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An Excerpt From The Franklin Township Informer

Allow me to take this opportunity to answer the questions I get asked most on a regular basis.

Why should I hire a REALTOR when homes sell in days?

There are several reasons to hire a REALTOR. Finding a buyer is just one of many steps in the process. There are numerous hurdles to overcome. These hurdles can include inspections, appraisals, title issues, financing, and buyer’s remorse. As buyers are competing for homes and sometimes paying more than they expected to pay, their remorse can set in. We find more buyers suffering from remorse now than we have seen in the past. It can sometimes require selling the home multiple times before getting to closing. There are some transactions that flow perfectly from beginning to end and some that have various challenges. Having a good real estate broker working for you, helping you and guiding the transaction will secure your best result.

Studies have shown that homes that were sold by owner usually sell for 7-11% below market value. Your home is one of your largest financial investments, so you want to trust that sale to someone with experience.

When is this housing market going to crash?

Financial cycles usually run 7 – 9 years. We’ve been in a strong market since 2012, each year getting stronger than the prior year. Personally, based on my research, I don’t expect the market to crash. However, I do expect a correction in the market where the increase in home values needs to level off. Currently the demand for housing exceeds the inventory because of affordable interest rates, large investors, the aging of baby boomers, millennials reaching the age where they acquire homes, and an increase in population. The increase in population is driven by neighboring states having a higher cost of living and taxes. Since a lot of those workers can work remotely, they can enjoy our lower cost of living and continue to work for their out-of-state employers.

In the past, when mortgage companies foreclosed on mortgages, those houses returned to the market as foreclosed properties that were available to be purchased by the public. Today, two factors affect the foreclosure process: First, lenders were banned from foreclosing during the COVID pandemic and have just started the foreclosure process again. Second, for the last several years as foreclosed homes have been sold at sheriff sale, most were purchased by large cash investors, and did not return to the market available for the public to purchase.

This market is affected by supply and demand and if the demand for housing remains high, I don’t see a major change in the near future.

Why are interest rates rising?

Interest rates are being raised to slow the economy and to slow inflation. We have enjoyed historically low interest rates for the last several years but as you can see in the chart to the right, even the current rates ranging between 4 and 5 percent are still below where we have been in the past.

Each person’s interest rate for a mortgage is based on their current credit score and the type of mortgage they choose.

Why does it seem that everyone wants to live in Franklin Township?

Franklin Township is considered a safe and desirable area. We are minutes from major interstates, beautiful parks, downtown Indy, 30+ minutes to Columbus, 30+ minutes to Carmel.

Our school system is one of the top-rated school systems in central Indiana. Since 2010 the township has had the lowest property taxes in Marion County, even though most of the land parcels in Franklin Township are mainly residential or agricultural.

Today, less than 50% of the township is developed. Since it is a rapidly expanding community, there will always be growing pains. Most of us feel that Franklin Township is the most desirable area in Indianapolis.

What is causing the inventory of homes for sale to be so low?

There are many contributing factors as to why the inventory of homes for sale is low. There has been an increase in population in Indiana which means there are more buyers now than there have been in the past. Investors are concerned about the stock market and are choosing to invest more in the real estate market instead. Some people want to sell but have projects that they want to complete before selling and contractors to do these projects are overwhelmed and not available to complete projects timely.

Other reasons for low inventory include lack of foreclosed properties coming back on the market and many sellers are reluctant to sell because of the pandemic and are concerned about where they will go if they sell their home.

The market has shifted from a “sell first then buy” to a “buy first then sell” mindset. Most of those people haven’t found a house to buy so they haven’t listed their home to sell.

With sellers receiving multiple offers, how can I make my offer stand out?

Many times, the highest purchase price is not the best offer. There are many factors other than price that a seller will consider when choosing an offer to accept. Some of these are: cash vs. financing; type of financing; is the financing guaranteed; coverage of an appraisal gap; closing timeframe; possession after closing; inspections; property taxes; title fees; and other types of contingencies.

We discuss with our buyers what their best offer looks like based on each buyer’s situation. The strategy can look different from one buyer to another.

Why are there so many neighborhoods being built in Franklin Township? How does that affect our home’s value?

Over 100 years ago, the land use plan for Marion County was designed to guide expansion. By design, Franklin Township was the last township slated to be developed. Every 10 years the land use plan for each township is reviewed and updated. Franklin Township has the most available land for development as the remaining townships have already been developed. The focus is now on Franklin Township. In an ideal situation, the roads would be expanded and improved, with the infrastructure in place prior to development. Unfortunately, in the real world, this happens simultaneously or lagging behind the developments. Currently, less than 50% of Franklin Township has been developed. There is much more to come. While development can cause frustration, it has been planned for decades. The “Supply” is defined as the number of homes available for sale and the “Demand” is defined as the number of homes sold during a specific period. Currently, demand is much greater than supply and when this occurs, prices can escalate quickly. The new home communities continue to cost more each year, thus raising the home values in the township quicker than the surrounding townships. Ten years ago, the average home price was $135,850. In 2021 the average home price was $279,104.

A company offered to buy my home in days. What is the catch?

While these programs get more attention today, they are not new. The benefit that they provide is that they sell your home quickly without any hassle. The reality is, if they buy your home with the intent of re-selling it, they discount the purchase price to cover their carrying costs and profit. So, while you can sell quickly, it usually costs you money for that convenience. We have provided a program like these since 1993 and have helped over 400 families with this type of program. For most, the benefits outweigh the cost.

Why does my neighbor pay less for homeowner’s insurance than I do?

There are several reasons that could affect your homeowner’s insurance premium. For example, the age of the home, what updates have been done to electrical systems, roof, and other components. Do you have a rider for jewelry, antiques, computers, and other valuables?

The biggest factor is that each person is evaluated based on their past claim history and current credit score. It is always a good idea to compare insurance companies but when you do, make sure you are comparing similar limits and deductibles.

What improvements should I make before I sell my home?

Over the years the answer has changed dramatically. Sellers used to have their home bright, shiny, and free of defects. Currently, buyers have been more forgiving because of the lack of homes available. Sometimes what a seller feels they need to do isn’t necessary in the current market. The best thing to do is to meet with an experienced real estate broker at your home and let that professional guide you through the process based on current market conditions.

Do I still need 20% down payment to buy a home and how does my credit score affect my ability to purchase a home?

Those are two great questions. First, there have been many different financing options through the years with as little as 0% down. A typical conventional mortgage with 20% down is the most affordable because you are not required to pay for mortgage insurance.

Many veterans qualify to purchase with 0% down without paying for mortgage insurance because of their service to our country. There are other 0% down programs that are designed to assist buyers with a reasonable credit score and income but don’t have money available for down payment. Programs such as FHA and Insured Conventional loans are available with as little as 3% down payment, and both require mortgage insurance. It is best to consult with an experienced real estate broker and their trusted lender to identify which option is best suited for your current situation.

The second part of your question is that with all the loans available, the interest rate is determined on an individual basis based on your credit score. Many real estate brokers and their trusted lenders can help you review your credit score, determine what loan program may be best suited for you and advise you on how to improve your credit score and ultimately reduce your interest rate.

There are so many investors buying homes today, what are they going to do with them?

There have always been different types of real estate investors. You have individual investors who are choosing to invest in a rental property because the return on real estate investments has typically been better and safer than other types of investments. There are some individual investors that buy homes, renovate, and sell for a profit.

What we have seen grow dramatically over the last decade are the number of large investment companies, some publicly traded, that are purchasing many properties with the intent to rent them for 10 years and then re-sell for a profit. These investors currently own tens of thousands of homes in central Indiana and other parts of the country. This has been driven by the overall affordability of homes in our market.

Why should I pick you to be my real estate broker?

EXPERIENCE. It boils down to EXPERIENCE. I have been working for 30 years as a Realtor and I am approaching 6,000 closed transactions. Even though real estate isn’t brain surgery, would you choose the doctor who just graduated from medical school or a specialist who has completed thousands of procedures? For most, your home is your largest financial investment, and you should trust the sale of it to an experienced professional.

INTEGRITY. What does that mean to me? When giving advice, the gauge I use is: Is this the advice I would give to my parents, my children, or my siblings? I always put my customers’ interests above my own.

GENEROSITY. At David Brenton’s Team we are dedicated to giving back to our community, an ideology that David has ingrained in his business since founding it in 1992. Our Team Members live and work on the southeast side of Indianapolis. This is our home too. We are passionate about giving back to our community, and our Team is active in many non-profit and charitable organizations. Here are just a few of the organizations our Team is proud to support: Riley Hospital for Children, Lead the Challenge Softball League, Franklin Township Chamber of Commerce, Franklin Township Civic League, Access Ministry at The Creek, Christian Men’s Fellowship group at Rocklane Christian Church, The SON Foundation, The REALTOR© Foundation, Juvenile Diabetes Research Foundation, Susan G. Komen Race for the Cure, Relay for Life, Keep Indianapolis Beautiful, Toys for Tots, Horizon House and other local food pantries.

I will always run my business with the attitude that I want to treat people the way I want to be treated. I hope to have the opportunity to serve your real estate needs. If you have any real estate questions, please contact me.

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