If you're currently behind in your payments, or struggling to make your payments and are unable to remain in your home even with a lower payment, a Short Sale or Deed in Lieu may be a viable option.
Short Sale: When the sales price of a home will be less than the current mortgage balance the lender may be willing to work wth the owner on a Short Sale. For instance, a property is worth $200,000, but the homeowners owe $220,000 due to decreasing property values. With the bank's approval, the homeowner may sell the property for $200,000 and often the bank will write off the $20,000 loss and not seek repayment for the deficit . Why would they do this? Banks are not in the business of selling homes. It costs tens of thousands of dollars for a bank to foreclose on a property and then re-sell it. It is often a good business decision for them to accept less from a short sale than to go through with a lengthy and costly foreclosure. For the homeowner, they can usually remain in the property through out the sale and avoid the embarrassment of foreclosure. There may also be credit report advantages to a short sale over a foreclosure.
Deed in Lieu: A homeowner can no longer afford their home and they sign it over to the bank in lieu of making any further payments prior to it reaching foreclosure. As with a short sale, this is usually less devastating to homeowner's credit status , but many banks don't want to participate. They don't want to own homes. Therefore they are often more willing to work with a homeowner on a short sale.
In both of the above cases the bank will require the homeowner to be in communication with them and provide documentation which explains their current financial situation and why they can no longer afford the property. This is often called a "hardship letter". In addition they will request other financial documentation such as bank and investment statements, Income Tax records, paystubs, medical bills, etc
Short sales are lengthy and complicated, so be sure to hire a real estate professional who has prior experience listing short sale properties and working with the banks. It is also recommended that you contact a tax attorney for advise on the legal and tax implications. The Hoagland Team has successfully sold short sale properties as well as represented buyers purchasing short sale homes in the Indianapolis and surrounding communities like Greenwood. Contact us if you have questions or would like more details. Additional resources are available on our website.
Posted: Monday, March 16, 2009 1:00 PM by Tonda & Steve Hoagland
For the second year in a row, Indiana takes the number one spot in the Midwest as the best place to do business by "Chief Executive" magazine. Each year the publication surveys over 500 chief executive officers on a broad range of issues and uses those findings to compile a list of the best and worst states for jobs and business growth.
Indiana ranked 11th in the Nation overall, 3rd in business friendliness, 4th in transportation and 6th in cost of business. This combined with our ranking as the most affordable place to live in another national survey promotes confidence that hoosiers are on the right track! For the full report, visit http://www.chiefexecutive.net/ME2/Default.asp.
Posted: Monday, March 16, 2009 10:05 AM by Tonda & Steve Hoagland
It's a tough market these days. But occasionally something happens that reminds us why we decided to do this in the first place.
Last week someone called wanting to see one of our listings as soon as possible. We hurried to set up the appointment, not wanting to pass up any business, yet knowing all the while that this could be another wild goose chase. As we chatted while showing them the home, we discovered they had put money down to build a home and unfortunately, that builder had declared itself insolvent that very day. They were devastated. Our new client, a first time homebuyer, was someone who really wanted a new home and their plan had come undone!
They were frustrated with builders and wanted to buy an existing home that weekend. So we spent Friday evening and most of Saturday showing them additional homes that might work. We answered tons of questions and offered advice, not just on homes - but also on property taxes, resale, hints for negotiating, making offers, and the entire home buying process. They were already pre-approved and felt confident in the price range they had already established with the builder, yet when they found a home they loved and we took the time to counsel them on the affect property taxes would have on their monthly payments they had some real concerns over the monthly payments. We soon discovered that the builder they had been working with hadn't taken the time to explain how Indiana property taxes work. Upon further review they agreed that it would have stretched their finances very thin. We could have easily written the offer and made the sale. But we wanted to do the "right" thing for our clients.
On Sunday we recommended they look at a brand new Ryland spec home in the Greenwood neighborhood of Brookhaven, where resale is excellent and taxes happen to be lower. Like many buyers they were surprised to find that we work hand in hand with builders -- helping them evaluate options and select a builder that will not only provide an excellent home, in an area with great resale, but also take wonderful care of them from beginning to end.
In this case, the spec home was just what they were looking for and the monthly payments were "just right" too! They got the brand new home they were looking for without having to wait for one to be built! We met them on Monday to go over the final paperwork. They were smiling from ear-to-ear! In two short days they had gone from a devastated "what now" to a very happy place - smiling as their picture was taken next to the SOLD sign in front of their brand new home.
Sometimes in the big scheme of life I wonder, are we really making a difference? I mean, we work crazy hours, rush from appointment to appointment, never seem to have a day off, yet their excitement and the smiles on their faces was priceless - and it made us remember why we love our jobs!
Posted: Wednesday, March 11, 2009 3:15 PM by Tonda & Steve Hoagland www.PerfectPlaceforYou.com
The Academy Awards are tonight. Have you had the opportunity to see the nominated movies? If you're anything like us, you meant to go, but busy schedules and the cost of an evening out may have kept you from making it.
Well, if you can free up time on your schedule, we can pass along some savings! Have you heard about the Kerasote Theaters Five Buck Club? A friend recently told us about this great savings and we want to pass it along to you! We just signed up and are excitedly awaiting our membership card and planning which movie we want to see first!
So what exactly is the Five Buck Club and who can join? Well, once a movie has been out for 2 weeks, sometimes a little longer, you can use your Five Buck Club card and get in anytime, for you guessed it, Five Bucks! No more hurrying to try to make the matinee showings!
Signing up is easy, just go to the Kerasote website, click on the Five Bucks Club, provide your contact information and they'll mail your Five Buck discount card. Currently, four Kerasote Showplace theaters in Indianapolis are participating. Illinois, Ohio, Colorado, California, Iowa, Minnesota, Missouri and Wisconsin also have participating locations. Visit their website to see if there is a theater near you!
Maybe next year we'll have actually seen the movies and know who to cheer for!
It's not often that Indiana makes the national news, yet recently we've been getting a lot of attention -- and not for the right reasons! Yes, it's been in the papers and on the news -- Elkhart Indiana has the highest unemployment rate in the Country. Even President Obama visited the area to market his economic stimulus package.
Well, here's some good news that you may have missed, Indiana also has the most affordable housing. According to the National Association of Home Builders/Wells Fargo Housing Opportunity Index released Thursday, falling home prices have led to the most affordable housing market in at least five years and CNNMoney.com confirms:
"Topping the list of most affordable U.S. metro areas, which ranks areas with more than 500,000 in population, was Indianapolis. This is the city's 14th consecutive quarter in first place; it boasts a full 93% of all homes sold being affordable to median family households." (read more)
Sure, some industries are struggling and unfortunately jobs in areas like Elkhart may be shaky, but that is not the case across much of Indiana. Many Hoosiers are in stable careers in cities with much lower unemployment rates. For those, it may be an excellent time to take advantage of Indiana's affordable housing prices. Rates are lower than we have seen in years, loans are available with as little as 3.5% down and if you're a first time buyer there is an excellent chance you qualify for the $8000 tax credit incentive. Yes, you'll receive $8000 which is yours to keep unless you sell your home in the next 3 years. This is an opportunity that requires serious consideration.
And not only are Indiana's housing prices affordable, our communities provide fantastic amenities to our residents. Do you know that Fishers Indiana was recently named the 10th best place to live in the country! Now that's more good news!
Is it the right time for you to buy? Do you have questions about the Indianapolis area real estate market, mortgage rates, down payments or the $8000 tax credit? - Post them here and we'll respond!
by The Hoagland Team on Hoagland's Chat with Indy Blog
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