Jul 262017
 

Buyers today will typically have the home they purchase inspected by a licensed home inspector. Acting as buyer agents we always will insist they do as they are buying a ‘used’ home and not everyone takes care of their home the same. And even a well-maintained home may have defects that the seller was not aware of.

A new roof can be an expensive surprise.

As the seller, you should expect this as part of the sales process. Even if you are selling ‘as-is’ a buyer will most likely do an inspection just to make sure they don’t get any surprises. They buyer hires and pays for this inspection so the inspector will be working for the buyer. With that in mind they will almost always find something wrong. The buyer will then present you with a Buyers Inspection Response that lists items they want repaired before they will close on the sale.

First, here are things expected of the seller for the inspection, which can take anywhere from 45 minutes to several hours.

  1. As a common courtesy, the seller should vacate the home during the inspection. Pets should be removed or crated during this time. If you cannot leave for some reason at least leave the inspector and buyers alone so they have some privacy. The inspector needs to be able to discuss items freely with the buyer.
  2. Access to the mechanicals, such as the furnace / AC, water heater, etc. is necessary for the inspector to check them out. Move boxes, items, etc away so they can remove the panel on the air handler unit.
  3. Any access to the attic areas or crawl spaces must be clear of all items. Cars parked in a garage can keep them from attic entry if that’s where the opening is. Locks on crawl space entry must be removed or a key left behind.
  4. Any electrical panel should not be blocked or hidden. If there is a picture hanging over it remove it. The inspector will need to pull the cover off to check the wiring.
  5. Any outbuilding, detached garage, etc should be unlocked or key left in home so inspector can enter.

Second, here are some things the seller can do to help prepare for an inspection.

  1. We usually suggest or sellers have the furnace / AC serviced when they list their home unless they’ve already done so recently. That way there are no surprises and inspectors will always point out serviced systems.
  2. If the home has a crawl space peek in there or hire someone to check it out before listing. This is where some of the most expensive repairs come from. Often from a non-working sump pump that leads to water damage and mold.
  3. If the roof is more than 10 years old or age is unknown, have a roofing contractor inspect the roof for damage before listing your home. This gives you time to get quotes and check for insurance coverage way before the inspector finds and reports the issue. This also is often an issue with appraisers and having the roof replaced can be a condition on the sale of the home.
  4. If you or a ‘buddy’ have done electrical work or you are aware of some electrical items that just don’t work correctly, it would be a good idea to have an electrician come inspect and repair any of these items. These often show up in inspection reports.
  5. Leaking pipes, call a plumber. It’s often not just repairing the pipes but repairing water damage that can run up the costs on inspection repairs.
  6. If you have a wood burning fireplace, it’s best to have it inspected and cleaned by a chimney sweep.
  7. If there are any major items you are aware of but don’t want to fix, get quotes beforehand. It helps with negotiations when you have a quote on the repair costs ahead of time.

Keep in mind the Buyer’s Inspection Response is a negotiation and not necessarily a demand. But the items listed above are generally items that should be addressed, as nobody wants a leaky roof, electrical or plumbing issue, water or mold issue, or a furnace that breaks down the first time it gets cold. We generally say look at the items you would want fixed if you continued to live in the home and work from there. In some cases it can be negotiated as rather than making repairs the seller adjusts the selling price in compensation to the buyer.

As both buyer and listing agents we’ve see it all. For question on home inspections, selling, or buying a home feel free to call or text The Derrick Team at 317-563-1110. We work 7 days a week including weekends and evenings.

Nov 102016
 
Our Danville listing that sold in 9 hours.

Our Danville listing that sold in 9 hours.

Common wisdom has spring starting in late March because the calendar and outside weather tells us that. A common misconception is that the prime home selling season starting around the same time. But there are other factors that come in to play that show by March you’ve already missed the first opportunity to sell you home. Like this past spring we sold the most homes in March, and all of those homes had been on the market for at least a month, if not longer. So people who waited until March to list missed the largest surge of selling activity. A good time to start is now by finding your realtor and talk to them about what you need to do to your house. The Derrick Team is more than happy to come out and discuss what you need to do with no obligations!

Getting ready
First you have to consider the preparation of getting your home ready to sell. Depending on how you ‘keep house’, this can be anything from a couple of weeks to 2-3 months or more. The basics that you will need to address are de-cluttering, cleaning, and making everything looking spiffy! This often includes painting, replacing worn / outdated fixtures & flooring, and repairing items that will need to be addressed to sell the property. We see this all the time where the homeowner is totally unaware of how long it will take them to get the home ready for the market. So a good time to start working on this is around the Thanksgiving holidays in November when you might have some extra time off from work to do as many chores yourself to save from paying others to do it for you.

When should you be ready?
Plan to be on the market in January after the holidays are over. This gives you cushion, as the end of January to early February is our latest recommend time frame to target getting your home on the market (see chart below). Why then you ask? First, when the weather is bad buyers are sitting at home searching the Internet and getting ideas on what they want to see as soon as the weather gets better. You want them to find your home so you’ll be the first on their list. Second, you want to beat all the other sellers who do wait until March or April to list. Again you’ve picked up those buyers chomping at the bit while the weather was bad. Third, first time home buyers will start as soon as they get their tax returns. So there are at least 3 good reasons to be on the market early.

This past spring was our busiest ever and in April local sales in central Indiana were the highest ever recorded after a very busy February & March. Many of our listings had accepted offers the day they went on the market. We saw that many sellers that waited until May / June had to sit and compete with all the other late listings, when the market normally slows somewhat. All the current reports show this spring should be at least as good as last spring with interest rates still in the reasonable range and consumer confidence continuing to grow. There is a pent up demand from first time home buyers that continues to propel the housing market.

If you have any desire to sell in the next couple of years it costs you nothing for us to come talk with you. We’ll be happy to help with a free CMA and tips for getting your home ready with no obligation on your part. Call or text The Derrick Team at 317.563.1110 or shoot us an email. Don’t wait and miss those early buyers.

Spring Home Sales

Apr 232016
 
Save The Earth

Save The Earth

We are not referring to a fad that utilizes lots of shades of green, such as a color scheme using hunter green for decorating accents. But you might have heard the term ‘Green Building’ or ‘The Healthy Home’ being tossed around lately. The idea is building homes along the lines of being friendly to the environment. While using products that don’t harm the environment are considered, that actually is not the focus of a ‘Green Home’ today. Instead the focus is on the amount of energy used to heat and cool and how that in turn affects the environment. More energy used uses more of the non-renewable energy sources on the planet. So an energy efficient home is thus labeled a ‘Green’ home for using less energy.

With new homes there are a lot of new design options and building techniques that can add up to a lot of efficiency for overall energy requirements. We attended a workshop held by David Weekley Homes in Avon that discussed many of the new implementations they have rolled out with their homes. You can find out a lot about their ‘Energy Saver’ homes here. You can see where a lot of builders are working on building changes here. So if you are planning to build you might want to look into your options that can pay off in the long run.  Be sure and give your Realtor (The Derrick Team) a call for assistance with local builders.

Now for the other part of a ‘Green’ home we look at existing homes. The reason I bring this up is that it’s quite probable that at some point in the near future there is going to be a energy rating applied to all homes. You may already have gotten notices from your energy provider about free energy audits that they provide to check your homes efficiency rating. At this point they are going to test your home and recommend items you can address to make your home more efficient such as insulation, window replacement, etc. But at some point they will also be applying a rating to be used for comparison purposes. Comparison to what you say? To other homes when you go to sell your home. Most likely it will be a common item to list a home’s efficiency rating, much like the gas mileage when shopping for cars, in the not too distant future.

So what does this mean to you today? It might be prudent to pay attention to what adds to your home’s energy efficiency with any updates you do to your home. For instance if you need to replace the furnace, consider spending a little more to get a higher efficiency unit. And it might be a good idea to take advantage of a ‘Free Energy Audit’ if your utility provides one. I know here in Hendricks County, Hendricks Power & Duke Energy will do free audits for their customers.

So if you want your home to be ‘Green’, it’s going to take a little more work than slapping the trendiest color of green on the walls. If you have any questions on updating your home and the future value call or text The Derrick Team at 317-563-1110 today and we’ll be happy to discuss with no obligation to you. Or use our handy Contact Form here!

 

 

Feb 122016
 

A well planned garage sale can put some $$$ in your pocket!

Garage sale todayIf you are planning to move, or just need to make some space, a garage sale (sometimes called a yard sale), is a great way to get rid of unwanted or unused items and pocket a little cash. Here are some general ideas that can help you clean up and get a reward.

Plan

  • It’s not a good idea to have sales on holiday weekends as most people already have other plans.
  • Look for community sales you can join or invite neighbors to join as you have more stuff and can split the advertising costs. More stuff increases a shoppers chance of finding something they like.
  • Check with your Homeowners Association and/or with local ordinances as sometimes a permit or registration is required. Some HOA’s only allow them during ‘community sales’.

Advertise

  • Run an ad in the newspaper and/or post an ad for free on Craigslist, Facebook groups, or other local Internet sites.
  • For larger sales passing out local flyers or posting on local store bulletin boards can draw traffic as well.
  • Put signs out the day before (check local ordnances) and check to make sure they are there the day of the sale. Most of the Indy area has 24 hour rules.
  • Remember, attaching signs to public signs and utility poles is a no-no, they must be free standing.
  • Good signs make a difference as most people are drive bys so make sure they are sturdy and easy to read from the road.
  • If it’s windy or you had a storm overnight go check them right before the sale is going to start. Consider using boxes with weights in them. And make sure and go pick them up after the sale.

Before the Sale Preparations

  • Supply plastic bags or boxes for multiple items. Keep old newspaper handy to wrap up fragile items.
  • Put dogs away as some people are scared or allergic of them.
  • Have a small calculator handy, buyers might otherwise question your addition.
  • Make sure you have room for parking safely on the street or yard area.
  • Place an ‘All Sales Final’ sign to make sure you don’t get people coming back the next day.
  • Have plenty of change at the start, at least $50 in small bills and coins. More if you have a lot of low priced items.
  • Don’t take checks from strangers as you have no way to get your money if the check is not legit.
  • Keep the money on you, not in a cash box as a tempting target. Carpenter aprons are a handy item to keep your money on you.
  • Price everything or at least group them on a table with a sign that says ‘All Items on this Table $5’. Price items in good shape for about a 3rd of what they are new. Make it easy on yourself and price them in even amounts like 50 cents, $1, $5, etc.
  • Provide electric power to test plug in items and batteries in battery operated items.
  • Have some soft music playing so people don’t have to whisper if they are talking about an items price.
  • Provide cold drinks (you can make a little money there) and even snacks as that can help keep people browsing.
  • Make sure all items are clean and neatly arraigned and during lulls in activity be sure and straighten the displayed items.

For the Sale

  • Expect early birds for the ‘professional’ yard sale shoppers looking for the under priced item they know are worth more and they can make a tidy profit from (if you want to discourage them put in the ads ‘Early Bird Pays Double’).
  • Put man items (tools, electronics, sports items, etc) and high dollar items by the street so the woman can get the man to stop.
  • Put broken or items with little value by the street with a sign ‘Free Pile’. This gets people to stop as well.
  • Don’t expect much for clothes, only baby items generally will sell at all. Use cheap hangers for hanging items (like from the dry cleaners) as buyers will probably take the hanger with the item.
  • Be sure and check the pockets as you might sell a shirt for $1 that has a $10 bill in it! As items sell, spread items out to fill in and make it look like you have plenty of items left to sell.
  • Be ready to haggle as everyone is looking for a bargain at yard sales.
  • Towards the end start dropping prices. This is where the price per table is handy. Just start moving everything to the cheap table. You can also box similar items (like toys, games, books, etc) and put a price on everything in the box.

After the Sale

  • Determine what items you want to keep for a possible future sale and box them up.
  • The rest can be donated to Goodwill, The Salvation Army, your favorite charity, or the trash man.
  • Don’t forget to go pick up the signs! Then sit back and count the money!
  • And if this is in preparation of moving, call The Derrick Team and we can help you with the next step, staging your home to sell and of course helping you market your home to buyers!

Call or text The Derrick Team at 317-563-1110. We work 7 days a week!

Download our free Garage Sale Tips Booklet here

Jan 182016
 

If you are looking at older homes or homes out in the country, chances are you’ll see some that have a private well as their primary water source. We’ll discuss what it usually entails and what to watch out for. But we will stress as always that you want to make sure and have any house you plan to buy inspected before you close on the purchase, and if the home has one, the well. These often go hand in hand with a private septic system. Check out our companion post on septic systems here.

What is a private well?

Older homes were often built in areas where municipal (city) water was not available. With old farm homes the original water source might have been a cistern filled by rain or a well with a hand pump outside. Fortunately, these systems normally will have been upgraded to a modern pressurized well system by now and is the system used for new homes today as they are still being built in areas that don’t have municipal water sources nearby. A typical single family home well consists of the well bored into the ground with some type of electrical pump that pulls the water out of the well on demand. In some cases, the pump is above ground and draws the water out but here in central Indiana most wells are deep enough to require submersed pump which is typically located near the bottom of the well and pumps the water up to the pressure tank. The pressure tank is used so that the water maintains a constant pressure when a spigot or faucet is opened. The pressure tank will have a controller that turns the pump on and off depending on demand. The diagram below (from Axsom-Franke Plumbing’s web site based out of Columbus IN) shows the basic layout of a system utilizing a submersible pump common in central Indiana.welldiagram

Depending on the water quality from the well there may be added filters and more commonly a water softener (due to the area’s hard water) as part of the complete system servicing a home. It’s also not uncommon to have a reverse osmosis system that further processes the water for drinking and the icemaker in a refrigerator. While each of the additions to the water service help the water quality it’s important to note none of them purify or sterilize the water so water quality is something the homeowner must always be aware of. Regular water testing is recommended just to be sure the well is producing quality water.

What to look for

A seller should have information on a well and you’ll want to make sure and review any documentation they might have. Depending on the age of the home and the well itself you’ll want to look for the equipment such as the pressure tank and if included the water softener. Both these items tend to perform poorly after years of use, and if the water quality is very hard they will wear out sooner. So if the units are older consider asking for a home warranty as they seem more likely to fail within the first year of new owners (probably due to the change in user demands).  Since the pump is probably down in the well you’ll want to know if any work has been done recently and the age of the pump if it’s ever been replaced.

wellheadWhen touring the home look for a well head somewhere out in the yard. It’s usually a 5” diameter pipe, these days typically PVC, sticking out of the ground about a foot or so that has a cap and a power conduit to one side similar to the image on the left. Note the distance to things around it as an older installation may not conform to current local ordinances. The most common issue we’ve seen is an improper distance between a well and septic system which is 50’ minimum in Indiana.welltank

Next locate the pressure tank, it’s usually located in the basement or a utility room with the furnace, water heater, etc. You’ll be able to tell if it’s a new unit pretty easily as it will look similar to the image to the right. Older tanks may have issues with keeping pressure so consider the cost of replacing it if it looks rather old. Ask your inspector to look it over carefully if it appears very old. Keep in mind the cost of replacing the pressure tank or the pressure switch which controls the pump is usually minor to the cost of replacing the pump or having a new well dug.

As far as other parts of the system (filters, water softener, etc.) are concerned, these items tend to be replaced on a regular basis so don’t put much faith if they look more than a few years old. Just count on installing new systems after you move in. We’ve found renting equipment like that makes more sense because of the improvements made to these types of systems every year. But it really just depends on the quality of the water from your well. We’ve seen two different well systems on homes next door to each other that have completely different water quality with wells of similar age.

Which brings up the final item for you to check. Be sure and order a water test when you do the inspection. Your inspector knows the proper way to take a sample and will send it to a lab for analysis. It’s not unusual for the test to show poor water quality in a home that someone has been living in. That’s when you ask for the well to be disinfected with chlorine bleach and then retested.

Don’t forget that once you buy a home with a well water system there is some required homeowner maintenance. Filters need replaced and salt added to your water softener if they are part of the system. And regular water testing is recommended. If the test shows bacteria here is a great document from a local home inspector (Center Grove Inspections) on how to disinfect your well: Water Well Care

If you’re in the market for homes that might have a well (older or rural type homes), you’ll want an agent with experience and of course The Derrick Team is here for you. Call or text 317-563-1110 today with any questions you might have.

Helpful Links:

Found this great video on shocking your well here:
https://youtu.be/MZJ6FxK6cwk

Indiana State Dept of Health information on wells:
http://www.in.gov/isdh/23258.htm

More online resources for homeowners with wells:
https://www.wqa.org/
http://www.groundwater.org/
http://www.wellowner.org/
http://www.ruralwaterresources.com/

See more details on the well diagram above at:
http://axsomfrankeplumbing.com/well-pump-installations/

 

 

 

Jan 142016
 

If you are looking at older homes or homes out in the country, chances are you’ll see some that have some type of private septic system for waste-water disposal. We’ll discuss what it usually entails and what to watch out for. But we will stress as always that you want to make sure and have any house you plan to buy inspected before you close on the purchase, and if included the septic system.

What exactly is a septic system?

Unlike a municipal (city) sewer system which treats waste-water for a large number of dwellings a private system is normally installed to treat a single family home.  In rare cases a group of homes in the country will be on a shared private system and the only thing I’ll say about that is be VERY careful if that is what services a home you are interested in. Now for purposes of this discussion I’ll show what a single household septic system SHOULD be based on current guidelines. For older homes this may not be the case so you might want to check with county health department records to see what actually is installed (if they actually have any records of it at all).

Most homes with a private septic system are serviced by what is known as a ‘gravity’ type system. The diagrams below from the Indiana Construction Guidelines document (found at the link at the end of this post), show a common installation meeting current requirements. But most installed systems should at least have a tank to catch solids and a drain / absorption field. (I saw an old farm house where the tank drained directly into the creek in back).  The diagrams include a dosing tank which is a new recommendation but not usually needed for most gravity systems. Perimeter drains are also a newer item and are often required in newly installed systems.

Construction_Guidelines_for

The basic idea is the tank will handle the solids which are partially digested by microbes and then the liquid overflow will drain out to a absorption field to keep the tank from constantly filling up with liquid. The nice thing with the gravity system is the maintenance is much simpler than some of the other types (no motors or pumps unlike the dosing tank shown in the system below).

Construction_Guidelines_flo

With regular maintenance a properly installed gravity system can last many years. What many people don’t know is that the system is sized depending on bedrooms in the home at the time of installation, not bathrooms. It’s based on how many people might live in the home at any given time.

What to look for

So now that you understand the basic function what do you look for when purchasing an home with a septic system? When we list a home with a septic we try to find out what the seller knows as far as location, last time is was cleaned (pumped) out, and if they had any issues or repairs done while living there. Also, if there were any additions / remodeling done to the home was the septic upgraded or moved properly if needed (otherwise if might be undersized if bedrooms were added or part of the drain field was covered up). This is basically what you as a buyer should want to know before you even make an offer. When looking at the home you might be able to walk out in the yard and at least locate the clean-out for the tank. Then you have an idea from there where the drain field might be as it usually will be away from the home and downhill from the tank. Look for any fresh digging or uneven spots to indicate some work had been done. Or look for standing water in that area which might indicated the drain fields are not working, especially if the water is discolored and smells like, well not good. If all looks OK from what you can tell you’ll still want to have it inspected, and in some cases your lender will require it as part of the loan approval. If everything checks good and you end up buying the home you do want to keep in mind that even if you don’t see your septic system, it does require some maintenance (see list below).  If the home is empty or is a foreclosure there is no real way to tell how well the septic will perform once you’ve lived in the home for awhile. Best just to assume the worst in that case and figure in the repair / replacement costs when making your offer.

If the type of home you’re looking for might have a septic you’ll want a real estate agent that has some experience with them and yes, The Derrick Team does. Our current home has one and they function just fine when properly maintained. In my younger days I owned a home with a system that had major problems as well. And that was no fun at all. Give us a call or text today at 317-563-1110 to see what we can help you with, we work 7 days a week.


Here is a list of recommendations based on what most septic companies see from common repairs:

  • Have your tank pumped every 3-5 years depending on usage / number of persons living in the home.
  • Take care of the absorption field as its basically a function of the volume and strength of water poured into the system so conserve water when you can. Never funnel rain or basement drainage systems into it or onto the yard area where the absorption field is located.
  • Minimize use of chemical or biological liquids and check for ‘septic system safe’ labels on cleaners and such. Even antibacterial products may adversely affect your system as there are bacterial microbes that break down the solids in the tank.
  • Don’t dump in or flush anything that doesn’t decompose.
  • Keep trees, bushes, or any building away from the tank and drain field as roots and shading will reduce the systems effectiveness and possible lead to it failing.

For more details on gravity and other systems check out this link to the Indiana State Department Of Health:  http://www.in.gov/isdh/23283.htm

 

Dec 072015
 

When I purchased my first home back in 1985 I was in the same situation as many first time home buyers: I had more energy than cash. So it was natural that any home in my price range would be a little rough. But I had basic carpentry and general home repair skills that I learned from my dad so a little work didn’t scare me. The home I purchased had been built during WWII and was a solid little home. But it did indeed need a little attention.

The first project my buddy and I attacked was the wobbly toilet. That ‘little’ project turned into replacing most of the rotten bathroom floor and the cracked leaky toilet. We did this while the girls kept reminding us that it was the ‘only’ toilet in the home so we had to get it done in one afternoon. We did get it taken care of and over the course of several years I did quite a bit of those little (and sometimes big) projects. But I’ve always enjoyed working with my hands and never really gave it much thought.

Today many first time home buyers are in a similar situation as they’ve grown tired of paying high rent but don’t have a lot of cash to buy a ‘move in ready’ home. What this article will discuss is some of the more expensive items to look for when searching for a ‘fixer upper’ so you don’t end up with a ‘money pit’ that needs a lot of money (that you didn’t have in the first place).

When looking at lower price point homes one of the first things to check is if it has a private well and / or septic system. You don’t need to automatically avoid them but understand the possible costs if either (or both) are in bad shape and need repaired or replaced. I’ll be writing another blog post about them in the near future. If you are looking at newer production homes which are commonly found in some areas with affordable prices you typically avoid issues with your water and sewer because they are provided through the local town or city.

Next you want to look for possible foundation issues as anything wrong with the foundation affects the entire building. Major defects such as crumbling foundation walls or sagging floors can be very expensive to repair. If the home has a crawl space, you’ll want to be sure and find out if anything has been done to it lately and be sure and have it inspected as we see a lot of moisture problems show up that the owners were not even aware of while living there. One of the advantages of homes with basements is you can usually easily see if there are any moisture/leaking issues.

After that be sure and look up at the roof and gutters as nothing ruins a home more than a leaky roof. Check on the age of the roof if the seller knows and look for stains in the ceilings anywhere inside the home. Make sure when you hire an inspector they will go into the attic to look for any staining or damage on the upper framing structure.

The reason I mention the above items first is they all will pretty much require you hiring a company to repair / replace and in each case the costs are usually very expensive and not usually covered by typical homeowners’ insurance. There are many other items such as plumbing, electrical, heating & cooling systems that need to be checked so you’ll want those inspected as well. Again you probably will need to pay someone to repair these items unless you have knowledge of these items or have a friend / family member who works in that trade and owes you a favor. You can also ask about a home warranty when you purchase your home to cover some of the mechanical systems (heating /cooling, water heater, etc) the first year you live there.

So what kind of home isn’t a ‘money pit’? Generally, you want a home that is in need of updating (which can be a personal opinion), fresh paint, new flooring, or just general cosmetic issues that you or a general handyman can take care of for materials and low (or free) labor costs.

HomeSweetHome

Home Sweet Home

The home that we now live in was a ‘fixer upper’ I purchased in the ‘90s that I knew needed major repairs. But I also knew it was a solid home because I had it inspected and it is in a great location in Hendricks County. I have since gutted and redone almost everything myself or paid contractors for items beyond my knowledge and/or abilities and we now have a great home that is perfect for us.

Buying a ‘fixer upper’ isn’t for everyone but sometimes the current financial situation requires you to at least consider a home that needs a little fresh paint and new flooring. Just remember to look at each home with the idea of it’s potential after you do a little work to ‘personalize’ your home. It’s actually nice to sit back and look at your work and take pride in what you’ve accomplished.

If you are thinking of looking for a ‘fixer upper’ be sure and give us a call. We’ll be glad to help you find a home that needs a ‘little’ attention. Or one that needs a ‘gut job’ if that’s what you are up too. I don’t mind crawling round a home with a flashlight to help point out obvious ‘major’ issues with a home you are interested in. While I’m not a trained inspector I can at least point out some things that will keep you from wasting your money hiring an inspector to tell you the home ‘has issues’. Call or text The Derrick Team today at 317-563-1110, 7 days a week. We’re here to help!

Nov 172015
 

Something a lot of people don’t understand: Every dollar you spend on your home will not increase the value of the home by the same amount. It’s known as the Return On Investment (ROI). So here are four examples that you would not gain much value if you added them to your home.

 Pool Time1. In areas where they cannot be used year around, swimming pools don’t add much if any value, and to some buyers will only looked at as an expense they are not interested in. Do not install a pool as an investment. Only do so for your personal use and understand the issues when you go to sell. The only exceptions are in the warmer climates and upscale neighborhoods where many homes have pools. If it’s an above ground pool, you might consider removing it when you go to list your home (or at least offer to do so at your expense if potential buyers don’t want it).

 2. Any improvements that bump your home in value that exceeds the neighborhood around you. Prime example would be a complete kitchen redo with expensive tile floors, granite counters, & custom cabinets where the other area homes are vinyl floors and Formica counters with stock cabinets. While you’ll be the best showing home in the area, your ROI will be much lower than just a standard update that matches surrounding homes.

3. Large investments in rooms that may not be common in your neighborhood such as converting an attached garage to a family room or fancy entertainment center in the basement. If you eliminate a garage, be sure your parking area matches area homes. If most homes have garages you’ve not gained much by the extra room. And for adding value to your home a fancy basement doesn’t add much more value than just a plain finished basement. Your ROI will again not amount to much.

4. Any project that you borrow a lot of money to complete. That loan will come off the proceeds right after your mortgage and thus reduce your net considerably while again not adding dollar for dollar increase in value.

The best advice we can give you is before you invest a lot of money in your home with the idea of selling in the next few years, call The Derrick Team at 317-563-1110. We’ll be happy to do area comps to give you a rough idea on your possible ROI. We’ll be happy to offer advice on some simple low dollar projects that will help you in the long run.

 

Aug 192015
 
Building a deck

That’s me, working on our home.

First time home buyers are always fun to work with because of the excitement they bring to the process (along with some anxiety). First timers have made that commitment to own their own home because they have been paying rent, sometimes for years and have nothing to show for it but an empty bank account. This article is for those first timers and those considering their first home purchase. It’s also a general summary of the responsibilities that come with owning your home and most importantly taking care of your investment.

First and foremost is of course the financial aspect of making payments as almost all first timers must get a mortgage to cover some part of their purchase. There is also the need for insurance and we cannot forget that the government will take some of your money in property taxes. But most of this is explained up front during the discussions on financing and the purchase itself. I want to discuss the after the sale responsibilities of maintenance.

All home owners should understand the value of proper maintenance of your home. It’s an investment and you probably expect to sell it someday and at the very least get some of your money back that you’ve paid into it. And when you do indeed decide it’s time to sell, proper maintenance or lack of it will have a big impact on how much return you get on your home investment.

Let’s start with the basics, regular maintenance such as lawn care. Don’t just mow the lawn but maintain the trees, bushes, and general landscaping to keep the yard looking neat. Go ahead and plant flowerbeds and install attractive lawn decorations but don’t overdo it and make the yard look like a flea market for landscaping. It’s also important to keep up your home appearance for the sake of your neighbors who are selling. Remember the more they get for their home when they sell also increases the value of your home. Plus it’s just a good idea to keep your neighbors happy.

Maintaining the home’s exterior is probably one of the most important as water intrusion will destroy not just the outside but the interior as well. Keep the gutters clean and make sure the downspouts carry the water away from your foundation, the further the better. Make sure your roof is in tip top shape and if you don’t know what to look for have it inspected by a roofing contractor on a regular basis. Replace loose or missing siding or any of the exterior cladding on your home as soon as you see it. Waiting to do repairs on the exterior is inviting much more damage to the homes entire structure and will cost much more in repairs in the long run.

Next on the list would be your mechanical systems which typically consists of your heating / cooling system, water system (plumbing, water heater and possibly a well & septic system), and electrical. All these often need some regular maintenance, especially the heating / cooling system so be sure and become familiar with the systems in your home and follow recommended guidelines. Again, regular maintenance can save you money by extending the lifetime of these systems and avoiding major repairs from ignored minor issues.

You should also pay attention to your interior structure such as walls, ceilings and flooring. Much of what needs attention here will be from normal wear and tear but keeping things clean regularly helps in the long run. Allowing items to get really dirty ruins the finish and you’ll find in order to make it look good enough to sell you’ll have to replace it completely, and those costs take away from your bottom line.

This is just a few basics items of what you need to take care of to maintain your home. Each home has different priorities to the maintenance schedule such as type of building materials, type of heating system, etc. But regular maintenance can make your return on investment when it’s time to sell well worth it. We’ve seen a lot of owners take a lot less for their home because of the poor condition it was in due to the lack of maintenance. Keeping your home in great condition makes financial sense but it’s also nice to live in a well maintained home so do it for yourself and your family’s health and well-being as well. And again, a neighborhood of well-maintained homes brings everyone’s homes value up when it’s time to sell and makes for happy neighbors.

If you have questions on your homes’ condition in preparation to sell feel free to call or text The Derrick Team at 317-563-1110, even it’s a few years away. We’ll be happy to come out and take a look and let you know what you might need to address at no obligation. It’s what we love to do, help people with home ownership!

 

May 262015
 
This porch sold this house with multiple offers!

This porch sold this house with multiple offers!

A question we realtors often get is ‘What can I do to my home that will add value when I’m ready to sell?’  If you watch HGTV and read most articles on the subject you usually hear things like ‘kitchen upgrades’ and ‘adding / renovating bathrooms’. Those items do add value but usually only if you sell soon after doing it. After a few years they once again will appear outdated to current buyers and you’ll be stuck in the endless cycle of updating every time you want to sell a home. But one item we see buyers love time and time again is a really nice porch or patio area. It’s not unusual to show buyers several homes and once they see a home with a really nice covered / enclosed porch they stop and say ‘let’s write an offer on this one!’

Porch’s used to be pretty much a standard feature on all homes back before there were air conditioners. So many older homes built before the 1940’s include what was really considered the ‘outdoor room’ for sitting or even sleeping in on hot summer days. Usually covered to protect from rain but open on 3 sides to make sure and allow a breeze to flow thru, these were the gathering rooms for the family and often nearby neighbors to share the latest gossip and local news. After WW II the mass of homes built for returning vets often left off the larger porches to cut costs. In later years air-conditioning became a more standard item on new homes and porches became more of a luxury item as they really weren’t needed to deal with summer heat.

But now there is a new trend back to making a porch area more of an ‘outdoor room’ again. With all the high end outdoor furniture you see today in home improvement stores you really would feel like you’re are sitting inside with a porch furnished like that. Add to that the idea of having an ‘outdoor kitchen’ and now you can cook and eat without ever entering into the home. With so many people (myself included) loving to grill out, the whole idea of the cook ‘n eat area outside has become a very attractive item for home buyers. And with the ‘hustle & bustle’ of today’s lifestyles a nice porch is considered a retreat to go relax, read a book, or nap on a hammock. Let’s just say there are not many people who say they wouldn’t utilize a nice porch on their home.

So if there were one item that I would say adds value AND is something you can enjoy until the time you decide to sell a porch or even just a nice patio area is the way to go. Other than normal maintenance most porches never ‘go out of style’ so it’s a safe bet that it’s going to add value when it’s time to sell your home.

If you’re thinking of any updates to your home and want a REALTOR’s opinion, text or give us a call at 317-563-1110. The Derrick Team is here to help!

Feb 232015
 

Sold Another Avon HomeYou often will hear about improvements to a home that help increase the value. But you really don’t know if the value was really improved until you go to sell your home. What you want to increase is the buyers’ perceptions which will in turn increase what they will offer. As long as it appraises you will have increased the value based on your improvements.

First and foremost, the most important improvement is to clean your home like it’s never been cleaned before. This will always be our number one recommendation to anyone who’s getting their home prepared to sell. We’ve heard all kinds of reasons why people want to skip this step but you’re hurting the home’s value because of the buyer’s perceptions. ‘If the owner does not clean the home they probably don’t take good care of the home in general.’ In other words they wonder what else has been ignored in the upkeep of the home in general.

The first part of this involves decluttering. Remember that you plan to move soon so purge first to save you a lot of trouble later on. Then store away as many personal, small items as you can to make the home look neat. You’ll be glad you did this first when you start to clean. While you can clean the home yourself and save money it might be worth having professionals come do a top to bottom cleaning once, then you can just do maintenance cleaning from that point on. Clean homes will always sell faster and for closer to original list price. So this is the biggest bang for the buck, even if you pay someone.

After the cleaning look over everything in the home such as kitchen / bath fixtures to see if there are any stains or damage that didn’t come clean. At that point consider replacing them and be sure and match or upgrade what you currently have. What you use as replacements depends on your home décor and price point. This is a good time to talk to a local REALTOR to see what would work best for your home. Now use this same thought process on everything else in the home. Scarred or damaged walls? Go ahead and repair / paint and be sure and use a neutral color. * Stains that won’t come out of the carpet? Consider replacing the carpet or at least getting a quote. You’ll want to talk to a REALTOR before you spend too much money on new flooring.

After cleaning and repairing things can get a bit trickier. This is where someone with local market knowledge can be the biggest help. While a complete bathroom or kitchen makeover will help you sell your home, you may spend a lot of money and only get a little increased value in return. What really drives major updates is the local market for your type of home. In markets in other parts of the country homes sell for much higher values (starting at $500K), so updated baths and kitchens are expected with a basic home. So in that market a $20K kitchen upgrade could pay off while here with an $85K starter home, not so much.

Better investments locally are to look at the condition of the mechanicals such as heating/air, water heater, sump pump, etc. For example have your furnace serviced before you put the home on the market and keep the paperwork on anything done, especially if there is a transferable warranty. These are the type of items that can come up in an inspection so you’ll probably have to do this anyway. But what you want is to show the buyer you take good care of your home. That is the basic perceived value you want to impress on buyers who tour your home. That in turn will increase their offer and what the real value of your home is to that buyer.

If you are looking to increase your home’s value feel free to call The Derrick Team to come take a look at your home. We’ll be happy to discuss what you need to do with no obligations. We love to help people sell their homes that much! Call or text 317-563-1110 or email us at DerrickTeam@DerrickTeam.com. We work out of our Avon Indiana office to help buyers and sellers in the entire Indy Metro Area.

* If you plan to do the painting your self be sure and do a neat professional job. Sloppy paint jobs can be worse than walls that need painting so invest in some good paint tools and tape to do it right.

Dec 222014
 

Let’s face it, we are so used to flipping the switch to turn on a light that when the power is out you still will flip the switch when you walk into a dark room (you know we’ve all done that before). Then you go ‘Duh, I already knew that wouldn’t work.’ Well there is a way to make sure that light will almost always work, and that’s by installing an Emergency Power System.

There are a few different ways you can set these up and the best systems will cost you a bundle. A fully automated, whole house system that you will never notice when the utility power is out is pretty much way out of most of our price ranges. This would include a large enough generator to power the entire house, a completely automated switch over system, and a very large battery bank (UPS) to run the power during the 30 to 60 second switch over. This type of system is usually only used in commercial systems due to the high cost.

There are home versions that are a bit simpler and more affordable. The basic option is a gasoline powered portable with a few outlets on the unit. These usually will power a handful of things depending on the size of the unit. Larger portable units are often setup with a single hookup to plug into the home’s wiring system. This wiring system is installed by an electrician and is properly sized so that only the important items in the house will be powered and thus you can still use a portable unit.  Having the wiring ready is key as then you can use any properly sized portable generator and plug it quickly into the house circuit when needed. The wiring system also isolates the home from the commercial power grid so when workers working on the power lines will not get shocked from your generator!

Fully automated backup generator

Fully automated backup generator

The next step would be a larger permanently installed unit with an automatic switchover system. These typically will run on natural or propane and sit somewhere outside the home ready to go when needed. With the generator, wiring, and automated switch system these can get expensive fast. These only make sense if you live out in the middle of nowhere and sometimes lose power for days.

The best way to figure out what’s the best method is to look at your own needs, and how often do you go long periods without power. I think for most of us, the quick connect to the house system is reasonable in price and worth the safety to know that within a few minutes, you can flip that switch again and this time you’ll have light!

Our listing in Brownsburg is setup with a fully automated backup power system.

Aug 152013
 
Weapons of War

Weapons of War

There’s nothing like an invasion of those pesky little flies that seem to come from nowhere, fill areas of your home, and then fly right into your face. I hate it when you go to take a drink and there is one taking laps around the top of your glass. Well I did some research and came of with some simple methods that helped us win this battle, or at least turn the tide in our favor.

First step is to clean your drains (they also go by the nickname drain flies), because they can live off the scum growing inside your kitchen & bathroom drains (yech). I just used bleach and very hot water to do the trick.

Second step is to arm yourself with a weapon. I took a spray bottle, filled it with water and a little dish soap, and set it to drown mode (mist). Now when that pesky little guy is in your face, mist away at him. It will knock him out mid-flight and then you can drown him wherever he lands (soapy water doesn’t hurt many things). I was so irritated with these guys I spent one morning hunting them down and misting a bunch of them! (yes, I’m easy to entertain).

The final step is to set traps to eliminate the sneaky ones. They are also known as vinegar flies because they love it.  Take some vinegar as it makes a great smelly bait (I used apple vinegar), and mix it with a couple of drops of dish soap in a small cup. I prefer a clear cup so I can see my results. Then cover with thin plastic (I used saran wrap) and secure with a rubber band. Finally poke some small holes for them to crawl through and set in areas they hang out (mostly around drains & moisture).

We did all these and the number of flies dropped dramatically in 2 days. I’m going to refresh the traps and see if any more show up before I declare total victory, but from now on I know how to battle these small, sneaky little foes.

And if you’re trying to sell your home, you don’t want your current tenants (the flies) to annoy potential buyers!

If you have any good methods you’ve learned let us know in the comment section. We all want to win this battle!

Update: 2 weeks later and I only occasionally find a dead one in a trap. Haven’t seen a flying one in a long time. I declare victory!

 

 

Jul 082013
 

Demo Man Dennis DerrickSome are born with the need to tinker. I am one of those persons and got that from my Father. He was always working on some sort of project around the house as I was growing up. Even then I was aware that this was not an automatic thing for all dads. Today as each generation has been raised with more diverse talents and occupations available the ‘around the home handyman’ is becoming less common. But since you can figure out how to do anything on the Internet (right or wrong), some still try to be that handyman that produces, um shall we say dubious results. This often becomes all too obvious at a point when you try and sell a home.

One of the most common ones we see is the attempt to paint, when a person shouldn’t really be allowed to hold a paintbrush. Walking through a home as they proudly show off the freshly painted walls, we have to point out the fresh paint on the ceilings, trim, windows, floor, etc. and politely ask how soon will you be finished cleaning up the, um overlap. Painting is more than slapping paint on the walls so keep that in mind if you plan to give it a shot. And if selling is in the near future, pick your colors carefully.

Flooring is often marketed these days as DIY with simple ‘peel & stick’ or ‘snap & click’. But again it stands out when the edges around the walls are not matched up, there are buckles in the middle, and the transition to the next room is an afterthought. As in painting, the quality of the installation is all in the details. And the cost of materials can make for an expensive mistake.

Another project today’s handyperson likes to tackle is tiling a backsplash or for the more brave, a whole shower. Watching the shows on HGTV makes it look like a snap. One little piece at a time you slap sticky stuff on it and slap in on the wall. Later you fill in the gaps with more sticky stuff to cover up the gaps, no matter how large. How hard is that? Let’s just say many find out halfway through the project they may have been just a little too ambitious.

These are just some of the most common little ‘big’ jobs that handy wannabes will attempt to spruce up their home. Our advice to anyone thinking about it: research and practice a little before taking on a larger project and take your time and pay attention to details. If you plan to sell your home in the next few years think carefully on how your workmanship will look when your home is on the market. Otherwise you may find yourself paying a professional more to undo all the damage you did.

Want free advice on getting your home ready to sell? Give The Derrick Team a text or call at 317-563-1110 today!

May 102013
 

Information For BuyersSome of the usual tips you get to your home ready to show are clean and paint where needed. We’ve covered this in more detail on other blog posts. Here are a few important tips to set your home above your competition on the market.

1. Documentation on work performed on your home.

I would almost call this a diary of your home improvements. Gather up any invoices, documentation, permits, etc of major items that have been repaired, replaced, or upgraded. This can be a simple as a repair to the furnace to a bathroom remodel or new roof installed. Warranty information is especially important. Other work could be outlined in a document with dates and work performed such as owner performed landscaping, painting, etc. Not only does this impress buyers but this can be used for inspections and appraisals which is an added bonus.

2. Find documentation from when you purchased the home.

Most people don’t realize there can be some very helpful documents in your last purchase package. First is that most title companies will give you a discount on your owners title insurance if you provide the title work from the last purchase. Also there might be a boundary or stake survey included in the packet. If you purchased new it should have the model information and floor plan. Again very helpful and could be added to #1 item above.

 3. Utility and service vendor information.

Good agent will ask you for this so it helps to go ahead and gather this up ahead of time. You’ll need to come up with average costs for items such as electric, water, & gas if applicable. Also include cable, phone, and Internet services. Don’t forget if you use a lawn service, trash pickup service to include that as well. Of course this all can be neatly laid out in a document and added to the book. (Are you seeing a pattern yet?)

4. Seasonal photos.

If you have really nice landscaping with flowers the bloom in the spring find some photos you’ve taken (you didn’t just look at them did you?) If applicable maybe some nice fall foliage photos of the trees in full color. If you have that ideal back yard that looks great with a fresh snow include that one. Also any wildlife photos you snapped in the back yard that adds to the beauty setting of your yard. Share these photos with your agent and of course, add them to THE book.

Well I think you get the idea now, do some work upfront to wow your buyers on how well you’ve taken care of and enjoyed your home. This will in turn add value in the eyes of the buyers but also help when this is presented to the appraiser. When they determine the monetary value of a home they compare it to similar area sold homes and then make adjustments based on condition. With your documentation they can make those adjustment on the ‘plus’ side and in turn raise the overall value of your home.

The Derrick Team will be glad to help our sellers create this book in a nice format as part of our “Above and Beyond” marketing. Give us a call for more details at 317-563-1110.

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!

 

Dec 162011
 

Getting ready to put your home on the market?  Better get started right now!

We often think of spring as starting in late March because of the actual calendar tells us that. So people think of the prime home selling season as starting around the same time. But the truth doesn’t pay attention to the calendar so you need to change your perception as well.

If you are not already getting your home ready to market, you’d better get busy. As the chart showing the seasonal pending home sales shows you, that early spring peak starts in January, in the middle of winter! So to get in the early spring sales peak, you should have your home listed by the middle of January by the latest.

Give us a call if you have any questions on what you should be doing. We’ll be happy to help with a free CMA and tips for getting your home ready. Call The Derrick Team at 317.563.1110 today!

Dec 132011
 

SittingRoomArtworkFeedback from potential buyers, other agents, and open house visitors is an important part of figuring out what your home needs to help sell it as we’ve discussed in another blog post. But one thing we don’t always get is the emotional feelings people get when walking into your property. While many savvy buyers today are looking at a home purchase from a knowledgeable standpoint of location, construction, etc., the actual home that is chosen will often be because of an emotional reaction. Buyers surprise us all the time in their final selection due to some emotional trigger we failed to sense.

This reaction is often triggered by all of the 5 senses. And all 5 must be positive reactions! So while we often tend to look a physical aspects we see with our eyes, such as home condition, updates, etc., we should also pay attention to the feel, sound, taste, and especially the smell senses.

So while we all can do our best to address everything the best we can, we really think there is a point where a professional stager is the best tool we can use to perfect the best emotional reaction for buyers when they view your home. A good stager knows and works with preparing a home to satisfy a buyers senses and trigger a positive emotion, thus leading to quicker sale for often at a higher price.

The Derrick Team has just added another tool to our extensive marketing toolkit with the addition of a local home stager that’s been working in the area for several years that will work with us as needed to fine tune your home for today’s emotional buyers. This company has agreed to do the consulting with us on your home with their consulting fee not due till closing. And if your home doesn’t sell, you owe nothing. That’s how confident they are in what they’ll advise you to do to sell your home. You can do their recommendations yourself, hire it out to your preferred contractor, or turn it over to them and let them do everything for you (for additional fees).

Want to sell your home with the best marketing plan around? Then give The Derrick Team a call today at 317-563-1110 to talk to us about getting your home prepared to emotionally sell your home to a buyers 5 senses!

Oct 122011
 

EntryDoorArtworkWe’re moving to the cooler months where spending time indoors is the norm in central Indiana. If you are thinking of selling your home next spring, now is the time to start getting ready. We are going to talk about looking at your home through a potential buyers eyes (and nose).

First, while it’s still nice out, take a walk around your neighborhood and get some fresh air. While doing that make note of the homes that seem attractive to you. Neat yard, nicely trimmed hedges, colorful flowers, no peeling paint, etc. Look at those compared to the homes with weeds, broken fences, missing gutter, etc and think which home would you think about buying? Now when you get back around to your home, stand out front and look over what you might want to address before next spring and make a list before you forget!

Now step inside and take a deep breath. Smell anything at all? This morning’s breakfast or something currently cooking aside, make note of the source and make sure that it is addressed before you market the home. Anytime friends are over ask them if they notice any smells. Sometimes you get used to a home smell and don’t even notice it.

Now to the interior of the home. Walk around with a clipboard or notepad and make note of ANY defect you notice. Dirty ceiling lights, broken outlet cover, broken trim board, etc. Don’t think about how you can hide it with furniture, it must be cleaned / fixed / replaced! No detail is too much. Buyers will pick apart the home and when a list gets too lengthy in their mind, they will walk out and move on to the next home. They want a “Move In Ready” home.

Start with the simple things, like cleaning dirty items. As a rule of thumb we say clean it to make it look like new. If it won’t come clean replace or paint it. Not sure on what to replace it with? Look at home centers for ideas, or go visit nearby new model homes in the price point you expect (or want) your home to sell in.

Next look at more major things such as painting a room or replacing carpet or flooring. Try to look for what fits with the room’s original use; like hardwood in a dining room you’re using as a playroom now. Again you can get ideas from model homes and improvement centers / magazines. But don’t go crazy with colors when painting. Neutral tones or single accent walls are a safer bet. Tone down any walls you have that are currently really loud if at all possible. For projects you cannot do yourself, get quotes and mark those costs on your list.

Then there are the major items that can be really pricey to replace so first consider the value they add to your home before a complete bathroom or kitchen makeover. Again get quotes on these items and mark those costs on your list.

This is the point where you want to talk to a REALTOR about local home values. This will help you determine improvement vs. home value to see if it’s worth the costs. The Derrick Team will be glad to come talk to you months before you are ready to sell. And you are under no obligation to use us at any time. We just love to help people sell their homes. Call or text The Derrick Team anytime at 317-563-1110, we work 7 days a week including evenings!

May 022011
 

We often are told by potential homebuyers, “We want to find a really great deal”. Well that makes sense, you’re shopping for the most expensive item you’ll buy during your lifetime, why not get a great deal too.

So in today’s market, that usually starts them looking at the homes everyone thinks are steals, foreclosed homes. Lets look a little deeper on what these deals are all about.

First, we break these into 2 categories, foreclosed homes and pre-foreclosed homes.

Pre-foreclosed homes are commonly referred to as short sales, possible short sales, or even pre-foreclosed homes. In general what this means is the owner is unable to pay the note holder of the mortgage (typically a bank) and the property is worth less than the amount owed. Various rules apply to what the homes status is depending on the note holders requirements are for short sale but often the owner must be behind on at least 3 payments and be able to document why they cannot pay the mortgage. This is known as a ‘hardship package’. If the requirements are met then the home is marketed as a short sale. For buyers these can be good deals, but the purchase process requires a lot of patience. There is a lot of back and forth negotiations with the purchase of a short sale and for a REALTOR it can be a challenge to get everything to work out, and each bank handles these completely differently. But it is doable and the federal government is working on ways to smooth this out. Short sales could be a long topic on their own so for now lets just say if you are not in a hurry, these can be a deal.

Foreclosed homes fall into a few different categories depending on who was the note holder of the home. The most common are listed as HUD’s, Homepath’s , & REO’s.

HUD homes were financed via a federal entity such as FHA, VA, USDA, etc. When the property is foreclosed the U.S Department of Housing and Urban Development takes over the home and it is then listed for sale with a processing service that works with a set of rules on how to sell the home. But the basics are it’s sold with a bidding process, kind of like the Ebay of home sales. These properties can be really nice or a total mess. But once you find one the purchase process can be pretty straightforward.

Foreclosed homes that had mortgages with Fannie Mae are now usually marketed as Homepath homes. These can be similar to HUD homes (Fannie & Freddie are quasi federal entities). Lately the Homepath homes are often marketed towards first time homebuyers with deals such as $100 down and escrows allowed to do repairs to the home. These homes can be very affordable and easier to purchase than HUD properties.

Finally there are the Real Estate Owned (REO) properties. (Nothing to do with the great rock band REO Speedwagon). These are listed like normal homes except the owner you negotiate with is the bank that was the mortgage holder. These can range from really nice homes to those referred too as “distressed”. Because you are negotiating directly with the owner, the purchase process is similar to a normal home sale. The question of how good a deal this can be depends on the status of the banks inventory and how bad they need to unload the home. But generally these will be sold for less than the general area market value so these can be a good deal for a buyer to consider.

This is a general high level overview of what deals a buyer can find. Each of these are more complex subjects so you want to make sure and have a professional REALTOR help you with these purchases as the respective sellers will pay their fees. But to summarize each, short sales require patience, bidding on HUD’s can be like playing the lottery, Homepath homes can have great financing options, and REO’s are more like normal deals that often are discounted, depending on the banks situation.

Ready to get a deal? Give The Derrick Team a call today and we’ll help you find the best fit for you.

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