Real Estate

Reflections on the 4th of July

“Do I not destroy my enemies when I make them my friends?” 
Abraham Lincoln
Moving to the US was an adventure I eagerly anticipated. I had lived in 5 different countries since leaving my beloved homeland of Jamaica. But what appealed to me most about living in the US was really not much different from what appealed to the great grandparents of so many Americans – the pursuit of the “American Dream”. If you work hard, as the saying goes, you can make it anywhere in the US because this is the land of opportunity for all. In many of the places where I have lived, this expectation simply did not exist. 

The recent renewed focus on racial tensions – and the timing of my own discriminatory treatment by a Westchester County real estate agent which occurred so close to July 4th celebrations – have given me reason to reflect intensely on what the American Dream truly means. There is no denying that the American Dream has eluded too many to number – not from a lack of hard work, but so often simply by accident of birth. 

There is a lot of debate as to whether racism is systemic in our society. Irrespective of how one feels about our system as a whole, I can say without hesitation that racism is certainly alive and well in the real estate industry in New York. I commend the high profile efforts of the State of New York and various Realtor® associations to address this curse upon my chosen profession. However, the problem of racism does not belong to any one industry, nor is it even just a “political” issue. It is a human rights problem that has made its way deep into the fabric of certain segments of American society. Imposing sanctions upon those engaged in improper conduct is only a start. 

I still believe in the American Dream. But let us be cautious that in pursuit of the fruits of our American Dream, we do not ignore glaring prejudices all around us, which make our shared dream an illusion for too many fellow Americans. 

Our challenge on this 4th of July holiday weekend: as we celebrate with friends and families, let us make a conscious decision to deeply consider what role we can and should play in confronting in our daily lives all forms of discrimination. 

Wishing you a happy, meaningful 4th of July.

BUYERS’ CLOSING COSTS

Everyone has heard of the ‘dreaded’ Closing Costs. Fear enters the process given the perceived – and oftentimes – actual uncertainty as to what these Closing Costs might be, especially for first time buyers. On top of this, the final amount is often disclosed to the buyer only a couple of weeks or even days before the scheduled Closing Date.

With this in mind, I wanted to share a list of typical Closing Costs, and at least equip the reader to ask the right questions of the professionals involved in their transaction:

  1. Interim Interest This is interest accrued on the mortgage for the number of days remaining in the month of the Closing and will typically be ‘credited’ to the seller if these have been prepaid.
  2. Mortgage Tax In Westchester (except for Yonkers), for a 1-2 family dwelling, the rate is 1.3% minus the $30 residential fee exemption. The rate for Yonkers is 1.8%.
  3. Origination Fee This is a fee paid at the time the mortgage application is processed.
  4. Private Mortgage Insurance (PMI) A premium paid by the buyer to insure the lender if the buyer is borrowing more than 80% of the appraised value of the home.
  5. Tax and Insurance Escrows Lender required funds deposited by the buyer into an escrow account, to be used by the bank to pay the taxes and insurance to cover a certain number of months to be determined by the lender. This is not strictly speaking a ‘cost’ of purchasing property, as it is money that would have to be paid by the Buyer in any case, but it is included here because the buyer often has to provide this money at the time of the Closing in advance as one of the conditions to receiving the loan amount.
  6. Appraisal Fee A fee for appraising the value of the property.
  7. Lender’s Attorney’s Fee Even though the buyer typically pays the lender’s attorney for reviewing the title to the property, resolving any title problems, coordinating the closing, typing the bank papers, attending the closing, dispersing the funds at closing, and ensuring the documents are accurate and properly recorded, the Lender’s attorney represents the Lender’s interest not yours. This is typically a flat fee which you will not be able to negotiate but for which you are still responsible.
  8. Buyer’s Attorney’s Fee This is for your own attorney representing your interest with whom you negotiate the fee. This is usually a flat fee negotiated in advance of the representation.
  9. Credit Report Fee A fee for investigating the borrower’s credit rating.
  10. Homeowners Insurance Policy – An insurance policy listing the lender as the loss payee. The buyer is required to bring a paid receipt for this policy to the closing. Cost will vary according to the type of coverage and insurance company.
  11. Mortgage Recording Fee A fee paid to the county clerk’s office for mortgage documentation. These fees are usually fixed and do not vary significantly.
  12. Title Insurance A one-time charge to the buyer for insurance that guarantees compensation if the title should prove to be defective (e.g., if the previous owner had a tax lien on the property). Two types of insurances they provide include (a) the required coverage of the lender and (b) the strongly recommended coverage of the buyer. If purchased together, title insurance companies typically provide a hefty discount, so it makes sense to purchase both together. Title insurance premiums also not vary significantly from company to company given that they are strictly regulated by the State.

A few days prior to Closing, your lender will provide you with a draft of what is called a Closing Disclosure (or “CD” for short) for your review. This document sets out all your closing costs. You may receive additional drafts of the CD with adjusted costs until a final version is reached. The above, although not an exhaustive list, are most of the important costs which are included on this CD and may vary according to total purchase price of the property or the mortgage amount.

While, you may not know the final Closing Cost figure until quite late in the process, you may be able to at least establish the categories of Closing Costs that will apply to your transaction, and this might be enough to ease some of the anxiety.

Solar Panel Systems – Could They Be A Good Fit For You and Your Home?

You may have considered installing solar panels in the past, but at the time, it may have seemed too expensive and the technology too unreliable to be worthwhile.

Here are just a few questions you may want to consider asking an expert from a local solar company to see if you should re-consider solar generated energy.

Should I wait for the price to drop further?

There are two main components to the cost of solar, the first is the cost of the equipment itself and the second is the cost of labor. The cost of the equipment has dropped sharply over the past few years, although in the last couple of years, this drop has been far less dramatic while the cost of labor remains largely the same. Another issue to consider is that the once vast pool of Federal and State tax incentives/credits, is now steadily shrinking. An expert from your local solar company will be able to help you work through the math for all of the above to help you decide if the current costs, available incentives/credits and payback over time, justifies an investment in a solar panel system.

Leasing vs Purchasing?

In the past, leasing had been extremely popular given the low upfront costs involved. If, however, you are thinking about adding some value to your home to be realized in a future sale, you may want to consider, that although having leased solar panels might not necessarily negatively impact the value of your home, it might make it more difficult to sell, than if you owned the system outright. Owning the solar panel system could increase the selling price of a home and reduce the number of days on the market given the heightened concern for our unique environment here in the Hudson Valley region and the relatively high cooling and heating costs. While that increase in value alone may not be enough to offset the actual cost of purchasing and installing the solar panel system, it may still be worth considering, if the purchase can be financed through a lender who understands the value that this technology adds and, can offer products that may nevertheless make the investment worthwhile. This is especially true if you consider that the actual payback may more likely take the form of drastically reduced energy bills.

Is the technology truly reliable?

The technology is in fact incredibly reliable.

Nothing in how your home operates will change. There may however, be instances when a general power failure on the grid necessitates the shut-down of the solar panel system in a home. Again, an expert from your local solar panel company can explain this in more detail and how these situations can be mitigated.

Don’t hesitate to speak to an expert about your particular concerns and questions. You may find that you and your home are better candidates for solar generated power than you thought.

Tanya is trained in understanding what makes a property green, helping clients evaluate the cost/benefits of resource-efficient features and practices, distinguishing between industry rating and classification systems, listing and marketing green homes and buildings, discussing the financial grants and incentives available to homeowners, and understanding how buyer and seller preferences may be inspired by resource-efficiency.