Sustainable "Green" Marin Blog

Last week President Obama signed (sealed) the Wall Street Reform and Consumer Protection Act (HR 4173) and delivered it into law. This bill is focused on tightening regulations across the financial industry in an effort to avoid a repeat of the recent economic crisis. This legislation establishes government oversight in an attempt avoid future “Too Big to Fail” bailouts. A council of regulators will be charged with constraining and even dismantling troubled companies and will reduce the possibility that taxpayers will be responsible for the burden of bailing out financial firms that threaten the economy.

While there are many components of this law, below are a few of the changes that are relevant to the financial services industry:

Improving Protection

· The Securities and Exchange Commission (SEC) has begun tightening requirements on investment advisory firms to protect investment clients from unwittingly becoming victims of fraud or Ponzi schemes. Financial advisors are now required to disclose all fees, any disciplinary actions and potential conflicts of interest (e.g., commissions). Additionally, the SEC has the authority to impose a fiduciary duty on those who give investment advice.

Opes fundamental belief is that it’s important to be an informed consumer of financial advice. Since our firm’s inception our investment advisors have worked on our clients’ behalf, not for transaction-based commissions. We disclose our fees and make sure that our prescribed strategies are clearly understood and support our clients’ goals. We issue clear and concise monthly statements, a quarterly economic outlook, and quarterly performance and asset allocation summaries. Our investment managers are all Chartered Financial Analysts^® (CFA^®) or Certified Financial Planners™ (CFP^®), which means they are well educated in the details of financial planning and analysis and are held to a fiduciary standard of care and diligence that exceeds industry norms.

While we already operate under the newly requested standards, there are other firms that may dramatically change the way they run their businesses. We applaud the SEC’s expanding involvement.

Mortgage Updates

· Under the new rules, mortgage lenders must verify a borrower’s credit history, income, and employment status. This is an immaterial change for Opes, as we have always followed this process.

Other changes include eliminating pre-payment penalties for homeowners with Adjustable Rate Mortgages (ARM) and prohibiting loan officers from earning bonuses based on the type of loan they sell. Opes believes that borrowers are best served by securing financing for a home in a way that is most effective in taking care of other long term financial concerns - retirement, children’s education and care for aging parents.

$1 billion has been allocated to Emergency Mortgage Relief to provide bridge loans to qualified unemployed homeowners to help cover mortgage payments until they are reemployed.

The goals of this bill are honorable: to promote the financial stability of the United States by improving accountability and transparency in the financial system, to protect American taxpayers by ending bailouts and to protect consumers from abusive financial services practices.

You can read a summary of the 2,200 page bill as included on the United States Senate Committee on Banking, Housing, & Urban Affairs website.

Victoria Wells

Real Estate Broker/ eco-Broker

Http://www.marinbesthomes.com

Making an offer Once you find the home you want to buy, the next step is to write an offer – which is not as easy as it sounds. Your offer is the first step toward negotiating a sales contract with the seller. Since this is just the beginning of negotiations, you should put yourself in the seller’s shoes and imagine his or her reaction to everything you include. Your goal is to get what you want, and imagining the seller’s reactions will help you do that. Read more in the article provided.

The offer is much more complicated than simply arriving at a price and saying, “this is what I’ll pay.” Because of the huge dollar amounts involved, especially in today’s litigious society, both you and the seller want to build in protections and contingencies to protect your investment and minimize risk.

In an offer to purchase real estate, you include not only the price you are willing to pay, but other details of the purchase as well. This includes how you intent to finance the home, your down payment, who pays what closing costs, what inspections are performed, timetables, whether personal property is included in the purchase, terms of cancellation, any repairs you want performed, which professional services will be used, when you get physical possession of the property, and how to settle disputes should they occur.

It is certainly more involved than buying a car. And more important.

Buying a home is a major event for both the buyer and the seller. It will affect your finances more than any other previous purchase or investment. The seller makes plans based on your offer that affect his finances, too. However, it is more important than just money. In the half-hour it takes to write an offer you are making decisions that affect how you live for the next several years, if not the rest of your life. The seller will review your offer carefully, because it also affects how he or she lives the rest of their life.

That sounds dramatic. It sounds cliché. Every real estate book or article you read says the same thing.

They all say it because it is true.

Victoria Wells/Broker Associate

Bradley Real Estate 415-710-4090 mobile

Speaking "Green"

As these groups and individuals seek ways to reduce the energy costs of homes, even more emphasis will be placed on eco-friendly designs and cost-savings. If you are a homeowner, there are steps—most are relatively easy—that you can take to make your home more energy-efficient; if you are a future home buyer, there are features and “green ratings and credentials” that you should look for in your future home.

Green-minded consumers seek agents who are knowledgeable about green real estate. You should not market yourself as a "green" REALTOR^® unless you have done your homework, perhaps earned a green designation or two, and can walk the walk and talk the talk. Otherwise, your lack of knowledge will reveal your insincerity. While a green-built home may look no different than a conventionally built home, these transactions have their own unique lingo and consumer motivations. For instance, ferrying a client to a LEED^® certified home in a Hummer takes us to our first word: Greenwashing--the practice of making an unsubstantiated or misleading claim about the environmental benefits of a product, service, technology, or company practice.
Here are some essential green terms that you should familiarize yourself with:

Alternative Energy: Energy derived from nontraditional sources (e.g., compressed natural gas, solar, hydroelectric, or wind).

Carbon Footprint: Carbon footprint refers to the overall carbon emissions created by a building, including its construction and operation.

Carbon Neutral: A claim made by some companies and developers to describe a building or product whose net carbon emissions are zero. This is very difficult to achieve and truly possible only if something doesn’t emit any carbon at all or soaks up as much as it emits.

Carbon Offsets: Carbon offsets allow people to pay money to fund a forestry project, renewable energy project, or research into renewable energy technology in order to offset their carbon emissions.

Fossil Fuels: Fuels including coal, natural gas, and oil that are used to generate electricity.

Going Green: Going green can relate to numerous parts of a person’s everyday life. From transportation choices to a home’s design features, going green can mean different things to different people, but its core theme embraces the idea of taking steps to reduce one’s overall impact on the environment. This can occur through reducing energy usage, recycling, utilizing public transportation, buying products locally, or designing or remodeling a home so that it is more energy efficient.

Green Enhancements: Green enhancements are changes and improvements made to a home that make it more environmentally friendly.

Sustainability: The World Commission on Environment and Development defines sustainability as “Meeting the needs of the present without compromising the ability of future generations to meet their needs.” In reference to building or business, it’s an approach that evaluates environmental, social, and financial factors equally.

Volatile Organic Compound (VOC): VOCs are organic chemical compounds that are emitted as gases from certain solids or liquids. They can have short- and long-term adverse health effects. In the home, VOCs are often found in paint, cleaning supplies, building materials, and furnishings.

Zero Energy Home: A zero energy home (ZEH) combines state-of-the-art, energy-efficient construction and appliances with commercially available, renewable energy systems, such as solar water heating and solar electricity. The result is a home that produces its own energy—as much as or more than it needs.

Alternate definition: Zero net energy homes use energy-efficient construction, equipment, lighting, and appliances with renewable energy systems to return or create as much energy as they take from local electric utilities on an annual basis, by using windmills, and solar panels.

Victoria Wells

eco Broker  415-710-4090

vawells@comcast.bnet

Http://www.MarinBestHoes.com

Marin Co., CA

Did You Know? Replacing standard incandescent light bulbs with compact fluorescent light bulbs (CFLs) can save 75 percent of lighting costs.

If you want to add to your bottom line, the targets are pretty obvious. If you want to further home in on other amperage vampires, connect your devices to Kill-a-Watt^TM Electricity Usage Monitor (retails for approximately $30 from CableOrganizer.com or other online vendors). The unit's large LCD display counts consumption by the kilowatt-hour, the same as your local utility. You'll know if it's time for a new refrigerator in the office break room or if that old air conditioner is cost-efficient. With minimal effort, you can probably reduce your office’s energy consumption by 30 percent and reap significant bottom-line rewards by implementing a few steps.

Keep in mind that your office’s electronics and devices sap power even not in use. Standby power, also called vampire power, phantom load, or leaking electricity, refers to the electric power consumed by electronic appliances while they are switched off or in a standby mode. A very common "electricity vampire" is a power adapter which has no power-off switch. While this consumption of power may be used to provide useful functions for appliances such as remote controls and digital clocks to the user, most power consumed by non-operational devices is considered wasted. A "smart" power strip, such as the Wattstopper Plug Load Control (www.wattstopper.com) and Smart Strip Power Strip (http://bitsltd.net/ConsumerProducts/index.htm) cut the power when your devices are off. The Mini Power Minder (available via online distributors) has the smarts to shut off your computer’s peripherals and doodads when the computer itself is shut down.

An important first step is benchmarking, i.e., learning how much energy your office building or company headquarters currently uses. Most energy-efficient commercial buildings consume 11 to 16 kilowatt-hour/square foot. An ENERGY STAR-labeled building earns a score of 75 or more on a 100-point scale. If your building’s performance falls outside these parameters, there is room for improvement. Contact your local utility provider or go to www.energystar.gov, click on “Buildings & Plants,” and “Assess Performance” to set up an account, and learn more about your facility’s consumption.

Victoria Wells

Bradley Real Estate, eco broker, Marin Co. CA

Why Real Estate Is a Green Issue

Did you know that in the United States, homes are responsible for 21 percent of the nation’s greenhouse gas emissions? That fact, plus rising energy costs and a decision by California’s Public Utilities Commission mandating that new housing developments are "zero net energy" by 2020, has caused consumers, homebuilders, homeowners, property managers, REALTORS^®, local governments, schools, and others to focus on the energy-efficiency of homes and buildings.
That’s why real estate is a green issue.

Victoria Wells/Eco broker

Bradley Real Estate, Marin Co. CA

710-4090

Key Green Principles

Reducing dependence on fossil fuels can take on many forms and can be done in a variety of places, such as the home or the workplace, through transportation, and more. As an individual, and particularly a homeowner, you can use many methods to reduce fossil fuel usage. These methods, or “green principles,” fall into five important categories:

Many of our 1031 Exchange clients hold title to their investment property in a Trust.  To understand why, it may make sense to review the basic differences between Wills and Trusts:
 
Will Basics:

• A will is a legal document that states your intentions and identifies to whom you wish to pass your money and property to when you die.
• A will must be administered by court order via the probate process.
• Probate can be costly.  Fees are set by set by law and computed based on the gross value of the estate.  For example: an estate valued at $500,000 would cost $13,000 in probate fees.
• A will is part of the public record. 

Trust Basics

• A trust is a device that allows you to transfer legal title of your property to another person (or to yourself as trustee) to hold for the benefit of yet another person (beneficiary).
  • Trustor – Person who owns the property and creates the trust.
  • Trustee – The person designated to make all the decisions about the money and property in the trust.
  • Beneficiary – The person who will receive the assets upon trustor’s death.
• Revocable living trusts are income and estate tax neutral (they do not have a unique taxpayer ID number).
• Trusts are not part of the public record and therefore private. 

Who should have a trust?
Setting up a trust can be beneficial if you own a home or real estate.

What's the point of a will?
You can prepare a will as a backup in order to pass on items such as jewelry and furniture that don't have a legal title and to express your wishes regarding the disposition of your remains and memorial services.

Do you need a lawyer to draw up a trust?
Not necessarily but if you have multiple properties it is a good idea to work with an attorney.

Can a revocable living trust be changed at any time?
Yes. It can be amended easily at any time although it may cost a nominal fee.

What is the main purpose of a revocable living trust?
The purpose is to avoid the time and expense of probate. 

Does a trust file a separate income tax return?
Not if it's a revocable trust and trustor is also a trustee. For IRS purposes, no completed transfer has occurred. It's not a real entity for tax purposes, so you just file your regular tax returns.

How important is the trustee in the trust?
The trustee is the person who makes all the decisions about your money while you are alive. Certainly if you are capable of setting up a trust and handling your own money, the trustee should be you.

Do you give up any control when you place your assets into a trust?
Absolutely none. It's like creating a corporation where you are the sole stockholder, the director, and the president.

Will the bank refinance your home while it is in a trust?
This depends on the bank. Some may want you to transfer the house back into your individual name to sign the loan

Can I do a 1031 Exchange with my property in a Trust?
Absolutely.     

Remember, although we can provide you with some basic information regarding Wills and Trusts, you should consult your tax advisor to see what is best for your specific situation.  

Spring is on its way! Winter is loosening its cold grip, wildflowers are beginning to bloom and sunshine is peeking into windows. It’s time to brighten up, rearrange furniture and welcome the return of warmer weather. A few hours of old-fashioned spring cleaning can refresh and revitalize your home and your spirit.

Where to Start?

• Move furniture and vacuum under it.
• Wash windows inside and out.
• Repair or replace torn screens.
• Bring out warm weather clothing; clean and store heavy winter wear.
• Inspect, clean and repair outdoor furniture.
• Clean out the garage to create space for sporting goods, camping equipment and garden tools.
• Clear away dead foliage and weeds to make room for new growth.
• Check interior, exterior and grounds for any needed seasonal maintenance.
• Have cooling systems inspected so they are ready for action.
• Schedule a garage or yard sale to dispose of unwanted items and turn your trash into cash!
• Clean gutters and downspouts and inspect for proper drainage.
• Wash house exterior to remove dirt and mildew.
• Clean and replace air filters.
• Reprogram thermostat settings for warmer temperatures.
• Check pool and spa equipment.
• Clean and seal wood decks and fences