Some of my posts that I hope to have in the near future:

• Indiana property tax updates- I won’t go into much detail in this article, with a vote of 93 to 1, the governor’s plan has been approved by the House of Representatives and will now move to the Senate for vote. You can view details of House Bill 1001 here
• Title Insurance and Clear Title- I am helping my father-in-law correct a title problem on a property he sold to a friend 2 years ago and will use it to explain title insurance and clear title
• Anson Indiana- Medco announced last month that they have decided to build their new distribution plant in Anson :} I’ll try and keep everyone updated on any new developments.

If anyone has topics or questions they would like me to address, send me an email and let me know.

Many of the subprime loans that were closed during the mortgage and real estate boom were “stated income” loans. These loans don’t require much, if any, verification of income and are often called “liar loans” within the lending industry. Unfortunately, the outcome of many of these loans will be the fact that borrowers are unable to pay the needed mortgage payments and will end up in foreclosure.

The current year has seen drastic increases in foreclosures across the nation with the south and mid-west leading the pack. The Mortgage Bankers Associations National Delinquency Survey for the 3rd Quarter of this year places the US average default rate at 19.6% (mortgage payments past due at least 1 month). Indiana is towards the top of the list at 22.3%, but the states in serious trouble are: Mississippi (30.2%), West Virginia (27.5%), Michigan (26.2%), Missouri (25.7%), Tennessee (25.3%), and Alabama (25.1%).

When the plan to freeze ARM rates is really evaluated, most experts agree that it will only help between 10-20% of the ARM borrowers facing serious problems. Combine lost projected income for mortgage investors, the increased amount of vacant homes, and the added foreclosures to the existing housing inventory, I believe the housing slump will extend well past the end of 2008; which is when many industry leaders state the upturn will begin.

I’m not going to sugar coat things. I see the current market as a strong buyers market. Several options to choose from and heavy listing competition put the negotiation power in the hands of the buyer with one big exception: Many sellers CAN’T reduce the amount they are requesting, due to the amount owed on the property. The refinance boom has effectively made the real estate market stagnant with no money down mortgages and home equity loans (2nd mortgages). Add in depreciation and many current homeowners have little to no equity in their home, or even worse, owe more than the property is worth. I speak with other Realtors on a regular basis and it is well know that we are in a bad market with no sign of change in the near future. I read a recent news article that talked about avoiding a recession, but then later in the article it was implied that we are already in a recession. Call it what you want- the overall current US economy is not good and several signs point that this is just the beginning.

I  don’t have a answer our current problems, mainly because I don’t have the authority to make the necessary changes. All I can do is try and educate people and identify some of the causes to these issues in hopes that I can help some people avoid costly mistakes. The best solution I can suggest is to begin teaching real life (practical) skills in our educational systems (and not just in colleges). Many people will say that learning about getting a mortgage, property ownership, obtaining insurance (car, life, auto, liability, etc.), managing a budget, paying taxes, and stocks (trading, options, IPO’s) should be taught in the home, but I disagree. My parents knew little about these matters and I have had significant obstacles to overcome to obtained my desired level of education on these matters. Mistakes in many of these arenas can have drastic and life-long effects for the average individual. The best way to avoid the problems we currently face is through education.

As a homeowner, you always have to worry about legal issues when you have guests over because you may be held responsible for their actions. You also have to worry about their safety and well being- what if you give everyone food poisoning?!?! I don’t normally sweat the small stuff, but I recently ran across this interesting form that you may want to use this Thanksgiving:

I finished laying, then grouted, the bathroom floor today in the front unit of a current property. A little over 1/2 of the place has been cleaned and painted. The bathroom now looks 1000% better (I also took the “warning gas” sticker off the bathroom door). I don’t do all the work needed on the property, a plumber is the among the 1st professional I’ll call, right with an electrician. But the ceramic tile floor in the bathroom is now much more durable than the previous laminate that one renters had scorched, and another tore out. It adds beauty, functionality, and durability.

I had 2 types of sanded grout that would give me just about enough to do the job. I took the chance and mixed the bags: I was 1/4 a medium to light gray and 3/4 a coffee brown by 2 different manufacturers. If I ran out, I would have a really tough time matching the grout. I worked my way from the back corner giving the areas that needed the grout, the grout they needed. A little over halfway done, I realized how close it was going to be on whether I would have enough to finish the job. I started grouting strategically, planning to hide any other future grout needs behind the toilet. Fortunately, the toilet sits right next to the door, so I was able to save those areas till last. The best part was finishing the bucket of grout perfectly in sync with finishing the floor. All I had to do was clean the bucket, wasn’t any leftover grout.

Making improvements to a property, if done properly can definitely add to the value. Whether it’s your residence or investment property, don’t forget to re-invest over time and as needed.

After our usual formalities, we received a presentation by Craig Anderson of Duke Realty Corporation, who is also a Boone County resident. The Anson project covers 1709 acres of land adjacent to I65 on the east between the 334 and 267 exchanges. This project is just 20 minutes from downtown and the airport. It is expected to employ approximately 25,000 people with an average income range of $55,000, with the non-residential construction cost estimates for this P.U.D. being placed at $810 million.

The project is planned for three different phases:

• Phase I (Marketplace at Anson) encompasses the Eagle Township section of the project and includes retail, residential, parks, medical and office space. This Phase will include names such as: Lowes, Meijers, Witham/St. Vincent (scheduled to break ground in the spring), Lincoln Bank, Indiana Members Credit Union, CVS (already open for business) and more.
• Phase II (AllPoints at Anson) is in Worth Township and will include distribution, manufacturing, and industrial buildings. The ASI Limited building is currently under construction and we received information regarding “Project Viking” that is currently under negotiation. Project Viking involves the 51st largest company in the US who is a pharmaceutical company which handles mail order prescriptions and should provide approximately 1300 jobs. The project is still in competition with other areas including Louisville and will likely decided by State/Local incentives such as TIFs.
• Phase III covers the small section of Perry Township in the project and primarily focus on office space.

While the Anson development is off the ground and running there are still several unanswered questions because the project is based partly upon speculation. Duke is highly vested in this project and should ensure a very successful venture, but has several obstacles yet to overcome. For example, they were involved in talks with KB Home regarding portions of the residential housing project. KB Home has since pulled out of the Indianapolis market leaving Duke to find other alternatives. Ryland Homes is already selling town homes starting at around $158,000 for 1700 sqft. within the Anson Development.

Some of the discussion during and after the presentation: Phase I will include 680 homes in the Zionsville school district, but these homes will have a Whitestown address. The potential for a Theater and/or an outdoor Amphitheater within Anson. The expansion of I65 from 865 to the Lebanon exits over the next several years. Craig also explained how several of the office/retail locations will be combined with apartment complexes, having the business on the 1st floor and upper levels providing housing.

Boone County is on the verge expansion with Anson leading the way. I am extremely excited to see these much needed changes and upcoming benefits to Boone County residents and would be happy to help anyone looking to buy in Anson or other Boone County Indiana Real Estate.

This year, there are 3,036 pumpkins on display between 10/28 and 11/4.

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.

• 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.

• 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.

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.