Paula Henry

Angelo -

The answer depends on whether there are currently any exemptions filed on the home you are looking at. The taxes you describe seem high and I would say there are probably not any exemptions filed. If that is the case, then, yes, the taxes will go lower once you own the home and file exemptions.

On a property priced at $99,000, you would have exemptions of $48,000, therefore, only paying taxes on $51,000. However, you will not see the benefit of lower taxes for over a year. Since taxes in Indianapolis are paid in arrears. So, if you were to close today on this home and file your exemptions, you would not see a reduction in the taxes until 2009 taxes, payable in 2010. By then, the new tax cap will be in effect.

All property taxes will be affected by the cap. If the home is owner occupied the taxes for 2009, payable in 2010 will be capped at 1.5% of asssessd value. 2010 taxes, payable in 2011, will cap at 1% for owner occupied homes. By then your taxes would be about $1000. a year, assumng the assessed value is also $99,900. - Fri Dec 19 2008, 05:06

Hi Ralph -

Relocating when you know nothing about the city is always a cause for concern. There are many areas which may fit your criteria - off the top of my head, there are a couple of areas which come to mind. West in the Hendricks County area, near Plainfield, you will find small towns which give you good freeway access (I-70) and the amenities, like shopping mall and groceries near by.

Northwest, in Boone County or western Hendricks County is another great area, northwest of Zionsville. This is a new area of growth for the city, so you might have to wait a while for a shopping mall, but you'll find everything else you need close. Easy freeway access into the city via I-65.

There are some great smaller cities North and Norteast also, but traffic is a concern.

Hope that gives you some ideas! Let me know if you would like more information. I offer a relocation package I'd be happy to send. - Thu Dec 11 2008, 08:23

Mike -

Let me tell you a story here -

I represented the buyer of a home. There were several things wrong with the home. The listing agent sent their contractor who estimated a price of $200. for repairs to a bathroom and another 250. te replace the subfloor in another bathroom.

I met the guy at the home. His suggestion for bathroom #1 was to put in a new shower liner. When I asked about a potential leak behind the wall, he said, the damage is already done. He had no intention of taking the current shower liner out to examine the wall, plumbing or damage.

For the subfloor - oh, yeah, we can raise the bathtub and slip a piece of board under there.

I got my own contaractor - the cost $3800.00, which was held in escrow for my buyers to get the work done professionally by someone of their choice. There were additional costs for electrical and a few other items, but my clients received a total of $5200.00.

Had they went with the listing agent to buy this home, what do you think they would have received? - Fri Jul 11 2008, 08:17

Mike -

You never know what the agreement is between the listing agent and their client - so, no, the seller may not save money if their agent represents you.

The key is, right now, the agent is THEIR agent and represents the seller's interest, not yours. I had this discussion with an agent in my office yesterday. Any good buyer's agent will save you more than a few % difference in price.

Consider what happens in the inspection phase of the contract, or the actual contract. There are several places within the contract which specify who will pay for certain costs. Who decides who pays for what if you are both represented by the same agent? Do you know the contract well enough to determine what you should ask the seller to pay?

The seller's agent has an established relationship with the seller. While we all want to create win-win solutions, I. personally believe Limited Agency is the most difficult transaction to work.

Best,
Paula Henry - Fri Jul 11 2008, 07:33

Mike -

When you are pre-approved, it is for the rate available at the time of pre-approval, so yes, it could change. I have seen rates differ from morning to afternoon on the same day.

Your rate is not set until you lock the rate. Most lenders require an address to lock the rate. Some will do "address to be determined", but once you lock, you need to find the home you want.

If you find an incredible rate, make sure your lock is long enough to get the loan closed. Sometimes, you can pay extra to lock longer.

Best,
Paula Henry - Fri Jul 11 2008, 07:40

Tara -

Lease Options are tricky when you are trying to determine future value. Depending on how much, if any, of the monthly payment is being contributed to your down payment and/or closing costs at the end of the option period, could influence the actual amount paid for the property.

If the price is set up-front and property values go down, you could lose. If property values go up, you win. If, however, the monthly amount being contributed toward your downpayment and/or closing costs is sufficient, it could balance the price of the home.

One thing to remember - you will not be able to get a loan for more than the appraised value.

Here's some additional things to consider:

Is the monthly payment higher than normal for the area?
How much are you receiving each month toward down payment/closing costs?
Do you know what the price point is for recent comparable sales?
Do you have specific conditions built into the contract, i.e., if after six months you discover there is severe termite damage, or the home or land takes on water during a severe storm, do you have recourse to get a refund of your down payment?

As far as value - you can always make the price to be determined by appraisal at the time of settlement.

I have written a few articles about lease option for both buyers and sellers which you can access with the link to my site below. Search for "lease option".

Good Luck! - Fri Jun 20 2008, 17:10