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10 Mistakes First-Time Home Buyers Make

first time homebuyersDepressed home values and record low mortgage rates are luring more first-time home buyers into the market than ever.  A recent survey found that more than 78% of potential first-time home buyers say now is a good time to buy.  If you agree, be cautious not to make these 10 all-too-common mistakes!

1.)  Not knowing how much house you can afford. 

One of the first things buyers should do is talk to a qualified lender and get pre-approved for a mortgage.  Without first figuring out how much you can afford, you risk falling in love with a home you can't. 

2.)  Assuming foreclosures are great deals.

Just because the previous owner owed $450,000 on a house before the bank took it over, doesn't mean it's worth that much now.  Also, many homes owned by lenders or banks have been sitting vacant for months and may have been vandalized.  That could require extensive renovation and repair.  Weigh the costs of fixing up the property against the savings you'll reap by buying a lower-priced home.

3.)  Letting your true feelings show.

No matter how much you've fallen in love with a home, don't let the seller's agent in on it.  Otherwise, they will gain the upper hand in negotiations.

4.)  Failing to find a good buyer's agent. 

Consider using an agent recommended by a relative or friend.  Interview each candidate about their experience, if they've worked with first-time buyers before, and what kind of service you'll get from them.

5.)  Underestimating the cost of owning a home.

Whether it's a rusty pipe or a leaky roof, things go wrong and need to be fixed.  Many home buyers don't anticipate the additional costs for repair and maintenance.  Be prepared to set aside a small percentage (1% at most) of the home's purchase price annually for repairs and upkeep. 

6.)  Failing to budget for property taxes.

Property taxes and the likelihood that they'll climb over the course of your time in the home should be factored into any home-buying budget. 

7.)  Assuming your first offer will get accepted.

As home prices become more affordable, competition is bound to heat up.  You can't assume you'll walk in the home, make an offer, and get it.  Try not to get discouraged if you lose out on the first or second house you make an offer on.

8.)  Skipping the inspection.

The seller isn't likely to know there's mold in the basement or the walls are poorly installed.  Buyers should find and hire their own inspector to ensure no conflict of interest.

9.)  Doing too much too fast.

Some buyers want to make the house their own right away.  They overextend themselves on credit to do so, and assume the improvement will pay for itself by increasing the home's value.  But that's not always the case.  Instead, buyers need to exhibit patience and make changes over time.

10.)  Failing to include a contingency clause in the contract.

A mortgage financing contingency clause protects you if, say, you lose your job and the loan falls through or the appraisal price comes in above the purchase price.  Should one of these events occur, the buyer gets back the money he used to secure the property.  Without the clause, this money can be lost and you may still be obligated to buy the home. 

Home Prices Rebound

Article brought to you by Chris Isidore, CNN Money, 9/25/12

In another sign of a turnaround in the long-battered real estate market, average home prices rebounded in July to the same level as they were nine years ago.

According to the closely watched S&P/Case-Shiller national home price index, which covers more than 80% of the housing market in the US, the typical home price in July rose 1.6% compared to the previous months.

It marked the third straight month that prices in all 20 major markets followed by the index improved, and it would have been the fourth straight month of improvement across the full spectrum if not for a slight decline in Detroit in April.

The index was up 1.2% compared to a year earlier, an improvement from the year-over-year change reported in June.  While home prices have been showing a sequential change in recent months, it wasn't until June that prices were higher than a year earlier.

The July reading matched levels last seen in summer 2003, when the market was marching toward its peak in 2006.  The collapse of the market after that led to the financial crisis of 2008.

"The news on home prices in this report confirm recent good news about housing," said David Blitzer, Chairman of The Index Committee at S&P Dow Jones Indices.  "Single-family housing starts are well ahead of last year's pace, existing home sales are up, the inventory of homes for sale is down and foreclosure activity is slowing."

Record low mortgage rates and a tighter supply of homes available for sale have helped to lift home prices.  Lower unemployment also has helped with home prices, although job growth in recent months has been slower than hoped.

Earlier this month, the Federal Reserve announced it would buy $40 billion in mortgage bonds a month for the foreseeable future.  This third round of asset purchases by the central bank, popularly known as WE3, is its effort to jump start the economy through even lower home loan rates.

Mark Larson, real estate analyst with Weiss Research, said part of the improvement in the housing market is due to investors using the low mortgage rates to buy up homes that are in foreclosure and renting them in a strong rental market.  But he said he doesn't think there's much chance of housing prices forming any kind of new bubble in the foreseeable future.

"Clearly the worst is behind us for this market, but this is not a market that is going to take off again," he said.  "While you have a firming up, you still have tight lending standards and people who have been burned are reluctant or unable to get back in the market."  He predicts it will take several more years before housing prices can gain more than 1-2% a year.

But that is good news for a housing market that was plagued by plunging home values and high foreclosure rates for much of the last six years.  And the good news has the potential to build on itself, said Joseph LaVorgna, chief U.S. economist for Deutsche Bank.

"Housing remains a rare bright spot in an economy that is otherwise muddling through," he wrote in a note to clients Tuesday.  "The price trend for housing is significant, because it provides economic stimulus via stronger household balance sheets."


**For additional information on pricing trends in YOUR neighborhood, contact us today at This email address is being protected from spambots. You need JavaScript enabled to view it. or This email address is being protected from spambots. You need JavaScript enabled to view it.!



Fall Maintenance Tips

Hartness House in autumn fs

With fall just around the corner, it's time to start thinking about protecting your home and lawn for winter.  After one of the hottest summers in decades, it's safe to say everybody is excited about cooler weather the next few months.  With these tips, your home will be just as ready for fall as we are!

  • Repair leaky faucets:  Examine all faucets for leaks in the kitchen, utility room and baths.  You'll spend a lot less time and money making these small repairs now than a broken pipe in the middle of winter!
  • Prep your fireplace:  Make sure your fireplace is rid of old ashes and ensure the damper is open to allow air to vent freely to the outside.  Be sure to close the damper when not in use so critters and cold air don't make their way down your chimney! 
  • Check for drafts:  Try inserting a dollar bill in the gaps around your windows and doors.  If you can do it, then you can see exactly where your money's going- out the window, due to energy loss!  Some inexpensive ways to fix small drafts include caulking, adding insulating strips or plastic sheeting. 
  • Take care of your lawn needs:  With the major drought we had this year, it's super important not to neglect your lawn this fall.  Rake the dead grass, set aside, then sow new grass seed and cover the fresh seed with the dead grass.  The dead grass will act as straw and retain soil moisture and reduce the amount of fresh seed eaten by animals.
  • Check for moisture in the basement:  Duct-tape a garbage bag to the basement floor for 24 hours.  If you can see the outline of the bag when you take it up, then there's moisture coming through the conrete.  Many times this means that the gutters are overflowing, causing the water to go where it doesn't belong.  This can be resolved by cleaning your gutters and installing downspout extensions. 

For extra tips and ways to protect your home this season, check out this website!


#1 Place to Live: Carmel, IN


Located just 20 minutes north of downtown Indianapolis, Carmel, IN has just recently been named the #1 best place to live by CNN Money.  A few years ago, Carmel was considered a nice, quiet family area, but did not offer the excitement or opportunities of the nearby city.  This has changed dramatically in the past 5 years. 

With the rise of companies such as CNO Financial and Midwest ISO, Carmel's business district now has the second-largest concentration of office workers in Indiana.  The unemployment rate is over half the nation's average. 

Not only does Carmel offer a vibrant economy, but events such as the BMW Championship at Crooked Stick Golf Club and countless concerts at the city's new performing arts center, The Palladium, prove that there is an abundance of fun activities in the suburbs. 

P.A. Ward Thomas describes Crooked Stick Golf Club perfectly when he says, "It's a haven far removed from the urgency or conflict, where golfers can enjoy the quieter pleasures of their game in seculsion and peace.  Crowds have no place here, and waiting between shots must be almost unknown, for the membership is limited."

So whether it's a quiet round of golf at Crooked Stick, a rock concert at The Palladium, dinner with friends at Woody's, or shopping in the Arts & Design District, life will never be dull in Carmel!  

For more information on real estate in the Carmel area, contact us today at 317-715-9185!








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