Controlling Factors

I read an interesting article in the Indianapolis Star today in which home owners shared their frustration of selling their home in the summer market. Traditionally, in real estate, June is known as the ‘peak’ of the real estate season. This is the time in which inventory is at its highest and relocating families are ready to make their move before the new school year.

There are several factors that play into your home selling in the June market. As a seller, you have control over two of these factors: price and condition. How you price your home will determine if your home sells quickly or if you will be in for the long haul. The first two weeks are the most important weeks in selling your home. It will be listed in the MLS (Multiple Listing Service) for thousands of agents to see. An agent will know at that time whether you are priced in line with the market. If you are priced to high within the first hit on the MLS, your home stands a chance of becoming ‘stagnant’ on the market; even if you lower your price after a month. This is why you as a seller have control over price and you must make sure you are in line with fair market value; being the price a buyer would pay in today’s market.

The second factor is condition. The Indianapolis Star’s article listed some great home selling tips. Make sure your home is always clean and smells fresh. Second is to de-clutter. If you are planning to sell your home, then pack early. This helps create openness to your home so that a buyer can easily visualize your home being their home. Curb appeal is an important factor which you can learn about by clicking here. Lastly, create an ambiance to your home. Open the curtains, turn on all the lights, and play soft music and place fragrant flowers in different areas throughout your home.

In a nut shell, June is the time to sell…if your home has not sold by end of July; I recommend that you review the factors that as a home owner you are in control of: Price and Condition.

Rain Dancer

I will never claim to be a Green Thumb…that title belongs to my mother. My thumb is rather, black. Unfortunately, that particular gene was not passed onto me.

However, I try.

Every Spring I head to my favorite nursery’s to purchase bright flowers in hopes of creating my picturesque garden. I water every other day, or every day if it’s extremely hot…succumbing myself to the mosquitoes each evening as they feast upon my blood.

This brings me to my point.

Watering.

As I stood with hose in hand, watering my garden my husband rushes outside to inform me that Indianapolis residents are no longer allowed to water. He looked at me as though I was from Mars, as I did to him. Since I am a California native, I am quite familiar with water rationing. However, I live in Indianapolis and last time I checked there is no water shortage! In fact, there is no water shortage; there is plenty of water. The problem is that the Indianapolis Water Company’s pump stations cannot keep up with the water usage. I can’t help but to be a little ticked off by this.

Don’t get me wrong, I am an advocate of conserving water. With that said, it is very difficult for me to watch my poor flowers cry for help as they suffocate in 97 degree weather. So, I did what only a Green Thumb would do….a rain dance.

Well folks, I got my rain and now I’m a happy little Gardner!

Gen-Xers take lead in home buying

A number of real estate professionals will mark 2005 as one of their top producing years…thanks in large part to Generation X. The housing sector in general is flourishing through job growth, continuing low interest rates, and price gains in some hot markets.

Four years ago, the median age for homebuyers was 36. This year the median age is 31. According to this profile, Generation Xers represent 49% of the home buying market. A majority of them are first time homebuyers with many of them owning a second home for investment purposes. One interesting finding is that the younger generation is more focused on purchasing second homes as investments, giving them both rental income and diversity in their portfolio. The other 51% of homebuyers generally purchase second homes for vacation retreats and eventually their future retirement home. These buyers are traditionally over 46 years of age.

Why is the younger generation now interested in home buying?

The number one reason given was that they just want to own their own home rather than pay rent or live with their parents. Today’s younger buyer generally has a higher income and they are also taking advantage of the many different alternative financing options.

We’ve Been Seized!

The vote has been cast… the ruling made.

The Supreme Court officially ruled today that local governments may seize people’s homes and businesses for private development, even against a home owner’s will.

The practice of eminent domain is actually quite common in several states. The Fifth Amendment allows governments to take private property for public use; however, the owner must be justly compensated for their property. Properties that are traditionally taken through eminent domain are those where roads, bridges, or public buildings are needed.

In the case of Kelo vs. New London, the Supreme Court ruling has basically allowed the local government to slate homes for destruction for the benefit of another party. In this particular case, residents living in the neighborhood of New London, Connecticut filed suit due to their local government announcing eminent domain of their homes for a riverfront hotel, health club and offices. This decision by the government is meant to create more job opportunities in the New London community.

Is this fair? There are two ways to look at it. One view being, that people are being uprooted from their homes, simply to accommodate a wealthier higher power. The other view being that removing a handful of people in order to create community wide employment opportunities helps more families in need of jobs as well as spurs other economic development.

My theory here is to buy smart. So many people buy their homes smack in the middle of an empty field or near a developing area….not always the smartest decision. Sooner or later a development will be in that empty field, or the hospital that’s several hundred yards away today, they might want to add another wing right up to your back yard.

What’s your opinion?

What is a 1031 Exchange?

A 1031 exchange is often a good option for investors wanting a tax deferment to postpone capital gains taxes. However, not everyone can use a 1031 exchange and of course there are very specific rules to follow.

Only investment properties can qualify for a 1031 exchange or properties owned in a business. This means private residences or second non-rental homes will not qualify. The exchange must be between two like properties. The properties must both be used for investment or business purposes, but they do not have to have the exact same use. For example, an apartment can be exchanged for a strip center.

The IRS has strict guidelines to meet the criteria for an exchange. First and foremost, you must move quickly. You only have 45 days to identify the replacement property following the sale of the initial property. You do not have to close within 45 days, but must have an accepted offer. You can purchase up to three properties of like value or as many properties as necessary to total the sum of the property you are exchanging.

Once you have an accepted offer, you have 180 days from the sale date of your previous property to close on the exchange. Some choose to simultaneously close on both the previous and new properties to make the transaction less complicated. However, if you cannot close on both properties simultaneously, you must use a bank or an attorney qualified to hold the sale money until the exchange is complete.

If you end up with any cash from the exchange to even out the value, that cash will be taxed at current capital-gains rates.

By the way, two important points here: the properties can only be located in the United States and no, you won’t qualify for deferred capital gains if you receive an exchange from a familial relationship and then sell it within two years.

If a 1031 exchange is in your future, start your search as soon as possible for the like property; 45 days comes very quickly, especially when you factor in the negotiation process.

Fuzzy Green Houses

Have you ever seen the houses with the greenish black roof or siding? Yuck!

The algae that is growing on your roof is slowly deteriorating your roof and can easily be removed. It’s important to maintain your roof to maximize its longevity. The same goes for your siding.

Algae is common in areas of the country that receive high amounts of rainfall and humidity (Indiana for one). It is also common in areas with mature trees. As this moss and algae continue to be fed from the moisture, it will multiply and slowly spread across the area usually starting on the northern side.

The most common answer in the past to ridding the algae was bleach and a power washer. However, recent studies are now showing that the bleach when left on the roof accelerates corrosion of metal gutters and downspouts, kills vegetation, and removes the natural color from wood roofing shakes. Also, the power washer can loosen your shingles or pull them upwards eventually causing them to fall off.

The safest way to clean the moss and algae off your roof is to use non-toxic oxygen bleach. The best use of this product is to mix the powder with water and apply it to a cool roof surface, such as on an overcast day. Keep the roof surface wet with the solution for approximately 20 minutes and then lightly scrub the roofs surface. The algae should come off; however, heavy build up may take multiple applications. You can use this same procedure for your siding.

Most of all…be careful! Moss and algae are very slippery. Make sure your roof is dry when working and wear shoes with durable tracking.

Indianapolis Realtor Blog Scoops the Indy Star

Thanks to a great observation and question from reader Torporific on Monday I answered the question why are so many Meridian Street mansions for sale. See post from June 12. The Indianapolis Star apparently thought that question was so important that they ran a front page story today covering the same topic.

Indiana Ranks #5 in Foreclosures

..for the month of May at least. I received a newsletter today from the Board of Realtors and decided to run the numbers. For several years, Indiana has ranked #1 with the highest number of foreclosures. This article in particular stated that across the nation foreclosures have dropped 17% in May. One website in particular RealtyTrac will give you the results of homes that are pre-foreclosures (properties in the first stage of foreclosure), Auction (Sheriff’s sale), and Bank Owned (properties foreclosed). The results are alarming and I have posted the figures below:

Marion County
4283 Pre-foreclosure
4052 Auction
5047 Bank owned

Hamilton County
9 Pre-foreclosure
5 Auction
29 Bank owned

Boone County
2 Pre-foreclosure
0 Auction
6 Bank owned

Hancock County
1 Pre-foreclosure
79 Auction
24 Bank owned

Hendricks County
3 Pre-foreclosure
2 Auction
25 Bank owned

In 2004, MIBOR (Metropolitan Indianapolis Board of Realtors) conducted a research study outlining the causes of Indiana’s high foreclosure rates. It is pretty informative and I have included a link here for your interest. Since Indiana has the highest home ownership rate, as well as being the hardest hit state in manufacturing job losses; one can only expect the influx of foreclosed homes.

10 Reasons Your Home Might Fail Inspection

There is always a sense of relief when you have an accepted offer on your home. However, never consider your home sold until you have passed inspection. A majority of real estate transactions that fail do so because of a failed Inspection. Many home owners either try to hide problems, or they just don’t know when to recognize a problem that can affect the outcome of a sale.

Inspectors are paid to find everything and anything wrong with your home…and trust me, they will find it. However, you can help yourself in advance by preparing for your inspection and in the long run, saving your home from a lost sale. I have gathered 10 major items that often cause sales to fall through. I recommend repairing these items prior to your inspection.

Why? Even though it may not seem like it now, you will be saving yourself money (or a sale) in the long run.

1. Defective Plumbing: Clogs, dirty water, and low water pressure are three areas that often fail. During an inspection, the inspector will turn on all the faucets in the highest bathroom and flush the toilet at the same time. This test will reveal any of the three items I mentioned above.

2. Damp/Wet Basements: When I show homes to perspective buyers and hear the dehumidifier running…I know there is a problem. Cracks in your basement foundation or walls are often the root of the problem with water seepage. If you see fungus growing on your walls, treat it. If your water problem is more severe, you may want to consider installing a sump pump or even hiring a water proofing company.

3. Inadequate wiring: Many older homes have not had there electrical updated. This is often a problem that a Realtor will find when showing homes. Homes should have a minimum of 100 amps service and you should mark it on your box.

4. Heating and Cooling systems: Make sure you keep your furnace clean on a routine basis. If your heating system is over 15-20 years old, it’s time to start shopping for a new one. Many companies will give you a discount if you install your heater and cooling systems at the same time.

5. Leaks: That water spot you tried to paint over? Yeah, that one…the inspection will find it. Leaks can occur for a variety of reasons such as age, weather, or mechanical. Make sure you periodically check your roof and attic for leaks, torn shingles, etc.

6. Damp Attic: This can sometimes be caused by your roof leaking or inadequate ventilation, insulation or vapor barriers that cause moisture in your attic.

7. Wood Rot: Check your windows, door frames, trim, decks, siding…inspectors are great at gouging these areas with a screwdriver. If you see rot, repair or replace the item.

8. Masonry: Chimneys are usually the hardest hit which could lead to water penetration, cracking, or even the chimney falling over. This can be very costly to fix as a seller, but even scarier to a buyer.

9. Over-fused Circuits: This is very common in older homes and a fire hazard. A typical 15 amp circuit is common in homes; however, it is unsafe to overload your circuit. Remember, larger appliances need higher amperage.

10. Structural/Foundation: This is the worst. An inspector will look at the underlying footing and foundation. In some severe cases a structural engineer may be called. If you suspect you have structural or foundations problems, I recommend inspecting before selling. A bad foundation can stigmatize your property while on the market.

Should you have any questions or would like me to recommend some Inspection companies, please email me and I will be happy to help out.

June’s Hot Pick’s

Here are some ideas around Indy that may sound “cool” during our heat wave!

June 10-11, Italian Street Festival – The traveler in me absolutely loves this time of year. If you can’t make it to Italy this summer, well the Italian Festival is the next best thing. This is truly a day of food, music, culture, and food (did I already say that?). This event runs for two days incase one just isn’t enough! Located at 520 Stevens St, 5pm-11pm. Admission is free; food vendors will be individually priced.

June 10-11, Middle Eastern Festival – Now, here is my theory…hit the Italian Festival one day and the Middle Eastern Festival the next! Since I just arrived home from my trip to Egypt…I recommend going to this festival! The food is great! Don’t worry about the heat, it’s and indoor air-conditioned bazaar filled with food, crafts, and dancing. Located: St. George Antiochian Orthodox Christian Church, 4020 N. Sherman Dr.
Fri: 4-11pm and Sat: Noon-11pm

June 11, Brew-Ha-Ha – In its 10th year running, the Brew-Ha-Ha is one huge block party with ample sampling of the regions best microbrews. All proceeds help support the Phoenix Theatre. Located at the 700 block of N. Park Ave from 3-7pm. Admission is $25. Info: 317-635-7529

June 12, Worlds Largest Water-Balloon Fight – Okay so the kid in me had to mention this one. Here is your chance to help out a great cause by raising money for Fishers Pointe Cooperative Preschool and maybe place in the Guinness Book of World Records. Entrants must throw as many water balloons possible at each other for five minutes. Goggles are required. Located at Holland Park, 2:15pm. Admission: $5 Adults, $3 Children or $12 Family. Info: 317-767-4312

June 12-13, Dave Matthews Band– They’re back…..I always enjoy watching Dave Matthews live from the lawn during a warm summer night. With their new record release of Stand Up, this live concert should fulfill your senses! Tickets: $56.50 for pavilion and $39 lawn. Show starts at 7pm at Verizon Wireless Music Center. Info: 317-776-3337

June 17-19, Indy Jazz Fest– Since the last two years had not been as successful; the original format is now back as a three day session. The new changes sound exciting as no two artists will be performing at the same time. Some artists include Tony Bennett, The Commodores, and Susan Tedechi. Tickets: $30 for single day or $45 for 3 day pass. Military Park. Info: 317-940-9945

June 19, U.S. Grand Prix – Get your engines started as the Grand Prix is back! People from all over the world travel to Indiana for this exciting race to see some of the most expensive cars around. Race starts at 1 p.m – Indianapolis Motor Speedway. Admission: $50 to $150. Info: 317-492-6700

June 25, Symphony on the Prairie– Opening night! Summer is not complete with a wonderful picnic dinner and a great symphony. Tickets: $20 Adults and $10 Children. Located at Conner Prairie. Info: 317-639-4300

June 27-July 3, Elephant Awareness Week – Visit the Indianapolis Zoo for an up-close and personal opportunity with elephants. This show includes daily bathings, keeper chants, and a weigh-in contest. Free with zoo admission. Info: 317-630-2001

Back from Egypt and back to Blogging!

Sorry I have not written in a while, but my husband and I went on vacation for two wonderful weeks in Egypt. We went on a tour through Grand Circle Travel and during the course of our vacation we toured most of Egypt’s most historical areas: Alexandria, Cairo, Giza, Luxor, Esna, Edfu, Kom Ombo, Aswan, and Abu Simbel. We stayed at the Cairo Marriott hotel for the first week and then we boarded a ship and cruised up the Nile River for the second week.

Basically we were taught 5,000 years of history in two weeks. Now that I am back in Indiana, everything is just finally absorbing. I enjoyed this tour because it not only focused on all the historical sites, but it also united us with the culture, religion, and daily lives of the Egyptian people. It’s amazing how much of their culture has not changed since ancient times.

The first question I have often been asked since my return is “did you feel safe?” YES! Egypt’s #1 economic source is tourism. If there are no tourists, their economy will literally be devastated. They make tourists protection their number one priority. Never once did we feel unsafe. Egyptians are so kind and they absolutely love American’s!

Some people have asked me to post some pictures, so here are a couple of my favorites. I’ll post more later on this site, or another site.

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