Paula Henry

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What Caused the Housing Crisis?

October 3rd, 2008 categories: Indianapolis Real Estate News, Indy Foreclosures, Real Estate Financing

Warning - this post is political in nature!

Not being one to publish political views on my blog, I have been debating for over a week about whether to post this video here. Ultimately - I decided the general public should see the video and make their own conclusions.

Even as a REALTOR, I wonder, how did the climate of the real estate market change so dramatically in such a short period of time. I believe this video answers the question best. The simple answer is, supply and demand. When the supply of “easy” loans were made available, the demand for such loans increased. As more people qualified, homes were quickly purchased, decreasing the supply of inventory, which increased the demand. Everyone seemed to jump on the bandwagon and money was easy to get.

Although Indianapolis did not have the same appreciation as many of the hotspots around the country, we are, nevertheless, experiencing the effects of the changes. We have our share of foreclosures and short sales, just not on a grandiose scale as some areas. We have other issues here such as property taxes, which have affected homeowners. Still, the supply of easy money was the beginning………along with the belief that real estate values would not go down.

Watch the video for the informational value, not the political opinion.

http://www.dailymotion.com/videox6wxmr

Authored by Paula | Discussion: 1 Comment »

Short Sales For Buyers

August 30th, 2008 categories: Indianapolis Real Estate News, Indy Foreclosures

  

Short sales are NOT short!

In the midst of several short sale negotiations, experience tells me home buyers do not know what Short Sale means. While visiting a past client yesterday, she asked if a short sale meant the seller was trying to sell fast.

In theory, that is usually the case. The seller is trying to sell fast to get out of a home they can no longer afford. In practice, it rarely happens fast. The process can be long and drawn out with twists and turns not found in a traditional home purchase.

A short sale – in simple terms - means the bank or investor is being asked to accept less than is owed on the property. Banks and investors really don’t like losing money – who can blame them, most of us don’t!

As a buyer, what does short sale mean for you?

Where are the deals?

Although there are deals to be had in short sales, you generally are not going to get a steal. Banks are fairly savvy and know what the value of the home is. When they start a short sale file, one of their first actions is to have the home appraised or what is called a Broker Price Opinion (BPO). Just because it is a short sale doesn’t mean they will accept any offer. They have guidelines which determine the loss they will take on a particular property.

You have to be patient!

This is not easy to do when you are waiting for an answer. If your offer is the first offer a bank has received on the home, your wait time will most likely be longer. Most banks do not want a short sale file until there is an offer. Being the first offer may mean a month to six week wait for an answer.

Banks always have the final word!

All offers are subject to bank approval from the sellers lender. Generally the bank will send a demand statement with their terms. You will then have the option of accepting their terms or not. Much like a counter offer, except the banks counter offer is final.

Property is AS-IS

Many banks have special addendums which state the property is being sold “as-is”. You can still have an inspection, but the bank will not be doing any repairs. Any repairs would have to be negotiated with the seller, but remember, the seller is facing foreclosure and may not have the funds to repair any inspection items noted for repair.

Short sales are not easy or fast, but the rewards of equity can be a payoff for your time and patience. Much of the burden of the process lies with the agent who has the home listed and whether they have submitted a complete package to the bank.

A gentle reminder – your agent can not make the bank work faster – it is a process! Believe me, I have tried!

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Authored by Paula | Discussion: 8 Comments »

Bank Owned Homes in Indianapolis

August 10th, 2008 categories: Indianapolis Real Estate News, Indy Foreclosures

Indianapolis Bank Owned HomesThere’s something about having homes available in the $10,000–40,000 price range, which brings out the investor in everyone. Naturally, there are some great investments in the mix of bank owned homes in Indianapolis; however, there are many, which are not.

I was out this week with a client who is looking for investment opportunities here in Indy and we looked at 22 homes. Our day took us into many neighborhoods north and east of downtown and included only duplex homes.

A disturbing statistic was the number of homes which were recently bought where someone had started the repairs, then the home was foreclosed on. These homes are not for the faint of heart nor those without resources to finish the job. 

My client is a contractor who knows what he is looking for, can do the work himself, therefore, eliminating the expense of hired help. Except for me of course. He relies on me to let him know the market value after rehab, rents in the area, which neighborhoods will bring him the most return on his investment and to negotiate the best price initially. I love working with investors like him.

On the other side of the spectrum of investors are those who think they can buy cheap and flip for an immediate profit. The initial price sounds good, but when they have to hire out most of the work, the profits are eaten up fairly quickly. Some of these homes are not “flip” homes. They are good long term investments which will make great rentals.

Investing in real estate offers a great return when all factors have been considered. It can also drain the finances of the ill advised investor who has not considered all the cost.

The majority of the bank owned homes we looked at can not be financed with traditional financing, eliminating the person who wants to buy, fix and live in the home. So, while Indianapolis does offer some great homes at great prices, an informed home buyer or investor needs to do their homework first.

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Authored by Paula | Discussion: 1 Comment »

Indianapolis Foreclosure Statistics

July 17th, 2008 categories: Indianapolis Real Estate News, Indy Foreclosures

Everyone in Indianapolis knows, when it rains it pours. This week has been “one of those”, where both computers have been in for repair. For an entire 15 hours, I had no computer access at home. Amazing how dependant we are on these little machines.

That’s my explanation for why the foreclosure report is a few days late

Originally, this was supposed to be posted here three days ago, so the stats are a few days old.

There are currently 22,679 homes available for sale in the entire Indianpolis area served by our BLC. Of these listings, 2615 are in the process of foreclosure or have been foreclosed on. These include:

  • Bank owned
  • HUD Owned
  • Foreclosure
  • Possible Short Sale

Of the homes included in these catgories, the breakdown for price is:

  • 930 homes are priced at $50,000. or less
  • 856 homes are priced between $50,000–100,000.
  • 496 homes are priced between $101,000–150,000.
  • 171 homes are priced between $151,000–200,000
  • 60 homes are priced between $201,000–250,000
  • 35 homes are priced between $251,000–300,000
  • 19 homes are priced between $301,000–350,000
  • 11 homes are priced between $351,000–400,000
  • 34 homes are priced over $401,000.

Of the 22,679 homes avaiable, 2264 are priced under $50,000, with a total of 7108 homes priced under $100,000.

If you are looking for a good investment, first home, or fix and flip, there are many goods deals. There are also some homes in truly “bad” condition, which would not justify the price. My suggestion for those looking to find a deal is, consider all the costs!

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Authored by Paula | Discussion: 2 Comments »

Foreclosure Rates Are Falling (Despite What You See In The Headlines)

July 13th, 2008 categories: Indianapolis Real Estate News, Indy Foreclosures

Foreclosures fell in June 2008 by 3 percent from May 2008According to RealtyTrac, the rate of foreclosures across the U.S. is slowing.  Versus May, June foreclosures fell at a 3 percent clip.

25 states showed improvement month-over-month, led by many of the same areas that had fueled foreclosure activity in 2007. 

A sampling of RealtyTrac’s data includes:

  • California : Foreclosures down 4.54 percent
  • Georgia : Foreclosures down 14.91 percent
  • Arizona : Foreclosures down 0.07 percent
  • Michigan : Foreclosures down 6.00 percent
  • Illinois : Foreclosures down 15.65 percent

However, the improving nature of the data is not what is making news this morning.  Instead, the press is reporting that foreclosures are up by half since last year and that bank seizures have tripled.

And while the annual data may be accurate, that doesn’t mean that it’s necessarily relevant to home buyers and home sellers across the country.

This is because people buying and selling homes don’t usually boast an “annual” mentality; when someone’s an active participant in the real estate market, the mentality is “right now”.

In other words, annual data fits an economist, but month-to-month data fits you.

June’s foreclosure data may be the start of a trend, or it may be a blip.  It’s really too soon to tell.  But the RealtyTrac data reinforces what real estate professionals already know — that markets all over the country are showing signs of life.

Tomorrow, I’ll post the stats for bank owned, short sales, pre-foreclosre and HUD owned homes in the Indianapolis real estate market.

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Authored by Paula | Discussion: No Comments »

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