California Homeowners
For the homeowners and voting citizens of the State of California already suffering with values of their homes having dropped and equities disappearing, the California legislature is bringing forth something special to increase your excitement about your homes. This time in the form of a gift to the citizens that might be considering bringing their homes to market.
Point of Sale Bill
This "Point of Sale" piece of legislation that ensures to delight all the eco-friendly, energy conscious folks that believe in conservation so much that they feel it must be mandated and for those that don't share that belief, they intend to convince them of their seriousness.
The Assembly Bill 2678 ( Nunez) The Point of Sale mandated Energy Audit is just a lovely expression from Mr. Nunez to the citizens of California . When they wouldn't extend his term limits in the last round of proposition voting ,this may be his gift in kind. Now whoever said that our heroes in Sacramento weren't gracious.
The Energy Audit and Implementation
If this Energy Audit becomes law, there will be a special treat for everyone, the real estate professionals, the homeowners and the buyers. To receive this wonderful gift of an Energy Audit all you have to do is agree to bring your home on the market. After the audit is completed estimated to be in the range of about $400 for an average home, then there is the 2nd half of your gift . The awesome pleasure of implementing the recommendations of the audit.
What might Implementation look like
Let's see what that might look like. For starters , how about some new windows. I would suppose that in some cases the old ones that are thermal pane (if you happen to have that type ) could be re-caulked but if the audit calls for new, they mean new. And then there is the air conditioner, heating system and the all the duck work. ( Now don't forget about the drywall guy here because that ductwork is buried behind the walls and ceiling). Let's not forget about all those appliances, from the dish washer, stove, washer and dryer to the refrigerator. If they are not energy star efficient, you could always take those with you on your way out of the state. Don't forget to change out all those incandescent light bulbs to the compact fluorescent before leaving. You know that great advertisement, "We'll leave the light on for you".
It just might get even better
Did I forget to mention the insulation and the weather stripping. Once all the drywall and ceilings are torn out, the new insulation should certainly not be a problem to get installed. Now, how about that water heater that is so seismic securely strapped in, is it energy efficient? Unless it is reasonably new, it probably isn't. Best plan on getting one of those too. It may get better. There is rumor that the mandated solar retrofit at Point of Sale that was denied us not more than a couple years ago, may be brought back in two years when we select our new Governor. But we should be happy enough with this first gift and not look our gift horses in the mouth, wishing for more.
All these energy saving items are so wonderful and the only way this gift could be better was if everyone got to receive this gift without having to bring their home to market. But they just have to limit the gift for now to only those that want to sell their homes, that's how this gift gets it name, "Point of Sale". I know they want all of us to have this gift that keeps on giving so maybe everyone would consider selling and then we could all get our share of the gift. When Assembly Bill 2678 gets its final passage by the senate, I so hope everyone, even if not planning to sell their home right now, will show their appreciation and send a special ‘Thank You" to the legislature.
Announcement of the Gift
From the voice of San Diego Real Estate, I am thrilled I could bring this announcement of these upcoming gifts from the outstanding legislators for helping all of us live our lives better here in California. I think I will send another card just to thank them for the opportunity to connect with my readers on this most important and exciting gift. Pull that level in November and be sure you thank all these wonderful folks for a job well done.
I was planning on selling my home to be able to get my share of the gift in the next few years so I am planning to get a head start so that all the drywall and paint will be dry in time to put it on the market.
What does the California Chamber of Commerce say?
In all seriousness, here is another opinion that is shared by the California Chamber of Commerce and it listed this bill in its annual "job killer bills" list and said the following of AB 2678 (Nuñez; D-Los Angeles) Building Energy Audits. " Threatens already-beleaguered existing housing and commercial real estate markets by establishing a process to adopt mandatory time of sale energy efficiency audits without any specificity on what would ultimately be required by the audits. "
It's that lack of specificity where I imagined this would most probably go when the Energy Commission sets up the standards for the audits and how the recommendations of the audits are to be implemented prior to sale.
Courtesy of William Johnson GRI CRS e-PRO and The Real Estate Text Book
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I consider San Diego an excellent place to live and would love to share with you my enthusiasm for the many communities that encompass it. Looking forward to assisting you with your Real Estate needs.
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Good Grief!! Don't you folks pay your dues to your local and state REALTOR associations??? Seems to me some good lobbying would be in order here.
This is really beyond the limits of logic. No longer is real estate a matter of negotiation between the buyer and seller for price, terms and condition. Big Brother in Action in CA in just took over.
What happens if a seller has no equity, has a buyer but with no net proceeds. In fact we just closed one last week where by seller brought $33K to the table to close.
If the seller can't replace the windows, do they just walk away and let the house go to foreclosure??? How are foreclosures for the environment???
All great questions. But we will have to wait until it gets passed because the negotiations will necessarily have to take place with the energy commission who will study and decide the factors for the audit and how to best implement the recommendations. The commission will I am sure will be very reasonable and may even make financing a possibility for those that don't want to use their mortgage equity ATM machine.
Uh, oh. What starts in California often comes to Florida ... so I'll be watching to see what happens.
Hi Sharon, the Point of Sale things maybe won't get past our current Governor. Not sure about it at this point. But they are accumulating on the shelves for when the office is occupied by someone who really cares. Many in the legislature want Californians to have these special gifts because they just keep passing them and he denies them from us. And look at all the good it would do for energy conservation. If we could then get rid of cars and replace them with bicycles, won't we will all be so much healthier. And then with our homes all retrofitted, life will be perfect once we pass universal health care and all the cancers and heart problems disappear because we are healthier. Oh and we need to tax everyone more so we can do all these things to make our lives happier and healthier. We should all be so grateful and I am sure we are, we just forget to say "Thank You" often enough.
William - I saw the note that came out from our state association about this and have done some reading as well. WHile I certainly support any efforts to improve our use of energy, this bill seems absurd to me. The high cost that could accrue to the buyer, on top of the cost of the audit itself, can potentially harm our already tenuous market. People already have difficulty qualifying for mortgages, and don't have large sums of money for downpayments. And they expect to add these costs on, and make them mandatory?
The real issue is NOT the lack of energy efficient windows and other componets of our houses...the real issue, and the more serious problem of global warming, comes from the lack of government intervention and policy around energy efficient manufacturing, systems and other pollution issues which we already know lots about but fail to act on. Requiring people to install energy efficient windows and similar improvements ignores the larger issues that are creating the energy problems we now have...and which will only get worse.
This bill seems to be more politically motivated than a genuine, well-thought out plan that will make a significant impact. But maybe I am missing something.
Jeff
All excellent points Jeff. The sellers are the ones that are ,most likely to take it in the shorts. Like a Zone report, I do believe it will be mandatory on the seller side to disclose and then the Buyer to negotiate what part the seller will pay. Which in any possible market could all be a condition for selling. I suspect yet more classes to learn about energy and the way to conserve it will also be mandated in the license renewal. We were mentioned in the authors comments for the rational behind the bill.
You make a good point about the construction and the materials manufactured and used in building. The utilities are wasted but also they are being paid for with a heavy price. We need some new power generating plants ( nuclear ) or otherwise. Like most things, there needs to be a balance here that is being neglected on the side of the mandated proposal.
EEK> I would think it would be easier and cheaper to throw a mini windmill on a roof + some photovoltaic shingles than to go through one of these audits. I have been in some of these older homes in SD near the beaches and this could get S C A R Y for sellers!
What I fear is that eventually that is what is going to happen. These things just keep getting passed and eventually the governor will not block them. The ideas behind all this are good ones and we all need to focus on that while we fight the point of sale nonsense. The point of sale idea does not work but as REALTORS we could more to inform consumers and be better role models ourselves in conservation efforts. A little effort can go a long way and if everyone tries a little....
What government must also do is provide more efficient and more readily available sources of energy. Power plants are blocked by the NIMBY's, new energy efforts come at a serious cost and environmentalists have blocked to much already. Funding needs to be found ( not by more taxes but by better and more worthwhile spending efforts).
If we better recognize the problem, we will undoubtedly have better choices for solutions but only if we can keep the special interests at bay.