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March 16, 2020

Zillow Pre-Foreclosures - What are those?

When searching for Hendricks County foreclosure homes on Zillow many buyers ask me about the the ones labeled as "Pre-foreclosure." Everyone wants a great deal, and foreclosures are usually sold under value because they need work. Zillow displays these like regular for sale listings now with with their own price they make up, so they appear to actually be for sale. The truth is they are not, at least not yet.

Although Zillow has gotten better with their data than in the past, some of these potential listings are outdated, and were already sold at the sheriff sale (courthouse auctions). In many cases the auctions will cancel for various reasons, and the listings will disappear and never come back. For those that do end up as a true foreclosure they will be offered for sale through the sheriff sale first (it happens once a month). With these sales, there are strict rules, risks, and must be 100% paid in full the day of the sale, which eliminates 99% of home buyers.

For those that do not sell at the sheriff sale, they will usually end up being a MLS listed foreclosed property where anyone can bid and financing is allowed if the property condition will allow it.

Do you see a "Pre-Foreclosure" property that you might be interested in? Reach out to me and we can discuss this process in more detail, and I can give you more options for potentially buying it. Purchasing and renovating these properties is something I have a lot of experience with!

March 10, 2020

Affordable New Construction at Heritage Lake, Indiana

For those looking for nice homes under $200k in Hendricks County, you have probably found them hard to come by. If they are in good condition they usually sell fast with multiple offers. Have you considered looking at Heritage Lake? This fast growing lake community is Just 11 miles West of Danville. Vacant lot prices used to be really cheap (under $5k), but have risen to about $7-$10k or more for the quality build lots. Lots on the actual lake are well over $100k. The other nice thing is this is a private lake with access only by lot/homeowners. The community also has playgrounds, beaches, common areas, pool, clubhouse, and a new marina in 2020.

When it comes to purchasing a home under $200k, you will find you have a lot of options. You can get nice existing brick homes, and you can even build your own BRAND NEW home, all for under $200k. You won't find that in Hendricks County! There are multiple builders building in this price range, so you have several choices. Also, these builders have lots in their inventory to build on, or you can purchase your own lot separately.

If you have struggled to find something in Hendricks County, contact me about building your own custom home at Heritage Lake for under $200k. If you are struggling to build up a down payment, this area is USDA 0% down eligible. This means you can build your own house, or buy an existing house with little or nothing out of pocket!

March 3, 2020

Kitchen Renovation Tip

If you're going to redo your kitchen countertops, consider this option if you have that half wall divider ledge. It will open up your kitchen a lot more, does not cost a lot extra, gives you a bar stool area, and a lot more counter space! It dramatically changes the look of your kitchen, and modernizes it.

Feb. 16, 2020

Is it time to refinance?

If you have not looked into refinancing lately, it might be a good idea. Rates continue to decline, and refinancing could save you a lot of money if you plan to stay in your house for the next several years. The other effect of low interest rates rates is that house prices will continue to increase partially because of that. Homebuyers can afford to spend more on a house as rates drop. Definitely check with your lender, and other lenders. Some allow you to refi with low fees, while other ones cost more money to do. If you have some extra cash you can also use the opportunity to do a refinance with a rate buy down for an even lower rate, or even pay down some of the principle.

 

Posted in Market Updates
Feb. 10, 2020

Camden Creek Community Coming to Danville

Danville is getting a new subdivision that just broke ground on the Northeast corner of Old 36 and 300 East. Homes should begin selling later this year. For more information on Camden Creek Subdivision you can click here.

Posted in Buying, Town Updates
Jan. 26, 2020

Auction.com vs Hubzu.com vs Xome.com Review

(updated 1/26/2020)

Having purchased several online auction properties from Auction.com and Hubzu.com. I find myself discussing these sites with a lot of people, so I decided to do a blog post about them. I have yet to win an auction from Xome.com, but I have bid on those as well. I included them here so I can update this blog post when I end up purchasing one in the future.

Auction.com

I have purchase 4 houses through Auction.com. Overall there were really no issues, just know that closing costs are high. They also attach the purchase agreement to the listings along with the broad closing cost estimates. It can be overwhelming at first because they send you about a 30 page purchase agreement and want it signed right away, along within earnest money within 24-48hrs. Its best to review this info closely before bidding. That way if you are the winning bid its not a surprise when they start the contracting process and want things to move quickly.

Another big thing is Auction.com will bid you up! You will notice if the reserve is not met, and you bid, that you are quickly outbid. This is their system outbidding you on purpose so you bid higher. You don't always need to keep bidding to win the auction. On 2 of the houses I purchase I was the second highest bidder because Auction.com had outbid me, AND the reserve was NOT MET. On both instances Auction.com then contacted me to tell me I won auction and I was close enough to the sellers actual reserve. Don't keep bidding yourself up.

On the first house I purchased the closing costs were pretty typical of what I pay locally (Indiana). But on the 2nd, 3rd, and 4th houses those closing costs were crazy high. Always factor in higher closing costs when bidding. For example: Closing transaction fees were $895 and $995 on 3 of the transactions (normally about $300 locally), and $400-$500 for a title search (normally about $200-$300 locally). Overall the transaction process went fine, and the deals closed in 3-5 weeks depending on who the selling bank was (some banks are slower than others).

Hubzu.com

I have purchased 2 houses through Hubzu, and you certainly need to keep an eye on your closing documents closely. Like Auction.com the closing fees are on the higher side and you pay a 5% buyers premium. The good thing is the seller side does pay a portion of closing costs including the title search and title insurance (which is typical in our area). With Hubzu auctions, they own the title company as well. If you don't use their title company, you have to pay ALL closing costs. The other thing that is uncomfortable is they use title reps located on the other side of the world to handle the title work. They are very responsive when emailing back and forth, but it makes you nervous when you are sending financial information to them and wiring your earnest money. With that being said, my two transactions also had a few issues...

On the first one the HOA was slow to get the documents need to them. Their title company was asking me if I could call the HOA to help them out. Sorry, but if I am paying high closing costs and a 5% buyers premium on top of that, then I am not going to do your job. After they finally got that figured out we closed. But then came another problem. I called the sewer company to change my name over, and they asked if I knew about the $500 lien that was on the property. Their title company failed to pay off an actual recorded lien. After about 4 weeks and several emails they did the right thing and paid off that lien.

On the second deal all was smooth until I got the final closing statement the day before closing. In this case they had the property tax prorate wrong and were not giving me enough of a credit for the upcoming taxes due. At first they insisted it was correct and the taxes had already been paid directly to the county. They county said they had not been, and the title company ended up fixing it after some back and forth.

Xome.com

As mentioned initially I have yet to win an auction from them. I'll update back when I do...

Final Thoughts

Always keep a close eye on everything when you are dealing with these out of state title companies! Also, factor in higher closing costs when you are placing your bids. If you want to connect with me on Facebook, or follow along on my rehab properties checkout my page Hendricks County Rehabs. Feel free leave a comment below, or contact me if you have any other specific questions.

Jan. 20, 2020

"I'm Waiting Until the Next Recession to Buy"

I had somewhat of this mindset also a few years ago. I kept thinking stocks and home prices are getting high and it has to stop sometime, but it hasn't, and there isn't much sign of any slowdown. However, at some point stocks will see a sizable pull back. What about Real Estate? The more I've considered the consequences of a recession, the less worried about it I have gotten.
According to ATTOM Data Solutions (big time real estate data tracking company), there have only been 2 times in the past 5 recessions that Real Estate prices have declined. The obvious one was 2008, and the second one was in 1990, where they decreased by less than 1%. So in reality, for the last 30 years housing prices only plummeted one time. The cause of this was all the subprime mortgages and lenders handing out loans to anyone with a pulse. The lending industry has completely changed since then with new regulations.
I don't see any reason housing will be greatly impacted during the next recession unless there is some massive world event. Demand is very high right now, and supply is very low. Most homes under construction now are larger homes homes meant for those moving up in housing. The smaller ones being built are updated and expensive, mostly appealing to those downsizing. Even if there is an economic slowdown I definitely don't see homes under $200k being effected at all. Builders are not building homes at this price point anymore (in Hendricks County such as Avon, Brownsburg, Danville, and Plainfield), so they will continue to go up in value.
If you have some thoughts on the next recession impact leave them below, or send me a message.
Jan. 13, 2020

Lowe's vs Menards vs Alternatives

When it comes time for home improvement projects the first place most people start is at Lowe's or Menards. For this blog post I will leave out Home Depot since we do not have a location real close to us in Hendricks County, so I almost never shop there. As a house flipper, stores like Menards and Lowe's are my second home. When I first started I purchased almost everything from these stores, but now I have branched out to other stores for certain things. After managing 16 house rehab projects I have developed preferences for each store based on what I need.

Right out of the gate I will say that Menards is cheaper in price on about 90% of their products, but the quality is also lower. On many items the qualify difference isn't as big of a deal, but on other items you don't want cheap quality. For example, for the vinyl black kick plate strips that many people put on the bottom of cabinets by their flooring only costs about $2 each from Menards, but cost about $7 from Lowe's. The only difference is the thickness, but this is an item where quality won't matter, so get the cheaper stuff. Let's break down everything else....

Kitchen Cabinets - My first flip in 2016 I bought off the shelf cabinets from Lowe's. The quality was not good at all, and I said I would not buy those again. I now order RTA (ready to assemble) cabinets online that are nice quality solid wood and do not cost much more than the Lowe's in stock cabinets. On the last house I rehabbed in 2019 I did purchase two Lowe's stock cabinets to make an island and the quality has actually gotten a lot better for those. I might take a second look at them again if I have a small project that doesn't need as nice of kitchen. Menards selection of stock kitchen cabinets are pretty slim, and the quality is not great, so I don't get those there at all.

Kitchen Countertops - If you just need standard laminate countertops then Menards is the cheapest and the quality is good. If you are looking for a solid surface such as granite or quartz you are better off going to a local company for better pricing and service.

Bathroom Vanities - This is a tossup, I go for whatever looks nice, and hopefully is on sale from Menards, Lowe's, or some of the local stores that get big box store returns. I have gotten great deals from companies that deal with store returns, paying 40-50% of retail where there is nothing wrong with the item.

Bathroom/Kitchen Faucets - I used to get these all from Lowe's or Menards based on what's on sale, but now I get almost all of them on Amazon. There are a lot of great quality brands I have found, and they are about half the price of the branded ones in stores.

Tile - For backsplash and shower tile I prefer Lowe's styles and selection, but if I can find something at Menards I like the pricing is usually better. 

Tub/Shower Sets - Usually for these I am looking at reviews and what is on sale. There are some cheap sets out there that I try and avoid. When you spend that money replacing something expensive like this it's important you put something of quality in and spend the extra money.

Laminate and Vinyl Plank Flooring - I prefer Lowe's hands down over Menards for these items. I like the colors, styles, and quality much more. Flooring is one thing you don't want to skimp on. Many times cheaper flooring is a pain to install as well. As the popularity of vinyl plank has taken off in recent years I have moved more into that over laminate. Also, local flooring stores are good sources for quality vinyl plank, but I still prefer Lowe's because I am already going there for other things, plus they will deliver it for only $20 for Lowe's credit cardholders.

Carpet - I used to always buy this from Lowe's because of the price and free install (install is built into pricing). After seeing prices continuing to increase, and lead times all over the map for carpet installs I started shopping around. For the last 5-6 houses I have used a local flooring store that has been great to work with. Better pricing, quality, and almost always can install exactly when I need it done. 

Electrical - This is something I don't personally buy a lot of because a contractor is usually doing my electrical stuff. But for basic plugs, switches, plug covers, switch covers, etc, I prefer Lowe's because they seem to be better quality. 

Plumbing - Another item I don't personally do a lot of other than minor things. For quick connect things like SharkBites, Menards has its own brand that are cheaper, but I am unsure of the quality of them. I don't like using cheap plumbing materials in places that can cause expensive damage if something leaks. For actual SharkBite brand plumbing items you will find the best prices on those at a local plumbing supply house (anyone can shop there) and on Amazon.

Lighting - I prefer Menards selection and pricing for this category. However, if I am looking for something nicer for kitchen, dining area, or ceiling fans I like Lowe's selection better. 

Doors (Int/Ext) - Generally cheaper at Menards, but this is an item I usually have contractors pickup, so it ends up being their personal preference.

Paint - It depends on how much I need. If it's only a gallon or less I usually just get it when I am at Lowe's. I've never really tried Menards paints. If I need more then I get it from PPG or Sherwin Williams for better pricing and paint quality.

Appliances - Since HHGregg closed down a few years ago I have been getting all my appliances at Lowe's. I have price shopped a few times at other stores, but find that Lowe's is almost always cheaper or around the same price as anywhere else. Since I am already at Lowe's and they deliver free it's just easier to get them while I am there.

For all the nick nack materials I usually just get them where it's convenient or where I already know the item is cheaper if there is a sizable price difference. Amazon has been a great source for many materials I purchase over and over.

I think that about covers all the main categories. If you need any free home improvement advice leave a comment or reach out to me!

Jan. 8, 2020

30 Showings Setup Just Hours After Listing

How hot will lower priced starter homes be during the Spring 2020 season? Here is one indication. A listing came up for about $140,000. It was a smaller starter home in Brownsburg that have been renovated. It was priced under value in my opinion, most likely on purpose to get lots of interest and offers, which is a good strategy for sellers at  this price point. I setup a showing for a client and we were one of the first showings. The house was nice, so we put an offer in real quick a little over list price, which was the first offer the seller received. We put a tight deadline on it hoping to get it under contract quick. The sellers agent called me a little later that day to let me know they were going to hold off accepting something because of all the interest. Within 12 hours of listing they had OVER 30 SHOWINGS in progress or scheduled. WOW! You can see how hard it is to compete. On this particular property my client decided to not battle it out with the others because we knew it was going to go higher than what he wanted to pay. If this is any indication, the Spring/Summer seasons are going to be crazy as more buyers start looking. Are you a homeowner that is considering moving up in home this year? There are plenty of buyers ready to purchase yours! Contact me for a FREE valuation!

Jan. 2, 2020

The Growing iBuyer Market Trend - When will it come to central Indiana?

First off, you may not have heard of the term iBuyers before, because they are not really operating in the Indianapolis, or Hendricks County markets yet. iBuyers are defined as RedfinNow, Zillow Offers, Offerpad, and Opendoor. These large companies will give you cash offers to purchase your home, close quick, and save you the headache of listing you house. For the sellers it can be a good thing if they found another house they really like and want to sell their home quick. But these offers generally come with a lower sale price for that convenience. According to MarketWatch sellers earned 11% less selling to the iBuyers, than selling on the open market. If you sell traditionally, your average real estate commission cost might be 6%. Subtracting that off, it might be more like a 5% discount.

For Example:
$200,000 House (disregarding other closing costs)
iBuyer = $178,000 Purchase Price (200k-11% discount)
Traditional Sale = $188,000 Net Purchase Price (200k-6%comm)

You can see in this rough example, that a traditional sale would net the seller about $10,000 more than the iBuyers. This is on average, sometimes its more, sometimes its less. If you're thinking about selling and the iBuyers operate in your market, it's certainly worth getting a price just to see what they offer. I have heard of sellers getting good offers very close to what they would net selling traditionally. But in many cases these offers are much lower as well, and it comes down to how their computer algorithm values your property.

When requesting a cash offer from these companies, the price they give you is not your final price. You will have to read into the details of the offer. The purchase price on the surface might look good, but there are other costs. Right off the top they charge a 7-12% service fee for the convenience. Then if you agree to that price, they send someone to inspect the home for repairs. Their definition of repairs needed include whatever updates they want as well. So if they think older flooring needs replaced they will subtract that, where in a traditional sale the buyers would never be asking for money for flooring after the purchase contract, unless something defective was discovered at inspection.

There can be good reason to consider the iBuyers for the convenience of a quick cash sale, no repair work (repairs are deducted off sale price), a faster sale means savings on loan payments, not dealing with getting your house totally ready for sale, and with buyers coming through for showings. At the end of the day, it's best to have all your selling options on the table, and choose what's best for you. Be sure to get the opinion of some real estate agents as well. Of course they could be bias to traditional listing since that is how they get paid, but good real estate agents will always work in your best interests. For a free home price evaluation, send me a quick message!

Posted in Buying, Selling