Don’t Build Alone

Many years ago, before I got into the real estate business, my husband and I were ready to take the plunge and buy our first home. We had just moved back home to Indiana after several years of apartment living, and we knew nothing about the process of home buying. We also didn’t know much about home maintenance, and had little cash on hand, so working with a local homebuilder that had programs for first time home-buyers seemed like the best route for us. Brand new! All ours! No cash up front! Life couldn’t get better…or so we thought at the time.

We picked a brand new housing development in a good school district. The salesperson in the model home was super nice. We got pre-approved for a certain amount through the builder’s preferred lender (that’s how we got the best deal on financing). The salesperson let us pick whatever we wanted, our selections just had to add up to under that total amount. There was a whole list of items and choices. We paid a premium to pick a lot that backed up to a wooded tree line along a railroad track. (No neighbors behind us!) We picked floors, appliances, structural design items, fixtures, and so on. It was a little overwhelming, but fun – it was all ours!

We checked on our house throughout the building process. We’d squeeze in trips to swing by the build before or after we got off work. One day, peeking through the doorknob hole (we couldn’t actually get in, because it was after-hours and no one was there to let us in or supervise), I noticed that the wrong floor had been installed. We went down to the office the next day, and after spending 10-15 minutes convincing the salesperson that it was, in fact, the wrong floor, he agreed to have it fixed. They simply installed the correct floor over the mistake. No big deal! That kind of floor can be installed in two layers.

Our home was completed, we closed, and moved in. Everybody wins, right? Well, sort of. Fast forward a few years and add in some real estate experience, and you’ll spot several rookie buyer mistakes. First, we were one of the first three homes built in the first section of that neighborhood, factor in that this neighborhood includes four sections, and you find that, six years later, we still live in a construction zone because the neighborhood still isn’t complete. We put no money down, and we went through the builder’s approved lender – a lender with deals in place with the builder to protect the builder’s interest. That means (in our case, at least) that we paid over market value for our home, because our selections added cost, not value to our home. We’ll also have to compete with the builder if we want to sell. (Who would buy a six year old home, when they could have a brand new one for the same price?) That leaves us today with little-to-no equity in our home and no chance of selling anytime soon.

We missed several key details when making our selections that would have added significant resale value to a home. Things like, we opted for upgraded appliances instead of structural upgrades that would have increased our square footage, or even details like remembering to include overhead lighting and cable jacks in all bedrooms.  Our lot backs up to a railroad track… yes there’s a tree line… but there’s also a train that rumbles behind it several times a week. (It’s actually kind of oddly soothing, and doesn’t bother us at all, but believe me, there are many potential buyers who wouldn’t and don’t see it that way.) If we want to change our vinyl floors, we have to rip up two layers of floor because of the builder’s mistake, instead of just adding that second layer ourselves.

I am inviting you now to learn from our experience. While everyone involved in our home-building transaction was nice (That’s their job! They are salespeople and are paid on commission!), no one was looking out for our long-term best interests. They were simply trying to sell us a home. You can still have all that, and have a trusted, professional advocate on your side, in the form of a Realtor. The nice salesperson in the model home may try to steer you away from this route, telling you that having a Realtor is not necessary and only complicates the transaction. But, remember, who does that salesperson represent? Whose best interests are on his mind? The builder’s, that’s who. These are highly trained salespeople, it’s their job to make you feel comfortable and spend your money. Remember that flooring mistake? The salesperson soothed us, then pursued the route that would be the least-expensive way for the builder to correct it. Not the route that would have been the best option for us, the future homeowners. If we had worked with a Realtor, he or she could have checked on the home for us throughout the build, during business hours, and advocated on our behalf to resolve any situation that arose with the actual construction manager, and not the salesperson.

Builders include a 3% “marketing fee” into the cost of your home, whether you are represented by a Realtor or not. They do this to protect themselves in case someone gets cold feet or a life situation changes before the close of the build. These homes become “spec homes” and are sold the same way any existing home is sold. This marketing fee is non-negotiable, so it costs the same for you either way. The builder just makes an additional 3% if you don’t have your own representative.

Building a home is exciting – it was for us – but don’t let the excitement cloud your judgment. Remember that while your home is your castle, it’s also one of the biggest financial investments you’ll ever make. Don’t be a solo rookie, get a pro behind you – someone with a cool head and experience that can guide you to create not only the home that excites you right now, but will deliver for you in the long run. Get the best of both worlds – and don’t build alone.

The Intersection of Time, Condition, and Value

Spring is about to spring… uh wait… it doesn’t work as well in that tense. Spring is about to have sprung (thank you, somewhat clunky and under-used past perfect tense)! And you’ve got the itch. You want to sell and you want that listing up now. But savvy sellers do not give in to impulse. It’s important to consider your end goals first and make some big decisions up front. Like, for example: your timeline. Do you want to sell quickly? If so, you have two choices, list your home for a slightly lower price, or get it in superior condition. By investing a little time and money making the right improvements up front, you can exponentially increase your home’s appeal to buyers, as well as the price they are willing to pay for it.

It takes less money than you probably think to hit homebuyers’ hot spots. Kitchens and baths, for example, sell homes. But don’t think you need to completely renovate. Switch out faucets, hardware on cabinets, and slap a facelift on your countertops, and you have already taken your home well on its way to spruced up. Also, never underestimate curb appeal. Throw down some fresh mulch, paint your wood trim, and plant a bush or two. Your home now looks fresh. If your home is starting out in less than average condition, you may have to do more, but from average on up, these small changes will make a huge difference.

It’s important to make the decision to spruce before you list. You’re going to get the most action on your home in the first few weeks of listing. And if you try to update after all those potential buyers have been through, they won’t come back. They can’t un-see what they saw as “updating issues” in your home.

A home in good condition will fly off the market, and a good agent will help you know what to focus on to minimize your costs, and maximize your value.  Let Compass point the way to sold for your current home, for a flat $2,000, so we can help you spring into summer in new digs.

Making a Move is Hard to do…

You would think that moving shouldn’t be too hard since I have technically been a part of around 250+ moves in the Indianapolis area. However, I am not making a home move but a career move (for the most part). I have been selling homes for 6 years now and have enjoyed it immensely, but family calls and I am looking to establish more time with my family in the evening and on the weekends so I can be a part of my children’s lives.

I will continue to carry an active brokers license but will be moving into insurance. I have joined an independent insurance office in Greenwood, IN. I am nervous and excited and am proud to work for them. We have AWESOME rates that I am proud to provide to our clientèle.

Please know I will be working very hard for my clients and to build my agency and would love an opportunity to quote you a rate for your auto, home, renters, life and/or commercial policies. Please keep me in mind when you are possibly unhappy (or just don’t know how they are) with your current insurance provider. I can be reached anytime on my office line at: 317-883-9461.

I will continue to represent buyers and sellers so please continue to refer me to your friends and family!

SHOW ME THE MONEY!!!

It is true…the government is giving away money – but only to what they consider first time home buyers. The qualifications are really pretty clear. Here’s the skinny:

  1. You have to be a first timer home buyer. What is a first time home buyer (you would think it’s pretty self explanatory…but it’s NOT!!!) A first time home buyer in the government’s eyes is someone who HAS NOT owned  principal residence in the past 3 years or a home at all. That means you could’ve owned a in the past, own a vacation home, own a rental home as long as the home you lived in the past does not have you as a title bearing owner in the past 3 years.
     
  2. It’s technically not $8,000 they are giving you….it’s UP TO $8,000 you can earn. Let me explain… They will pay you 10% of the purchase price up to $8,000. Therefore, to recieve the maximum benefit from this program you have to purchase a home for at least $80,000. If you purchase a home for $60,000 then you would only get $6,000 – not the advertised $8,000. (Don’t get me wrong…it’s still free money!!!)
  3. There is a time limit to cash in…. this year only. The dates that you have to purchase a home are from: January 1st, 2009 – December 1st, 2009 (not the 31st).
  4. There are income limits also (of course). The limits are $75,000 for an individual and $150,000 for a family. The income is “adjusted income” so they do take into account expenses – it’s basically your taxable income they are looking at here.  If you are above those limits you can still qualify for the rebate, but it will be reduced…if you want additional info just give me a call and we can discuss what you are looking at.
  5. Stay home. You have to live in the home you received the credit/rebate on for a minimum of 3 years. (which isn’t a long time…my daughter was only 3 years old at the end of a 3 year time period.) If you don’t they can take the money back (they call it a recapture clause). Extenuating circumstances do apply and there could be execptions to the recapture such as death of a spouse, etc.

That’s it! If you have any additional questions about the program just post them below and I will respond. This way anything I may not have explained clearly others can capitalize on the answers as well.

Please remember to send me those referrals! Any of your family members or anyone you work with…send them my way ;-)

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What to do if You are Behind on Your Mortgage Payments

Thinking about selling because you can’t afford your home anymore? Well, you aren’t alone. The good news is that you have options. With homeowners giving their homes back in record numbers due to irresponsible lending practices of our industry the government has stepped up to the plate for us (finally). I have compiled a list of various options that you can look into or give me a call about any of these to get additional information. I will do anything I can to help you out.

If you are in a compromising situation – before making a decision - please consult with me, your mortgage company or someone in the industry so you can make an informed decision with a field expert.

Short Sale
What is a short sale? A short sale is when a bank or mortgage lender agrees to discount a loan balance due to an economic or financial hardship on the part of the mortgagor. This negotiation is all done through communication with a bank’s Loss Mitigation Department. The home owner/debtor sells the mortgaged property for less than the outstanding balance of the loan, and turns over the proceeds of the sale to the lender in full satisfaction of the debt. In such instances, the lender would have the right to approve or disapprove of a proposed sale.

Extenuating circumstances influence whether or not banks will discount a loan balance. These circumstances are usually related to the current real estate market climate and the individual borrower’s financial situation.

A short sale typically is executed to prevent a home foreclosure. Often a bank will choose to allow a short sale if they believe that it will result in a smaller financial loss than foreclosing. For the home owner, the advantages include avoidance of having a foreclosure on their credit history and the partial control of the monetary deficiency. Additionally, a short sale is typically faster and less expensive than a foreclosure. In short, a short sale is nothing more than negotiating with lien holders a payoff for less than what they are owed, or rather a sale of a debt, generally on a piece of real estate, short of the full debt amount.

More Information to Know
When/if the lender decides to forgive all or a portion of a borrower’s debt and accept less, the forgiven amount is considered as income for the borrower and is liable to be taxed. For example, if you owe $130,000 on your home and sell it for $90,000 you will actually be 1099’d (income earned) for the $40,000 difference and will have to pay taxes on it.

However, (here’s the good news) after the signing of The Mortgage Forgiveness Debt Relief Act of 2007 by President Bush, amendments have been made to remove such tax liability and allow the borrower and lender to work freely together to find a common solution that is beneficial to both parties. This protection is limited to primary residences so consultation with a tax advisor is necessary ensure that a borrower qualifies.

If you are considering a short sale check with your lender as you will need to provide them certain information such as a hardship letter outlining your situation, a budget letter outlining your current financial obligations and various other items that are investor specific.

Short Refinance
The refinancing of a mortgage by a lender for a borrower currently in default on his or her payments. This is done to avoid foreclosure. Typically, the new loan amount is less than the existing outstanding loan amount and the difference is typically forgiven by the lender. A lender might do this because it is more cost effective than foreclosure proceedings.

Why Would a Bank Do This?
Foreclosure is an expensive solution for a lender for loans in default; not only does the lender not receive any payments for up to a year, but it may lose out on fees associated with the procedure. A short refinance is just one of several alternatives that might be more cost effective for the lender. It also allows the borrower to keep his or her home. Other potential solutions are entering into a forbearance agreement or a deed in lieu of foreclosure.

Sell It To An Investor
Many times an investor may be available to purchase your home for cash depending on how much you owe and how much your home is worth. Obviously, they are looking to “invest” so they are looking to purchase the home below market value. This is dependent on how much you owe and if you are willing to take less for your home to avoid a credit disaster.

Foreclosure
A situation in which a homeowner is unable to make principal and/or interest payments on his or her mortgage, so the lender, be it a bank or building society, can seize and sell the property as stipulated in the terms of the mortgage contract.

In some cases, to avoid foreclosing on a home, creditors try to make adjustments to the repayment schedule to allow the homeowner to retain ownership. This situation is known as a special forbearance or mortgage modification.

The bank will start this process if you have not made any contact with them to make other arrangements and you are 3 months behind on your payments. Contact your lender before you get to this!

HUD Backed Loans (FHA Loans)
There is an option that you can use that our government has put out to help stop the bleeding. You can visit the website here or call their 800 #: 1-800-995-4673. This website also has links posted for Fannie Mae and Freddie Mac. They have an alt website as well which is www.995hope.org.

In Summary
I really hope this helps anyone that is lost or confused by what your options are. I am very willing to do what I can to help anyone out. We are located in the Indianapolis market and provide services to all Metro areas of Indianapolis.  Visit our website to learn more about us!

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Active Rain

Check me out on Active Rain. It is a networking, blog and forum site for real estate agents and other related fields to have questions answered and network.

Real Estate Agent in Greenwood, Johnson County, Indiana

Cool New Search Features

Looking for a place to search for homes? Check out our website: http://www.StilesRealEstate.com

Upgrades to our Search Agent

·Availability to set up as many searches as you like.

·Search using an interactive google style map. (Zoom in and out, double click to zoom, view home locations on the map while you are searching, etc.)

·Google Street View (see what the location really looks like before saving the listing as a favorite)

·Search by city, community, or zip code

·View multiple properties at once while being able to see they are located at the same time.)

·3 Different map views available to you. (Terrain, Sattelite or Hybird of both)

·Get statistics on the area you searched using the Map Statistics tab located on the fair right of the map.

I appreciate your help and look forward to helping you find your next home. Please contact me at any time via phone or email and I will do anything I can to help you out!

We are also actively working on a new website for our team….details coming soon!

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I’m upside down on my home….what do I do?

Recently I had a client from another state contact me and ask me what they should do because they were upside down on their home. (upside down = selling your home for a loss and bringing money to the closing table)

Here is how our conversation went:

Question:
She (the agent she had met with) was very honest and up front with me about everything. It looks like with the market the way it is, that I may have to take a loss. She suggested, since I have a pool, that it might be better to wait till March when people are looking for one and maybe by then the market will be better. You know, I could play guessing games all day long, but that doesn’t change the fact that I want to sell and move back to Indiana. I’m really disappointed right now and I guess I’m going to have to go over my “moving” numbers and try and do some crunching and “loss” and go from there….do you have any suggestions?

Response:
Well, that is disheartening. The silver lining is that you can take advantage of the down market here to get a good deal on a home. The grey part inside the silver lining is that analysts in our field (at least the ones that I read) have anticipated the market to continue its downward slide into the late part of 2009 or even early 2010 where it should bottom out.

It is a very difficult decision because if you put your home on the market right now for a higher price to gauge interest then you may not get what you want so you would have to lower your price. Unfortunately, in this scenario you will get the most home showings in the first 45-60 days you are on the market (new toy theory). If your home is priced too high then you won’t get any offers (and a chance of not many showings as well) and by the time you reduce your price the people who were interested in your home (just not at the initial list price) will have moved on and possibly even purchased another home. Getting them back into your home will be very, very difficult.

My advice is detail your home like you would your car if you were selling it. Clean the baseboards, window sills, change your furnace filters and clean off your vents and bath fans. Make your home sing!

Nice homes are selling (even in this market) and if you can get a potential buyer to get emotionally attached to your home then you won’t lose them as a buyer. Buyer’s make a decision on the home within the first 90 seconds they enter – if they enter at all. Make sure your front yard and front porch are inviting (curb appeal 101).

The reason why I posted our exchange is to detail that no matter the market nice homes ARE SELLING. It may take longer on the market to accomplish your goal, but they are selling. The most important thing a seller can do is to make sure every showing is staged like it’s the ONLY showing you may ever get. You only have a couple of minutes to make a lasting impression so it is imparative that you do so.

The markets are down almost everywhere in the country, however, if you wait to sell until next year you could be in worse shape than you are this year. We are in a somewhat stagnant market where home prices do not fluctuate dramatically as demonstrated on the coastal lines and out west in areas like Nevada and Arizona. We are down here in the Indianapolis Metro area but our team is thriving!

If you have any questions about selling your home please contact me via email if you like: jake@stilesrealestate.com or you can visit our website at: www.StilesRealEstate.com and check out our team’s success.

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Greenwood Real Estate Team Gets Recognized

That’s right, we did it! We sold over 300 homes again this year! (326 to be exact) That gives us a 2 year total of 632 homes sold. Keller Williams Realty awarded our team with the Triple Platinum award in selling.

 If you are looking to build, buy or sell don’t use an average Realtor. Use our real estate team. This will ensure you are using a professional, respected group of Realtors that will protect your interest and your equity.

Call us directly at: 317-885-ZONE (9663) or visit us online at: www.EveryIndyHome.com

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Save Money Now!

If you haven’t been paying much attention to the real estate market now is the time!  What I mean is…now is the time to refinance, purchase or do something with your real estate….other than sell. If I didn’t have a great rate already now is the time to refinance your mortgage into a 30 year fixed. If you are in an adjustable rate then GET OUT OF IT NOW!

There is no reason to stay in your rate. You can get a 30 year fixed rate as of today for around 5.50%. Why in the world would you not want to get that kind of fixed rate for the next 30 years? (Average home ownership is actually at 5-8 years, but hey enjoy the low payments while you can!)

Call or email me to find out where you can get the low rates and how I can protect you going into it. I will be sure to refer you to one of my prefered lenders who will be sure to take care of you.

 Remember you can visit our real estate team at: www.EveryIndyHome.com or my personal website at: www.Jake.EveryIndyHome.com.

Lastly, to save on selling your home visit my parent site at: www.StilesRealEstate.comto contact me to save money if you are intersted in selling your home!

Feel free to contact me anytime via phone or email I will always answer any of your questions confidentially.

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