Paula Henry

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Archive for December, 2007

Protect Your Family from Foreclosure Scams

December 28th, 2007 categories: Indianapolis Real Estate News, Indy Foreclosures

HelpSmart Money recently published an article about new consumer scams for the New Year. Two of the scams mentioned are about foreclosure rescue companies and foreclosure rental scams. I have posted warnings and information about avoiding these snakes who target people who are facing forclosure.

Foreclosure Rescue scams offer to deal with your lender for you and charge a substantial up front fee for no service. This is generally something you can do for yourself. There is absolutely no reason to pay someone to do this task for you. If you need help there are companies you can contact who can assist you for free.

Foreclosure rental scams seem a little more above board, but are actually more costly to the homeowner facing foreclosure. They offer to catch you up on your mortgage payments in exchange for you signing your deed over to them. You can rent back your home from them until you get caught up, then they will sign the deed back over to you. What they really do is take whatever equity you have, take your rent payments from you and never send a dime to the bank. Eventually, the bank will foreclose. In the meantime, you have lost all equity and given your money to a scam artist.

Read the entire article at Smart Money here.

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Authored by Paula | Discussion: 2 Comments »

Lease Option for Buyers in Indianapolis

December 27th, 2007 categories: Indianapolis Real Estate News, Indy Home Buyers

Indianapolis Real estate Lease OptionIn a follow up to my previous post about Lease Options, let’s talk about the benefits and risk for the buyer in a lease option situation.

Many of the buyers who I speak to who are interested in a lease option, are sincerely looking to get out of a rent situation and start applying equity toward their own home. Like most of us, they want a place they can call home. Somewhere they can put down roots, make memories, plant a garden, and not have to worry about rent increases or where they will go at the end of their rent term.

The biggest misunderstanding most have about the lease option process is the amount of down payment they will need and the monthly payment. In a true lease option, the down payment can be a considerable amount, anywhere from 2–10% of the purchase price, sometimes more.

An example from a recent client. The home was priced at $156,000. The seller wanted $5000. down and $1500.00 a month in payments. The monthly payments would be about $250. more a month than if they were to purchase.

With $150 a month being applied to the purchase price at the time of purchase, the buyer would have about $8600 toward down payment and/or closing costs at the end of a two year lease.

Assuming they were in a position to buy outright with the same $5000. to use toward closing costs, and a 7% interest rate, they would have paid less for the home upfront and their payments would have been about $1250 a month. These are esimates and depend on the specific loan program, taxes and insurance of the property.

When you purchase a home through lease option, you lose power in negotiating the purchase price. Whether the purchase price is determined at the beginning of the lease option or is subject to appraisal at the end of the lease term is negotiable and is a term of the lease you want to clearly define. Having a good understanding of the Indianapolis real estate market is crucial in determining which is best for a particular home and your situation.

In the above scenario, let’s assume the price of $156,000 was established up front in the contract. If after two years of making payments toward the purchase price, you decide to exercise your option to purchase and the appraised value was $149,900, you have lost $6100.00 in value. Since every lender will require an appraisal, you now only have $2500.00 toward your downpayment and/or closing costs. If the terms of the contract established the price was subject to appraisal at the time of purchase, you would still have your $8600.

There are both pros and cons in a lease option for buyers. Having a professional to assist you in determining value and guiding you through the contracts and negotiation can help you better decide whether lease option is the right decision for you.

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Authored by Chris | Discussion: 4 Comments »

Is Lease Option an Option? The Risk and Reward for Sellers!

December 26th, 2007 categories: Indianapolis Real Estate News, Indy Home Sellers

LeaseoptionXSmallOne of the not so new  financing terms being offered lately is a lease option. I have discussed the details of a lease option with both buyer and seller clients. I ve also had several buyers who have come by my website searching for more information about the process.

With a slow down in the Indianapolis real estate market this past year, some sellers are considering lease option and buyers who see the advertisements for such have started to ask about the details of a lease option.

As a seller, should you consider a lease option? It really depends on your personal tolerance for risk. If you can handle the risk, the reward may be beneficial. If you are a seller who has little equity and/or too much competition in the current market, a lease option could allow you the opportunity to ride the market for awhile.

Pros: While waiting for the market to return to a more normal balance of supply and demand, your house payment is being made and you have a portion of your equity up front as collateral. Monthly payments are a bit higher than normal with a portion of the payment going towards the lessor s down payment or closing costs at the time of sale.

Cons: The option portion of the contract is only binding on the lessee (seller) and the buyer can decide to not purchase at the end of the lease term, leaving the seller to start the process over again. If the buyer buys the home at the end of the option period, chances are you have come out ahead. Should they decide not to buy and do not maintain the property, you may lose any savings in repairs and deferred maintenance.

My advice on a lease option will depend on if I represent you as a seller s agent or a buyer s agent and your personal goals. Tomorrow, I will discuss the pros and cons for the buyer in a lease option.

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Authored by | Discussion: 4 Comments »

What Will Become of Bush Stadium in Indianapolis?

December 25th, 2007 categories: Indy Places

Bush Stadium stands as a remnant of what it once was. In the glory days of it’s youth, the stadium was revered as one of the finest ball fields in Minor League baseball. As former home to the Indianapolis Indians, and the Indianapolis Clowns Negro League team, Bush Stadium was most recently used as midget car race track.

Today, it has been vacant for eight years and is owned by Indy Parks. Although just a remnant, it still stands. Now, the question is what to do with the building which was once filled with baseball fans. For many, the building and grounds are an eyesore, while others want to see it remain.

 The city is not prepared for the cost of rehabbing the building and it is unlikely the stadium will ever be used for sports again. The chances of it being demolished are slim, since the building is listed on the National Register of Historic Places.

There has been much talk about what to do with the stadium in the last few months. Much of the speculation has the building remodeled and used in some fashion for life science facilities. The buildings location along White River at 16th Street makes for a quick trip to IUPUI and medical facilities like Wishard Memorial, Indiana University Medical Center and Riley Childrens Hospital. 

Whatever it becomes, I hope the original building remains as part of the new plans.

Bush Stadium Indianapolis   Bush Stadium Indianapolis

Bush Stadium Wiki

Indianapolis Indians Wiki

Minor League Ballparks

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Authored by Paula | Discussion: No Comments »

Wisdom From a Three Year Old

December 24th, 2007 categories: Random Thoughts

Words of WisdomHave you ever been in a position where you couldn’t find the words you wanted to say? Or what you want to say isn’t coming out in a clear concise fashion? Maybe you said something you wish you had never said. It happens to us all.

This happened to my three year old granddaughter the other day. She had just awaken from her nap and she couldn’t find her blanket, or at least the blanket she wanted. After my daughter told her to look in her room and the entertainment room, then the living room, she became very frustrated at her inability to find her blanket.

As three year olds do – she began displaying her emotions by whining. She started to tell her mom she looked in all those places and she couldn’t find her blanket.  She actually speaks very well, but what she said came out sounding like whaaa….I look, my blank, not room, I wan, my bank………..then she stopped……….stomped her foot and said, Mouth, stop it!!!

I wonder how many times we should stop talking, clear out thoughts and then begin again……or not begin again. What if could we take back our words as easily as if we just told our mouth to stop it?

 

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Authored by | Discussion: 4 Comments »

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