City of Sacramento offering free leak repair services to qualified households

The City of Sacramento is offering free leak repair services to qualified households until March 31, 2018. This is a great opportunity to have a city contractor to investigate, repair or replace fixtures at no cost!

The program, called "Leak Free Sacramento" is available to those Sacramento home owners who meet the following criteria:

• Live within a Disadvantage Area Community (here is a map);
• Complete and submit the application (linked here);
• Single family residential homeowners that are customers of Sacramento County Utilities;
• Show irregular water usage, need leak detection and repair or replacement services;
• Applicants must own both the home and the land (for example, mobile homes on rented land do not qualify); and 
• Applicants must be the permanent resident of the home.

The program may be used to repair leaks and install water efficient fixtures. Residents can contact the program at 916-808-5605 or email leakfree@cityofsacramento.org. Do not wait! This program is available for a very limited time between March 19, 2018 - March 31, 2018.

Water Conserving, Low-Flow Plumbing Fixtures are Required in Single Family Homes in California Starting in 2017....

Due to legislation passed in California several years ago, starting in just a few weeks on January 1, 2017, ALL single family homes constructed before 1994 in the state must install water conserving plumbing fixtures. Some basic standards are:
- Toilets: use of no more than 1.6 gallons per flush
- Urinals: use of no more than 1 gallon per flush
- Showers: use of no more than 2.5 gallons per minute
- Internal faucets: use of no more than 2.2 gallons per minute

Generally, if you have replaced these items in your home in your pre-1994 home the last few years and purchased the fixtures in at suppliers in California, what you installed should be appropriate water conserving fixtures.

If you are selling your home, will you be required to upgrade all of your plumbing fixtures? Well, the short answer is no, you are not required to as a condition of closing the transaction. You as seller will have to disclose to the buyer if all of your home's plumbing fixtures are in compliance with the water conservation laws or not. I do suspect that if a seller discloses that fixtures in a home are not water conserving fixtures, then the buyer may be inclined to request that the seller bring the home into compliance with the law and replace all of the non-compliant fixtures.

At this point, I am not sure if or how appraisers will be asked by lenders to determine if a property has water conserving fixtures. Candidly, I am not even sure how one might go about measuring the flow of fixtures, short of turning them on and letting them run for a minute into a large bucket and then measuring the output. That said, I am sure appraisers will figure it out if banks demand it, or home inspectors and plumbers will figure out a way to do this if home buyers demand it...

I have a new listing coming onto the market in January that was built in the 1980's and while the seller was performing some other updates, he proactively went ahead and replaced both toilets, interior faucets, and the shower head to comply with the law.  The cost was about $600. So that is not completely cost prohibitive, but as most sellers try to net as much money as possible out of a sale, I am sure it is an expense most sellers would prefer not to absorb.

In 2019, all multi-family and commercial property will also have to comply with these water-conserving plumbing fixture standards.

Ditch that old Toilet for one that conserves water...

Did you know that the State of California offers a rebate program for replacing old toilets with water conserving units? They do! The California Department of Water Resources will rebate up to $100 per household for the purchase and installation of one qualified "high-efficiency" toilet (aka, one that flushes 1.28 gallons or less). To qualify for the rebate, a homeowner must replace a low-efficiency toilet (aka, one that flushes more than 1.6 gallons). There are hundreds of different toilets that qualify as high-efficiency in many different styles.

There is limited funding for this rebate program, however it still has a couple million dollars available! To get started, visit the "Save Our Water Rebates" website. There is a brief online application and FAQ section...this is a nice way to modernize your bathroom and to help save water! Or at least get rid of that man-eating toilet.

Think twice before financing home improvements using a Property Assessed Clean Energy (PACE) Loan...

A few weeks ago I listed a really cute home in the Tallac Village neighborhood. The sellers walked me through the house and showed me around. I took note of the dual pane windows, updated kitchen, central heating and air, drought tolerant landscape, composition roof, and all the other nice amenities the house had to offer. Then I asked the million dollar question: "have you financed any of these improvements?" The seller had indeed financed the new artificial grass using a Property Assessed Clean Energy (PACE) loan. Yikes. Alarm bells were ringing in my head.

She then said, "Oh, but don't worry. The PACE loan will be transferred to the new owner!"

Umm, no.

A PACE loan allows a homeowner who meets the eligibility requirements to finance energy-efficient home improvements, and make payments via the twice yearly property tax billing. Examples of the types of work that can be done to a home are solar, central heating and air, dual pane windows, lighting, a roof, low-water-flow plumbing, insulation, artificial turf, etc.

Let me just say that I have some negative thoughts about PACE loans. There is a lot of room for confusion among homeowners who use this program. This is the perfect case in point.

While in theory, a homeowner may transfer a PACE loan to a buyer, there are two big-time flaws in this concept.

First, what homeowner wants to pay the market value for a home and assume a loan for part of the improvements that made the home worth that amount of money? Nobody. That's a raw deal. Let's just assume for a minute that the $7,000 that the seller of this property financed to pay for artificial turf (yes, that's right $7,000) increased the home's value by even half that amount: $3,500. The house may have been worth $271,500, and the market value is worth maybe $275,000 now after adding the value of artificial turf. Why would a buyer pay $275,000 AND assume a $7,000 loan? No buyer in his/her right mind would do that. (And for the record, I do not think this sort of improvement actually increases a home's actual value that significantly)

Second, and where the real trouble lies, is that lenders will not place new loans on properties with existing PACE loans. Fannie Mae, Freddie Mac, and FHA all consider PACE loans to be "superior" liens. Fannie, Freddie, and FHA will not put a loan on a property and be in the "second position" to ANY loan. Including a PACE loan. PACE loans, because they are attached to a property tax bill, survive foreclosure. A regular second mortgage or Home Equity Line of Credit will not survive a foreclosure.

So while the PACE loan administrator (a company called Ygrene in Sacramento) may allow the transfer of this debt to a new owner, this is highly unlikely to happen unless you happen to sell the house to a poorly advised, all cash buyer. And that ain't happening.

So what does this mean for homeowners? It means if you have a PACE loan, it's going to have to be paid off when you sell. AND, it will have to be paid off if you refinance. Bet that wasn't made clear to you by the contractors pushing this financing for services they were trying to sell you, was it? It wasn't to my seller. And thankfully, we had this conversation early in the selling process, and they have more than enough equity to pay it off with the sale.

Let me share one other anecdote from personal experience as well. I am in the process of re-roofing my own home. My husband and I got five bids, and one of the contractors was trying to sell us on using PACE to pay for the roof and how it was like getting "free money" since we could pay for it over 10-15 years and via the property tax bill. That company's bid was THE HIGHEST, and the highest by about $7,000. Wow. A $20,000 bid, for a roof we are paying $11,000 for is insane. And I would argue that a lot of folks will overpay and not question a contractor's bid when they are financing the cost it over 10-15 years in this "free money" scam. Food for thought.

My advice? Stay away from PACE loans. Or at least be sure to read the fine print and really know what you are getting.