Tougher mortgage lender requirements and market conditions over the last year has changed the landscape of real estate.

A real estate short sale can take time, but can provide a good value to the patient buyer.

A short sale is one where the owner is not able to make up the difference financially between what a property will sell for after expenses and what is owed to the bank(s).  Banks will approve such a sale and take a financial loss now if the value offered is reasonable for today’s market in order to prevent future losses due to delinquent payments and costly foreclosure proceedings.  The seller must have a credible hardship.  The buyer must have patience.  Due to new guidelines, bank response times will be improving.

Banks have become tougher on loans. 

The good news is that loans banks are approving now will have a lower failure rate compared to just two years ago.  The banks have insulated the appraisal process, increased buyer credit rating requirements, and have been downright picky on stipulations that were overlooked in the past.  Money is still available for people to purchase a home, though not as many.  The byproduct of banking loan restrictions has been a robust demand for single family home rentals.  The buyers that are out of the market to purchase due to a blemish on the credit report still want a home are willing rent for a year or two.  Keep in mind with the new property tax laws, rental home tax rates (2% tax cap max.) can be double that of a neighboring home that is owner occupied.  The rental rate may trend up due to this extra cost.

As a real estate professional, I’ve opened up a toolbox of different strategies to accomplish the goal of buyers and sellers.  We have negotiated a sale with a bank while they fixed a foreclosed home, worked out a sale with a one year closing date, strategized with options on properties,  bought property with a personal retirement account fund, and saved years of seller’s financial hardship by negotiating short sales.  Due to the unusual market provided this past year, I feel more even more educated to be able to provide buyers and sellers valuable insight gleaned through our experiences.

Type:  Historic

Age:   Built in1908

Location:   Near Range Line Road and Main Street

Neighborhood:   Carmel Arts & Design District

Square footage:  2274

Rooms:   This home has four bedrooms with one on the main floor, two full baths, family room, formal living room, laundry room and two-car detached garage/workshop.

Strengths:  This home has been updated with modern amenities including a stylish kitchen, bathrooms, roof, wood floors, furnace and more.  The backyard offers a large deck, fence, lush landscaping and mini-barn.  It is conveniently located just steps from the Arts and Design District’s shopping, dining and entertainment. 

Challenges:  Although historic homes are loaded with charm and a storied past, the new owner will have to live without a master suite and extra bathrooms.  Where some buyers will see character, others may see imperfections often found in older homes.  

WHAT’S IT WORTH?    $250,000

Right now, demand for residential properties for lease, lease to own, and contract sale (seller financing) is improving.  There are several reasons for this, but the primary reason is tougher loan restrictions on credit.  Lack of easy money just a year ago has created a new group of people who want to, but can’t, purchase the conventional way.  Many of these people have stable cash flow incomes, but for one reason or another (ie. job market, medical bills, credit cards, or divorce) have reduced credit scores. 

Traditional Financing and associated challenges:

FHA- A loan limit of $271,000 in Indiana has increased the credit rating cutoff to 620 to mitigate risk.  The FHA (Government Backed) loan is the preferred option right now for properties that are less than $300K.  FHA usually would be slightly more expensive to the strong buyer.  This is not the case now.

Fannie Mae/Freddie Mac- Conventional and insured conventional loans sold to the secondary market with an upper limit of $417,000 in Indiana are much more restrictive.  One year ago, the Fannie Mae loan (estimated at 60% of the current outstanding loans) was the primary option except for a buyer with some serious credit issues or someone who could only put a very small amount of money down.  There is now a rate bump (higher rate) required based upon a FICO credit score less than 740.  A 740 credit score is very, very good.

Jumbo loans- With the major problems with private mortgage insurance providers, there is no capability to borrow above $417,000 without a 20 percent down payment.  In recent past, the optimistic small business owner may have purchased the same property for 5 percent down payment; therefore, the upper end market has lost a pool of buyers.  Additionally, mortgage interest rates for Jumbo Loans are much higher than smaller loans due to the perceived risk and lower demand in the secondary market. 

If their price range sales are sluggish, many motivated home sellers must turn to a new marketing approach to accomplish their goals if the competition and high inventory levels will prevent a profitable short-term sale.  There is a pool of responsible buyers who would love to live in the home and there is another group of sellers with an obvious demand to get cash flow to cover their debt and maintenance requirements.  These sellers likely comprehend the increased probability of selling their property for significantly more money in the future.  There are viable options and you should decide what is best for your situation with professional guidance and expert advice.  Let’s get specific, call Me.

A Fishers study committee consisting of nearly fifty members will determine the pros and cons of the town of Fishers becoming a city.

An announcement was made Tuesday by Town Council members that 44 people have been chosen to research the options and inform the town.  The committee may make a recommendation if the data is conclusive enough.

The town of Fishers continues to look for a moderator to assist the committee.  Town leaders hope to find a moderator by the end of the week so the committee can set its first meeting date.  The committee will then determine how often it meets and the plan of action.

Eight committee members were selected by the Fishers Chamber of Commerce and four were appointed from the CityYes political action committee which supports the change.  The remaining members were chosen from a pool of about 80 applicants.

CityYes has been collecting signatures in attempt to get a referendum on the ballot that would give voters the ability to choose their form of government and officials say a special election could be held sometime this year.

Type:  Traditional

Age:   Built in 1992

Location:   Palmer, Alaska, an hour outside of Anchorage and 20 minutes from Sarah Palin’s hometown of Wasila, Alaska

Square footage:   2903

Rooms:   This four-bedroom home has three baths, a large open kitchen and family room combination, main floor office that could be used as a fifth bedroom, and a spacious 900 square foot garage with built-in storage cabinets.

Details:  This home has an amazing setting with over an acre of lakefront property and impressive views of the Chugach Mountains and Walby Lake.  This home was appraised for $590,000 in March 2009 and is currently listed for sale at $100,000 under the appraised value. 

Price: $490,000

If you enjoy viewing holiday decorations and lights, make a night of driving past some of these extravagantly decorated homes, as voted on by Indianapolis Star readers.  For a cheap dose of Christmas spirit, pack the minivan with cookies, a thermos of hot chocolate and a passel of kids, then take a drive.

And if you want to enjoy looking at the lights and not at the road, several local limousine companies offer special packages for limo tours. Companies include: Carey Indiana Limousine, (317) 241-6700; Hoosier Connection Limousine, (317) 359-5466 and Advanced Limousines, (317) 716-1201.

This is by no means a definitive list, but it includes the most popular areas recommended by readers in an informal Indianapolis Star survey.

1. Village Farms, Westfield

This neighborhood has the cul-de-sac with the most nominations. There are more than 20,000 lights synced to music. It runs from 6:30 to 9:30 p.m. on weekdays and from 5:30 to 9:30 p.m. on weekends.
» Located north of 146th Street off Spring Mill Road. Turn right onto Greyhound Pass, and Senate is the first left.

2. Harrison Park, Fishers

The main street into the neighborhood has several lighted homes, but 8440 Harrison Parkway stands out with its lit penguins.
» Neighborhood is on the east side of Allisonville Road, just north of Conner Prairie.

3. Princeton Park, Fishers

Several homes on Eaton Court; the house on the corner of Salem Drive and Eaton Court also has lights timed to music.
» Neighborhood is north of 106th Street on Eller Road. Entrance to neighborhood is Manchester Drive; turn at the first left, and then right onto Salem Drive.

4. Broad Ripple, Indianapolis

» The home is on the southwest corner of Broad Ripple Avenue (62nd Street) and the entrance to Broad Ripple Park. The owners of this display have been known to give out hot cocoa and cookies to onlookers.
» Gladden Drive: The award-winning houses are at 6027 and 6065 Gladden Drive. Located north of Kessler Boulevard and east of Meridian Street.
» 55th and New Jersey streets.
» 45th and Delaware streets.

5. Oakforge Woods, Indianapolis

Cul-de-sac is decorated in a Christmas Village style and is said to be unique.
» Located at 6042 Maple Forge Circle. Neighborhood is on the southeast corner of 59th Street and Georgetown Road. Take Oakforge Lane or Oakforge Drive. They both will lead you back to Maple Forge Circle.

6. Woodcreek Farms, Avon

Cul-de-sac on Walnut Creek Crossing.
» Neighborhood is on the north side of County Road 200 North, west of Dan Jones Road. Head north onto Woodcreek Drive and turn left at the first intersection.

7. Pheasant Run, Southwest Indianapolis

This light display twinkles from 6:30 to 9:30 p.m. Sunday through Thursday and until 11 p.m. on Friday and Saturday. For more information, go to www.indychristmas.com » The neighborhood is on the south side of Mills Road between Mann and High School roads. Turn south into the neighborhood and go to Alcott Lane; turn right onto Raritan Drive and then left on Lippan Way.

8. Oak Meadows, Greenwood

Several homes are decorated on both sides of Averitt Road.
» Averitt Road between Main Street and Smith Valley Road.

9. Bel Moore, Southeast Indianapolis

This display runs from 5 to 9:30 p.m. Sunday through Thursday and 5 to 11 p.m. on Fridays and Saturdays. For more information, go to www.southsidechristmas.com
» Neighborhood is on the south side of Stop 11 Road, just east of Five Points Road.

10. Hogan Drive, Cumberland

House is at 2131 Hogan Drive, which is on the north side of 21st Street, between Mitthoefer and German Church roads.

 Source:  IndyStar.com

Type:  Traditional

Age:   Built in 1895

Location:   Muncie, near the Ball State Campus

Square footage:  2352 square feet

Rooms:   This home is separated into two units and has a one-car detached garage.  Unit A has four bedrooms and two baths on two levels.  Unit B has one bedroom and a full kitchen. 

Details:  This house is a Ball State University investment property typically rented to BSU students.  The owner can rent both units out for a total gross income of $1725 per month with an investment under $75,000.  It is located on Riverside which is a main road through Ball State University.  Due to the close proximity to the university, this home could add some stability to your investment portfolio.

Price:  $75,000

Fishers and Carmel will have their community tree lightings this Saturday, the weekend before Thanksgiving.

Fishers:  6:30 to 8.p.m. Saturday. Town Hall, 1 Municipal Drive. Includes costumed Dickens carolers, music from the Fishers High School choirs and cookies and punch. Free. (317) 578-0700 or www.fisherschamber.com.

Carmel:  4:30 to 6:30.p.m. Saturday. 1 Civic Square. Lighting of the Giving Tree and holiday lights is at dusk or approximately 5:45 p.m. Jugglers, carolers, balloon artists, reindeer and other North Pole animals. Holiday entertainment provided by Clay Middle School Choir, Carmel Symphony Orchestra Brass Quintet and Central Indiana Dance Ensemble. Refreshments provided by the CFD Auxiliary. First 400 children will receive goody bags. In event of rain, held at the Carmel Fire Department Headquarters Fire Bay. Bring unwrapped gifts, no plush toys, for the Gazebo Giving Tree. Free. (317) 571-2400.

Source:  IndyStar.com

Type:   Traditional

Age:   New Construction

Location:   161^st Street and Carey Road

Neighborhood:   Oak Manor offers a community pool and clubhouse.

Square footage:  5065 including 1720 in the finished basement

Rooms:  This four bedroom home has a main floor office, upstairs bonus room, finished walk-out basement with a full bath and room for a home theater, master suite with sitting room, pond views, and a three-car side-load garage.

Strengths:  This is a builder’s spec home that has never been lived in.  It is an attractive value and could not be rebuilt for the same price.  In my opinion, the property tax cap will help these suburban neighborhoods immensely and may improve the monthly payment by as much as $500. 

Challenges:  There are vacant lots in the neighborhood so a potential buyer will have to deal with future construction traffic.  The supply of area homes in this value range has forced builders to price homes aggressively.  Home resellers need to keep close tabs on the builder market to price their home competitively. 

WHAT’S IT WORTH?    $495,000

Type:   Ranch/Vacation Home

Age:  Built in 2000

Location:  Fort Myers, Florida

Neighborhood:  Reflection Lakes is a modern gated community in south Fort Myers that offers tennis courts, a workout room, a community pool, clubhouse, and lake views.

Square footage: 2400 square feet

Rooms:  This 3 bedroom, 2 bath home has an open living area, tall ceilings, a lake view, pool, over-sized lanai, kitchen with granite counter tops, and paver driveway. 

Description:  This is an upscale south Fort Myers gated community with an abundance of amenities.  This house would have sold for $675,000-700,000 just a couple of years ago and is now listed at a bargain price.  Fort Myers is growing south and this home is in a prime location and only a 15-20 minute drive from the beach. 

Price:  $415,000