I ran across this article today and thought it was an excellent article...well written. The onlything I would change is to move #9 (Not using an agent or using sellers agent) to the number one position. I say this because a great agent acting on your behalf will pro-actively help you address every other issue and help you make a great choice!

10 Worst First Time HomeBuyer Mistakes

Are you gearing up to buy your first place? Shopping for a home is exciting, exhausting and a little bit scary. In the end, your aim is to end up with a home you love at a price you can afford. Sounds simple enough, right? Unfortunately, many people make mistakes the prevent them from achieving this simple dream. Arm yourself with these tips to get the most out of your purchase and avoid making 10 of the most costly mistakes that could put a hold on that sold sign.

1. Not Knowing What You Can Afford
As we've all learned from the subprime mortgage mess, what the bank says you can afford and what you know you can afford or are comfortable with paying are not necessarily the same. If you don't already have a budget, make a list of all your monthly expenses (excluding rent), including vehicle costs, student loan payments, credit card payments, groceries, health insurance, retirement savings and so on. Don't forget major expenses that only occur once a year, like any insurance premiums you pay annually or annual vacations. Subtract this total from your take-home pay and you'll know how much you can spend on your new home each month.

If you end up looking at homes that are outside your price range, you'll end up lusting after something you can't afford, which can put you in the dangerous position of trying to stretch beyond your means financially or cause you to feel unsatisfied with what you actually can afford. You may even learn that you can't afford the type or size of home that you desire and that you need to work on reducing your monthly expenses and/or increasing your income before you even start looking.

2. Skipping Mortgage Qualification
What you think you can afford and what the bank is willing to lend you may not match up, especially if you have poor credit or unstable income, so make sure to get pre-approved for a loan before placing an offer on a home. If you don't, you'll be wasting the seller's time, the seller's agent's time, and your agent's time if you sign a contract and then discover later that the bank won't lend you what you need, or that it's only willing to give you a mortgage that you find unacceptable.

Be aware that even if you have been pre-approved for a mortgage, your loan can fall through at the last minute if you do something to alter your credit score, like finance a car purchase. If you cause the deal to fall through, you may have to forfeit the several thousand dollars that you put up when you went under contract.

3. Failing to Consider Additional Expenses
Once you're a homeowner, you'll have additional expenses on top of your monthly payment. Unlike when you were a renter, you'll be responsible for paying property taxes, insuring your home against disasters and making any repairs the house needs (which will occasionally include expensive items like a new roof or a new furnace).

If you're interested in purchasing a condo, you'll have to pay maintenance costs monthly regardless of whether anything needs fixing because you'll be part of a homeowner's association, which collects a couple hundred dollars a month from the owners of each unit in the building in the form of condominium fees.

4. Being Too Picky
Go ahead and put everything you can think of on your new home wish list, but don't be so inflexible that you end up continuing to rent for significantly longer than you really want to. First-time homebuyers often have to compromise on something because their funds are limited. You may have to live on a busy street, accept outdated decor, make some repairs to the home, or forgo that extra bedroom. Of course, you can always choose to continue renting until you can afford everything on your list - you'll just have to decide how important it is for you to become a homeowner now rather than in a couple of years.

5. Lacking Vision
Even if you can't afford to replace the hideous wallpaper in the bathroom now, it might be worth it to live with the ugliness for a while in exchange for getting into a house you can afford. If the home otherwise meets your needs in terms of the big things that are difficult to change, such as location and size, don't let physical imperfections turn you away. Besides, doing home upgrades yourself, even when you have to hire a contractor, is often cheaper than paying the increased home value to a seller who has already done the work for you.

6. Being Swept Away
Minor upgrades and cosmetic fixes are inexpensive tricks are a seller's dream for playing on your emotions and eliciting a much higher price tag. Sellers may pay $2,000 for minimal upgrades or staging that you'll end up paying $40,000 for. If you're on a budget, look for homes whose full potential has yet to be realized. Also, first-time homebuyers should always look for a house they can add value to, as this ensures a bump in equity to help you up the property ladder.

7. Compromising on the Important Things
Don't get a two-bedroom home when you know you're planning to have kids and will want three bedrooms. By the same token, don't buy a condo just because it's cheaper when one of the main reasons you're over apartment life is because you hate sharing walls with neighbors. It's true that you'll probably have to make some compromises to be able to afford your first home, but don't make a compromise that will be a major strain.

8. Neglecting to Inspect
It's tempting to think that you're a homeowner the moment you go into escrow, but not so fast - before you close on the sale, you need to know what kind of shape the house is in. You don't want to get stuck with a money pit or with the headache of performing a lot of unexpected repairs. Keeping your feelings in check until you have a full picture of the house's physical condition and the soundness of your potential investment will help you avoid making a serious financial mistake.

9. Not Choosing to Hire an Agent or Using the Seller's Agent
Once you're seriously shopping for a home, don't walk into an open house without having an agent (or at least being prepared to throw out a name of someone you're supposedly working with). Agents are held to the ethical rule that they must act in both the seller and the buyer parties' best interests, but you can see how that might not work in your best interest if you start dealing with a seller's agent before contacting one of your own.

10. Not Thinking About the Future
It's impossible to perfectly predict the future of your chosen neighborhood, but paying attention to the information that is available to you now can help you avoid unpleasant surprises down the road.

Some questions you should ask about your prospective property include:

• What kind of development plans are in the works for your neighborhood in the future?
• Is your street likely to become a major street or a popular rush-hour shortcut?
• Will a highway be built in your backyard in five years?
• What are the zoning laws in your area?
• If there is a lot of undeveloped land? What is likely to get built there?
• Have home values in the neighborhood been declining?
• If you're happy with the answers to these questions, then your house's location can keep its rose-colored luster.

Conclusion
Buying a first home can seem stressful and overwhelming, and it isn't without its share of potential pitfalls. If you're aware of those issues ahead of time, you can protect yourself from costly mistakes and shop with confidence.

For many people, a home is the largest purchase they will ever make, but it need not be the most difficult.

If you are a first time buyer or know of one in the Indianapolis area, the Matt Borushko Team of Keller Williams Realty would love to help.

If you are a buyer, did you know that you can be represented by a real estate agent for FREE?  Having been an agent for a long time, it still amazes me that more people don't know this and yet it is true.

In the past, all agents were agents working for the sellers. The term caveat emptor or "buyer beware" was definitely an issue. A few years ago the laws changed and now agents can represent either buyers or sellers. If I am representing a buyer, I as an agent need to keep a buyers best interest in mind. I have a fiduciary responsibility to that buyer to do the best for them. 

Here are some of the many benefits of having a great agent represent you:

• Saves you time
• Help you discover and define your wants and needs
• Helps you find and select your dream home.
• Saves you money through powerful negotiation
• Helps provide data on the home, area, and comps so you make a good decision
• Information Resources: Names of lenders, title companies, handymen, painters, and inspectors
• Navigates you through the paperwork, inspection and closing processes.

Great agents can help you with homes listed on the market, for sale by owner homes, builders, and may even know of homes not yet listed. Put simply, as a buyer hiring an agent is free and will save you money, time, and stress! That sounds like a pretty good investment.

If you are considering buying a home in Indianapolis, Carmel, Noblesville, Fishers or lakefront property in Indiana, call or email the Matt Borushko Team of Keller Williams Realty to put our experts to work for you.

The first time buyer tax credit expires April 30, 2010. At this point there has been no discussion about an extension and with the current political climate, an extension of the credit is very unlikely. For first time buyers this means you have to have a purchase agreement in place by April 30th and close by June 30th in order to get the $8000 first time buyer tax credit.

For first time buyers this is free money. As long as you stay in your home for at least 3 years you don't have to pay it back at all. Most readers know this already so why am I posting?

If you wait until the last 2 weeks of April you will lose in a few ways...

1. You will be putting all control in the seller's hands. Think about it, if they know you are a first time buyer and you don't have time to buy another home, they can refuse to repair anything and you are in a very weak negotiating position. They know you can't buy another home and get the credit so they can play hardball. The only exception to this is if the sellers have been in their homes longer than 5 years and are also trying to take advantage of the credit.
2. Home prices will be higher. This weekend I represented buyers who got into bidding wars on 2 different occasions. There are many houses on the market but only a few that will meet your needs...don't wait for more competition as you may lose out on your home or pay a higher price.

The Matt Borushko Team of Keller Williams Realty is here to help you with your real estate needs in northern Indianapolis, Carmel, Fishers, Noblesville, and Westfield. We can help you anytime, having said that if you are a first time buyer, call quickly so you don't miss out on thousands of equity or worse yet, need to buy your second choice home!

I have been in various aspects of real estate a long time. I represented builders for 11 years, was a mortgage broker for 4 years, and have been a Realtor@ for 6 years now. I've learned a lot in my time and yet everyday I get asked questions that cause me to step back and think. Not that the questions in and of themselves are difficult. My challenge comes in trying to keep simple answers simple.

A perfect example made itself clear to me the other day. I had a referral from an agent in Florida. The person they referred to me wanted to buy "foreclosures" in Carmel Indiana. When I contacted the potential buyer he told me his intention was to buy a home or two in Carmel and that he wanted to spend 10-15K for each (Carmel is a very affluent suburb north of Indianapolis). When I asked a few more questions, I found out that he was basing this thought process on someone else who was buying foreclosures in downtown Indianapolis for that same price. Somewhere in the process it dawned on me that this buyer didn't understand what drives home prices. In review I realize we really have this type of conversation all the time with potential buyers and sellers alike.

The simple answer to what drives home prices is supply and demand economics. If demand exceeds supply, prices go up. If supply exceeds demand prices will always go down. There, a simple answer to a simple question. In utopia we could use this simple answer and never have to delve deeper.

This however is when it is difficult to keep simple answers simple. For example, there is no such thing as a national real estate market. Real estate markets are local, sometimes as small as a specific street or neighborhood. Our buyers are beseiged with national statistics that may or may not apply to a local real estate market. If you ask me how the real estate market is in Carmel Indiana, I may ask you what price range you would like to know about because again, there are different answers.

Worse yet is when demand for homes is falsely modified. What happens when we completely relax lending standards and nearly everyone qualifies?  We have a false demand for homes and 3 things happen: 1) Existing home prices rise dramatically; 2) Builders build homes to this new false demand; and 3) Eventually the housing values will crash hard until they again reach the natural balance of supply and demand. That is exactly what happened up until around 2005 when prices peaked, the market was appreciating and building to a falsified or accelerated demand, so now we are trying to again find that balance between supply and demand. That is unless you believe that tax incentives and first time buyer tax credits are creating a new wave of false demand...we'll know the answer to that in 5 years or so.

How can you use this information?  If you're an agent, make it a priority to understand the laws of supply and demand economics and the factors that influence both supply and demand in your area. For buyers and sellers, don't rely on national media for local information. Ask your local real estate experts about the local market(s) conditions. They should be able to tell you what is happening and why. If they can't, they aren't experts and you should find another agent who can better help you.

So what happened to the 10-15K Carmel foreclosure buyer? There is no such market so we're trying to decide between location and price. Again, supply and demand!!

I found this article and thought it was worth posting. It shows what buyers are currently looking for in a home. This is a national list so locally in the Indianapolis area there would be a few changes to the list. For example Main Floor Masters are not nearly as popular in our area yet and basements are very high on the list. Buyers may find this interesting, sellers should look at this list as a home improvement checklist! 

 
Home designers and builders speaking at the recent International Builders Show in Las Vegas say that buyers are seeking cost-effective features and rejecting things that don’t have lasting value.

“It's all about family togetherness – casual living, entertaining and flexible spaces," says Carol Lavender, president of the Lavender Design Group in San Antonio.

Paul Cardis, CEO of Avid Ratings, which conducts an annual survey of buyer preferences, identified these must-haves in new homes:

1. Large kitchens with islands
2. Energy efficiency, including energy-efficient appliances, super insulation, and high-efficiency windows.
3. Home offices
4. Main-floor master suite
5. Outdoor living space
6. Ceiling fans
7. Soaking tub in the master suite and/or an oversize shower with a seating area
8. Stone and brick exteriors rather than stucco or vinyl
9. Community walking paths and playgrounds
10. Two-car garages, but three-car garages are even more desirable

Source: MarketWatch, Steve Kerch (01/30/2010)

Spring in Indianapolis brings many changes. The spring real estate market in Indianapolis tends to be more active than any other time of year. This spring promises to be no different, and upcoming changes could significantly impact both buyers and sellers.

The Changes:

FHA Lending Changes: Recently FHA announced that starting April 5th upfront MIP will increase from 1.75% to 2.25%. On a $200,000 home that means an increase in cost to buyers of $965.
Expiring First Time Buyer Tax Credit- The first time buyer tax credit which was responsible for a vast majority of the homes that sold last year expires April 30. This means buyers must have accepted purchase agreements in place by April 30 and close by June 30th to receive the credit.
Interest Rates: Interest rates are going up. Simply stated, the government has been subsidizing rates to stimulate interest in home sales. Every sign now points to an end to those subsidies which means higher rates are on the way.

The Potential Impact on You

Buyers:For Buyers, especially 1st time buyers, waiting will cost you a great deal. For starters, you run the risk of losing the First Time Buyer Tax Credit. Second, your costs of sale may go up due to the increase in MIP and higher interest rates. Lastly by waiting you may pay more for your house. Last year when the first time buyer credit was scheduled to end, we saw a significant decrease in first time buyer homes and home prices went up 1-2%. Spring already brings higher demand...add these other factors and waiting could cost you a great deal, maybe even your dream home!

Sellers: For Sellers, this could easily be the best time in years to get your home on the market. Look at all the factors and very real time constraints facing buyers and ask yourself...what happens when all of this goes away. Common sense says that the housing market will slow down significantly after the expiration of the tax credit. Plus homeowners who have lived in their home 5 years can also receive a tax credit up to $6500 if they buy their next home by April 30, so waiting could cost you as well. 

If you are considering buying or selling a home, contact a member of the Matt Borushko Team of Keller Williams Realty quickly. Acting fast can make a major difference in costs, and may be the difference between a  successful transaction or not!

Are you curious to know about your first time buyer peers?  Here is a great ebook from Keller Williams Realty that breaks down who the first time buyers are, their reasons for buying, and more.

Look Who's Buying Now

Buying a home can be a great investment and now is definitely a great time to buy if you're prepared. If you are looking to buy a home in Indianapolis, Carmel, Fishers, Noblesville, or Westfield Indiana, the Borushko Team is here to help. Please feel free to browse our website or call us at 317-843-8739. We are ready, willing , and able to help you find your dream home!

If you are considering making an investment and purchasing a home, here is a link to a great little ebook that can help. This ebook is geared towards first time buyers and is a great refresher for those buyers who haven't purchased a home in a while.

8 Steps to Buying Your First Home

The housing markets in Carmel, Fishers, Noblesville, Westfield, and Indianapolis continue to provide some fantastic opportunities. The looming deadline for the first time buyer tax credit will create a buying frenzy in March and April (read rising home prices in first time buyer price ranges). For those in that price range it would be wise to find your home now. 

The Borushko Team would love the oportunity to help you with your home search. Click Here to start a home search where the newest listings that meet your criteria come to you!

Here is a great report talking about the changing landscape of home buyers and the effect of the tax credit expansion to existing homeowners. The tax credit is definitely having the desired effect which is good news for home sellers and home values. In Carmel, Fishers, and Noblesville there is a shortage of good homes in the 200-350K range. This means those who list now are selling quickly (assuming the condition is good and they price it correctly). In order to get the tax credit, existing sellers must purchase their new home by April 30 and close by June 30. If you want to sell your home and take advantage of the market, act now! The Borushko Team of Keller Williams Realty is ready to help you sell your home!

More Existing Homeowners Move up in November

By AUSTIN KILGORE
December 21, 2009 11:12 AM CST

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The $6,500 homebuyer tax credit is getting existing homeowners off the fence and to the closing table, according to a Campbell Communications monthly survey of real estate market conditions.

Existing homeowners accounted for 41% of home purchase transactions in November, up from 38% in October. First-time homebuyers decreased from 47% in October to 45% in November, and investors’ share of activity declined 1% to 14% in November.

“Our survey statistics are showing the effect of Congress’s delay in extending the homebuyer tax credit and then its eventual extension,” said the study’s research director, Thomas Popik. “The first-time homebuyers started to lose interest in October when it appeared that Congress wouldn’t extend the credit. When the credit was finally extended in early November, current homeowners jumped at the new opportunity for a tax credit on their home purchases.”

Activity in the non-distressed market also increased. The share of non-distressed houses purchased jumped from 58% in October to 63% in November. Existing homeowners tend to purchase non-distressed properties, the firm said.

The market report is a survey of 1,500 real estate agents across the US.