Mar 022017
 

USDA
Many of our listings qualify for the USDA no money down program. This program is for rural homes such as ares in the western areas of Hendricks County and beyond such as Danville & North Salem. Check here to see if this is an option for you.

Next Home
Another option for you might be the ‘Next Home’ program. Indiana Housing & Community Development Authority has a program to use and supplement other offerings for home buyers who need some help to purchase a home. They provide a brochure on their web site detailing many of the options here: Homeownership Brochure.

The lenders who are participating in the program are listed here: Current Lenders.

Call The Derrick Team at 317-563-1110 to start your search for a new home. Don’t forget, we can help you with your home purchase and our services are paid by the seller, not you. So let’s start looking!

A few of the lenders we’ve worked with that offer this & USDA (link takes you to their site for details):

Reggie Galvin at American Mortgage – (317)-272-0074
JP Brens at Caliber Mortgage – (317) 550-2116


Also included these handy links if the above links do not work.

Website link: http://www.in.gov/ihcda/2507.htm

Income Limits: http://www.in.gov/ihcda/files/2011-12_Income_limits_FOR_LENDERS.pdf

Participating lenders: https://ihcdaonline.com/AuthorityOnline/participatinglenders/participatinglenders.aspx

Brochure: http://www.in.gov/ihcda/files/IHCDA-OpportunitiesForHomeownership-032410.pdf

 

 

Jan 152016
 

anothersoldOne of the biggest steps to adulthood is that first time one buys their own home. After living with your parents and then in rentals having to live by the landlord rules that next true step to freedom is purchasing your own home. At the same time it’s a big step in responsibility as now you are solely responsible for payments and upkeep.

We love working with first time homebuyers as they are always excited and fun to work with. We take them step-by-step on the entire process and stay in touch after the sale. But what many people don’t realize is how important first time homebuyers are to the sale of all homes.

There is a market for homes we call ‘first time homebuyer’ or ‘starter homes’. These are smaller, lower entry point homes in any given market. As homeowners outgrow these homes they will find they are now looking for first time homebuyers to purchase their homes so they can move up to a larger home. The people with the larger homes are looking for these ‘moving up’ buyers to purchase their home so they can move to, well you see where this is going. First time homebuyers are the first domino that keeps the real estate market busy.

10 first time homebuyers will purchase 8-9 inhabited homes (a few are vacant for various reasons) on average. Of the sellers who then proceed to purchase new homes you now have about 17 transactions. As those sellers become buyers you go down the line and the original 10 sales become 25 – 30. So on average a first time buyer triggers 3 home sales.

This is why it is important for our economy that lenders work with first time homebuyers and have options available that will work for those with good credit. It’s what keeps the housing market moving forward.

We work with several lenders that have many options for first time homebuyers. No matter where you are in the buying / selling domino chain The Derrick Team is here to help. Give us a call or text 317-563-1110. Or use our handy contact page.

Jun 262015
 
Purchase Agreement

See link to sample purchase agreement below.

Every state has different rules in regards to real estate transactions so in this article I’m focusing on Indiana’s Residential Purchase Agreement and the contingencies that matter most to buyers (but really are important for sellers to be aware of as well).

Today’s purchase agreement is now more helpful to the buyers than in the past. Years ago purchasing real estate was more of a ‘buyers beware’ transaction as most of the contract favored the sellers. Any misstep by the buyers and they forfeited their earnest money to the seller or listing broker. Now there a few built-in contingencies that unless superseded by other documents help to protect the buyer. The 2 most important on a standard contract is the ‘Independent Inspection’ section and the ‘Financing’ section.

Any good real estate agent is going to instruct their buyer to plan on the inspection costs as that is one of the best protections a buyer has. The idea is that they don’t want to end up paying too much for a home that has hidden defects (or at least not obvious to the untrained eye). When purchasing a home, a buyer needs to understand that they are paying for an inspection because the inspector is working for you, not the seller. The inspection section in the Purchase Agreement gives the buyer a time period to have the home inspected for major defects and safety concerns and determine if they want them addressed by the seller. It’s what we refer to as another ‘buyer / seller negotiation’ process in the transaction. The buyer can ask that certain items be repaired or addressed and the seller can negotiate back. A good listing agent will have prepared the sellers for this part of the transaction so the seller should be prepared to address any major defects found by the inspection. In rare cases the buyer can determine the house is in such bad shape they can ask to cancel the Purchase Agreement with a mutual release and have their earnest money refunded. Our experience is if both sides are reasonable this can be worked out to both parties satisfaction. Keep in mind if a buyer waives the right to inspection, you’re back to ‘buyer beware’.

The other important section is the financing sections that outline the type of buyers financing and the timeline in which everything is completed up to the final ‘closing date’. For the most part this protects the buyer so that if for any reason the buyer cannot obtain financing to complete the transaction the buyer will get a full refund of the earnest money. For the buyers sake it’s always a good idea to have all your financing worked out before you start looking at homes. When we work with buyers we insist a buyer talk to a lender to confirm their financial status before we start showing homes. We don’t want to waste everyone’s time if there was never any chance the deal would close. But at the same time there can be other reasons for the buyer to not be able to get financing. In some cases it might be the home’s condition is so poor the lender denies the loan (usually FHA / VA loans). In other cases it can be the appraisal comes in too low and the seller is unwilling to lower the price so the buyer is unable to get the loan. And in some cases there are sudden financial hardships that come into play as the buyer loses their job. So in most of these cases the purchase agreement protects the buyer in that they at least should get their earnest money back. Keep in mind there are other factors that come in to play but this is mostly what we have seen in our past experiences.

There are a handful of other sections that give the buyer a chance to negotiate or back out such as if the transaction is dependent on the buyer closing on their current home (and that buyer fails to close) or the section that covers homeowner associations. But the inspection and financing are what we always see as the 2 most important when working from accepted offer to closing. So a buyer must pay attention to this and work closely with their agent and lender to make sure everything goes smoothly to get to the point of signing the closing documents and getting the keys to their new home.

Have questions on how the process all works? Check out this flow chart here. Or feel free to call or text The Derrick Team at 317-563-1110. Based out of Avon Indiana we serve Hendricks County and the surrounding Indianapolis Metropolitan area.

Sample 2015 Indiana Purchase Agreement: Purchase_Agreement_Improved_Property_-_2015_ts48492

Apr 272015
 

In the old days it was common for the seller to throw something in with the home to sweeten the deal during negotiations. Sometimes this is still considered but if the buyer is financing the purchase that gets a little tricky. Anything not installed in the home is considered ‘Personal Property’ in legal terms. So when you write up an offer any ‘Personal Property’ listed can become a problem when a lenders underwriter sees this. There are guidelines many lenders are required to follow if they plan to sell the note after closing. One we see more of is no personal property is to be included in the sale of a home. Lenders do not want to see that big screen TV being paid for over 30 years of the mortgage.

Part of the home.

Part of the home.

So what are things that can be included?
Common items include built in appliances like stoves, dishwashers, built in microwaves, and even refrigerators (though they don’t have to be mounted per say). Other items are built in play equipment like swing sets, sandboxes, & basketball goals. Also items that are large and bulky can be included like sheds, above ground pools, spas & hot tubs, and boat docs. Built in items like in wall speakers, retractable projection screens, and those fancy outdoor grills & ovens. Only a couple of items slide by the built in requirement like window treatments and pool tables, but sometimes even those cannot be included.

Then there are the no-no’s.

No-no

No-no

Common items that will be rejected by a lender are accessory appliances like wine coolers, blenders, coffee makers, that extra freezer in the garage or anything that is not built in to cabinets, walls, etc. Outdoor patio items and lawn equipment will never be considered in addition to any sort of furniture inside or out. Even items like bar stools that match the bar cannot be listed on a contract. Any of that shelving in the garage cannot be included unless mounted to the walls. I think a normal rule of thumb is if you can move it without using tools to undo it, it is considered ‘Personal Property’, with of course the occasional exception.

Now keep in mind this really only applies if the buyer is getting financing to purchase the home. With cash deals, anything goes! Otherwise these items can be included with a ‘Bill of Sale’ that takes place after closing and not paid out of the loan financing. This places the transaction separate from the home purchase and the lender doesn’t care about that part of your deal.

Be sure and go over everything with your Realtor when you list your home. This is something The Derrick Team will detail on your listing contract so feel free to contact us with any questions when you are preparing your home to sell. Call or text us at 317-563-1110 or email us at DerrickTeam@DerrickTeam.com

Also want to give a shout out to JP Brens at Caliber Home Loans in Avon who provided us with great info on this subject. Be sure and give JP a call at 317-414-2743 with any questions on financing questions you have. We highly recommend JP for any financing needs you need!

Jan 312015
 

RinehartSOLDSo you’ve been though the process of searching, touring, and determining the home you wish to purchase. You made an offer and your Realtor just called you and told you your offer has been excepted. Congratulations, you just made the first step in your home purchase process. But you’re not quite done yet. Now it’s time to get busy as you and your Realtor have some things to do.

First, your Realtor should let you know specifically what to do per what you put in the Purchase Agreement (PA). There are contingencies that must be met to complete the entire purchase.

Getting A Loan
Typically if you are getting a loan there is a contingency for you to be able to obtain acceptable financing and the property to appraise for the purchase price. Your Realtor will work closely with your lender to make sure all the information is exchanged on the property and purchase agreement with all needed parties. This includes the Ernest Money (EM) you put down on the property (which is deposited in escrow by the listing broker at this point, so make sure you have the funds to cover). It is YOUR responsibility to provide all your personal financial information to lender as quickly as possible when anything is requested. Failure to do so can lead to delays or even the default of the PA, which then can make you lose the property and possibly your EM. Time is of essence after the first few days so do everything you’re told as quickly as possible. What ever you do, DON’T go spend a lot of money. We’ve seen more deals fall apart because buyers ruin their credit rating just as they are about to purchase a home. If you need to buy something, talk to your lender first.

The Home Inspection
At this same time you’ll be told to hire an home inspector if it was in the PA. We always recommend one for every home purchased as you want to make sure there is no hidden major problems that end up costing you a lot of money in the future. Take the time to get this setup as quickly as possible, and make the time to be there during the inspection. A good inspector will show you things you need to know, like how to check the furnace or water heater. They will educate you a little about your new home. A good Realtor will be there with you for the inspection (I will always try my best to be there for the entire inspection.) After the inspection we will write the inspection response based on what is documented in the report. At that point we will negotiate with the sellers if there are issues that need to be resolved.

Homeowners Insurance
After those two items are addressed things will slow down a little bit while waiting for the lender to finish preliminary underwriting on your loan and the appraisal is ordered. You will need to call and get homeowners insurance as that will be a lender requirement. Check with your auto insurance company as discounts often apply to combined home and auto insurance.

Listen To Your Advisors
If there are other contingencies your Realtor should keep you advised on anything you need to get taken care of. Be a responsible buyer and follow the advice of your Realtor and lender to make sure the entire transaction proceeds smoothly. Buyers who do not complete contract items in time can find they lose the property and their EM. But stay in the required timeframes and everything will move more easily to you owning a new home.

Just starting to look? Give The Derrick Team a call today at 317-563-1110! We will assist you every step of the way to get you into you’re new home.

Apr 022014
 
5 acres we sold just outside Danville

5 acres we sold just outside Danville

Part of the American Dream is to own that place out of the city with maybe a few acres, a pond or lake, and plenty of space for horses. This was something I wanted back when I was younger and hoped to have some day. It’s still a popular dream as any of our listings with a few acres gets a lot of inquiries. But it sounds really great until you actually try to purchase your Land Dream Home.

For this blog post we are focusing on raw land, as that is what we receive so many questions on what a person needs to do to make an offer. Usually the conversation starts with “We want to make an offer, what do we need to do?” The caller is excited and doesn’t want to lose out on the opportunity to buy the first part of their Land Dream Home. But then it gets a little more complicated.

As in all purchases the ‘how you pay for it’ comes into play here. Unlike what is referred to as ‘developed land’, meaning land with a home built on it; it can be difficult to get a lender to finance ‘undeveloped land’ or raw land. Land with a home on it is much easier to place a monetary value on thus the appraisal can give a clear value on how much money can be loaned to the buyer. Raw land on the other hand often has potential value based on its possible use. Agricultural land can be used as collateral for a farm loan but the value is based on possible future crop production. Commercial land can also be valued based on future income possibilities. But with residential the value can vary greatly based on what it’s used for and what is eventually built on it. So lenders tend to stay away from loans for raw land.

The only exception is the situation where the buyer is ready to build a home. This is a type of bridge loan where the lender approves a loan based on the land value and the home to be built on it. These typically are limited to 18 to 24 months while the home is constructed. The loan is then converted to a standard mortgage once the home is completed. So the best way to approach this option is to pick out the builder and type of home you want to build and find the land to build on. If you won’t be ready to build for a few years this probably will not work for you.

Another option is to buy on contract. In this case the seller has to be willing to be the lender for a set period of time, usually limited to a few years. The buyer agrees per a ‘land contract’ to put a certain percentage down, usually 20-25% and make monthly payments like a normal loan. Typically these are limited to 2 – 4 years and at the end of the term the buyer must pay the remaining balance or forfeit the land back to the seller. Interest rates are usually higher than general rates at the time. So as you can see this type of loan strongly favors the seller for taking all the risk as they may end up having to put the land back on the market. This is not necessarily the best approach to start with your Land Dream Home.

So how does one actually buy raw land? One word: Cash. In any purchase cash is king but in this case it really is the only viable option. So we recommend that if you want to buy raw land to start the process for your Land Dream Home, start saving now to purchase in a few years. There may be other options for you to get cash such as borrowing against retirement accounts but that would be a discussion with your financial planner, not something we Realtors can advise you on. Then there are always rich relatives but again that’s outside of our advice window.

So to summarize you have 2 viable options. If you are ready to build hire a builder and work with a lender on a construction loan. Or pay with cash.

If you have any further questions or need help in locating the perfect land for your Land Dream Home give The Derrick Team a call today at 317-563-1110. Even if you are a few years out from having enough cash, feel free to contact us. We’ll help you down that long road to your Land Dream Home. You can find some land search links at our web site http://IndianaAcres.com.

15 Acres we sold in Brown County

15 Acres we sold in Brown County

Feb 202014
 

Deciding to own a home is an important decision that people shouldn’t take lightly. It’s a large financial investment of both time and money. But it’s a good one for those who have settled down roots in a community they want to live in for the next few years at least. Or maybe you’ve outgrown your current home with an expanding family. Whatever the reason this chart outlines the typical processes involved with buying a home.

 HomeBuyerFlowchart

Talked To Lender?

This should really be a part of your decision process in the beginning for several reasons. Most importantly you need to know if and what you can qualify for. You may find some unknown issue with your credit that needs to be fixed first. Or you may find you can buy a more expensive home than you originally thought. But no matter if you are buying your first home or selling and buying another, you need to know your financial position first. If you don’t know of any lenders give The Derrick Team a call and we can recommend one.

Call The Derrick Team

Now you know your financial situation you’re ready to tour some possible homes. Don’t make the mistake of going it alone as you really can save a lot of time using a realtor to help you. And it comes as no cost to you as the seller pays the fees. Call The Derrick Team and we’ll sit down and go over the processes and determine how to start your search for your new home.

The Home Search

This can be a long process or can happen real quickly. It just depends on what you are looking for and what’s on the market at the moment. We can really help you narrow down the choices and point out the items to focus on with your particular needs. We will set up an automatic search that sends you properties as they come on the market so you can be the first to have a chance to make an offer on that perfect home. We also can quickly get you information on any home you happen to see on your own. There is no reason to not have a realtor help you with your search.

The Offer & Negotiations

Once we find the home you want we will go over your options working closely with your lender to put together an offer that tempts the seller to accept immediately. We pride ourselves in writing ‘clean offers’ that often result in our clients winning over other offers submitted at the same time. We work closely with you every step of the way in the negotiations during the offer process.

Hire A Home Inspector / Negotiations

Once you have an accepted offer the first step for you is to hire an inspector. While you don’t have to do this step we always recommend it based on our experiences in hidden problems with homes. We can recommend inspectors and Dennis will do everything possible to be with you during the entire inspection to answer any questions you have. We work with you every step of the inspection process and if needed, negotiated repairs. If for some reason seller is unwilling or unable to make repairs you then have the option to go back to searching for homes again.

Home Appraisal Process

The home appraisal is another point that can become an issue if the property does not appraise for the sale price. While this is usually the seller’s issue we will work with your lender and the seller to negotiate a new sales price if needed for you to get the loan. If for some reason seller is unwilling or unable to adjust the price you then have the option to pay the difference or go back to searching for homes again.

The Closing

After making it through all the contingencies in the steps to buy a home we now have the last step with the actual closing where you take ownership of the property. We will be there at the closing to assist you in this step as well. The only thing left after this for you to move in!

 

As you can see this process can be very complicated (and this is a very simplified description of the actual process). Having a realtor on your side each step of the process is something every buyer should have right from the beginning. With The Derrick Team you have 2 agents there to help every step of the way. Call or text us today at 317-563-1110, 7 days a week. Your realtors are here to help! Or use this handy Contact Form!

Download our Buying A Home book for free!

 

 

 

 

Jan 022014
 
Merlin-Dreaming

Dreaming of a new home?

We always suggest any homebuyers check with a lender before getting started on your search for a home. There are many reasons for this but the most important is knowing where you stand in what you can afford and what options you might have available to you. You might find you’re not in a position to buy in the area you want or maybe you can actually afford more. For example if you are looking for a fixer upper you need to know about 203K repair loans and if you qualify. There are so many options you just need to find out what works best for you.

If you want to be ahead of the game you need to gather all the info the lender will ask you and review it yourself first. The usual rule is 2 last paychecks, 2 months of bank statements, and last 2 yearly tax returns (signed). Now consider what other bills you owe such as car payments, credit cards, and any other ongoing payments for more than a few months as they will show up in the credit check by the lender. Add these all up and then you might see the need for a ‘financial diet’.

So where do you start? First examine the short term debts such as credit cards and revolving accounts that have a balance that could be paid down. Also look at things like car payments, especially if you are in the last year of the loan. Now figure out where you can diet (items you can do without i.e. financial ice cream). Take that money and pay down or off any bills you can to get yourself in better financial shape. Why is this important? First you want make sure you are ready for the financial responsibility it takes to own a home. But more importantly it helps you qualify for a better rate and possibly save you thousands of dollars on your home mortgage over the life of the loan.

So buckle down and stop eating out all the time. You’ll find you get in both better financial and physical shape with proper dieting. Call The Derrick Team with any questions when considering a home purchase. We’ll be happy to help you even when you are starting your ‘financial diet’. We can help guide you months, even years in advance of your next home purchase! Call or text today at 317-563-1110 or use our handy Contact Page.

 

 

Nov 012013
 

Almost ThereYou’ve probably heard the horror stories from friend or had the unlucky experience yourself where you’ve sold your property and then unexpectedly you haven’t. You were making plans to move, maybe already had an offer on another home and now everything is back to trying to sell or buy a home. It’s one of the more frustrating parts of buying and selling real estate, but it happens. So in this article we’ll discuss some of the common reasons and some indicators to be on the lookout for.

There are several items that can require negotiation when selling / buying real estate and each one can be a potential trouble spot. Obviously the starting point is negotiating the price and contingencies in the purchase agreement. An offer with more contingencies is the first warning as that makes more hurdles to get over to finally close the transaction. The Derrick Team takes pride in writing ‘clean’ offers that avoids this when possible. Solid offers mean better chances of closing making everyone in the deal happy.

Problem Spots
But there are usually at least 2 contingencies that cannot be avoided after the price has been agreed upon. First the buyers should be getting an inspection for their own protection and a seller should be prepared for this, even if selling ‘as is’. Once the inspection report is done the buyer can renegotiate getting items repaired or an adjustment to the price. This is a common part where things go wrong as the buyer is in control here and the seller has to be on top of things to keep the buyer happy. If the buyer is not satisfied they can walk away and only be out the inspection costs.

The second contingency kicks in if the buyer is getting a loan, as then the property must be appraised to determine the value meets the loan amount. This can be tricky in today’s market because of the recent drop in home prices in some areas (that’s just now starting to climb again). This is a wild card and again the seller needs to be prepared for this possibility. In some cases the appraiser will point out some condition items of the home that have to be addressed as well, especially if its a FHA, USDA, or VA loan.

A few of the other common reasons are the buyer loses their job, the buyers own house sale falls apart, or the buyer loses interest and walks away (usually forfeits the earnest money). In rare cases the seller suddenly doesn’t want or need to move anymore and does a mutual release to remove the property from the market. In that case the buyer can hire a lawyer but it usually costs less to just go find another home.

For all these reasons and more it pays to have a good Realtor working for you. As mentioned a solid clean initial offer reduces the chance of a deal falling apart.

Being Prepared
A seller should know the general condition of their property and thus have some expectations on what a home inspection is going to turn up. When setting the marketing price that should be a consideration so if needed you can have a little wiggle room to address possible issues. One of the things we guide both sellers and buyers on is that the inspection report should be used to spot potential safety and expensive repairs, not cosmetic issues. But then there is always those surprise issues that show up (mold, hidden water damage, termites, etc) that can change everything.

If the home marketing report is used to set a realistic sales price the appraisal shouldn’t be an issue. But some homes are easier to estimate depending on the types of homes in the area. If there is an issue with the appraisal there are ways to keep the deal moving forward and a good Realtor knows how to do that. But this sometimes is what we call the ‘wild card’.

So a couple of things to watch for from the initial offer are a low earnest money amount (buyer doesn’t have much to lose if they just walk), or a lot of contingencies that have to be addressed before closing. A good Realtor will discuss all these with you and if any of them are a big concern.

Another red flag can be when the lender seems to be dragging their feet on getting the loan approved resulting in multiple delays on the closing date. Again a good Realtor can stay in contact with the lender to see what is holding things up and let you know what your options are if things don’t look good.

What You Need
A smart Realtor stays on top of every deal to make sure no options are missed when things start to go wrong. We at The Derrick Team work hard for our clients to make sure we get deals closed. We advise our clients on possible sticking points to try and eliminate surprises and explore multiple options when there are. We want everybody to be happy when we walk away from the closing table with another successfully closed transaction.

Call or text The Derrick Team at 317-563-1110 when you are ready to sell or buy and know you’ll be well represented in your next real estate transaction. Use our handy Contact Form here.

 

 

 

Mar 082013
 

I need a lot of money to buy a home.
Not really. Depending on your credit rating and financial income there are ways to purchase a home with practically no money down. There are programs that finance up to 4% of the required 3.5% down required for typical FHA loans, leaving you extra to be used for closing expenses. Combined with seller assistance you can really purchase a home with little or no money down. (more details here)

I have to pay a REALTOR to help me buy a home.
Not true! REALTOR services are 100% paid for by the seller so as a buyer we represent you for free. There is no advantage to not using a REALTOR to purchase any real estate property. But by law and our ethics we must represent you and your interests over the seller’s, as they are represented by their own agent. (more info here)

I don’t need to worry about financing until I find the home I want to buy.
Bad move. We always suggest the first step is to check with a lender to find out where you stand in getting a loan. Sometimes they say go for it. Other times they may find you need to take care of some things financially to put you in a better position to get a good loan. But the main reason is that you don’t want to spend time looking to find the perfect home and THEN discover you cannot get a loan to buy it. It also helps guide you to what kind of home you can afford and in some cases where you can look (like you can afford more home than you thought). (check this post for details)

The national news on real estate is all I need to pay attention to.
Big no-no. The cliché in real estate is location, location, location. And as far as the real estate market is concerned, city, area, neighborhood. Just 2 blocks away can be a different market, depending on the area. This is where using a REALTOR pays off as we know the market in our area. For ANY questions on real estate ask a local agent. (typical local report here)

REALTORS get paid by their brokers no matter if they sell homes or not.
Mostly false. Except in a few cases almost all REALTORS work as Independent Contractors. The Derrick Team works with Carpenter Realtors as contractors and we only get paid with successful transactions, of which a portion is shared with Carpenter for services provided. So if you spend time with one agent, then use another to write an offer, the first agent gets nothing for their work. Keep this in mind when working with an agent. If you like an agent, stick with them so they will get paid for their work for you. That will in turn make them work harder for you. (read this for more info)

Give The Derrick Team a call today at 317-563-1110 with more details on these or any other questions you have. Remember, our services are paid for buy the seller so it costs you nothing.

May 142012
 
Contact the Derrick Team at 317.563.1110

Sweet Dreams of a New Home

Let’s start with why. Sometimes it’s obvious, such as you’ve been transferred to a new city. Or maybe family situations have changed such as a divorce, death, or recent medical conditions. Maybe you’ve found your house is too expensive or large and you have to downsize. If any of these are the case or you just know you have to move the next section won’t apply but read it anyway as it might open your eyes to a potential problem.

Now maybe you’re just considering a move, but don’t have a specific reason that you have to sell your home. There is a little more to consider. First, determine where you want to move to. Do a little research and look for an area that interests you. Check home prices (your Realtor can help, you do know one now), and visit Open Houses when you see them in the target area. Talk to friends that live in the area. Once you have an idea, now make sure you can afford to live there. This is a step sellers often forget to do, no matter what the reason to sell is, make sure you can buy another home! Check with your bank or lender and get prequalified. Just because you own one now doesn’t guarantee you can buy another. Job changes, credit problems, other debt load, can easily disqualify you from a new mortgage. They will prequalify you based on the sale of your current home. A CMA can help here so have your Realtor do one for you. None of this obligates you to sell your home, it’s just a good homework assignment before moving to the next step.

The next part is evaluating the readiness of your home for selling it for the best return on your investment. In other words it needs to look move-in-ready to help you get the best sales price possible in this highly competitive market. At a basic level you need to think of fresh paint, replacing worn flooring, installing new fixtures in kitchens & bathrooms if they are stained or extremely outdated. Again your Realtor (the one you now know) can assist you in what helps the best in your area and price range. You don’t want to spend too much and not get that much back, so don’t get too carried away. See more about preparations in the post.

Now you are ready to put it on the market, right? No not quite yet. Prepare yourself for your life being interrupted for showings and open houses. Start packing what you don’t need and make your home look inviting but not too personalized. Start making plans for your move. Don’t be caught off guard when an offer comes in. We’ve sold homes in days before (once a more common thing than today), and our seller had to scramble to find a place to live. So you don’t have to rush to buy a home if that happens, accept the fact you may have to move into temporary housing, nobody wants to rush a home buying decision.

If you are ready to sell, or will be soon, call that Realtor you know today. That would be The Derrick Team at 317-563-1110. We’re here to help for all your real estate needs!

Feb 152012
 

Getting ready to put your home on the market? You might want to check out the requirements an appraiser will need to OK your home for an FHA loan. Why is this important? A large portion of homes are sold with the buyers getting some sort of FHA financing, or requires the home to pass FHA appraisals. If your home doesn’t pass that test, your limited to conventional or insured conventional loans, or cash buyers. That shrinks your buyers market, considerably…..!

From the FHA (HUD) web site:

Required Repairs: Required repairs are limited to those repairs necessary to preserve the continued marketability of the property and to protect the health and safety of the occupants, A.K.A. the three S’s:

Safety: protect the health and safety of the occupants

Security: protect the security of the property (security for the FHA insured mortgage.)

Soundness: correct physical deficiencies or conditions affecting structural integrity

In general this all sounds good as any buyer wants their property to be a good investment as it’s a rather substantial one for most buyers. But as a seller you can easily get tripped up on the sale process after a buyer has made an offer. You’ve negotiated a sale price that you feel comfortable with, and then the appraiser calls out many defective items that will need to be addressed in order for the FHA loan to be given to the buyer. Now your stuck with paying for the repairs, or letting the buyer walk away. And you’ll have to make those repairs before the next FHA buyer comes along. We’ve seen this happen more than once….

Some of the more common things to consider that often get called out are:

  • Peeling paint, especially on older homes (pre 1978) that might contain lead based paint.
  • Roofs that have outlived their life (a judgment call sometimes, others more obvious).
  • Exposed wiring or dangerous electrical issues.
  • Broken or missing windows.
  • Loose or missing handrails and balusters.
  • Holes in walls and flooring, especially as pertains to firewalls (between garage and home, or other units in multi unit buildings).

This is a very short list but it covers some of the items we’ve seen called out, more than once.

Appraisers are required to go by the FHA guidelines or they can be fined and lose their license. Some will be more strict than others and sometimes you can request a second one at your own expense. But that doesn’t guarantee anything, so the best approach is to address obvious items up front, and be prepared for some surprises, even on newer homes.

If you so desire you can review the entire FHA list here: http://www.hud.gov/offices/adm/hudclips/handbooks/hsgh/4150.2/41502c3HSGH.pdf

Or just give The Derrick Team a call. We’ll be glad to come do a walk through and help point out the obvious items we’ve seen called out. Some items can only be determined by a professional (electrician, HVAC tech, etc). But we can at least give you a heads up. Call us at 317-563-1110 today!

 

Aug 162011
 

As Realtors we often look at tax data, most importantly assessment value, in part of our Comparative Market Analysis (CMA). It’s not uncommon to find that the homeowner may not have a common deduction on their property taxes. The most important one, the Homestead Credit can mean a much higher tax bill if not applied to the property if it’s applicable. If you are the owner and you live in the home, you are eligible. Another common one is the mortgage deduction that is usually only $3000 or less but still, it’s a few more bucks in your pocket if it applies (you have a mortgage on the property).

There also is a new process in which you must re-apply for your Homestead Credit to keep it in effect. In your last property tax statement there was a pink sheet that told you that all information must be updated by 2013 or you can lose this credit. In most counties you can do this online. I just did ours for Hendricks County at this link: Hendricks County Parcel Search. Just type in your address and find your information. Then on your property information page click on the Homestead Deduction button and fill in the information. You will get an email later confirming your Homestead Deduction has been OK’d from the auditors office. Only takes a few minutes and can save you hundreds of dollars.

There are many others and I’ve borrowed a table from the Indiana Department of Revenue flyer and added it below. Look it over and if you have questions call your county tax assessors office to get more details. Many require a form to fill out and some documentation to prove your eligible. But in the long run it’s money in your pocket that is rightfully yours!

Indiana Property Tax Deductions

Here are some handy links from the Indiana GOV web site:

 

 

Jun 272011
 

So you are in the preliminary stages of getting ready to shop for a home loan, either to purchase or refinance. A suggestion from a lender we talked to the other day was to create a “New Home” folder, or whatever you are securing the loan for.

The idea is to gather all the necessary paperwork needed by the lender and keep it updated all the time so when you are asked for something, you know exactly where it’s at. Based on the required items, you might have to consider a box as it may not all fit in one folder.

What lenders want are documents that prove your income and assets, and the sources of both. So the first and most important documents are as follows:

  • 2 months of bank statements from all banks & asset accounts (retirement and investments). Obviously this is something you’ll need to update each month.
  • 2 months of income statements. Paychecks & dividend income, (again updated as needed).
  • 2 years of filed & signed tax statements with all associated schedules. If you file electronically, print and sign copies for the bank. The signature is important as that certifies you saying it’s correct.
  • 2 years of employment history with employer contact information. They WILL call to verify.

Some additional items may apply and it helps to have this ready to go as well:

  • Documentation on the source of any extra money, especially if it’s part of your down payment. For example a gift from a relative; provide a copy of their canceled check and your deposit slip to show how and when it was put in your bank account. Same if it was an inheritance, a copy of the will showing the amount and when you deposited it, and a death certificate.
  • If you’ve been through a divorce you’ll need the divorce settlement and documentation on child support. This only applies in certain situations and can depend on the children’s ages but it’s better to be prepared in case it comes up.
  • Paperwork for any judgments or liens against you and explanations in writing on payment plans or history if paid off. These will show up in a credit report so it’s best to be prepared ahead of time.
  • If you’ve been renting, copies of the lease / rental agreement and 2 years of canceled checks.
  • If applying for a VA loan; Certificate of Eligibility, DD 214, and Disability paperwork if applicable.

Consider this a basic list; in each situation the type of loan and your credit rating can dictate the need for even greater documentation. Don’t’ forget you’ll also need to prove you are you. Typically that means having a VALID drivers license (pull yours out right now and make sure it’s not expired), a social security card, or a permanent resident alien card.

It’s also a good idea to check your credit reports now so there are no surprises. If you haven’t done so in the past year, you can request free credit reports from the 3 main credit companies. If you find mistakes you have time to work on getting them corrected before you start the actual loan process.

Finally don’t do anything that might hurt your credit while the loan processing is taking place. Check our post on Your Credit and Buying a Home for details.

Now look at this list and determine how big of a box do you need?

If you need any help with finding a lender, give us a call and we can give you names of some of our recommended lenders. And if you are preparing to purchase a home, we can help you with that too!

Mar 232011
 

You’ve talked to a lender and now know what your price range is for purchasing a home. You’re working with a REALTOR to find that ‘just right’ home you’ve always wanted.

While your doing the search, and especially when you’ve found one and made an offer, there are very important steps to make sure you still qualify at the closing (purchase) of the home.

First things first:

You absolutely should not take out any additional credit or even have an inquiry into your credit report from the time you start the loan application until after you have completed the purchase (closing is when you sign all the documents and make it official).

Make sure you don’t:

  • Go on a spending spree for new furniture, new window treatments, etc., and raise your credit balance above 30% of your limit. Revolving credit balance (credit cards, store accounts, etc.) is acceptable if it stays below 30%. Also watch and make sure your CC holder doesn’t drop your limit on a card thus pushing you over that percentage.
  • Get ANY “Buy now –Pay later” type of financing, this really hits your credit report as maxed out credit account (as in %100!).
  • Co-sign on a loan for anyone else as his or her credit then becomes part of yours (which may be really bad, why else would you be co-signing?)
  • Go shopping for large purchase items such as a car, truck, or fishing boat, even if not ready to buy yet. The dealer will pull your credit and that will result in an additional inquiry on your credit report.
  • Miss or pay late ANY payments!

Best if you do:

  • Carefully document all deposits into your bank and investment accounts. Lenders want to know where you get additional funds once the process is started (making sure your money is legit). This includes any items you sell for a few hundred dollars to your friend or neighbor. Check with the lender if someone is offering a cash gift to help, sometimes that’s not allowed or can only be a certain amount or percentage.
  • Keep an eye on mortgage rates. Banks are competitive and if you see a better deal at another lender, negotiate with your lender and they will probably work with you to keep your business.
  • Keep your down payment money intact, or add to it. More available cash can sometimes help at negotiations with a seller.

We’ve seen deals fall apart more than once when the buyers didn’t follow the ‘Don’ts’ from the list. You should always be smart with your credit but it’s VERY important when getting a mortgage from a lender. Ask your lender about these items and watch them nod their head (except the part about getting a better deal). If you really feel the need to spend, at least wait until the day AFTER closing!

Dec 212010
 

If you are planning on buying a home soon, or even a year or two from now, here are some good things to know about qualifying for a loan. This information comes from a certified trainer for “FICO Scoring 101”.

The FICO score is based on five different weighted factors:

▪ Payment History: The record of your on time and late payments
▪ Amounts Owed: Your credit limit minus the amount you owe for each account
▪ Length of History: The average length of time of all open accounts
▪ New Credit: Records of inquiries, new account openings
▪ Type of Credit: Mortgages, installment loans, revolving accounts etc

Easy Ways To Improve Your Credit Score:

With all the different kinds of information that credit scoring models incorporate, numerous tactics for improving scores are available. However, any action to improve a score must be taken judiciously: some actions aimed at improving your score may actually make it worse. Precision Credit Group can help you determine which steps will help your credit the most, without doing harm.

Many individuals reap significant benefits by properly employing these simple FICO score improvement techniques:

▪ Make payments on time, especially to installment and revolving accounts, as these report to the bureaus monthly
▪ Do not apply for any new credit cards or loans
▪ Pay credit card balances down to 30% of your credit limit or less
▪ Make sure your credit card company reports a limit
▪ Keep 3-5 open and active accounts in good standing on your credit report
▪ Review your credit report every year

This information provided by Ryan D. Keip, Owner of Precision Credit Group

The Derrick Team is not associated with Precision Credit Group but is providing these tips to help you get ready to buy your home. This information is not provided as professional advice. Consult with your lender if you have any questions on your FICO score and what you need to do to qualify for a loan as not all lenders follow the same guidelines.

When you’re ready to buy a house, give us a call. Being represented by a Realtor costs you nothing!

 

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