November Steve & Jack's Home News Newsletter

Check out our November edition of Steve & Jack's Home News with some fun articles about curses, princes, employee surveys, 9/11, cleaning your phone before discarding it, and some common abbreviations. Also, some notable (and good) housing numbers just in for the Indy Metro Area: *Closed sales are up 24.1% *Median Sales Price is up 4.1% *Housing inventory is down 7.7% to 9.5 months *Interest rates are still low at around 4.25% Click here for our November Newsletter. Enjoy!!!

Sub-4% Interest Rates? Really?

Yes! Really!! On Friday of last week, we saw for the first time in decades interest rates below 4%!! This is for 30-year fixed, conventional, conforming mortgages. One client recently remarked, 'That is almost like free money!'. Unfortunately, due to the weak global economy and the significant action the Fed is taking on monetary policy, mortgage interest rates continue to drop. How low can they go, you say? No one knows, but if you are in the market for a house, rates like this literally can't get much better. Take some time to talk with a reputable and local mortgage consultant to show you know much more house you can buy with these low rates. Of course, I am not encouraging you to buy a bigger house than you need, but if you have been dreaming about a bigger/nicer/better location house, this might be THE time to seriously look into it.

September 2011 Steve & Jack's Home News

Check out the latest edition of our fun and informative newsletter. The link will also take you to our VIP discount site and a first-ever video introduction!! Let us know what you think!!! Enjoy!!

http://bit.ly/oFxDDy

Half Price Indiana State Fair Tickets!

Like to visit the Indiana State Fair, see all of the animals, interesting people, ride the fun rides, and eat that yummy food? What is better than that? How about getting in for HALF PRICE? Click the following link for a half price coupon courtesy of your Indiana BMV.

http://bit.ly/pvfjTT

Buy Your First Home from Your Bridal Registry? Yes!!!

Newlyweds say “I DO” to FHA Bridal Registry Gift Funds

Are you planning to get married and buy a home in Colorado, but wonder
where your down payment funds will come from?
FHA has a Bridal Registry program where the money you receive as a wedding
present can be used towards your down payment. Just like registering at a specialty or department store, the FHA Bridal Registry program allows you to register with a lender. Then your friends and family are able to make gift payments into an interest bearing account on your behalf.
It's a win win! Not only can your gifts earn interest, but they can be used as a down payment towards an FHA Loan.

Bridal Registry Guidelines

Bridal Registry Accounts were originally introduced in 1996, but still remain a little known fact when it comes to down payment assistance. The
misunderstanding of how this program works might be the fact that it was
originally only allowed by banks. Soon after, FHA modified the program and
offered new flexible options and the opportunity for the newlywed to set up the account at any bank. Plus, newlyweds are now able to make deposits on their own from the gifts they receive.

Here's how it works in 3 simple steps:
• You will open a savings account at your bank prior to the wedding
• Friends and family will be given the banking information where the gifts will be deposited
• All of the gift funds can go towards the FHA required 3.5% down payment
• Anyone with an interest in the purchase cannot be party to the gift funds (i.e. realtor)
• There is no requirement that you be married prior to closing on your new home

Another huge advantage is that there are no gift letters or other documentation required other than proof of your savings account
named "bridal registry account." It's that simple!
AGENTS: Marketing Ideas to Spread the Word in Your State
• Explain it on your website
• Blog about it
• Let your “to-be-married couples” know about it
• Send an email to past clients
• Attend wedding fairs & distribute brochures
• Mention it at your homebuyer seminars

The great news about this program is it is available Nationwide!

To learn more: Check out our FREE Top 20 Homebuyer Secrets that can save you thousands of dollars! Plus browse our Home Buying Resources section and fill-out a free no-obligation secure online application or call us in Colorado Springs, Colorado at 719.387.1368 with any questions.

Bad credit or No credit? Check out our Credit Repair Program and get started on the path to homeownership today!

Overcome loan application stage fright by reading my Simple Steps to a Complete FHA Loan Application
Newlyweds say "I DO" to FHA Bridal Registry Gift Funds was written by Rebekah Radice.

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.