Activity is UP!

Wow!! The number of listings in Indy has dropped 24.4% per MIBOR since March and I am seeing it in the low inventory available to show my buyer clients. What I have found is that there are fewer homes in good condition at market-acceptable prices than in the recent past. This is making it more frustrating for buyers to see a number of feasible options when house-hunting, however it is having a positive effect on sellers in that the average sales price is increasing-a simple law of supply and demand.

If you or someone you know is thinking of selling their home, please talk with your real estate agent to see how the market has changed and how you might benefit from the low inventory. In many cases and areas, inventory is below 3 months right now, which is indicative of a strong SELLERS market.

The $250,000-$350,000 Vacuum

Do you or someone you care about have a house valued between $250,000 and $350,000 on the north side of Indianapolis? If so, ever thought of selling it? It just so happens the north side of Indy right now has a depleted inventory of homes in this price range and there are a lot of buyers wanting homes in this price range. What does this mean to you?

Many homes in this price range are selling in days, with multiple offers, for above asking price. It is a simple supply and demand problem. If you would like to know specifically how homes in your neighborhood are moving in this price range, shoot me an e-mail and we can talk specifics.

Spring Is Here!

Spring has sprung (optimistic thinking, I know), but unofficially the spring real estate market in Indianapolis begins the weekend after the Superbowl. The recent harsh weather has tempered activity, but if you are thinking of taking advantage of the spring selling season during which 72% of all homes in Indy are sold (February-June), then NOW is the time to make your preparations to get it show ready. Interest rates are creeping up (currently at 5.125% for a 30-year fixed conventional mortgage with a 740+ credit score), but that is still a really good rate given the 40-year average for a 30-year fixed conventional interest rate is 7.875%.

Start preparing your house by decluttering, depersonalizing, and pre-packing items you don't use on an everyday basis. A fresh coat of paint goes a long way and is probably the best investment in preparing your home for sale you can make. Paint over any bold colors with earth tones and for heavens sakes if you have wallpaper, please, please, please remove it.

A good, thorough, deep cleaning goes without saying paying particular attention to the kitchen and bathrooms. Your house should pass the 'white glove' test. If your carpet is clearly worn, please replace it. If it just needs to be cleaned, hire a professional carpet cleaner who will breathe new life into them. Any dirty grout should also be cleaned by a professional grout cleaning company.

When the weather warms, plant some colorful flowers and plants outside your house and make sure the front door is clean and welcoming. Cleaning the windows will allow more light into your home, too.

These are just a few tips and tricks. Feel free to contact us for more ideas and suggestions. Happy staging!!!!

Indianapolis One of Best Cities to Move

Did you see this article? CNBC posted an article explaining why Indianapolis is one of the 10 best cities in the US to move to right now. Read the full article here:

http://realestate.yahoo.com/promo/best-cities-to-move-to-in-america.html

This is just another example of why Indianapolis is still one of the best places to live in the US. We have very high quality of life, a vibrant city, low cost of living, a highly educated worforce, a stable economy, and the most affordable housing in the country.

FHA Increased Fees

Did you know that on October 4th, FHA increased its annual (monthly) mortgage insurance premiums? For loans with 5% down or less the monthly premium went from .55 to .90. It also decreased its upfront insurance premiums from 2.25% to 1%. This is for 30-year loan products. For a LTV less than 95% the monthly premium is slightly reduced at .85.

What does this mean to you? While the closing costs will be less, your monthly payment will slightly increase. On a house with a $200,000 loan, it could mean a monthly increase of your mortgage payment of around $42. At the current interest rates, this means that the average buyer will be able to afford $7,000-$8,000 less house than last week. Pleast note that these are very rough numbers and are used for a basic illustration only. Please talk with a mortgage lender to find out how these changes specifically reduce your buying power. But know that your buying power just went down no matter how you slice it.

For some great tools for buyers including a great mortgage calculator and nationwide listing search visit http://www.welcome2indy.com.

Interest rates--How low can you go?

3.99% fixed rate conventional 30-year mortgage with no points. Seriously? Yes, I saw one of my lenders offering that last week. Crazy!! It is unlikely that they will go much, if any lower, but then we thought that was the case at 4.375% last month. The effects of the housing tax credit expiring are being felt in the Indy market and throughout the country. As an example, here are some stats from July 2010 compared to July 2009:
29% decrease in homes closed
23% decrease in pending home sales
9% increase in average sales price-yea!
1% increase in price/s.f.
6.6% increase in homes currently available for sale
11.26 months of inventory currently on the market vs. 7.48 months in July 2009

Aside from values increasing, we are seeing some sobering numbers come in. The best markets as far as lowest months of available inventory is, believe it or not Decatur Township with 7.47 months of inventory and Carmel Clay Township with 7.88 months of inventory. The worst is downtown Indy with 24.73 months of inventory!!!

What does all of this mean? Well, with such low interest rates and higher inventory and a trend of increasing housing values, this is a great time to buy a house!! Not to sound too salesy here, but we are seeing values recover, but super-low interest rates and lots of choices. If you are thinking your window of opportunity has closed, think again. Conversely, if you already own your home and you have a 30-year interest rate of 5% or more, do yourself a favor and talk with a reputable lender about whether or not it makes financial sense to take advantage of these crazy low interest rates and save some money. E-mail me if you would like some names of good lenders in the area.

4.375% interest rates?

Who would have ever thought that we would see a 30-year fixed conventional mortgage interest rate at the 4.375% mark? Well...we are seeing it right now. What is your current mortgage interest rate? Is it 5% or higher? Do you know what it is? If not, it would merit checking. Reducing your interest rate by around 1% could save you hundreds of $$$$ each month. It might make sense to talk with a mortgage lender and see how these low rates could positively affect your monthly payment.

Indianapolis is in the recovery mode, however we are still short of buyers out there relative to what we usually see at this time of the year. If you are thinking of buying a home, these great prices of homes coupled with the super-low interest rates could be a big win for you with being able to afford more house than you would have otherwise been able to afford, or further reduce your mortgage payment. Either way, you win!!!

The tax credit vacuum

Welcome to the tax credit vacuum!! We saw this coming months ago. Unfortunately, we are in it now. What I am talking about is the void of buyer activity we are currently experiencing due to the expiration of the homebuyer tax credit on April 30th. No one knows how long this is going to last, but the first-time homebuyer price range is the most affected. Here in Indy that is $200,000 and under. Homes priced above $400,000 are not doing badly and homes above $900,000 are seeing some of their best activity in years.

The sooner the unemployment rate retreats, the sooner we can set our sites on a long-term recovery. Banks and secondary markets are preparing to release their 'shadow inventor', which are the homes they own, but don't have on the market as they are waiting for the market to improve. Since they have seen signs of improvement, we are hearing that these distressed properties will be released soon, further depressing the market.

The good news is that interest rates have fallen again and as of Friday afternoon were around 4 5/8% for conventional and 4.5% for FHA with excellent credit.

Either way you look at it, it is a great time for buyers to get back in the market with inventory increasing, sellers getting frsutrated with lack of activity, and super-low interest rates, which, by the way could save you more money in the long-run than the tax credit with higher interest rates!

Another low appraisal

Ah, the reality of real estate today-another low appraisal. These are becoming more and more rampant and are the bain of every real estate agent's existence. On top of the added research, work, stress, and communication with the other agent and your client, what can be done with low appraisals?

First, a thorough review should be performed to determine if any mathematical mistakes were made when adding and subtracting the adjustments for the comparables.

Second, was the subject property properly 'bracketed' by the sold comps? By that I mean, did the appraiser use relevant comps, some of which were higher in price than the subject, some about the same price, and some lower in price than the subject?

Third, are the comparables the best comps to use? Were they all in the same neighborhood as the subject? If not, why not? Sometimes there just aren't enough comps available in the subject neighborhood. If the appraiser must search outside the neighborhood, then he/she should look for similar neighborhoods to the subject and adjust for location as necessary.

Fourth, are the adjustments made fair?

Fifth, were any distressed properties (short sales, foreclosures, HUD homes, bank-owned homes, etc.) used as comps? If so, did the appraiser disclose that fact and make an additional adjustment for the distressed sale, which almost always is lower than a non-distressed sale.

Sixth, is the appraiser from the area or out of the area? If out of the area, has the appraiser perfomed many appraisals in the subject's area?

Seventh, was the subject labeled as being in a 'declining market'? If so, that can be the 'kiss of death' and require a 10% down payment from the buyer. This label is VERY difficult to remove.

As for action steps, I would gather all of my information and personally call the appraiser to talk with him/her about any discrepancies. HVCC DOES allow for a real estate agent to contact the appraiser directly, just not the lender. Not all appraisers will be open to talking with real estate agents, however. Some are more receptive than others.

If the appraiser is unwilling to adjust the appraisal, your next step is to file an appeal through the lender who will take your information you have showing that you believe the appraisal is flawed and run it through the appraisal review process. This could take up to a week.

If that doesn't work, you can always order another appraisal from a different appraiser (for a fee) and see if it will come back higher.

This is just a starting point for a low appraisal issue and there are other steps, which could be taken as well if the situation warranted. It is important to note that I am NOT a licensed appraiser, but have been through this process more times than I can count. If this post helps just one person avoid losing a sale based on a low appraisal it will be worth it. Good luck!

The clock is ticking...

That sound you hear, is the clock ticking away and the end of the homebuyer tax credits. The first-time homebuyer credit and the existing homebuyer tax credit both expire June 30, 2010 and you much have an accepted contract by April 30, 2010. What does this mean? If you want 'free' money from Uncle Sam and you are considering moving in the near future, this is the time to do it. The Indy market has consistently improved and so have home values making for fewer 'deals'. There are lots of buyers in the market already and we are seeing many multiple offer situations. In many markets it is already a 'sellers' market, which is defined as fewer than 6-months of inventory.

So, get out there and take advantage of these low rates, low prices, and 'free' government money. All three will go away this year.

36.5% Increase in Indiana Real Estate Market!

BIG news from the Indiana Association of Realtors yesterday with a HUGE increase in home sales throughout the state. Read the full article from the Indianapolis Star below:

http://www.indystar.com/article/20091222/BUSINESS/91222011/Indiana-home-resales-jump-36-in-Nov

BIG Increase in Home Sales

Click on the link below to read a recent article by NAR about a record home sales increase. Good news, for once:

http://www.realtor.org/press_room/news_releases/2009/11/record_big

FAQ for the Homebuyer Tax Credit Changes

NAR Frequently Asked Questions

Homebuyer Tax Credit Changes

National Association of REALTORS® Government Affairs Division

500 New Jersey Avenue, NW, Washington DC, 20001

Here are some of the most frequently asked questions on the changes to the Homebuyer Tax Credit

Question: Existing homeowner credit: Must the new house cost more than the old house?

Answer: No. Thus, for example, individuals who move from a high cost area to a lower cost area who

meet all eligibility requirements will qualify for the $6500 credit.

Question: I am an existing homeowner. On October 25, 2009, I signed a contract to purchase a

new home. I have lived in my current home for more than 5 consecutive years and

am within the new income limits. I will go to settlement on November 20. If

President Obama has signed the bill by the time I go to settlement, will I qualify for

the new $6500 tax credit?

Answer: Yes. The existing homeowner credit goes into effect for purchases after the date of enactment

(when the bill is signed). There is no reference to the date of contract for the new credit. The

provision looks solely to the date of purchase, which is generally the date of settlement.

Question: I am a firsttime

homebuyer but was not within the prior income limits at the time I

entered into my contract to purchase on October 30, 2009. I will be covered,

however, by the new income limits. If the new rules have been signed into law by the

time I go to settlement, will I be eligible for a credit?

Answer: Yes. The new income limitations go into effect as soon as the President has signed the bill.

The income limit and other eligibility rules will look to your status as of the date of purchase,

which is the settlement date. So if the new rules have been signed when you go to settlement,

you should be eligible for the credit (or a portion of the credit if you're within the phaseout

range).

Question: I am an eligible existing homeowner. I have a fair amount of equity in my home. I

have found a home with a nonnegotiable

price of $825,000. Will I be able to use any

of the $6500 tax credit?

Answer: No. The $800,000 cap on the cost of the purchased home is firm at $800,000. Any amount

above $800,000 makes the home ineligible for any portion of the credit. The $800,000 is an

absolute ceiling.

Question: I owned my home for 10 years, but sold it two years ago year and have been renting

since. If I purchase a home, will I be eligible for the $6500 tax credit if I meet all the

other eligibility tests?

Answer: Yes. Because you lived in the home for more than 5 consecutive years of the previous 8, you

will qualify for the $6500 credit. For example, Say John and his wife bought a home in 2000

and lived there until 2008 when he got a divorce. Whether John has been renting or bought in

the interim, he WOULD INDEED be eligible for the credit because he owned a home and

occupied it as his principal residence for 5 consecutive years out of the last 8 years. The

keyword here is "consecutive." As long as he lived in that house for 5 years straight what he

did since 3 years doesn't impact eligibility.

Question: I am an eligible firsttime

homebuyer. I entered into a contract to purchase on

November 1, 2009. Do I have to go to closing before December 1? How does the

extension date affect me?

Answer: You do not have to close before December 1. Once the legislation has been signed, it will be as

if the Nov 30 date had never existed. Therefore, so long as the contract settles before April 30

(or July 1, worst case), the purchaser will be eligible for the credit.

Homebuyer Tax Credit Passes Congress

Congress overwhelmingly passed an extension to the homebuyer tax credit. See link below for details.

http://www.cnbc.com/id/33673455/

Deed for Lease Program

	News Release
	November 5, 2009
	Fannie Mae Announces Deed for Lease™ Program
	WASHINGTON, DC -- Fannie Mae (FNM/NYSE) is implementing the Deed for Lease™ Program under which qualifying homeowners facing foreclosure will be able to remain in their homes by signing a lease in connection with the voluntary transfer of the property deed back to the lender. "The Deed for Lease Program provides an additional option for qualifying homeowners who are facing foreclosure and are not eligible for modifications," said Jay Ryan, Vice President of Fannie Mae. "This new program helps eliminate some of the uncertainty of foreclosure, keeps families and tenants in their homes during a transitional period, and helps to stabilize neighborhoods and communities." The new program is designed for borrowers who do not qualify for or have not been able to sustain other loan-workout solutions, such as a modification. Under Deed for Lease, borrowers transfer their property to the lender by completing a deed in lieu of foreclosure, and then lease back the house at a market rate. To participate in the program, borrowers must live in the home as their primary residence and must be released from any subordinate liens on the property. Tenants of borrowers in this circumstance may also be eligible for leases under the program. Borrowers or tenants interested in a lease must be able to document that the new market rental rate is no more than 31% of their gross income. Leases under the new program may be up to 12 months, with the possibility of term renewal or month-to-month extensions after that period. A Deed for Lease property that is subsequently sold includes an assignment of the lease to the buyer. For additional information about the Deed for Lease Program, including full details on program eligibility, please review the Guide Announcement on www.efanniemae.com.

Homebuyer Tax Credit Extended?

Wow!! Click the link below to read the latest news on Congress extending the homebuyer tax credit. This could be huge, especially if you are an existing homeowner. Click the link to read more.

http://www.cnbc.com/id/33536082/

I'd love to hear your thoughts!

Short Sales

Modern homebuyers will inevitably come across one or more properties currently classified as a short sale. A short sale is an attempt by the current owner to sell a home in lieu of the bank taking it back through foreclosure proceedings, thus partially salvaging their credit rating and lifting the burden of heavy mortgage debt.

The entire short sale process hinges on the hope that the bank will take a loss now, approve the sale, and eliminate the costly process of foreclosing, clearing, and reselling a home. Obviously, this is a big hope on behalf of prospective homebuyers as well and they need to understand some things in order to lessen the chance for disappointment of unapproved short sales. This is what they should know:

1) Price is usually set by the agent & seller, not bank - The agent and seller often create a very low asking price in order to attract buyers. The bank is normally unaware of the asking price; however, the bank has the final say in what an acceptable offer will be. Since the bank has the power to ultimately accept or deny offers, their lack of price awareness often leads to the process taking longer than anticipated. The bottom line is that the buyer needs to remain positive and patient throughout the entire process, sometimes even for months.

2) Loans owned by 1 bank usually better than 2 - If the seller has loans owned by two different banks it is a lot more difficult to approve the short sale. This is something the agent or the buyer cannot control; it simply depends on the willingness of the bank or banks involved. While the reasons are beyond the scope of this guide, buyers should know that when the seller only has loan(s) with one bank the short sale often becomes more buyer-friendly. A savvy Realtor can let you know this type of information.

3) Lowball offers get slow or no response - Remember that the bank is typically unaware of the pricing during a short sale. When lowball offers stream into the bank they are often scoffed at and rejected, giving the prospected buyers little or no feedback. Surprisingly, it may also take painstakingly long to hear back even on good offers due to the high volume of transactions lenders are inundated with these days.

4) Agent must check comparables before submitting offer - The agent must be sure to check recent home sales in the area to give buyers a better idea of the properties that are selling. This will give the agent and the seller appropriate grounds for an asking price that will be more likely to be approved by the bank. Checking comparables will also give the buyer a better knowledge of what price homes in the neighborhood are selling for and ultimately make them a more informed homebuyer.

5) Don't hang your hat on the property - Short sales aren't necessarily "short." It can sometimes be a very long process. Don't get your hopes up for just one property, keep your options open and continue to actively look at multiple properties. Buyers must remain optimistic, the right property will come along. In most areas it is completely legal and risk-free to have multiple offers out at any given time with the proper contingencies.

6) Sellers with other properties or too strong of financials may not qualify for short sale and/or may be asked to pay the difference - Sellers that own more than a handful of properties or have an extremely large net worth will probably not be eligible for short sale. In some cases the seller will be asked to pay the difference of the sale. The seller might even need to sign a promissory note stating that they will pay back all or most of the debt. This has virtually no effect on the buyer as long as the seller cooperates.

7) "Approved" prices are quickest - It is important to remember that short sales are not always timely; however, making an offer on an "approved short sale" can be a quicker process. An "approved short sale" has a price that has already been given the green light by the bank. This could be due to the fact that another interested buyer made an offer that was approved, but didn't end up buying the property. These types of short sales are some of the most highly desirable.

8) Some banks look want strongest buyers, some want strongest offers - The bank has all the power in approving short sales. The bank can pick the most appealing buyer, which may mean different things to different banks. Some banks may prefer the buyers with large down payments while others just want the highest price regardless of down payment. Many buyers want to know if they will get a deeper discount for an all cash offer. This is very hard to predict and one will never really know until they make an offer. As long as the buyer is surrounded by a good team we would advise them to do just that.

9) Repairs are seldom done, credit is more frequent - If there are improvements that need to be made on a home, even if they are necessary to get a loan, it is often unlikely that they will be done. Typically there is some sort of credit issued and the buyer must take the responsibility of fixing anything that is broken.

10) When you get approval, must close on time - During a short sale there is no leniency with the closing escrow date as there often is in a traditional sale. During a short sale, exceptions are rarely made and the buyer must close on time. Because of this, it is important to take care of all loan paperwork immediately after opening escrow. We'd advise buyers to be extra prepared and try to have the loan finalized a few days in advance of the closing date. If there is going to be an issue that will prevent closing on time, a request for an extension will need to be made immediately. If the request is made early enough, many banks will grant an extension but don't just assume it will happen.

Conclusion
Short sales can be a great opportunity to find your new home at a competitive price. A Short sale could also be a major headache that lasts for months. It is important to have a good understanding of the factors that lead to a successful short sale to make it an enjoyable and profitable experience. We hope that these tips will help you to remain positive and optimistic throughout the process.

Todd Foust is the chief marketing executive for the FOUST Team at C21 Discovery; one of the top-selling real estate teams in Southern California. He specializes in Orange and Los Angeles Counties and operates one of the areas most informative real estate websites. To contact him or learn more about Anaheim real estate, please visit FOUSTonline.com.

About the Author: Jennifer McNamara works as a creative marketing contributor/manager for the FOUST Teams public relations division. She is a Southern California native and specializes in translating complicated real estate knowledge into user-friendly information for local homebuyers.

The Magic of A Child's Laughter

Welcome to Autumn! It seems like we barely had a summer and Fall hits quickly. We hope you are enjoying the colors, festivals and, of course your favorite football team!

Thank you for everyone who has called and e-mailed to inquire about how Brigid is doing with her pregnancy. Today is the beginning of her 6th month and she is still doing well, uncomfortable some days, but well. Ana is 'preparing' to be a big sister and is reading books and playing 'big sister' with her dolls to assist in this 'preparation'. As if this weren't cute enough, she asked to have the ultrasound photos in her bedroom so she could 'get to know' the baby better. What I've learned about being a father for a very short four years is that children can certainly try every last nerve in your body, but more importantly, they create more laughter and smiles than you would otherwise have ever thought possible. Parents, does that ring any bells or truths for you? I've shared my most recent funny story about my daughter with you. Now, I'd love to hear some of your funny stories, which have made you smile. Please e-mail me at Steve@Welcome2Indy.com or post on our blog at www.Welcome2Indy.com.BlogSpot.com. I can't wait to smile some more!

Finally, who do you know who should be a first-time homebuyer, but they haven't taken the first step for whatever reason? Please encourage them to talk with a trusted real estate consultant who can take the time to get to know their wants and needs as well as their hopes and dreams and can counsel them effectively on their options. We would love to be that consultant for them as the tax credit expires November 30th, which means they have to CLOSE by November 30th. Time is running out, interest rates are at historic lows, sellers are motivated, and inventory is still plentiful. Our market is getting stronger every day, and the historic values will not last forever, especially in Indy. Please introduce us if we can help make a difference in someone's life. Below is a secure link to our October Newsletter. There is a lot of good and fun information and articles in there. Enjoy! As always, thank you for your loyalty and support!!

http://tinyurl.com/yfoenxr

$8,000 First-Time Buyer Credit Expires Soon!

Are you a first-time home buyer? Do you know someone who would be? You have until the end of October to find a house and get an accepted purchase agreement in order to take advantage of this historic tax incentive. It expires November 30th, which means if you have CLOSED on your new home, you will NOT be able to take advantage of the tax credit. There are many outstanding houses out there still and interest rates are still historically low. Take advantage of this free money while it lasts. For more resources, check out: www.Welcome2Indy.com.

The Media Finally Catches Up...

It's about time! After many months, the mainstream media has finally caught up and started reporting something those of us in the industry have known for many months--the real estate market is healing. Welcome to the party!

We are seeing multiple offers, homes selling in days, and in some instances, for more than asking price. The bad part is that appraisers are still making things difficult and, in my opinion being too conservative and killing deals by valuing homes too low despite a ready, willing, and able buyer and seller happily paying the agreed upon purchase price and easily defensible comparables. So, buyers and sellers beware! Just because you got a great price for your house, that doesn't mean you are going to get an educated appraiser who will properly value your home.

If you qualify for the $8,000 first-time home-buyer tax credit, you only have until November 30th to close on your new home. And, don't forget that if you are bringing $10,000+ to closing, your funds MUST be wiring to the title company-absolutely NO exceptions.