Pre-qualification vs. Pre-approval

[VIDEO TRANSCRIPT] This is a pre-qualification letter. This is a pre-approval letter. Now, as a home seller, one of these documents has the potential to make you very happy if it accompanies an offer to purchase your home. And the other document? Well here at the Julie Hall group we have a very specific process for how we deal with pre-qualification letters...

Pre-qualification and pre-approval are not the same thing. A lot of times a buyer can phone up a lending Institution and simply by providing their debt, income, and assets, can have a pre-qualification letter generated… without any verification.

Pre-approved Home Buyers

Whereas a pre-approved buyer has formally applied for the loan. The lender has dug deep into their financial history. Credit checks have been run. And the lender has made what's called a “conditional commitment” to finance the purchase.

So you tell me, who would you rather take your house off the market for? I know who I would choose.

Hey, my name is Jason Patton and I'm the listing specialist with Berkshire Hathaway HomeServices, The Julie Hall Group. We help people buy and sell houses in Kosciusko and all the surrounding counties and we would love the opportunity to earn your business. please give us a call at 800-218-8195 or email us at sold@juliehallgroup.com. Thanks. I hope you found this information useful, and we hope to talk to you soon.

The Julie Hall Group specializes in northern Indiana homes for sale. Call us today and let us know how we can help.

What is a Kosciusko County Sheriff Sale?

The Kosciusko County Sheriff sale is a public auction of foreclosed properties providing consumers with an opportunity to acquire real estate at deep discounts compared to the open market. Sheriff sales are conducted after foreclosure hearings have concluded and the property’s deed has been awarded to a lender. This type of sale occurs because the previous property owner was severely delinquent on payments and eventually defaulted on their mortgage.

After reading this blog post you'll be able to answer the following questions:

• What types of property are available for sale?
• When and where are Kosciusko County Sheriff sales held?
• Is there a list of foreclosed properties I can view prior to the sale?
• Can you finance purchases made at a Kosciusko County Sheriff sale?
• What happens when one of the properties on the list doesn't sell at auction?
• What are some of the risks I should consider?

What Types of Properties are Available?

The type of real estate sold at a Kosciusko County Sheriff sale differs from month to month. While the majority of available properties will be single-family dwellings, it’s not unusual to see multi-family, commercial, mixed-use, and vacant land become available at the auction. As far as condition is concerned, sheriff sale foreclosures range anywhere from “nearly brand new” to “barely standing”… and everything in-between.

When and Where are Kosciusko County Sheriff Sales Held?

Here in Kosciusko County, sheriff sales are held at 10am on the 4th Tuesday of every month in the lobby of the Sheriff’s Department. These offices are located at 221 W Main Street, Warsaw. Be sure to show up early because the sale starts EXACTLY at 10am and the sale moves quickly.

Is There a List of Foreclosed Properties I Can View Before the Sale?

There is. Every month the Kosciusko County Sheriff's Department provides a spreadsheet detailing all foreclosed properties scheduled for auction the following month. This document contains valuable property information including: cause number, defendant name, plaintiff name, property address, attorney name, judgment amount, minimum bid, and property status. This spreadsheet is updated frequently however you should be aware that often times a property’s status will change from “active” to “cancelled” because the defendant has either a) paid the delinquent amount or b) was able to make other arrangements with the foreclosing institution to delay the proceedings. You can find the spreadsheet here.

Can I Finance My Purchase at a Kosciusko County Sheriff Sale?

No. All Kosciusko County sheriff sale foreclosures must be paid for with cash in the form of a cashier’s check. The winning bidder must present this check to the Kosciusko County Sheriff’s office NO LATER than 3pm the SAME DAY as the sale. As a potential buyer, it’s important to make sure you’ve made all the necessary arrangements with your banking institution to ensure this is possible. Failure to pay the total balance due via cashier’s check by 3pm on the day of the sale will result in forfeiture of all rights to the property and a $200 administrative charge.

What Happens if a Home Doesn’t Sell?

When attending a Kosciusko County sheriff sale you will notice that each foreclosed property has two dollar amounts associated with it, a judgment amount and a minimum bid (more commonly known as the “upset price.”) Contrary to popular belief, the minimum bid IS NOT always lower than the judgment amount and depends heavily on how much of a loss the plaintiff (bank) is willing to incur. Should it happen that no one places a bid AT or ABOVE any properties upset bid, said property rights return back to the bank.

What are Some the Possible Risks? 

The financial incentives associated with purchasing a property at a Kosciusko County sheriff sale are obvious and attractive. Who doesn’t love the idea of acquiring real estate at a deep discount and making heaps of money? I mean… all those people on HGTV make flipping foreclosed homes look quick and painless, right? Unfortunately, what you don’t often see or hear about are the potential pitfalls associated with purchasing sheriff sale foreclosures. This process involves REAL RISK and if you don’t exercise proper due diligence you can (and probably WILL) lose A LOT of money. Here are just a few of things you need to take into consideration when purchasing property at a Kosciusko County sheriff sale. (*NOTE: This is not a comprehensive list!*) 

• YOU ARE PURCHASING “SIGHT UNSEEN.” You will not have access to the property prior to the sale so you have no way of knowing the condition of the structure prior to purchase. Sure, you can drive around the building and possibly peek in the windows (although this is technically trespassing so we do not encourage the activity) but you will still have very little idea as to the condition of the interior until you receive the keys. Did a pipe break resulting in 4 feet of standing water in the basement? Did the disgruntled previous owner rip every inch of copper tubing out of the walls? Maybe… maybe not.
• THERE COULD POSSIBLY BE OTHER LIENS ON THE TITLE. The sheriff sale you are participating in only releases the property from encumbrances associated with the lender in “first lien position.” Did the previous owner have any additional mortgages? Are there legal judgments associated with the property? You should be able to answer all these questions before you even consider placing a bid. Any local title company can perform a “preliminary title search” on the property and provide you with this information for a small fee.
• YOU MAY HAVE UNWANTED HOUSE GUESTS. Picture this: you’re the winning bidder on a foreclosure you’ve had your eye on for several months. You go to the sheriff’s department and exchange a cashier’s check for keys to the front door of your new investment. You can’t wait to get inside and see exactly what you’ve purchased so you drive straight to the property to take a look. But as you approach the home you notice several cars in the driveway and a guy grilling hamburgers on the porch… Guess what… the previous residents have decided they’re in no hurry to vacate the premises. Now what? Unfortunately, this scenario actually occurs more often than you might think. So what can you do? [Option 1] BRIBERY: Think “cash for keys.” Offer them money in exchange for exiting the property within a certain amount of time. I know this sounds ridiculous seeing as it’s YOUR property but this is often the best method to ensure your home is delivered in "good" condition. [Option 2] EMERGENCY EVICTION: In the scenario described above, there's the possibility a Kosciusko County Judge will award you an “emergency eviction”. In order for this to take place you must file suit with the County Clerk’s office and pay a $125 fee.

As you can see, buying a foreclosed property at a Kosciusko County Sheriff sale can be extremely lucrative but it can also be extremely risky. Make sure to DO YOUR RESEARCH on the front side and use caution to avoid spending more money that you can realistically afford to lose. Use your favorite Kosciusko County Realtor and Beacon GIS to provide you with as much information about the property as possible.

Have more questions about the sheriff sale process? Give Jason Patton a call at (800) 218-8195. In addition to overseeing all the marketing and business development affairs at The Julie Hall Group, Jason is also a savvy real estate investor. Good luck!

STOP! If you're looking for Zillow Warsaw IN let me ask you one question... Why? This website is much more accurate and up-to-date than Zillow! CLICK HERE TO VIEW ALL WARSAW INDIANA REAL ESTATE FOR SALE.

[VIDEO TRANSCRIPT] Okay, follow me. So you're in the market for a new house, you're in front of your computer and you're browsing Zillow, and, all of the sudden, you see this brand-new listing that you've never seen before. And in great, big letters, it says, "Pre-Foreclosure." So you get all excited because you see the word "foreclosure," and you click on the link, but there's no pricing information.

So you get on your phone as quick as you can, and you call your realtor, and you say, "Jason, I just found this new listing on Zillow. What can you tell me about it?" And that's when I say, "Ryan, first of all, calm down. And second of all, I have no idea what you're talking about." I'm calling this video "Everything You'll Ever Need to Know About Zillow Pre-Foreclosures in 90 Seconds."

Zillow Pre Foreclosures Are Not For Sale

Listen, Zillow pre-foreclosures are not for sale, at least not on the open market. All that that means is that the current homeowner has been served with what's called a notice of default notifying them of the bank's intentions to begin foreclosure proceedings, usually because of late payments, and it's just the beginning of a process that can literally take years. And the current homeowner still has the opportunity to make it right by catching up on their payments. So do yourself a favor and save yourself some headache and some heartache, and when you see Zillow pre-foreclosures, just ignore them.

My name is Jason Patton. I'm the listing specialist and broker associate with Berkshire Hathaway HomeServices, the Julie Hall Group. We buy and sell houses in Kosciusko and all the surrounding counties. We specialize in Warsaw, Indiana waterfront homes for sale, nd I might be a little bit biased, but I like to think we're the best at what we do.

Please give us a call at 800-218-8195 or email us at sold@juliehallgroup.com. Thanks, and we hope to hear from you soon.

Should I Replace My Carpet to Sell My House?

[VIDEO TRANSCRIPT] Hey, everybody. My name is Jason Patton. I'm a partner and the listing specialist here at Berkshire Hathaway HomeServices, and I wanted to take a second to talk to you about carpet.

So one of the questions that comes up time and time again when we're on a listing consultation is, "Hey, you see our carpet over there? Should we replace that?" And that's a great question. And for the sake of this video, I wish that I had a boilerplate answer for you, but the truth of the matter is it just depends.

So if your carpet was installed in 1974 and it's hunter green and THAT THICK, you're probably going to need to replace your carpet. Or if you own six dogs and a goat and they spend the majority of their time indoors, you're probably going to have to replace your carpet. 

Replacing Your Carpet Can Maximize Your Sale Price

Replacing your carpet is one of the easiest and most cost-effective ways to maximize the sale price of your home. But, that being said, it's not always necessary. If it's in relatively good shape and it doesn't stink, just have it professionally cleaned. Or if you don't want to mess with it at all, then just offer the buyer a carpet allowance. 

Look, like I said, my name is Jason Patton. We do a lot of business in northern Indiana, and, in the last two years, we've sold over 250 properties with sales volume totaling almost $40 million, and we would love the opportunity to sell your residential, commercial, or investment property for sale.

Please give us a call. Our phone number is 800-218-8195. Or email us at sold@juliehallgroup.com. We would love to answer any questions you have, and we would love to earn your business.

In the meantime, take a look at the Lake Wawasee homes for sale? The are beautiful and some of the best investment opportunities in Indiana.

Video Transcription: The facts are all right here in black and white. Right now in this market, sellers are doing cartwheels and popping bottles of champagne while home buyers are literally screaming into their pillows out of frustration. But the good news is that spring has sprung, and there's no denying the fact that the housing market is in full swing. My name is Jason Patton, we are Realtors in Warsaw Indiana, and this is your Kosciusko County Market Minute for May of 2018.

First, let's start off with some good news. Last month in Kosciusko County, 125 new real estate listings came on the market. That's up 45% from the previous month, and it's up 14% year over year. Now, this sort of movement is typical for this time of year, and we expect to see this trend continue throughout the summer months. As far as closed sales are concerned, 89 Kosciusko County real estate transactions made it all the way to the closing table last month. That's up 79% from the previous month, and that's up 29% year over year. But again, this type of movement is fairly typical for Kosciusko County in the spring.

Last month, the medium sale price for a home in Kosciusko County was $150,000. Now, that's up 16% from the previous month and it's up 3.5% year over year, but make no mistake. That number is most assuredly going to rise due in large part to the fact that some of these more expensive lake properties are going to start hitting the market.

And now, let's talk about SUPPLY, which, in my opinion, is the most important metric to track when you're trying to take the temperature of the market. Supply is measured in months, and essentially what it means is if we keep selling homes at the rate that we've been selling them, how long until we run out of homes to sell? So it's been said that six months is a balanced market with no advantage to the seller or the buyer. Supply under six months is a seller's market, and supply over six months is a buyer's market.

Well, let's take a look at where Kosciusko County was last month. So as you can see here, last month, across all price points, we ended up right at 4.5 months of supply, which is a modest seller's advantage. This number is up 2% from the previous month, but it's down 14% year over year. But here's the thing: This number is a little deceiving. Remember, I said that 4.5 months of supply was across all price points. So if you drop it down to houses available under $200,000, WE ONLY HAVE 2.2 months OF SUPPLY IN ALL OF KOSCIUSKO COUNTY. And you'll remember I said six months is a balanced market.

So we understand your frustration, and if you're one of those buyers who's banging their head against the wall because they can't find a house under $250,000 without somebody else writing an offer first, I have three pieces of advice for you.

Number one, get pre-approved. Number two, be vigilant and set realistic expectations for how far your money will go in this market. And number three, hire a bulldog buyer's agent to work on your behalf. If you need a referral, we've got an excellent one on our team. Again, my name is Jason Patton. I'm the listing specialist and broker associate with Berkshire Hathaway HomeServices, the Julie Hall group. If you need anything, please give us a call. We cover all of Kosciusko County and right now there are some GREAT Syracuse Indiana real estate deals! Our number is 800-218-8195. Or email us at sold@juliehallgroup.com. Thank you so much.

By: Jason Patton

Having been in this field for over 20 years now, I like to think myself as a true real estate expert. I've been quoted in reputable online publications like SuperMoney, and if the question is real estate related, I probably have the answer. That being said, one of the questions I answer the most is, "What is earnest money?"

Despite good intentions, northern Indiana real estate transactions aren’t always ideal. While one would think that a seller and a potential buyer would be able to agree on a price, sign the purchasing agreement, and trade the keys for a small down payment – it doesn’t always work that way. There are a few terms you have probably heard of including “buyer’s remorse” and “breach of contract.”

These and other issues have the potential to arise if there isn’t a fail safe to ensure that a buyer is serious about purchasing a home. Once an offer has been made, and the purchase contract has been signed, the buyer will need to put money down to prove that he/she is serious. This money is referred to as earnest money or an Earnest Money Deposit. 

What is an Earnest Money Deposit? 

An Earnest Money Deposit is a way for a buyer to prove he or she is committed to following through with the agreements spelled out in the purchase contract. As mentioned earlier, this is considered separate from the down payment. An Earnest Money Deposit is usually paid by check and is written to the listing real estate brokerage. The money is held in escrow for the seller until the closing is finalized. 

How much money is considered acceptable? 

The amount of the deposit varies based on each individual situation. Here are some factors that should be taken into consideration when determining how much money will be deposited in earnest: 

·      Is there a high level of interest on the property from other buyers?

·      Is the property priced aggressively?

·      How quickly is the buyer able to close on the property?

·      How much less is the buyer’s offer compared to the seller’s asking price?

·      Is the property being financed or is the offer cash? If financed, what type?

·      Are there already multiple offers on the property? 

Industry experts have varying opinions on how much an Earnest Money Deposit should be, however, most recommend somewhere between 2-5% of the purchase price. Occasionally, sellers will disregard the percentage amount and ask for a fixed amount between $1,000 to $10,000.

Legal limits vary from state to state regarding how much of a EMD is required/allowed. When a buyer provides little or no down payment (as is the case in certain VA and USDSA loans), a higher earnest deposit will usually be required to guarantee the buyer will follow through with their mortgage. A buyer can also increase their earnest money deposit in order to make their offer appear more attractive to the seller. 

Earnest Money Deposit Payment Methods 

After the purchase contract is signed, the buyer may write a personal check for any amount UNDER $5,000. Earnest Money Deposits over $5,000 must be in the form of certified funds (money order or certified check). Checks must be delivered to the listing brokerage within the time period specified in the purchase agreement. Again, this varies from state to state. (In Indiana delivery must occur no later than 48 hours from the date of acceptance unless otherwise stated in the purchase agreement.) 

Once received, the earnest money will be deposited into an escrow account owned by the listing real estate brokerage. That said, any check(s) must be written out to the listing real estate brokerage firm. Real Estate Brokerages are under strict regulations (state-by-state) that prohibit the Earnest Money Deposit from being deposited into a business account (commingling of funds). Instead, they are required to keep a separate account for funds in escrow. 

How to protect buyers and their Earnest Money Deposit?

First and foremost, a buyer should ask for a receipt from the real estate brokerage. The following should be included on the receipt: 

·      A copy of the check on the brokerage’s letterhead

·      The signature of the person who accepted the delivery of the check

·      The date and location of when/where the check was accepted

A buyer looking to close quickly should consider using a certified check for their Earnest Money Deposit. 

Is interest earned on an Earnest Money Deposit? 

When paying an Earnest Money Deposit, a buyer should remember that the money is deposited into an account and is considered an investment. Because the deposit is made in an escrow account, the deposit can earn interest. If the total equals more than $5,000 a buyer will need to complete the IRS Form W-9 in order to acquire the interest on their deposit. 

What happens to the deposit if the deal falls through? 

Occasionally, a sale will fall through. The buyer might not be able to secure a down payment or they find they're unable to qualify for a mortgage. Most often, after two parties have signed a purchase agreement the seller will remove the property from active status in the MLS.

If the buyer is unable to continue with the deal, the seller has lost the opportunity to market their home to other potential buyer resulting in lost time and money. However, keep in mind when this happens the buyer has most likely already paid for inspections and an appraisal so they are out time and money as well.

State purchase contracts are generally written to heavily favor the buyer. Again, this varies from state to state, but several contingencies usually exist within the contract to protect the buyer from losing their EMD. Some of these include: 

·      Inability of buyer to obtain a mortgage

·      Inability of buyer and seller to agree upon necessary repairs after inspections

·      Appraisal not meeting amount offered for purchase

·      Seller misrepresenting condition or withholding defects on Seller’s Disclosure

·      Seller unable to deliver possession of property on agreed upon date

·      Seller unable to deliver “free and clear” title (liens or encumbrances on the property)

·      Buyer discovery of additional required insurance (i.e. flood, natural disaster)

·      Buyer discover of undisclosed encroachments on property 

(The following red text only applies to the state of Indiana. I am not a lawyer. Please seek professional council in your own state regarding earnest money deposit refunds.)

For the most part, the only time a seller has a clear-cut path to LEGALLY keep an Earnest Money Deposit is if the buyer 1) gets cold feet and tries to back out of the contract due to buyer’s remorse, or 2) fails to cooperate with their own lender in such a way as to purposely harm the transaction.  

Typically, if something happens early on in the purchase process, a seller will give up their claim to the earnest money deposit and return it to the buyer. In doing so, the seller is able to expedite the process of re-listing their home on the MLS. Unfortunately, emotions can sometimes become involved and a peaceful solution is no longer possible. 

In the event both buyer and seller fail to concede the EMD, the agents representing both sides will attempt to arbitrate on behalf of their clients. If an agreement still can’t be reached, the holder of the funds (listing brokerage) will initial the “release process.” At this time the listing principal broker will notify all involved parties by certified mail of the brokerage’s “intent to distribute” the funds to the party specified in the letter.

If neither the seller nor the buyer initiates litigation or enters into a mutual release with 60 days of the date the certified letter was sent, the broker can then release the EMD to the party specified the certified letter.

What is the most important aspect of the earnest money deposit?

Many buyers are under the impression that the earnest money is an additional cost to purchasing the home – this is not true. The Earnest Money Deposit becomes part of the down payment at closing. If the deposit is larger than the required mortgage down payment, the buyer will receive the balance at the closing. 

In conclusion, an Earnest Money Deposit is a way for a buyer to prove they are serious about following through with the purchase of a property. If you pay a higher Earnest Money Deposit, your offer will often look better to the seller. Remember – all of the earnest money will be applied to the down payment if the offer is accepted. That said, a buyer should consider putting an amount that’s equivalent to their required mortgage down payment. If the offer is rejected, the check will be returned to the buyer without being deposited. 

For more information on northern Indiana real estate (like Barrington Hills Homes for Sale) call the Julie Hall Group – Berkshire Hathaway Home Services at (574) 267-7501.