I'm a builder and today I had something incredible happen. I built 5 homes in a high end subdivision in northwest Indiana and I had a total nightmare happen. I bought a window from my local supplier that I researched extensively and found nothing but positive on it, turns out that the windows permitted water through the seams. After $40,000 and many sleepless nights we found the problem and set about to totally take care of all of those involved. we replaced all of the windows that were bad and I kissed off ever having another customer from those that knew of the problem. Even though I did what I could to give my customer a good affordable product I felt like my name was ruined.

Today I bid a very nice home and the customer told my sales guy that he was good friends of one of those that I had replaced the windows for and one of the reasons that he called me was because he was told that I would stand behind anything no matter what it cost me. Before I heard that today I was sick because I thought I had lost an entire market of people that were associated with that subdivision. Sometimes it is very painful to do what is right but in the long haul when people know that you are a man of your word then things always seem to come back around to good things. I've always felt that it's never wrong to do the right thing no matter how much it hurts. 

Many people are passing up a great time to build right now because they fear the trial of going to their own banker and going through all the hoops simply to be rejected in the end. This task seems daunting to many so they won't even try to test the waters. So what are the keys to a smooth easy process that takes the fear out of meeting that giant slayer the banker?

1.       The easiest and most straight forward way is to find a bank that is friendly to new construction. Many people are way too loyal to a bank where they have a friend or relative that does their banking, using a bank that is committed to new construction normally will not affect that relationship at all. People believe that because they know their banker then that banker will be able to get the deal done but because of the policies of most banks the ability of your banker to do a loan is usually way out of their control. Simply finding a bank that is willing to do solid financing for new homes will make the procedure very simple without affecting your normal banking with a friend or simply someone a customer has worked with for a long period of time.

2.       So the obvious question is to find a bank that is doing new construction loans. The key is to find a builder or realtor that regularly does new construction. They will have a real knowledge of bankers that do these loans easily on a regular basis. There are banks that do these loans and accomplish  them for customers with many different credit ratings. Even those with lower credit scores can usually get a very fair loan. Rates are so low that even if you have to pay more because of a lower credit rating the rate will still be a very reasonable rate. 

3.       Normally a bank has a number of ways that they can arrange a loan to fit your needs that will be most expedient for your position in financing. Some of these ways are: a.fha loans that require only 3% down. These loans are a little more cumbersome and take more time to accomplish but are still very doable, b. 80%, 10%, 10% loans are structured so that  a customer puts 10% down and then the bank does a second mortgage for 10% percent after the first 80% mortgage. This is a great way for a buyer that has 10% down but can't get to the 20% that a lot of banks are asking for now. The beauty of this is that the new homeowner won't have to pay pmi insurance that is normally paid for anyone that can't reach the 20% down. c. Usually the banks that are doing new construction are the solid local banks, therefore they have the ability to keep these loans in house which means they are not selling the mortgage out to a secondary market which has many regulations that handicap a lot of loans. When the local bank keeps the loan in house then they can structure the mortgage in ways that will fit your needs and credit ratings. d. if a bank does sell your mortgage to the secondary market then a customer might be required to pay points. A point is simply 1% of the total mortgage. This might fit the needs of someone who has some extra cash but their credit rating isn't quite as good as they hope it would be or have had a rough couple of years but have gotten on their feet and are making a solid income once again, many of us have been there lately. These are just a few of the many options that a solid bank can often times provide to a customer.

4.        Make sure to explore the banks and mortgage brokers that provide services to many different incomes and credit ratings. Often times when our great local banks can' work out our mortgage then we take them right to one of our trusted mortgage brokers and they often get the deal done or work with a customer until their finances and credit rating permit them to buy new. Don't be upset or discouraged if it doesn't work out with the first bank your broker or Realtor sends you to.

5.       Just remember that banks especially local banks make a fair dollar on new construction and if they are in a solid condition then they will be eager to make you a loan if that is the way they are geared. Often times bankers assure you that they are set up to do new construction but they really aren't able to do those loans because of the decision making that is far above their reach. Be sure to talk to people who know the banking industry and know who to work with. Your local builder should know those people all to well and will be glad to work you through the process.  

6.         A customer should verify that a bank will do the construction loan and an end loan together and therefore the closing costs are typically way lower and the process is much smoother. A construction loan is simply the loan that happens when the builder is building the home. This loan grows as the house is built and the payouts often times are done once a month. This is a good way to go simply because the bank guards your interests and only pay out on the work that has been done on the home. Before the housing market dropped off this was less true and the banks didn't control it as well. Sometimes the banks cut the checks directly to the subcontractors to guarantee that they are being paid as the work is done. If a customer does use one bank for the the construction loan and another bank for the end loan make sure that you know from your Realtor or builder that both of these banks will have the ability to carry this out instead of getting 3 months into the process before you find out that they really don't have the ability to carry this type of loan out.

7.       Hopefully many customers will take advantage of this great time to build and will not let certain banks stand in their way of the American dream. Housing costs are lower , lot costs are typically way lower and there are great tax advantages for most people looking to build new. Go find a great builder that is competitive and build your new home.

Dan Steiner

We are steadily selling houses in this market but our great dilemna is in getting a bank that will finance the building process. Financing a construction loan is like expecting your taxes to go down. We stumble through bank after bank until we can convince our customer to use just 2 local banks that will do the construction loan and the end loan. We are putting into our contract that we strongly recommend using these 2 local banks.

Our average time for getting financing through starting with other banks is averaging 3 months, what a way to make our customers happy. Here's the scenario, 1.The customer comes and tells us they have a great banker with whom they have dealt with for years and he tells them he can take care of evrything for them. 2.The customer and our company get them all of the information in about a weeks time. 3.We wait 3 weeks while my wife calls them every 3 days. they say no problems, everything is going good. 4. The banker then says we need more information, they need blood samples and drug tests from our customer and us and our employees or whatever other silly thing they can think of. 5. We resubmit our info and we go into another 3 week circular flight pattern. 6. No problem says the friendly banker "all is good now". No call back after our repeated calls and we know that things smell a little toe-jammy. 7. Finally we reach the bank and they say we can give you a one month construction loan, (not too bad if a modular is showing up on your lot in a week). 8. Sorry we can't do better than that and we will not answer any more phone calls because we look really stupid for telling you we could make it happen.

I know there is some tongue in cheek coughed up here but the reality of that scenario is the rule and not the exception. Take the time to find a couple of banks that can get you approved quickly and within reason of your ability to finance. Find that banker hug em and send every home you wish to actually sell or build straight to them.

In our struggling to come out of this recession there is only one thing customers, realtors and builders should be screaming about and that is to relax the banking regulations that have swung the pendulum way outside the giant gong. The underwriters of the banking industry have shriveled up any real growth in the one industry that would quickly bring us out of the recession, and that is housing. If housing begins to recover everything else will be righted quickly.

Building growth in Northwest Indiana

 Unbridled, unchecked growth in real estate on the 2 coasts and unethical lending started us into this downward spiral that we face but we don't have to stay in this malaise. Northwest Indiana has a lot to promote and solidify in this volatile market. Are things bad? Of course they are but how has America pulled out of messes like this before? People who like to make things happen have stepped up and believed in something bigger and have dreamed of something better for all of us.

I am a builder in Northwest Indiana and we have had a beehive of new customers lately. I've done a lot of thinking as to why that might be and I don't have time to share all of those things but I will say it is because we are loving what we do and are pushing very hard. We are also working at unconventional ways to be successful. People talking to us sense integrity, immediacy and flat out hard work to be better than what is expected of us. We are blessed but we believe in great intensity behind the blessing. So what should we and our leaders be perpetuating in terms of real growth in Northwest Indiana?

1. Our governor and state pols have eliminated double taxation on our businesses, our state stands in a unique position because of this. The rest of the country is celebrating in our new found socialism but our state leaders have seen the value in the fact that business creates new and real jobs that increase our standard of living for all involved. Most people live very affluently in this country because of the idea that every person who works hard and produces gets to live the American dream.

2. Property taxes have been set at levels well below our neighboring states. Our state pols know that limited government and lower taxes produce growth. I was delighted to see a number of counties vote on eliminating positions that can be done by other govt. entities. To further our growth the pols set property taxes at 1% for residential and slightly higher for business. What a stroke of genius. This means that when companies are looking for states where they can grow then they will obviously consider Indiana.

3. State sales taxes are below neighboring states. If you were to work in Chicago and considering where you where to build a home then it seems apparent that you would look at Northwest Indiana since it is as close to downtown Chicago and taxes are considerably less than living in the land of Lincoln, (which is a misnomer these days).

4. We have a plethora of great safe school systems that believe in quality education but not in spending unlimited amounts of tax dollars on it. In the Chicago area you almost have to pay for a Catholic education to get that kind of quality.

5. Good steady growth that reflects itself in our banks and and many other institutions in Indiana that haven't sold out for the quick dollar which we have seen in the two coasts that brought this whole mess on. I think back to when Greenspan was warning the 2 coasts that they were shipwrecking the country and that they needed to change their ways, (which they didn't). You can lay the blame on President Bush if you like but I heard many national pols say everything was fine and that included many Dem's that were in very influential positions. Greenspan and President Bush both warned of the impending crisis after 6 years of great growth but they were largely ignored by the elite in congress.

6. Big business is spending huge dollars in Northwest Indiana to expand growth. If you take what big business is spending in Northwest Indiana and multiply it times ten then that is the real effect of money that is fueling our growth in the region. This money extends out to everyone that is employed in this region. Let's encourage our leaders to set the standard for growth and leadership in these hard times because there is a silver lining in these gray clouds. Show all items Displaying 1 / 1 All 1 New 1 Sort by: List Order Date Title Author Filter by category: Northwest Indiana can build new and vibrant growth 1 Mark feed as read View feed properties...

I have never sold a pre-sold through a realtor, I have offered very good money for selling a pre-sold but have yet to sell one through a realtor. I offer a very nice package at a very reasonable price and a lot of realtors know that but no one will sell one on their own. Little do they know that when things are good I would give them all of my business which is highly lucrative. Please tell me what I am missing. 

We have been fortunate to sell 10 pre sold homes this year and we're thankful because otherwise I'm not sure we would have made it. These are some things we did that I believe help set us apart. Heres what we are doing.

1. People are shopping on the internet. Have a good website and make yourself visible on search engines. It's hard to get on the SEO side but anyone can buy into the PPC side. Take time to learn what all of this means and how you can get there.

2. Advertise as cheaply but most effectively as you can. We are in a once a week shopper that goes in stores as a free shopper. It costs us to advertise but it still is a lot less than the newspaper. We are sending out monthly post cards and e-mails to everyone who is in our list of anyone that we have a contact with. We are showing off our new product continually and offering incentives for any of our past customers.

3. Give them fair honest rock solid pricing. Don't let greed control you. Do the job for what you think will  help you survive through this market.

4. Call people back and get them pricing as fast as you possibly can.

5.  Do special things for them like designing the house the way they want it and by giving them a few extra freebies that you sense that they really want. We continually give away granite countertops, or free wood flooring, upgraded bathrooms, crown, treys and backyard ammenities. We don,t do all of those together but we will always do at least one of them and if I haven,t sold anything I will give away 2 or 3 of them.

6. You have to advertise enough to get your company known locally. Whether it's billboards, newspaper, radio, or t.v. you have to spend some money to get people to check you out. Lot's of builders and realtors get too cheap and therefore exclude themselves from the vast majority of people who would check them out. You can only sell a product if people are looking at you and considering you a viable way to go.