Indiana Realtor blog by James P Wells. Discussing Real Estate topics concerning Central Indiana and the US. Focusing on Boone and Marion County.

As a Realtor, I get solicitation and information from Indiana home builders on a regular basis. I have also worked for a builder during my time in the real estate industry and learned many of the secrets they don’t want you to know.

Buyers can currently receive huge advantages from home builders on their “market ready” or “spec” homes. These are the homes they already have built and are ready for immediate move in. These builders run a business; and the longer a completed home sits empty the more money they lose, so to try and avoid that loss they will attempt several different strategies to sell the homes which can create huge benefits for the buyer.

Here are some of the benefits I have noticed recently:

• Ryland- Has select homes up to $80,000 off the original price, most have seen price reductions around $20,000-$30,000, but some of the high end homes have had drastic reductions.
•  MI Homes- They have a 4.7/8% fixed rate mortgage available to homeowners that meet credit guidelines
• Beazer Homes- Market ready homes have been reduced by $20,000 to $100,000 off

If you are currently looking to buy a home, contact me today to get more details regarding these incentives. Most incentives have specific requirements that must be met to achieve these savings and there are also many other factions you must consider before buying. One of the biggest factors is in regards to resale of the home you buy. You must closely evaluate the community in which the home is located. If the community is brand new it may take years before it is complete and you no longer have to worry about competing with the builder when it is time for you to sell. This can really hurt some homeowners, because most home buyers would prefer a new home over a used home. You must also be fully aware of the property tax implications of buying a newly constructed homes. Many recent foreclosures are due to uninformed buyers who purchased new homes due to property taxes.

Negotiations with a new home builder can be very tricky, they negotiate home sales on a regular basis and most home buyers will benefit greatly from the expertise of a qualified professional. There is a misconception by most buyers that they can get a better deal if a Realtor is not involved. While this may be true in some situations, it is not the case in most. Builders work hard to establish good relationships with the Realtor community and have already factored in the cost of paying those professionals into the cost of the home, if you don’t use one- it just means they are able to profit more on the transaction while you lose valuable negotiation power and knowledge of the process.

If you are considering buying a home in the central Indiana market contact me today to find out how you can also earn up to 1.5% back on the price of the home via Honeycomb’s new construction rebate program. If you buy a $150,000 home you would receive $2250 back at closing to use for your new home or other needs. Remember, the more expensive the home: the greater the rebate! There hasn’t been a better time than now to buy a new home in central Indiana.

Well it’s about time. There is a lot of debate regarding how to fix the Indiana property tax problem, but at least we are now working towards a solution. Yesterday, Indiana’s Governor Mitch Daniels proposed the following changes to address Indiana’s serious property tax problems:

• Cap every home owner’s property taxes to no more than 1% of a home’s true value
• Increase sales tax by 1% and use a “small share” of the state’s budget surplus
• Move school operating costs and the cost of protecting abused and neglected children to the state level
• Control excessive government spending on school construction, libraries, fire departments, and local services by making the County Tax Board responsible for spending
• Any new capital project or spending in excess of the growth of local income be approved by voter referendum
• Elimination of political assessors and the appointment of a single qualified and certified assessor to be responsible for future assessments

I’ve reviewed many discussions regarding the proposed changes and there are people on both sides of the fence. Non-homeowners are upset that they will be required pick up a larger portion of taxes if the burden is pushed to sales tax. There have been requests to eliminate property taxes for those over 65, so they can truly own their home. There is also a debate that transferring the tax burden to sale tax will hurt the lower and middle class.

I don’t know that we can find a solution that will make everyone happy, but I do believe the proposed changes will be an improvement over our current situation. While the Governor’s changes aren’t exactly in line with the proposed changes by the IAR, they are very similar in nature.

As a Realtor, I am tired of seeing friend, family, clients, and myself hurt by the current property tax assessment system. Change is needed and needed soon. I am a little surprised that no one has proposed to use income from the lottery to replace the reduction required in property taxes.

This is a continuation of an earlier blog where I will explain certain real estate terms for you:

• Closing- This refers to the time when the buyer and seller meet to sign the final documents (normally at a title company) to transfer the deed of the property and transfer funds for the purchase.
• Closing Costs- These are the fees and costs incurred at the closing and are a 1-time charge. Normally closing costs include (but are not limited to): Closing fee by title company, recording fees, courier fees, points or pre-paid finance charges on the mortgage, title insurance fees, property taxes, attorney fees, and survey.
• Collateral- What you are using to secure a loan in case you can’t pay- in real estate, it is the house.
• Commission- The fee paid to your Realtor.
• Common Area- This is a piece of property that is owned by all the homeowners within a given community and the homeowners normally pay for upkeep of these areas thru homeowner’s associations fees. Examples include, swimming pools, playgrounds, and community entrances.
• Comparable Sales- Properties used that are similar in nature to the subject, and are normally used to help establish a properties estimated value.
• Condominium- A type of property ownership involving the “Horizontal property laws”. Condo’s normally have more common areas and higher maintenance fees that usual properties.
• Contingency- A condition to a contract that must be met to make the contract legally binding. In real estate, offers to purchase may be contingent upon the sale of a buyer’s existing home.
• Conventional Mortgage- a loan that is not FHA or VA. the terms is also commonly used to identify mortgages that meet common requirements to be sold on the secondary market.
• Credit Report- This is a borrowers history of debt repayment.
• Debt- An obligation to repay borrowed money.
• Deed- The legal document which states ownership of property.
• Deed-in-Lieu of Foreclosure- To avoid actual foreclosure proceedings a mortgagee can sign the deed of the property over to the mortgage company instead of foreclosure. There must be agreement by both parties for this transaction.
• Default- A term used to describe when a borrow has failed to meet the repayment obligations of a loan, normally 30 days past due.
• Delinquency- Same as Default.
• Depreciation- A loss of value in a property, the opposite of appreciation. It is also an accounting term used for assets to reduce taxable income.
• Down Payment- Any portion of the purchase price of a property that is not financed.
• Due-on-Sale- A standard clause in mortgages that requires the loan be paid in full upon the effect sale of the property.
• Earnest Money-A”goodwill” downpayment of funds by a buyer to seller to be submitted with an offer to purchase.
• Easement- A right of way providing access to a property. Many utility companies have easements to gain access to equipment.
• Eminent Domain- The ability of the government to seize private property for public use, requires payment to owner for fair market value.
• Equity- The difference between the value of a property and the amount owed on the property.
• Escrow- Funds placed in a non-interest bearing account to be head until a later time.
• Eviction- Legal forced removal of a renter.

I attended the 2nd round of the public meetings held by the Boone County APC last night. The focus of the meeting was to get public input to develop the Vision, Goals, and Objectives for a comprehensive plan while also providing information gathered during the 1st round of meetings.

The 1st meetings were designed to gain public opinion on Boone County’s S.W.O.T’s (Strengths, Weaknesses, Opportunities, and Threats). The information obtained during the 1st round of meetings was compiled and provided to us via hand-outs. The information was interesting to say the least and here is a quick breakdown:

Strengths- “Fertile Agricultural Farmland” received the most votes with 26, followed closely by “Small Town Rural Character”, with 25 votes. The next five included; Transportation (access/usability of county roads), Location, Schools, Agri-business, and current Ag-preservation zoning.

Weaknesses- “Lack of diverse tax base” ranked #1 with 30 votes, with a “Split County-vision, communications, municipalities, townships” obtaining the #2 spot with 24 votes. No impact fees, planning and zoning choices, maintaining agricultural character, and condition of the roads, were also identified as important concerns.

Threats- “Developers have too much control” earned the top spot here (33 votes) with “Taxes” right on it’s heals(26 votes). Other leading threats identified: Growth/development impacts, loss of Agri-business, zoning, and the Ronald Reagan Parkway location.

Opportunities- “Preserve Agriculture” earned more votes than any other item on any of the lists with 48 votes. Other important opportunities were controlled growth/zoning, recreational opportunities (parks, trails, etc.), long term unified vision, and using the I65 corridor as a business opportunity.

Using the information from the 1st meetings, we were to brainstorm ideas for a 20years vision for Boone County. Most of the evening was spend in groups developing ideas for Boone County’s vision which were then shared with the entire group. To end the meeting, the APC split the meeting into 5 different groups to discuss the top 5 themes uncovered during the meeting.

Personally, I believe 2 of the biggest concerns to attract quality growth within the county involve the school systems and our infrastructure. Simply put, we won’t get good quality people/employers to relocate to Boone County unless they believe we have superior school systems, and without adequate waste water facilities and other utilities in place, we will be unable to support proper growth.

I was very impressed with the format and atmosphere of the meetings. There is a genuine concern for obtaining public opinion along with an open minded approach to problem solving. I feel that the Anson development is the beginning of many changes for Boone County in the next 10-20 years and it is refreshing to see the APC take a proactive hands-on approach regarding the Comprehensive Plan and Economic Development Plan. This is a pivotal point in Boone County’s history and the effects on Boone County Real Estate and the overall economic well-being of the county can be improved with careful planning. Watch my blog for further updates or contact me if you would like to attend a meeting.

I get asked all the time how the Real Estate market is going. My answer changes, but I find I normally get more information than I really give when I discuss this issue with people. I don’t get to determine if we are in a good market or not, the general public does. When people ask me what I think, I ask them the same thing and get a ton of information regarding current opinion.

I also use a website to post short surveys, and review other’s surveys regarding the real estate market. You must understand it’s demographic limitations, but it is still a good source of public perception. Here is a recent survey regarding Real Estate Short Sales which tells me many people don’t know what it is:

A recent article on CNN Money shows different estimates for home value growth in various regions of the US. While some market values look bleak in the future, the majority will see a slight rise in value based upon their estimates. Here is their breakdown:

• The North East- The slowdown will continue. One of first areas to be affected by the market decline, the trend is likely to continue, but some areas will see moderate growth.
• The South- Having 12 of the 20 hottest markets for 2007, the South seems to be rising again. Other than areas of FL, most of this region will see gains in property value.
• The Midwest- Having missed out on the good times during the Real Estate boom of the last several years, this market doesn’t have much to lose and therefore won’t suffer a lot in the downfall.
• The West- Ouch, the worst outlook in the nation for the next couple years. The gold has turned to lead, with Las Vegas being #99 out of 100 in projected price change.

With foreclosure filings to hit an expected 2 million this year, the real estate market is hitting new records which aren’t good ones. Nevada leads the pack with 1 in 185 households hitting foreclosure.

If you visit any of the pages in my website like my Zionsville Real Estate section, you will see county information regarding building permits for the last three years. A quick review of the permits for Hendricks, Hamilton, and Marion county over the past few years shows a decline in the market. I see this as a market adjustment to meet supply and demand. The demand for homes as been declining in our local market, but central Indiana still has growth, even though it is not as strong as it was. The area around Indianapolis is expected to have between a 3-3.5% increase in property value over the next two years, ranking it 7th in the Midwest and and 33rd nationwide.

So what does all this mean to you?

Buyers- Foreclosures are rising and lenders are tightening the belts on approvals, but sellers now have to be realistic in their pricing to sell within a reasonable time frame.

Sellers- Buyers seem to have the upper hand, so promote your property in the best possible fashion and remember that “buyer financing” is the #1 reason a sale doesn’t occur once an offer is accepted.

In closing- The Indiana market is good, but parts of the nation are in real trouble. And while the economy has a direct impact on real estate value, public perception of the housing market (which is also effected by the economy) plays a vital role in property values as well.

Fantastic. - I was trying to think of how to describe this morsel of Real Estate, and this one word was the 1st thing to pop into my head. I attended a wonderful event showcasing this prestigious community this weekend.

This community is a goldmine for so many reasons, starting with it’s location. Tucked away on the south side of 121st St. just west of Michigan Road, this community is 30 minutes to anywhere in Indianapolis. With a school system that boast 96% of it’s students go onto higher education and shopping less than 5 minutes away, this community couldn’t feel more secluded. On top of all that, you also have an amazing golf course within walking distance to the west.

Once you realize what a perfect location this is, you begin to see the beauty of the property itself. The event was sponsored by Bentley of Zionsville who had several impressive vehicles displayed and available for sale. We were given a tour of the 80 acre estate in very posh Bentley golf carts. The land is heavily wooded bordered by both Little Eagle Creek and Eagle Creek itself which combine in the southwest corner of the property.

Only 34 acres are for building use with the other 46 reserved for community use (Homeowners Association dues of $5500 a year). With lot sizes ranging from 1 to just over 3 acres, the 21 home sites are well positioned. Only 2 homes are currently completed without any others under construction, although several other home sites are spoken for leaving 13 available to choose from. Prices for the sites range from $495,000 to $995,000, with lot #1 at 3.18 acres being the million dollar spot. It’s densely wooded which would require some clearing, but many options abound for this well positioned piece of nature. I noticed during the tour that the water drainage for the development utilized the natural flow of the water run-off throughout the landscape to leave the area apearing untouched.

This is a gated community with 2 ponds and over 1.5 miles of trails to view the natural wildlife. Building requirements are subject to the Architectural Review Committee, but do state minimum requirements of 4000 livable square feet above grade on ranches, and multi-story homes require at least 3000 square feet on the ground floor.

The event was hosted by Indianapolis Dine Magazine and was superb. Impeccable food and drink, along with Hot Air Balloon Rides, great company, and almost perfect weather, created a fabulous day. I did finish the day by test driving a Porsche 911 Turbo, thanks to the sponsors Bentley of Zionsville.

While the community may be exclusive based upon price range alone, anyone who is fortunate enough to enjoy this community as home, can truly be considered “rich”.