Tonda & Steve Hoagland Greenwood IN Real Estate

One day. Seriously.

The difficult thing to predict is which day that will be!

The number of motivated buyers looking to purchase a new home will strongly influence this time frame. Of course there are peak times during the year when more buyers enter the market. Typically that begins with the end of the Holiday Season as buyers start thinking about their resolutions for the new year. In the real estate business the "Spring Season" starts on January 1st! The next biggest jump in activity typically comes in late February through May.

Why?

Well there are many reasons, but one of the most common we see is that many buyers have children in school so they want to finish the school term in their current residence, and then move into their new home during the summer months. Plus it's just plain more enjoyable to look at homes in the spring than during a winter freeze and neighborhoods look better too -- with green lawns and budding trees!

What else motivates buyers?

Low interest rates and more house for their money. When money is cheap to borrow, buyers want to take advantage of the low rates....and yes, interest rates are incredibly low right now, plus most of central Indiana has seen home prices hold steady or actually fall over the past several years. Add to that the just announced $8000 government tax credit and the incentive for buyers to make a move goes way up!

So back to the original question - how long does it take? Many factors affect this number, but let's make a few assumptions. Let's say you are priced correctly, your house shows great, your location is nice and the real estate agent you are working with markets your home effectively. If so, here in the Central Indiana / Indianapolis market you will likely have your home on the market for a minimum of 60 to 90 days before receiving an offer. Then if you reach an acceptable agreement with the buyer, most transactions close sometime within the next 30 to 45 days.

So it's probably going to take 3 or 4 months before you can actually move?

Yep! So if you want to be in that new home before school starts in the fall it's time to get hopping!

Dear Real Estate Consultant,

I am currently renting a nice 2 bedroom apartment. I keep hearing about low mortgage rates and depressed prices, I was just wondering -should I be considering buying a house?

The apartment costs $850 per month and that includes all utilities. I know I should have renters insurance, but I haven't done that yet. Of course, I would really like to get out of the apartment because my neighbors downstairs are loud, I have to carry groceries upstairs every time I go to the store, and I'm getting really sick and tired of parking my car outside. Scraping windows is getting to be a drag.

What are your thoughts?

Dear sick and tired,

WHAT ARE YOU WAITING FOR? Let's do the arithmetic. You are spending over $10,000 every year to rent. While you don't have yard work or other maintenance concerns, you also have the loud neighbors, stair climbing, and scraping of windows.

At today's interest rates, which by the way are near record lows, you could own your own home and not pay more than you are now. Imagine turning up your stereo and not worrying about the neighbors! Think about the convenience and security of your own garage. Wouldn't it be nice to paint, decorate or make improvements without checking with the landlord? You could really make a house your home!

So how much home could you buy? For about the same amount monthly you could purchase a $110,000 home in Indianapolis or the surrounding areas such as Greenwood. That's a nice home with 3 bedrooms, an attached 2 car garage, and a yard! Oh, and that doesn't include the benefit of a mortgage tax deduction or the $7500 tax credit that Washington is offering new home buyers on their Federal Tax Returns. Visit our website for a payment and rent vs buy calculator for all the details.

Does that sound better than renting? If so, give some thought to what color you want to paint the living room. Now the choice is all yours!

by Steve and Tonda Hoagland of The Hoagland Team

That's the big question everytime we sit down with a buyer to write an offer.

Ultimately, since it's your money, it's also your decision. But a great real estate agent will povide valuable information and counsel so you'll feel confident with that decision. They are your advocate in the negotiation process and will use their years of experience and knowledge of the neighborhood to help you gauge what is in your best interests. This may be your first offer -- but they've been through this many times before.

What factors are important to the price? Well, here are a few examples.

• Uniqueness of the property - Is this a one of a kind piece of real estate? Does it have features that aren't readily available elsewhere? For instance, the Central Indiana area doesn't have many lakes, so lakefront property is sold at a premium.
• Location - Is it on a cul de sac? Wooded lot? Popular school district? Busy road?
• Comparables - Is this home in an area where other homes compare nicely with it? If so, your agent will look at the history of what has been sold over the past year or so, and with that information they can give you insight into what the seller is probably expecting.
• Motivation - The motivation of the buyer is critical. Will you be heartsick if you make an offer and someone else's offer is accepted or do you have a back up which is equally attractive?
• Condition - What is the condition of the home? Does it need a lot of work? New appliances? New countertops? Wallpaper removal? Are you a handyman, or will you need contractors to help? Your agent can help position this specific property against others.
• Status - There are a lot of circumstances that affect price drastically. Bank owned, HUD-owned, and short sales are examples of properties where the sellers are in some degree of financial distress. While these homes might have an attractive list price they are often in need of repair and are generally sold "as is". In some cases these are attractive for buyers. In other cases they can be unpredictable, primarily in receiving a
• Occupied vs. Vacant - What do you think when you walk into a vacant home? Generally we hear buyers say "they must really need to sell". The first instinct is that a low offer might gain the attention of the sellers. In some cases that is true. Your agent can help you with this. Generally sellers are determined to receive a fair market price, and are often willing to wait until that offer comes along.

Other than price, is there anything else the buyer can negotiate? Great question! Yes -- here are a few examples.

• Closing date - Are you flexible or is your lease expiring...etc? Does your closing timeframe work for the sellers? Are they building a new home? If so, they may not be anxious to accept a lower price offer if it requires them to make a double move. However, if it helps them prevent a double move, and you have the flexibility to help them meet their unique timeframes, you may have an opportunity to more strongly negotiate price.
• Possession - Similar to setting a specific closing date that works for the sellers, the date that you actually take possession of the property is also a negotiation point. You may want to move into your new home the day of closing. The seller may need a few days, weeks, or months to vacate the home gracefully. Those are days you own the home! This is certainly an area where the sellers might agree to a lower price in order to receive favorable terms on possession.
• Pro-rated property tax - Property taxes are generally pro-rated through the day of closing. Depending upon the circumstances you may be able to negotiate different terms.
• Closing costs - Many buyers don't want to spend "cash" to acquire property. In some cases buyers can negotiate with the sellers to pay for some or all of the buyer closing costs. If so, the purchase price will probably be higher, but it will mean less cash out of hand at closing. That might be cash you expect to use to buy new appliances, updated fixtures, or for repairs.
• Cash vs. financing - Cash offers really catch the attention of sellers! Why? Because they can close more quickly! A cash offer can be accepted and closed in days. Financing is a variable that takes time - we usually tell clients to expect 30 to 45 days. If a seller is anxious to sell (for instance they are moving out-of-state) they may accept a lower offer if it is for cash.
• Appliances, hot tubs, personal property - Lenders usually discourage intermixing personal property with "real" property on offers, with the exception of appliances which are generally acceptable. If there are pieces of personal property Sellers want to include, the lender may request them to be on a separate bill of sale, and not included in the mortgage.
• Warranty - Unless you are acquiring a brand new home you may have concerns about unexpected repairs after you move in. How old is the furnace? Air conditioner? Water heater? Roof? We frequently advise our clients to ask the sellers to provide a one-year warranty. This is a nominal fee for the sellers, and can often be negotiated into the deal.

There is much more that your agent can share with you, but this should get you thinking in the right direction and give you some ideas to consider.

Was this helpful? If so, please post a comment! Don't be afraid to ask the nagging question that is bothering you. We'll be happy to post a response. Chances are there are others out there with the same question.

by Steve Hoagland, The Hoagland Team

January, a new year, another new goal. Or is it the same one as last year and the year before that? Isn't it interesting how we set new goals for ourselves in January. It's like we need a fresh start to the calendar in order to make a plan -- to get things done that we know need doing.

What are your 2009 goals? Lose weight? (Yes, that's one of mine!) Land a new job? Get a promotion? Spend more time with family? Go back to school?, Buy a new house?......

Whatever your goal -- do you have a plan to get there? Goals are seldom achieved unless you think through the things that need to happen before they become accomplishments. For example, I want to lose weight this year. Great. I know in my head that I can watch what I eat, exercise more, maybe even skip a meal or two. Will I do it? Where will I be by March 1st? Yes, you guessed it -- probably waiting on January 1, 2010 to restart my goal to lose weight!

So what should I do? How do I really make it happen?

Here is a formula that has worked for me in the past. It's not easy, and I can't say I always follow my own advice, but when I do, I have a lot better chance of achieving my goals. Maybe it will work for you too.

Step One: Choose your goal - and write it down. (This is the easy part!)

Example: I want to lose weight.

Step Two: Set a measurable objective. (Answer the questions, "how much" and "by when".)

Example: My objective is to lose 20 pounds by May 1st.

Step Three: Determine your strategy for achieving your objectives

• I will stop eating fast food
• I will exercise 5 days per week for at least 30 minutes
• I will monitor my progress on a weekly basis and reward myself (not with food) when I meet the milestones I've set

Step Four: Determine what you need to execute upon your strategy

• I need to organize my day so that I am not tempted to hurry through lunch or go to the drive through
• I need to schedule time on my calendar to exercise -- an appointment with me!
• I need to monitor my activities and progress on a chart
• I need to stick to the plan! "Just Do It" as Nike would say
• I need to share my goals with my wife and ask her to help me stay the course

There are many more things I can add to the list, but you get the idea! I find if I follow this plan of goals, objectives, strategies, and needs then I stand a very good chance of losing those 20 pounds by May 1st. If you're anything like me, you feel a real sense of accomplishment when you actually get 'er done!

As a real estate professional, I meet a lot of people who would like to buy a home, but just like losing weight, they're not sure how to make it happen. Is purchasing a new home one of your goals in 2009? Perhaps your objective is something like "moving to a great Greenwood neighborhood before school starts in the fall". Now, how do you determine your strategies and needs? This where a Real Estate Professional can make all of the difference. It's like hiring a personal trainer. They'll guide you through the process from beginning to end, ensuring you're on track with your strategies and providing the resources to assist you with your needs. But unlike a personal trainer, hiring a buyer agent isn't expensive! Their fees are paid by the seller. So what are you waiting for? Put a plan in place to make this New Year's Resolution a reality!.....Oh, and you might want to save some time on your calendar the last week in July for the big move into your new place! As for me, hopefully I'll be celebrating shedding those extra 20 pounds!

by Steve Hoagland of The Hoagland Team

Do You Really Need a Down Payment?

With all of the recent hoopla in the press and crack down on lending institutions, yes, zero percent down financing is a thing of the past. But how much down payment is really required? I've heard buyers say, "I know I need 20% down", well I'm here to tell you that just isn't so!

Many buyers are electing to use FHA financing because it requires the smallest down payment and offers a very competitve interest rate. As of January 1, 2009, FHA will require 3.5% of the purchase price as a down payment. That's not so bad, especially when the rates are near 5%! Do you know that your down payment can also be a gift from a family member? That's right, if mom and dad would like to contribute, all they have to do is write the lender a letter stating that they are giving you the down payment as a gift!

Although sellers are no longer allowed to contribute to a buyer's down payment, they can pay the buyer's closing costs, and many are willing to do just that in order to close the deal. So you see, for a $100,000 home, the down payment required could be as little as $3500 (zero if you have a relative willing to foot the bill for you) and zero closing costs! It's a fantastic time to buy a new home!