HomeSmart Realty | Indianapolis Indiana Real Estate

Francesca Levy, Forbes.com

Homeowners should buck the conventional wisdom about selling in the spring.

Putting a home on the market in this grim real-estate climate might seem like lunacy considering how heavily the market favors buyers. Home prices are down 28% from their national peak in the second quarter of 2006, according to the S&P/Case-Shiller home price index, which tracks sales in 20 major housing markets. Still, listing a home during certain months can improve a seller’s odds.

See More: The Best Time Of Year To Sell A Home

Late spring and summer are usually thought of as the best times to put a home on the market because buyer demand builds steadily through spring. Sales then peak during the warmest months, when it’s easiest for families to move without uprooting their children from school. But this year, experts predict that the selling boom, which normally starts in spring, will hit at a different time than it has in the past. Sellers with flexibility should market their homes earlier in the year.

According to data from Zillow.com, an online real-estate database, the volume of home sales was highest in June, July or August every year since 2000. This year, however, an $8,000 credit for those buying their first home–that expires on June 30, 2010 and requires buyers to have closed on a home by April 30, 2010–will force buyers to speed up their decisions. Historically low interest rates also suggest that sellers will face a busier market as early as February.

“This year, we’re anticipating sales will peak earlier,” says Nicole Hall, editor in chief of Lendingtree.com, an online mortgage comparison service. “The best time to get your house on the market will be February or early March, and maybe even earlier if you want to avoid competition.”

The Economy Upsets Seasonal Trends

House hunting may have traditionally sped up after March, but nothing about the last few years in real estate has been traditional. In 2008, sales failed to pick up with their usual gusto in late winter because the financial crisis cast a shadow of fear over buyers, and lending seized up.

“Between the fall of 2008 and March of 2009, there was a long dead period in real estate,” says Ken Shuman, spokesman for the real estate Web site Trulia.com. “You don’t want to buy a house if you don’t have job security, and a lot of people had jobs but didn’t feel too secure about them.”

2009 didn’t follow typical trends, either. Fall, when sales usually plummet, saw more sales activity than usual this year because of the introduction of the government’s tax credit, which was initially set to expire on Nov. 30, 2009.

Improving the Odds

Granted, some sellers have no choice but to sell at a slow time of year. Job relocation and the need to free up assets are facts of life that can deprive families of the luxury of waiting until the peonies bloom to put their homes on the market.

But Hall says that there are ways to improve your chances of a sale if you have to list your home late in the year, like playing up holiday decorations and shoveling walkways tomaximize curb appeal. She adds that selling at this point in the cycle isn’t always the worst fate.

“Look at how you can turn it to your advantage. Maybe because you’re forced to sell at a different time, there will be less competition,” she says. “Also, be realistic about your price. If you know you’re selling at a tough time, it can be a tough call, but you might have to drop that price a little.”

Shuman and Hall agree that the season shouldn’t be the only factor homeowners consider when getting ready to sell. Paying attention to the vagaries of the local real-estate market, where inventory and prices can fluctuate week to week, will offer more guidance to sellers than simple seasonal trends.

“Check out your local inventory,” says Hall. “Read the housing-market blogs, follow the local market really carefully, and look at the unemployment rate. That will make a big difference.”

For smart sellers, Shuman and Hall agree, taking a chance and starting the sale process earlier will reap distinct benefits in 2010.

“The beginning of the year is going to be make-it-or-break-it,” says Shuman. “If you’re a seller, get your property listed as early in the year as you can.”

by Prashant Gopal
Thursday, September 4, 2008provided by

Stacy Williams owns a three-bedroom house with a full basement and central air-conditioning in a quiet neighborhood on the upper west side of Youngstown, Ohio.

Williams, now 33, was earning $8.05 an hour as a manager at McDonald’s when she moved into the house with her husband, a laborer at a construction equipment manufacturer, and son back in 2004. The couple’s combined annual salary was $33,000. But the purchase didn’t require much of a financial stretch: The house cost $48,000. “If you have the credit score to do it, there’s nothing that can stop you from buying a home in Youngstown,” said Williams, whose plans for the house include a second bathroom.

A fallout from the real estate slump is that once again many homeowners are forced to look for homes that are within their budget. Access to cheap adjustable-rate mortgages gave many Americans the chance to live in homes that under normal circumstances they could have never afforded. People such as the Williamses are lucky that their income matches up well with the average home prices in Youngstown, but if they had lived somewhere more expensive, they might not have been able to buy their own home or would have spent too much, and now could have been facing the prospect of foreclosure.

So what metro areas are most and least affordable? The Youngstown metro area, which has a median income of $52,000 and a median home price of $77,000, is the second most affordable metro area in the U.S., according to the new National Association of Home Builders/Wells Fargo Housing Opportunity Index (HOI) for the second quarter. BusinessWeek.com used the index to rank the 10 most affordable and 10 least affordable major metros based on incomes and home prices. Indianapolis was the most affordable—91.6% of homes sold in the second quarter could be afforded by median-income households. The least affordable was the New York City-White Plains (N.Y.)-Wayne (N.J.) metro area, where only 11.4% of homes are affordable to median-income earners. (A decade ago, 66.4% of New York-area homes were affordable).

Affordable Youngstown

Stacy Williams owns a three-bedroom house with a full basement and central air-conditioning in a quiet neighborhood on the upper west side of Youngstown, Ohio.

Williams, now 33, was earning $8.05 an hour as a manager at McDonald’s when she moved into the house with her husband, a laborer at a construction equipment manufacturer, and son back in 2004. The couple’s combined annual salary was $33,000. But the purchase didn’t require much of a financial stretch: The house cost $48,000. “If you have the credit score to do it, there’s nothing that can stop you from buying a home in Youngstown,” said Williams, whose plans for the house include a second bathroom.

A fallout from the real estate slump is that once again many homeowners are forced to look for homes that are within their budget. Access to cheap adjustable-rate mortgages gave many Americans the chance to live in homes that under normal circumstances they could have never afforded. People such as the Williamses are lucky that their income matches up well with the average home prices in Youngstown, but if they had lived somewhere more expensive, they might not have been able to buy their own home or would have spent too much, and now could have been facing the prospect of foreclosure.

So what metro areas are most and least affordable? The Youngstown metro area, which has a median income of $52,000 and a median home price of $77,000, is the second most affordable metro area in the U.S., according to the new National Association of Home Builders/Wells Fargo Housing Opportunity Index (HOI) for the second quarter. BusinessWeek.com used the index to rank the 10 most affordable and 10 least affordable major metros based on incomes and home prices. Indianapolis was the most affordable—91.6% of homes sold in the second quarter could be afforded by median-income households. The least affordable was the New York City-White Plains (N.Y.)-Wayne (N.J.) metro area, where only 11.4% of homes are affordable to median-income earners. (A decade ago, 66.4% of New York-area homes were affordable).

Buyer’s Blues in New York

Longtime Manhattan renters Olive Hayes, 64, a New York City nurse, and her husband, Kevin, a Verizon employee, were hoping to spend no more than $450,000 when they started looking for a house more than a year ago. Hayes said she wanted a large apartment with a terrace and a separate living room and dining room. They wanted to buy, in part, because Hayes plans to retire and they will have to give up the spacious two-bedroom apartment they rent from the hospital. It’s located in a doorman building overlooking the East River on 96th Street and First Avenue.

On Aug. 25, the Hayeses closed on a one-bedroom pad in a newly built condo building eight blocks north of their current home. It doesn’t have a terrace and is about 764 square feet, much smaller than what Olive Hayes had originally hoped for. It’s going to be a tight fit for her plants and piano. “It’s not easy. It would probably be $1.5 million for what I’m used to,” she said.

Hayes’ agent, Lynda D. Gray of Bellmarc Realty, said first-time buyers in New York often have to lower their expectations and stretch their finances. “The motivator is the investment,” she said. “You’re not going to have as much space as you like…but you’re going to be able to sell for a profit and possibly buy something outside of the city.”

The 10 Most Affordable Housing Markets

1. Indianapolis-Carmel, Ind.
Median home price: $108,000
Median household income: $65,100
Share of homes affordable to median-income families: 91.6%
Share of affordable homes in Q2 1998: 73.1%

2. Youngstown-Warren-Boardman, Ohio-Pa.
Median home price: $77,000
Median household income: $52,000
Share of homes affordable to median-income families: 90.1% 
Share of affordable homes in Q2 1998: 80.1%

Wikimedia.org/Andrew Balet

Detroit-Livonia-Dearborn

3. Detroit-Livonia-Dearborn, Mich.
Median home price: $92,000
Median household income: $54,400 
Share of homes affordable to median-income families: 88.4%
Share of affordable homes in Q2 1998: 62.8%

4. Warren-Troy-Farmington Hills, Mich.
Median home price: $140,000
Median household income: $78,800 
Share of homes affordable to median-income families: 86.8%
Share of affordable homes in Q2 1998: N/A

5. Grand Rapids-Wyoming, Mich.
Median home price: $112,000 
Median household income: $59,200
Share of homes affordable to median-income families: 86.3% 
Share of affordable homes in Q2 1998: 74.8%

Wikimedia.org/Joel Rossol

Toledo

6. Toledo, Ohio

Median home price: $104,000
Median household income: $60,100 
Share of homes affordable to median-income families: 85.5%
Share of affordable homes in Q2 1998: 77.3%

7. Dayton, Ohio
Median home price: $102,000 
Median household income: $59,800 
Share of homes affordable to median-income families: 85.4% 
Share of affordable homes in Q2 1998: 83.8%

8. Akron, Ohio
Median home price: $100,000 
Median household income: $61,700 
Share of homes affordable to median-income families: 84.5%
Share of affordable homes in Q2 1998: 69.6%

Syracuse

9. Syracuse, N.Y.

Median home price: $98,000
Median household income: $61,000 
Share of homes affordable to median-income families: 84.2%
Share of affordable homes in Q2 1998: 83.6%

10. Scranton/Wilkes-Barre, Pa.
Median home price: $91,000 
Median household income: $54,700 
Share of homes affordable to median-income families: 82.5%
Share of affordable homes in Q2 1998: N/A

View the 10 least affordable housing markets.

By STEPHEN OHLEMACHER, Associated Press Writer

WASHINGTON – Buying a home is about to get cheaper for a whole new crop of homebuyers — $6,500 cheaper.

First-time homebuyers have been getting tax credits of up to $8,000 since January as part of the economic stimulus package enacted earlier this year. But with the program scheduled to expire at the end of November, the Senate voted Wednesday to extend and expand the tax credit to include many buyers who already own homes. The House is scheduled to vote on the bill Thursday.

Buyers who have owned their current homes at least five years would be eligible for tax credits of up to $6,500. First-time homebuyers — or anyone who hasn’t owned a home in the last three years — would still get up to $8,000. To qualify, buyers in both groups have to sign a purchase agreement by April 30, 2010, and close by June 30.

“This is probably the last extension,” said Sen. Johnny Isakson, R-Ga., a former real estate executive who championed the credits.

The homebuyers tax credit is one of two tax breaks totaling more than $21 billion that the Senate included in a bill extending unemployment benefits for those without a job for more than a year. The other would let companies now losing money recoup taxes they paid on profits earned in the previous five years.

“We are still in a world of economic hurt, and Congress must continue to act boldly and creatively,” said Sen. Max Baucus, D-Mont., chairman of the Senate Finance Committee. “With the right mix of tax breaks and investments we will get through this recession and get folks working again.”

The real estate industry has been pushing to extend and expand the housing tax credit. About 1.4 million first-time homebuyers have qualified for the credit through August. The National Association of Realtors estimates that 350,000 of them would not have purchased their homes without the credit.

Extending and expanding the tax credit for homebuyers is projected to cost the government about $10.8 billion in lost taxes. While the measure passed the Senate by a 98-0 vote, Sen. Kit Bond, R-Mo., questioned its efficiency in stimulating home sales.

“For the vast majority of cases, the homebuyer tax credit amounted to a free gift since it did not affect their decision to purchase a home,” Bond said. “And for the small minority of buyers whose decision was directly caused by the credit, this raises the question of whether we are subsidizing buyers who may not have been able to afford buying a home in the first place.”

The credit is available for the purchase of principal homes costing $800,000 or less, meaning vacation homes are ineligible. The credit would be phased out for individuals with annual incomes above $125,000 and for joint filers with incomes above $225,000.

The credit would be extended an additional year, until June 30, 2011, for members of the military serving outside the United States for at least 90 days.

Expanding the tax credit for money-losing companies is projected to cost $10.4 billion.

The business tax break would allow money-losing companies to use current losses to offset taxable profits earned in the previous five years, giving them refunds of taxes paid in those years. Under current law, businesses with annual gross receipts of more than $15 million can claim losses back only two years.

The tax break would help industries suffering losses in 2008 or 2009, including retailers, homebuilders and newspapers. Congress included a scaled-back version of the tax break — for companies with revenues of $15 million or less — in the economic recovery package enacted in February. The new tax break would be available to companies of any size, providing a quick source of cash.

The U.S Chamber of Commerce has been a big backer of the tax break for money-losing companies.

“It frees up capital that they can use to maintain jobs and potentially even hire new people as the economy returns,” said Caroline Harris, senior tax counsel for the U.S. Chamber of Commerce.

The tax breaks would be paid for largely by delaying a tax break for multinational companies that pay foreign taxes. It was passed in 2004 and originally was to have taken effect this year, but would now be delayed until 2018.

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The bill is H.R. 3548.

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On the Net:

Congress: http://thomas.loc.gov

Let HomeSmart Realty help you buy your next home and receive a $500 gift card to the store of your choice at closing!

Indianapolis, AKA Circle City or Nap-town is the capital of Indiana. The Indianapolis metropolitan area has seen modest and steady growth among U.S. cities, with growth centered in the surrounding counties of Hamilton, Hendricks, and Johnson. Hamilton and Hendricks Counties are currently the fastest growing counties in Indiana and in the Midwest, although the state as a whole is only showing modest growth. Currently, the Combined Statistical Area stands at 1,984,644, making it the 23rd largest CSA in the U.S. The locals like to refer to themselves as “Hoosiers” which loosely translates to “A person from Indiana who likes basketball.” Central Indiana residents enjoy a low cost of living as the housing market is the second most affordable (among major metropolitan areas) in the United States.

Indianapolis Attractions

1. Indianapolis Zoo
2. Indianapolis Motor Speedway
3. Indianapolis Museum of Art
4. The Children’s Museum
5. Eiteljorg Museum
6. Indiana State Museum
7. Brown County
8. Conner Prairie
9. Eagle Creek Park
10. Arts Council of Indianapolis
11. Gregory Hancock Dance Theatre
12. Herron School of Art and Gallery
13. Indianapolis Arts Center
14. Indianapolis Children’s Choir
15. Indianapolis Civic Theatre
16. Indianapolis Opera
17. Indianapolis Symphony Orchestra
18. Indiana Historical Society
19. Indiana Repertory Theatre
20. Murat Centre
21. National Art Museum of Sport
22. White River Gardens

Education

Listing of All Indianapolis Public Schools

Maps

1. Crime View Community
2. Indiana Historical Map
3. Indiana Time Zones
4. Indiana Sheriffs’ Sex Offender Registry
5. Indy Site Finder
6. Interactive County Maps

Sports

1. Indianapolis Colts
2. Indiana Pacers
3. Indianapolis Ice
4. Indianapolis Indians

Local Organizations

1. Indianapolis Chamber of Commerce
2. Marion County Public Library
3. Indiana University

State Government

1. State of Indiana
2. Arts Commission
3. Attorney General
4. Department of Agriculture
5. Department of Commerce
6. Department of Natural Resources
7. Department of Revenue
8. Tax Forms
9. Department of Transportation
10. Office of The Governor
11. State Archives
12. State Library
13. State Parks
14. State Treasurer
15. Indiana Bureau of Motor Vehicles
16. Indianapolis International Airport

1. Take a few moments to discuss what
you’re looking for with your spouse orpartner before you start setting up appointments to look at properties. Make a list of “must have”features together, then discuss other “would like,but can live without” features. After you’ve looked at a dozen or so properties, re-evaluate your criteria.Often priorities shift with time.

2. Have a realistic idea of how much you can afford before you start looking(most lenders will pre-qualify you for free). Not onlywill this save time, but will also avoid needless disappointment on everyone’s part. Note: Keep in mind that pre-qualified and pre-approved are two very different things. Don’t mislead sellers by telling them you are pre-approved unless you have a commitment to lend from a mortgage lender.

3. Don’t sign a contract with an agent that locks you into looking with him or her, or guarantees them a commission even if you find the house yourself! Specify, instead, that a commission will be paid only if you buy a property shown to you by that agent. This enables you to look with others, and also at For-Sale-By-Owner properties, at your own convenience.

4. Don’t bring an agent with you to look at FSBO properties, or bring them into the picture when it’s time to draw
up a contract, unless you are willing to pay their commission through either a higher sales price, or out of your own pocket. Otherwise, you may risk losing the house (note: your lawyer and banker can help you if you aren’t sure of the process).

5. If you find the house you want to buy before you’ve sold your home, and the seller is reluctant to sign a contract
with you with the contingency that you sell your home first, you may draw up a contract that allows the seller to continue marketing and advertising the property yet gives you the “first right of refusal” should they receive another
offer. This way you will be notified immediately if the seller has another offer, giving you an opportunity to re-offer if necessary.

Another option is to put a non-refundable deposit on the property. This shows the sellers that you are serious about buying their property.

6. If you sell your house before finding a home you want to buy, be sure your sales contract is contingent upon
you, the seller, finding suitable housing! We have heard several stories of people frantic to find a home under pressure, and even having to rent after the closing, because they sold first. Remember, the seller is legally bound to sell once the contract is signed.

7. When presenting an offer, be courteous and respectful of the sellers. In general, avoid criticizing the property with statements like “we don’t care for the new carpeting, and therefore we’ll have to replace it”. This will not justify a lower offer and may possibly insult the sellers, decreasing your chances of their accepting your
offer.

8. If you feel the property may be overpriced, yet the seller refuses a lower offer: Make your offer contingent upon the property appraising for the selling price or higher.

9. Request that you be permitted to walk-through the house (shortly before closing) after the furniture is removed to make sure that some of the home’s faults weren’t covered with furniture, rugs, or wall coverings. It is far easier to request compensation for necessary repair work before the house is sold than afterwards.

10. Request that the seller complete a property disclosure form, stating the condition of all aspects of the property,
before you make an offer. (If the seller doesn’t have a form, we have them at our office.) If you are making an offer on a property listed with an agent, make sure you see the seller’s disclosure information first. Agency-listed properties carry no guarantees, and it is the seller who is legally bound to be truthful in reporting the property’s condition.

11. If you don’t know much about building construction, don’t worry. Simply make your offer contingent upon the
property passing a professional home inspection. This is also an excellent way to become more familiar with the upkeep needs of your future home.

12. Put everything in writing. Your sales contract should spell out whether the washer and dryer stay, draperies,
etc.

On Tuesday, February 17th, 2009, the American Recovery and Reinvestment Act of 2009 was signed, authorizing an $8,000 federal tax credit for qualified first-time home buyers purchasing a home on or after January 1, 2009 and before December 1, 2009. The following questions and answers (FAQ’s) are designed to provide you with general guidance regarding the segment of the Act that deals with the new Tax Credit.

Who is eligible to claim the $8,000 tax credit?
First-Time homebuyers purchasing any type of owner-occupied home are eligible for the “tax credit”. To qualify, a home must be purchased on or after January 1,2009 and before December 1, 2009. The purchase date is considered the closing date.
The taxpayer’s “Modified Adjusted Gross Income (MAGI) is limited to $75,000 for single taxpayers and $150,000 for married taxpayers. There are some partial tax credits available if the MAGI exceeds the limits. (See below).

What is a tax credit?
A tax credit is a dollar-for-dollar reduction in what the taxpayer owes. That means a taxpayer who owes $8,000 in federal income taxes, and who receives a $8,000 tax credit, would owe nothing to the IRS.
If the taxpayer owes $1,000 in federal income taxes and uses the new tax credit, they would receive a $7,000 refund. This type of tax credit is called a “refundable” credit.

The tax credit is “refundable”. What does that mean?
The fact that the tax credit is “refundable” means the home buyer’s credit can be claimed even if the taxpayer has little or no federal income tax liability to offset the credit. Typically this involves the government sending the taxpayer a refund check for a portion or even all of the amount of the refundable tax credit.

What is the definition of a “first-time home-buyer?”
The new law defines “first-time home-buyer” as a buyer who has not owned a principal residence during the three-year period prior to purchase. For married taxpayers, the law tests the home history of both the home buyer and his/her spouse. If one does not qualify, then the married couple does not qualify.

What type of home qualifies?
Any home purchased by an eligible first-time home buyer will qualify for the credit, provided the home will be used as a principal residence and the buyer has not owned a home in the previous three years. This includes single-family detached homes and attached homes like condos and townhomes. If the home is modestly priced, is the tax credit still $8,000? Generally, for home buyers purchasing a home priced less than $80,000 the tax credit is equal to 10% of the purchase home price. Therefore, a first-time home buyer purchasing a home for $65,000 would receive a $6,500 tax credit.

What is the “Modified Adjusted Gross Income” (MAGI)?
“Modified Adjusted Gross Income” (MAGI) is defined by the IRS. To find it, a taxpayer must first determine “adjusted gross income” (AGI). On IRS Form 1040 and 1040A, AGI is the last number on page 1 and is the first number on page 2 of the form. For Form 1040EZ, AGi appears on line 4.
After you have the AGI, add certain amounts such as foreign income, foreign housing deductions and deductions for higher education costs. Questions about the taxpayer’s MAGI should be directed to your tax preparer, CPA, or attorney.

If my Modified Adjusted Gross Income (MAGI) is above the limit, do I qualify for any tax credit?
Maybe. It depends on your income. Partial credits of less than the $8,000 are available for some taxpayers whose MAGI exceeds the phase-out limits. The credit becomes totally unavailable for individual taxpayers with a MAGI of more than $95,000 and for married taxpayers filing joint returns with a MAGI of more than $170,000.
As an example of the “phase-out”, assume a married couple has a MAGI of $160,000 ($10,000 above the $150,000 limit). Dividing the $10,000 overage by $20,000 ($20,000 is the set number for this calculation single or married taxpayers(s)) equals 0.5. When you subtract the 0.5 from 1, that gives you 0.5. To determine the amount of partial credit, multiply $8,000 by the 0.5 and you have $4,000. That’s the partial credit allowed in this example.

Do I have to repay the tax credit?
No. If the taxpayer lives in the home as their principal residence for a minimum of three years, there is no repayment. If the taxpayer fails to live in the property for the three year period, the entire amount of the tax credit is recaptured upon sale of the property.

What paperwork is required prior to or at the Closing?
None. At this time, the paperwork required to claim the tax credit will be completed by the taxpayer or their tax preparer for their tax return filing.