from Ward Manufacturing.
Installation Requirements For CSST
Each manufacturer has their own specific installation instructions. Most of them ,however, are very similar. There is one requirement in particular I want to point out. Per the WARDFlex® installation manual:
“Direct bonding is required for all natural and LP gas piping systems incorporating WARDFlex® CSST whether or not the piping system is connected to an electrically powered gas appliance.”
This requirement is generally agreed upon to be one of the most important things to check for when dealing with CSST as it pertains to safety. There have been numerous articles written about the need for CSST bonding. I will discuss this issue in an upcoming post.
A home inspection is a vital part of every real estate transaction. A thorough home inspection serves to inform prospective buyers about the home they are seeking to purchase. I believe buyers don’t always understand what to expect from the home inspection, and when expectations and reality don’t match up, problems can arise. Read on to learn what you can expect when you hire Wilson Home Inspections to perform your next home inspection.
Home Inspection Defined
First let’s look at the textbook definition of a home inspection. The International Association of Certified Home Inspectors, which I am a member of, defines a home inspection as, “a non-invasive, visual examination of the accessible areas of a residential property, performed for a fee, which is designed to identify defects within specific systems and components defined by (InterNACHI’s) standards, that are both observed and deemed material by the inspector.” (To see InterNACHI’s complete Standards of Practice, click here.) By this definition, a home inspection at its most basic level should provide information about any deficiencies of the major systems of the home. As such, I go through your home from top to bottom with a fine toothed comb looking for any issues, but I think a home inspection should be much more than just a problem seeking mission. I believe that a home inspection can, and should, educate you about the home as a whole, rather than just tell you what’s wrong with it. This is why I strive to provide you with information I believe will help make you a better homeowner. Lets look at information that adds value to your home inspection report.
Locations of Key Components
In the event of a major plumbing leak or burst pipe, do you know where or how to quickly shut the water off? If Wilson Home Inspections inspected your home, that information would be in your report. Do you know the locations of GFCI outlets and which downstream outlets they control? That information would also be in your report. Gas shut-off? Electrical panel? They are in there too! Knowing where to find these things will prevent you the frustration of trying to find them when you’re in a bind, and, if you forget, simply refer back to your home inspection report.
Serial Numbers and Dates
As part of the HVAC inspection, I will open up gas furnaces to look inside at the burner unit. This area is also where the spec plate is that contains important numbers such as model and serial numbers as well as build dates. I note all of these things in the report. If there is ever a problem with the furnace and you need repair parts, or if you can’t remember when the unit was built, you can pull up your inspection report to get the numbers and dates rather than having to climb up in the attic and open up the unit. I include this type of information for the water heaters and AC units as well. It’s just another way I add value to your home inspection.
Owning a home is a great feeling, but it also comes with a lot of responsibilities. One of those responsibilities is keeping the home well maintained. I know at my house it seems like there’s always something that needs to be done. It can be quite a challenge remembering what needs to be replaced or cleaned when. In your home inspection report, I include helpful tips about maintenance and cleaning schedules for different areas of the home. A clean and well maintained home looks more appealing, holds its value better, and will sell faster when the time comes.
Without a doubt, the primary purpose of a home inspection, with regards to the real estate transaction, is to identify any deficiencies the home may have. However, there’s plenty of other helpful information that can be included in the report. In my opinion, that’s what separates good home inspectors from great home inspectors. That’s why I always urge everyone, not just my own clients, to read the full inspection report rather than just skipping to the summary of deficiencies. You might be surprised what you find.
This weeks blog post comes from Jeff Antilla over at the real estate website Redfin.com. Jeff has a passion for writing about topics relating to home ownership. I found this article to be very fitting for the beginning of the new year. I hope the information Jeff presents here helps you on your home buying journey. I personally think #18 is great advice for every home buyer. When you get ready to buy, give me a call. I'd be honored to inspect your new home. Now, on to the good stuff. Enjoy!
What You Need To Buy A House In 2019
You are about to embark on one of the most amazing and rewarding experiences that can ever come from spending money: buying a home. If you are buying a home in 2019, you should know that the entire process is not quick, but when all is said and done, there are few things more exhilarating than buying a house. This guide will help equip you with what you need to buy a house this year.
1. Check Your Credit Score
Before applying for a loan and certainly before ever making an offer on a house, you should know your credit score. Why is your credit score important? Well, it’s not only the difference between getting a low-interest rate on a home loan versus a high one, but it will also directly impact how much a bank or lender will actually loan you. There are several websites you can use to check your credit score, here are a few to consider: TransUnion, Equifax, Experian.
You can check your own score as much as once a day without affecting your credit, also known as a soft inquiry. Hard inquiries are when financial institutions check your credit score, typically when you’re applying for a loan or credit card. Hard inquiries lower your credit score a few points, so try to keep hard inquiries to a minimum.
2. Improve Your Credit Score
Maybe you just checked your credit score and realized it’s not as high as you had expected. Don’t worry, there are a few things you can do now that will help raise your credit score so you can capitalize on a great interest rate.
Though you can easily implement steps to help your credit score, fixing or raising a credit score doesn’t happen overnight. It’s imperative to start now so when you go to apply for a home loan your credit score will (hopefully) be where you want it. Here are three tips to help improve your credit score, and recommended by John Heath, Directing Attorney at Lexington Law:
“Improving one’s credit score may take time, but it can be done. Bad credit is not irrevocable,” said Heath. “Developing good habits and repairing your credit report will help increase your credit score so you’re able to secure a home loan or a great interest rate with confidence.”
3. Know What You Can Afford
The best way to determine how much house you can afford is to simply use an Affordability calculator. Though calculators such as these do not necessarily account for all of your monthly expenditures, they certainly are a great tool for understanding your larger financial situation.
After you figure out what you can comfortably afford, you can then start online window shopping for houses and really begin to narrow down what you want in a house versus what you can afford. Are you looking at specific neighborhoods? How many bedrooms do you want? Do you need a large yard, big deck, swimming pool, man cave, she shed, etc?
Understanding what you can afford in the area you want to buy will help keep you grounded and focused on what you actually want in a house versus what might be nice to have.
4. Save Up For a Down Payment
Unless you want to pay Private Mortgage Insurance (PMI), you really want to save up for a sizable down payment. PMI is an added insurance charged by mortgage lenders in order to protect themselves in case you default on your loan payments. The biggest problem with PMIs for homeowners is that they usually cost you hundreds of dollars each month. Money that is not going against the principal of your mortgage.
How much should you save for a house? Twenty percent down is typical with most mortgage lenders in order to avoid paying for PMI. However, there are other types of home loans, such as a VA loan if you have served in the military and qualify, that may allow you to put down less than twenty percent while avoiding PMIs altogether.
As an added benefit to having a sizable down payment, you may also receive a lower interest rate that will save you tens of thousands of dollars in interest over time. So start saving now!
5. Build Up Your Savings
Lenders like to see a healthy savings account and other investments or assets (i.e. 401k, CDs, after-tax investments) that you can tap into during hard times. What they really want to see is that you are not living paycheck to paycheck. A healthy savings account and other investments are a good idea in general as it will help you establish your future financial independence, but it is also a necessary item on your checklist of what you need to buy a house in 2019.
6. Have a Healthy Debt-to-Income Ratio (DTI)
Another key component banks and other lenders consider when issuing loans, and at what interest rate, is your debt-to-income ratio. The debt-to-income ratio is a lender’s way of comparing your monthly housing expenses and other debts with how much you earn.
So what is a healthy debt-to-income ratio when applying for a home loan? The short answer is the lower the better, but definitely, no more than 43% or you may not even qualify for a loan at all. There are two DTIs to consider as well.
The Front-End DTI: This DTI typically includes housing-related expenses such as mortgage payments and insurance. You want to shoot for a front-end DTI of 28%.
The Back-End DTI: This DTI includes all other debts you may have, such as credit cards or car loans. You want a back-end DTI of 36% or less. A simple way to improve this DTI is to pay down your debts to creditors.
How do you calculate your DTI ratio? You can use this equation for both front-end and back-end DTIs:
DTI = total debt / gross income
7. Budget for Extra Costs
There are a lot of little costs that go into buying a house that are overlooked by new home buyers all the time. Though there are some things, such as sales tax and home insurance, that can be wrapped into a home loan and monthly mortgage, there are several little things that cannot be included into the home-buying package and need to be paid for out of pocket.
Though these items can range in price depending on the area, size and cost of the house you’re buying, here is a list of extra costs you should consider (not all inclusive):
**Property taxes and home insurance can be paid separately or your lender could include it into your monthly mortgage payment.
8. Don’t Close Old Credit Card Accounts Or Apply for New Ones
Closing a credit card account will not raise your credit score. In fact, in some cases, it may actually lower it. Instead, try to pay down the balance as much as you can, while continuing to make your monthly payments on time. If you have an old credit card you never use anymore, just ignore it, or at least don’t close it until after you have purchased your new home.
Opening new credit cards before buying a home is also not a good idea. You don’t want creditors checking your credit or opening new cards under your name, as you may lose some points on your credit score.
The absolute worst thing you can do is max out one of your credit cards, even if the limit on the card is low. If you do, your credit score may plummet. Try tackling your credit cards by paying on the ones with the highest interest rate first, then as one gets paid off, focus on the next card until you’re free and clear.
9. A Solid Employment History
If you haven’t gotten the picture yet, lenders like consistency, including your employment history. Lenders like to see a borrower with the same employer for about two years.
What if you have a job with an irregular or inconsistent pay schedule? People with jobs such as contract positions, who are self-employed, or have irregular work schedules can still qualify for a home loan. A mortgage known as a ‘Bank Statement’ mortgage is becoming rapidly popular with lenders as more self-employed or what has been referred to as the ‘gig economy’ has taken off.
10. Know the Difference Between a Fixed Rate and an Adjustable Rate Mortgage
The difference between these two types of mortgage rates really lies within their names. A fixed rate loan is exactly that, an interest rate that will never change the moment it’s locked in. You will pay the same amount the very first month you pay your home loan and will continue to pay that same exact amount over the course of thirty years (or however long the loan term is).
An adjustable-rate mortgage (ARM) is typically a mortgage that starts out as a lower rate than fixed interest rates but then is adjusted each year typically resulting in a rate higher than a fixed rate. A 5-1 ARM is a popular mortgage offered by lenders, which is a hybrid between fixed and adjustable rate mortgages. Your mortgage would start out at a lower fixed rate for the first five years, then after that time period has elapsed, the rate would then be adjusted on an annual basis for the remainder of the loan term.
11. Follow Interest Rates
It is important to know what interests rates are doing. The big question is are they on the rise or are they falling?
When the economy is good the Federal Reserve typically raises the interest rate in an effort to slow down economic growth in order to control inflation and rising costs. When the economy is in the dumps the Fed does the exact opposite. They lower the interest rate in order to entice more people to make larger purchases that require loans (i.e. land, cars, and houses) to help stimulate the economy.
As new soon-to-be homeowners, it’s a good idea to know how the overall economy is doing, and more importantly, how it’s impacting the interest rates you’ll soon be applying for. In 2018, after years of bottom of the barrel interest rates, the Fed raised interest rates three times and is projecting to raise it three more times in 2019.
Why are small hikes in interest rates so important to you? To put it into perspective, even a one percent increase in your interest rate on a home loan is the difference of paying or saving tens of thousands of dollars in interest payments on your home loan over time.
12. Know How Much Time it Takes to Buy a House
The home buying process from start to finish is time-consuming and very relative to individual circumstances and the housing market in your area. However, there are some general universal constants that you can expect, such as a cash offer on a house is usually much quicker than a traditional loan, and if there is a perfect house in a good neighborhood and at a great price, you better expect competition and added time for a seller to review offers.
Depending on the housing market in your area and possibly which season you’re buying in, it can take you a couple of weeks to find a home or more than a year. But after you find your home you can typically expect the entire process from making an offer on a house to walking in its front door, to be as little as a few weeks to a couple of months on average.
13. Find a Knowledgeable Real Estate Agent
There are several ways to find a knowledgeable real estate agent. Many people rely on recommendations from friends and family, while others look to online reviews. While both of these scenarios work really well and can land you a great real estate agent, the reason these agents rise above the others as the best of the best or the crème de la crème is because of their intentions.
A good real estate agent isn’t trying to get you into a house as quickly as possible so they can earn acommission. Instead, you want an agent that will act as your guide through the home buying process, while having your best interests in mind. A good agent will be able to tell you straight if they think a house is a good fit for you, or if you should keep looking. They should also be expert negotiators so that you get the best deal possible.
14. Find a Mortgage Lender
There are a few things to keep in mind when researching a mortgage lender. The first thing that comes to most people’s’ minds is what mortgage rate can they get. You may have to shop around to find the best rate because lower the rate the more money you save.
Secondly, how does that mortgage lender rate compared to other lenders? By looking at positive and negative online reviews you can usually establish a theme pretty quickly of the strengths and weaknesses of the lender, and what you can possibly expect for a level of service down the road.
Ask the lender what their average length of time is to close on a house after the offer has been accepted? A good lender versus a bad one can be the difference of moving into your new home two to four weeks earlier. You want to find out how streamlined their processes are.
15. Get Pre-approved
When being approved by a mortgage lender, you should be aware that there is a small but relevant difference between the typical fast preapproval for a home loan versus an underwritten pre-approval.
The fast pre-approval usually encompasses a credit report and a loan officer review and can be done in less than a couple of hours. This basic pre-approval allows you to quickly know how much you can afford and then make an offer on a house that may have just come on the market.
The underwritten pre-approval usually takes about twenty-four hours and includes a credit report, loan officer review, underwriter review, and a compliance/fraud review. Though this process takes longer, your offer on a house is actually stronger. Eventually, if you’re planning on buying a house, you will have to go through the underwritten pre-approval process anyway, so it’s better to jump on it from the start.
16. Research Neighborhoods or Areas You Want to Live
There are many variables to think about when researching your future residents. The key to beginning your research is to determine those variables most important to you. Are you looking for a good school district, a large house, convenience to commuter options, or a specific neighborhood that is extremely friendly and ranks high on Walk Score?
Your real estate agent will most likely tell you to figure out your list of the things you absolutely want in a house versus the extra features that you would like to have, but wouldn’t deter you from a house if it wasn’t there.
Your list will help your agent narrow down the number of houses they’ll show you, saving you time by only showing you houses you’d actually be interested in.
17. Shop For Your Home and Make an Offer
Now that you know where you want to live and you’re pre-approved, the fun begins. You get to look at houses! Once you find the house you know would be a great fit for you and your family, you’ll want to make an offer.
There are numerous variables to consider and hopefully, your knowledgeable real estate agent will help you through this process. Understanding the market conditions, how houses have been selling in the neighborhood and at what price (above or below asking), and knowing if there are other competing offers will help you assess and determine how you’d like to make an offer.
Negotiating an offer on a house can be emotionally taxing, so do your research and rely on your agent’s advice so you come to the table prepared.
18. Get a Home Inspection
Congratulations are in order! The sellers have accepted your offer. Now you want to get the home inspected to make sure there are no underlying issues that could cost you money down the road, such as a bad roof or foundation. Usually, a home inspection is a contingency built into the initial offer, and your real estate agent can help you set this up. However, it is recommended to hire an inspector that is certified by a national organization (such as ASHI or Inter-NACHI). Though you can waive this contingency if you’re trying to make your offer more competitive in a hot market. Just be aware that if you do waive a home inspection contingency, you may be taking on considerable risk.
There are several types of home inspections, but in general, a typical home inspection involves a certified inspector that will go in, around, under, and top of your house looking for anything that could be of concern, such as structural or mechanical issues. The inspector would also look for safety issues related to the property. Though they will go into crawl spaces and attics as part of their inspection, they will not open walls. They will inspect the plumbing and electrical systems and should point out any defect in the property that could cost money down the road for the homeowner.
Then they will put their findings into a nice written report for you with pictures, which then basically becomes a miniature instruction manual for your house. No house is perfect, but the report will give you a great snapshot of the property at the time of the inspection. If there are fixes that need to be addressed, this report will certainly let you know.
You should also know that the sellers are not required to make any repairs to the property. However, you can request them through your real estate agent, which will let you know what repairs are reasonable or not.
19. Have the Home Appraised
Home appraisals are an important part of the process because oftentimes house prices can quickly skyrocket when the housing market is hot, and banks do not like to loan out more money than what a home is worth. A home appraiser will not only tell you what the home is actually worth for the area and for the current housing market, but this appraisal will also directly affect the size of loan the bank will give you.
If the home appraisal comes back and states that the house is worth $300,000, but you made an offer of $310,000, the bank will most likely only lend you $300k. You will then either be stuck with paying the additional $10k out of pocket, or you may try to renegotiate the price with the sellers to see if they would be willing to come down. Or you may lose the house altogether.
Also, the mortgage lender will usually set up the home appraisal so you can take this time to focus on other home-buying tasks that need to be finished up.
20. Close the Sale and Sign The Papers
Congratulations, you’re a homeowner! Your real estate agent should help you map out the last details, such as when and where you should sign all the papers to take ownership of the house and, of course, the handing over of the keys. Welcome to your new home.
Last week, I introduced you to the GFCI (sometimes shortened to GFI) outlet. I talked about how they function, why they are necessary, and where they should be located. To summarize, they are safety devices designed to prevent fatal electrocution accidents and should be located in all wet areas and areas with good potential for ground contact (think exterior). This week I will go into the different types of GFCI devices, common installation practices, and how to test them.
Types of GFCI Devices
Two types of GFCI devices commonly seen in a home inspection are outlets and circuit breakers. GFCI circuit breakers are located at, you guessed it, the main breaker panel. These protect all of the outlets on the circuit and don’t require any GFCI outlets to be installed in the circuit. GFCI beakers are often used to protect jacuzzi tubs where the outlet for the pump is concealed inside the tub enclosure. This prevents having to disassemble the tub enclosure to reset the outlet in the event of it tripping. These devices have a test button just like the outlets; to reset them you simply turn the breaker back on. If your wondering, "What does a GFCI look like?", take a look at the pictures below.
The other type of GFCI device, which I have already talked a little about, is the GFCI outlet. You’ve probably already seen them around your house. A distinguishing feature of a GFCI outlet is the presence of two buttons, one which says “TEST” and another labeled “RESET.” We will discuss these buttons and their functions in a bit. Similar to the GFCI breakers, a single GFCI outlet can protect other non- GFCI outlets on the circuit as well. If you look on the back of a GFCI outlet you will see terminal screws labeled line and load. Power coming into the outlet should be wired to the “line” side of the outlet. Any outlets to be protected “downstream” of the GFCI outlet should be wired to the “load” side of the outlet. Many homes use a GFCI outlet located in the garage to control or protect all of the exterior outlets. They may also install a GFCI in one bathroom that protects all of the other bathroom outlets. Each house is different, but a thorough home inspector will note GFCI outlet locations and the outlets they may or may not protect.
Testing GFCI Devices
Just like smoke detectors and other home safety devices, GFCI outlets should be tested regularly to ensure they are functioning properly. As part of a your home maintenance plan, you should test GFCI outlets monthly. Luckily, it is a very simple process. All you have to do is push the test button. When you push the test button, you can have a few possible outcomes:
Now, suppose you want to find out which non-GFCI outlets in your house are protected by an upstream GFCI outlet. A simple way to test them, the way I test them during an inspection, is to use a GFCI outlet tester. The tester can be found at your local home improvement store for under 10 dollars. You simply insert the tester into the Non-GFCI outlet and press the test button. If the power goes out, you know the outlet is protected. The trick can be figuring out which GFCI outlet is protecting it. I recommend making sure the house is nice and quiet so you can listen for the GFCI outlet to trip so you can determine its location. There’s almost nothing more frustrating than a tripped GFCI that you can’t find.
I hope I’ve answered any questions you may have had about GFCI outlets. If not, drop me a comment below and I’ll answer it or make it a future blog post!
For this week and next week’s blogs, I will be looking at GFCI outlets. I will discuss how they work, why they are needed, where they are needed, and how you can test GFCI outlets in your home.
Before we jump into GFCI outlets, we need to talk a little bit about wiring. In an electrical system, there are 2 wires that normally carry current. One of the wires makes the connection to the earth. This wire is considered a grounded conductor (not to be confused with the ground wire) and the other wire is considered an non-grounded conductor. The grounded conductor is (usually) the white wire and is referred to as the “neutral” wire. The non-grounded conductor can be any color other than white or green, although it is usually black. It is referred to as the “hot” wire.
Electricity’s goal always has been and always will be to find its way back to the earth. This is what causes lights to illuminate and other electrical devices to function. Electricity travels from the “hot” wire through a light or other electrical device and back to earth through the “neutral” wire. This inherent property of electricity is also what makes it a safety hazard.
Electricity can’t differentiate between a light bulb and a human being. If you provide electricity a path to ground through your body, it will pass through it just the same as a light bulb. When electricity finds its way to ground in a manner that it wasn’t supposed to, such as through your body, this is known as a ground fault. Wet areas in the home such as the kitchen and bathroom are prime locations for shocking experiences. A wet hand holding on to a faucet while another part of the body comes into contact with faulty wiring could spell disaster. This is where the GFCI outlet proves its worth.
A Ground Fault Circuit Interrupter, GFCI for short, is an electrical safety device designed to prevent fatal electrical shocks due to ground faults. A GFCI device monitors the electricity coming in and compares it to the electricity going back out through the grounded conductor. When the GFCI outlet senses a difference of as low as 5 milliamps (.005 amps), it shuts down or “interrupts” the circuit within milliseconds as a ground fault is most likely occurring. It’s not so fast that you won’t feel a shock at all, but it will prevent a fatal electrocution.
GFCI outlets requirements in the residential setting first appeared in 1971. They were first required to be installed near swimming pool equipment. Fast forward to today, and GFCI outlets are required to be installed in the areas of the home where shocks are most likely to occur, wet areas and areas where ground contact opportunities are best. This includes garages, exterior outlets, bathrooms, kitchen countertops/islands, basements, crawlspaces, and outlets within 6 feet of plumbing fixtures. Click here to see a great chart that illustrates when GFCI outlets became required in each respective area of the home.
That's a good stopping point. Next week I will talk about different types of GFCI devices, common installation practices, and how you can test the GFCI outlets in your home.
In my first post, "Aluminum Wiring: Why Is It A Concern?", I talked about the differences between aluminum and copper wiring, the problems associated with aluminum wiring , and the solution for those problems. In this post, I continue by talking about where aluminum wiring is still commonly used today, requirements for using aluminum wiring, insurance companies, and what you should do if your home has aluminum wiring.
Making A Better Aluminum
With all the problems discovered shortly after aluminum wire’s introduction to the home building industry, wire manufacturers searched for a way to improve aluminum wire and “stop the bleeding” if you will. In the early 70s, they came up with a higher quality alloy that worked much better in electrical applications.
Too Little Too Late
This new and improved aluminum wire proved to perform much better than previous iterations. However, by the time these improvements were made, aluminum wire’s reputation was so tarnished that nobody was buying it. The late 1970s was the end of the road for solid strand aluminum wire.
While most manufacturers have ceased production of solid strand aluminum wire, aluminum wire can still be found widely used in the multi-strand form. Multi-strand aluminum wiring is commonly used to supply power to power hungry appliances such as stoves and HVAC units. It is also used for service entrance conductors into the home.
Now let’s look at a couple requirements for aluminum wire still in use.
A special paste was developed for use at the connection points of stranded aluminum wire. This paste or “joint compound” prevents oxidation (rusting) of the wires and is also electrically conductive.
No Push-in Connections
Testing has proven that aluminum wire performs much better when used with screw connections rather than push-in connections. The screw connection involves wrapping the wire around the screw and tightening the screw down. The push-in connection, sometimes called a quick connect or “stab” connection relies on spring loaded contactors to make the connection. For this reason, push-in connectors are not permitted for use with aluminum wiring.
What About Insurance?
Home insurance companies are very well aware of aluminum wire and the worst case scenarios its malfunction can result in. Some insurance companies refuse to insure homes that have aluminum wire present. Other insurance companies may require a certificate from a licensed electrician or power company which states that all aluminum wire connections have been inspected for proper installation.
The Big Question: What To Do?
Your certified professional home inspection has revealed that your current home or prospective home has aluminum wire present. What should you do? There are several options available for dealing with aluminum wiring.
The fix that many people automatically gravitate towards is a complete rewire of the home with copper wiring. This is the most costly option as a complete rewire can cost upwards of $10,000. A complete rewire is something you can try to negotiate for with the seller if you are buying the home. While a rewire is without a doubt the most permanent solution to aluminum wiring, in most cases I believe it to be impractical.
Install Approved Devices
Another option, which I am a proponent of, is to have all of the outlets, switches, and other connection points upgraded to those approved for use with aluminum wiring. This is still a costly option, however it is much more realistic than a complete rewire.
A third option would be to have a licensed electrician come in and “pigtail” all of the aluminum wires with copper wire using copalum crimps. This process involves a special tool that crimps or bonds the 2 wires together. This would allow you to safely continue to use the outlets and switches already installed. Below is a video showing the COPALUM connector installation.
The last option is to do nothing and hope for the best. While I believe this would be a very bad idea, I understand that money doesn’t grow on trees and large scale repairs may not be financially viable. In this case, it is imperative that you have functioning smoke detectors installed in all the proper locations. You should also stay vigilant in watching for any of the signs of electrical issues discussed here.
Aluminum branch circuit wiring has has its share of problems, but significant improvements have been made. While many people call for complete rewiring of the home, neither electricians nor electric authorities believe it to be necessary. A licensed electrician should inspect all connection points and replace or correct them as necessary.
Colin is a Certified Professional Home Inspector as well as a licensed MS Residential Builder. He has been remodeling homes since he was 14 and even built his own house by hand from the ground up. Colin is also the owner of Wilson Home Inspections.