The Housing Scene

It takes about 43 days, on average, to go from signing a contract on a house to reaching the settlement table. And between those dates, bunches of things can go haywire and scuttle the deal.

The buyer may be short on cash to cover the various closing costs -- possibly because they ran out and bought a truckload of furniture to fill their new abode. Or maybe the appraisal comes in too low, forcing the seller to lower their price or the buyer to come up with more money.

Here are some common issues that can delay closing -- or even cancel the sale.

-- Big tickets. If you must purchase a new vehicle, wait until after you close on your mortgage. Unless you pay with cash, a new automobile loan will raise your debt-to-income ratio. That could push you into a higher interest rate or disqualify you for funding altogether.

The same goes for any big-ticket items you are purchasing with a credit card, like furniture or appliances. Just because you have already been approved for a mortgage doesn’t mean you can go out and spend freely. Most lenders run a second credit check a few days before settlement, and if your credit picture has changed, they can pull the rug out at the last minute.

-- Employment. Ready to make a job switch? Wait until after closing, especially if you are going to work in a different field. Lenders want to see several years of continuous employment -- if not with the same employer, then at least in the same industry. Again, lenders will check a few days prior to closing.

-- Big dollars. Don’t move large amounts of money in and out of your bank accounts. If you do, lenders will want you to document why.

-- Co-sign. If Junior wants help buying his first car, wait to co-sign his loan until after your own closing. Putting your John Hancock on a loan makes you totally responsible if your youngster fails to make the payments. As such, it can bump your DTI ratio into the danger zone.

-- Shortfalls. Did you set aside enough money for both the down payment and closing costs? Did you also budget for homeowners insurance and property taxes?

There are any number of down payment issues that can arise, and any one of them can put your closing at risk. It's best to have a little extra set aside -- or a side deal with your parents for some cash if you need it.

-- Estimates. By law, your lender is required to give you an estimate outlining the different costs related to your financing. But it is just that: an estimate. Certain fees are allowed to change, but not by more than 10%.

If you believe you are being overcharged, ask for a reduction or switch lenders. Either way, though, closing will be delayed.

-- Contingencies. In most sales, the contract depends on a number of conditions being met, the two most important of which are your financing being approved and an independent inspection of the property meeting your satisfaction. Another important contingency comes into play if the purchase depends on the sale of your current residence.

These clauses come with deadlines: The inspection must be performed by a certain date, for example, or you must apply for financing within a certain number of days. Missing any deadline could delay closing or cancel the deal.

-- Inspections. Besides an examination of the house, there may be other inspections required -- perhaps for radon or termites. If the house is on a well or a septic system, those must be found to be in good working order. If a problem is discovered, the necessary repairs could push your closing further out.

-- Lost. Closings are sometimes delayed through no fault of your own. Your agent, loan officer or lender might be to blame. Vital paperwork could become lost, for example, or maybe someone along the line failed to file a document. Keep on top of everyone involved and make sure everything is copacetic.

-- Appraisal. If the appraisal comes in too low, you'll need to either make up the shortfall at closing or persuade the seller to lower their price accordingly. The latter approach means reopening negotiations with the seller, which is always difficult to do.

-- Title. Lenders will order a title search of the property to make sure the seller owns the place free and clear. If there is an issue -- say, a long-lost heir to the house is discovered, or the seller’s ex-spouse still has a claim to the place -- closing could be delayed. Cross your fingers that the title company can clear up the problem quickly.

-- HOAs. Most new communities, and lots of older ones, are run by homeowners associations. These groups collect dues from residents to cover maintenance costs for the neighborhood, including roads, amenities and landscaping. HOAs also sometimes require special assessments to cover costs not anticipated in the budget.

If the seller is behind on dues or failed to pay an extra assessment, someone will have to make up those fees, or else the lender won’t close. You must persuade the seller to either pay up or lower the house’s price to cover the difference. Otherwise, you'll be on the hook for it yourself.

Sales of electronic vehicles continue to increase every year. And with that comes greater demand for at-home EV charging stations.

According to Cox Automotive, the parent company of Kelley Blue Book, EV sales in last year’s third quarter hit 346,309. That’s nearly 9% of all car sales in the period -- a quarterly record.

Homebuyer demand for charging stations hasn’t quite kept pace, but it is growing, especially among buyers of new homes. According to the National Association of Home Builders, charging stations are not yet "must-have" features. Still, the share of buyers who want one has more than doubled over the last decade, from 23% to 49%. (Compare that with existing houses: In surveys by the National Association of Realtors, charging stations aren't even on the list of desired features.)

Unfortunately, only about 1 in 4 builders say they are likely to include a charging station in the houses they build this year. And Congress has allocated $5 billion to increase the number of charging stations along the nation’s highways, but that doesn’t help homeowners who want to charge their cars at their own places.

If you are a homeowner in the market for an EV, you should first check with your homeowners association to determine if it allows EV chargers. Then, hire a licensed, insured electrician to look at your electrical panel. They can determine whether you need to “heavy up” to install a 240-volt circuit.

There are several types of chargers to choose from, and the charger's distance from your electrical panel will impact the installation cost. According to ChargePoint, an EV charger manufacturer, most people’s chargers are 15 to 30 feet from the panel. (Note that some EV batteries don’t need to be charged to 100% capacity. The manufacturer may recommend charging to 80% and supplementing power with the vehicle’s regenerative braking system. Follow the recommendations and guidelines that came with your car.)

If all you want is a 120-volt charger, also called a Level 1 unit, you may not need any special installation. Level 1 units use household AC current, and the portable charging cables that come with most new EVs should suffice. The unit supplies current to the vehicle’s charging control unit (CCU), which converts it to DC power.

Level 1 units are the least expensive, but they charge slowly, adding only about 4 to 7 miles of driving range per charging hour. That means that over a 12-hour period, you’ll only add 48 to 84 miles to whatever’s left in the battery.

That’s fine if you only plan to use your EV for short distances. But for a faster charge -- more miles, more quickly -- you’ll have to move up to Level 2 or 3.

Level 2 units call for a standard 240-volt outlet, such as the ones used for clothes dryers or electric ranges. But they require a specialized installation, perhaps a new electrical box, and maybe even a permit from your local building department.

With these chargers, you’ll add 20 to 60 miles per charging hour, depending on the unit. So a 12-hour charge will give you 240 to 720 miles' worth of power -- certainly enough for a few days of commuting.

Level 3 units call for 480 volts. They deliver charges directly into your EV from an external charging station, either inside your garage or outside on an external wall. Instead of relying on the vehicle’s own CCU converter, these units convert AC to DC electricity outside the vehicle.

Level 3 charging stations are very expensive, often requiring additional electrical service panels. As a result, they are not feasible for single-family houses. They are cost-effective only for multifamily and commercial properties.

The cost of Level 1 and Level 2 chargers vary by manufacturer. HomeFlex, a popular unit from ChargePoint, is compatible with all EVs, even Teslas. A hardwired outdoor HomeFlex unit is listed at $549 on Amazon, not counting installation.

To ease the cost, there are plenty of federal, state and local incentives -- including, in some cases, manufacturer rebates. Uncle Sam will chip in 30% of the cost, up to $1,000, in the form of a tax credit. And that’s on top of the up-to-$7,500 credit you can claim if you purchase certain EVs.

At the state and local levels, benefits vary. Westerville, Ohio will give qualified residents a rebate of $300 for signing up for an off-peak-hours EV charging program. And in Maryland, residential rebates cover 50% of the cost, up to $700 per house, to buy and install an EV charger.

Some local utilities also offer incentives. In Florida, for example, Duke Energy offers a $7.50 monthly credit to residential customers who have Level 2 units and charge their vehicles during off-peak hours. And the Jacksonville Electric Authority will give customers who charge during specific hours a $7 credit, plus a 15% rebate, up to $300, to cover home electrical upgrades needed to install a Level 2 charger.

Obviously, you’ll also save money on fuel by purchasing an EV -- up to $1,000 a year, according to some estimates. But if you charge at home, your monthly electricity costs will go up by an average of roughly $60. Schedule your charges when electric rates are the lowest to minimize these costs.

Most people know that 2022's Inflation Reduction Act (IRA) was passed to create jobs, catch tax cheats, lower drug prices and rebuild the nation’s basic infrastructure. But what’s frequently missed is that the law also helps homeowners make energy-efficient repairs and upgrades to their places.

The help comes in the form of federal tax credits: They cover a percentage of the cost to, say, change out your heat pump, upgrade your old windows and doors, or even have an expert perform an energy audit on your house.

The law also authorized the Department of Energy to provide millions to state governments for their own energy assistance programs. Combine these with other state, utility and manufacturer tax credit and rebate programs, and your improvements could pay for themselves in short order.

“In my almost 20 years, I’ve never seen the opportunity (to make energy improvements) so lucrative. This is the best it's ever going to get,” Melanie Paskevich of NeighborWorks of Western Vermont told me. (NeighborWorks is a community-development nonprofit with chapters all over the country.)

The DOE money, which is administered through state energy offices and local nonprofits, tends to go first -- and fast.

“We have enough folks on our waiting list to spend down our allocation every year,” said Joyce Parton of CHN Housing Partners, a NeighborWorks affiliate in Cuyahoga County, Ohio.

The problem is most folks don’t know the extent of what is available. According to the White House, 3.4 million homeowners claimed $8.4 billion in federal tax credits to lower their energy costs in 2023. But that’s only a drop in the bucket of the billions set aside for energy upgrades.

According to a survey by NeighborWorks, half of the 2,500 people polled had no clue about the financial incentives available to them. And almost that many were unfamiliar with the concept of an energy audit, in which a professional analyzes your home's energy flow to pinpoint areas of waste and recommend cost-effective improvements.

“Families could literally be letting money sweep out their windows and doors,” says NeighborWorks spokesman Douglas Robinson.

Adds Paskevich: “People should be banging on our doors” to take advantage of what’s available.

Unlike DOE’s assistance programs, there are no income limitations under the IRA’s tax credit initiative. One of the only qualifications is that the house must be your principal residence. And it usually must be an existing property, but in some instances, a new build also qualifies.

Tax credits are available for 30% of the cost of an energy upgrade, up to $2,000, in the tax year in which it was made. And they can be combined with credits of up to $1,200 for other qualified improvements in the same year for a total credit of $3,200.

You can claim 30% of the cost, up to $1,200, of energy-efficient windows, doors, even skylights and weather stripping. If you invest in renewable energy -- solar, wind, geothermal, fuel cell or battery storage technology -- you can qualify for a clean energy tax credit of 30% of the cost every year until 2032. The credit drops to 26% in 2033 and 22% in 2034.

Except for fuel cells, you may claim the clean energy credit for the above improvements on a second home, too, as long as you live in it part-time and do not rent it out. And you can carry forward any excess credit to reduce your tax bill in subsequent years. Interest on loans to pay for these upgrades cannot be claimed, nor can loan origination fees.

To max out your benefits, though, you may want to undertake your upgrades over several years, starting with an audit to identify the most beneficial improvements.

If you intend to change out your HVAC system, for example, it might be best to add attic insulation first. That way, you can claim 30% of the audit’s cost, up to $150, plus 30% of the cost of the insulation, up to $1,200. Next, you can buy an air-source heat pump and claim 30% of that cost, up to an additional $2,000.

But you aren’t done yet. Most states and public utilities offer rebate programs that you can use on top of the federal initiatives. Even some counties, cities and manufacturers have programs.

Rebate programs vary among states and product manufacturers, and they can differ depending on your income. You’ll have to do some work to find them, but the savings could be significant.

For instance, besides the Fed’s tax credit, most states offer substantial incentives for adding solar panels to your home. Many installation companies also offer zero-down options and net metering, a utility rate program that allows your power company to buy unused solar energy from your panels.

Under its Clean Energy Advantage Loan Program, Maryland provides 24 months of interest-free loans to residents purchasing solar panels by “buying down” the interest rate. Minnesota exempts from its sales tax the cost of purchasing solar energy equipment. And Missouri does the same for qualifying energy-efficient appliances, including dishwashers, refrigerators, water heaters, furnaces and air conditioners (up to $1,500 per appliance, when purchased during a one-week period).

Electric companies also offer incentives ranging from free energy audits to rebates for common household appliances, including smart thermostats and heating and cooling equipment.