Buying a house in Indiana for the first time can be stressful. Not only do you need to find the perfect home within budget, but you’ll likely need to secure financing too.
The home buying process does not stop there. Due to the nature of seasonal fluctuations, it is also important to assess whether you are entering the market at the right time. You’ll also need to evaluate what property taxes you’ll need to pay, as well as the costs associated with closing.
In order to help you along the way, we’ve created an in-depth guide on buying a house in Indiana.
How to Find an Indiana Buyer’s Agent
Your first port of call when buying a house in Indiana should be with an experienced real estate agent that knows the local housing market well. They’ll be able to guide you through the entire home buying process.
This begins by finding out what your goals are, such as the specific Indiana city or town you want to live in. They’ll also be able to suggest suitable home buyer programs such as those aimed at low-income and first-time buyers.
It is also important to choose a real estate agent that has extensive experience in closing deals in your chosen Indiana region. A top-notch agent will be able to evaluate market timing to ensure that you get the best price possible.
Clever can connect you with a reputable Indiana agent that can guide you through the buying process. If you purchase a property with a sale price of $150,000 or more, you’ll likely qualify for the Clever Home Buyer Rebate program.
Learn More: What Does a Real Estate Agent Do for a Buyer?
Indiana Housing Market Forecast for 2019 — and Beyond
Although growth is expected to slow down over the next 12 months, prices are still expected to grow by an additional 5.4%. This once again outperforms the U.S. average of 4.1%. In most cases, this would illustrate that the Indiana housing market is potentially unsuitable for low-income and first-time buyers.
However, this couldn’t be further from the truth. The median property prices currently amount to just $144,600. In comparison to the national average of $226,700, this makes properties in Indiana very affordable.
It is also important to remember that housing market forecasts should be assessed on a regional basis, as opposed to just state-wide. This is because each regional housing market is often independent of one another.
For example, house prices in Indianapolis grew at a remarkable 15.1% last year, with a further increase of 7.2% in the next 12 months. On the other hand, although still stronger than the national average, Columbus properties grew by 8.4% last year, with a 3.8% increase forecasted for next year.
Best Time of Year to Buy a Home in Indiana
Although we have discussed the strength of the Indiana real estate space, it is also important to make some considerations about timing. Each housing market in the U.S. goes through seasonal fluctuations.
Indiana home buyers are typically in full force around May. This is especially the case for families, who are want to complete the process well before the school year resumes at the end of August.
As a buyer, this means that competition is higher, and thus, sellers can demand higher prices. This is further supported by historical listing times, which shows that Indiana properties sell far quicker in the early summer months.
By instead starting the home buying process once the summers months have passed, you stand a much better chance of getting the best price possible on your dream home. On the other hand, seasonal fluctuations can also occur on a regional basis. This is why you should find a reputable agent that knows your specific housing market well, as they’ll be able to assist with timing.
Learn More: When Is the Best Time to Buy a House in Indiana?
Calculate Your Property Taxes in Indiana
Property taxes are often overlooked during the home buying process. These are annual taxes that are collected at a county level in order to pay for local services. This includes the costs linked to constructing and maintaining roads and highways, and to help pay for local government salaries.
The amount that you pay is usually determined by the assessed value of your property. Your local county assessor will use a process known as "mass appraisal." This means that the assessor will look at similar properties in your area, as well as assessing the property’s age and condition.
Once your property has had its assessed value determined, the amount that you pay will be calculated against the property tax rate levied in your specific district. This can vary quite considerably based on where you live.
For example, property taxes in Brown county are between 1.2238 and 1.5362, depending on the specific district that your home is situated. Over in Jennings County, while North Vernon properties are subject to rates of 3.2622, those in Marion pay just 1.9414.
This variance in tax rates highlights the importance of assessing how much you are likely to pay. An experienced real estate agent that is based in Indiana will have a full grasp of the property tax framework, so they’ll be able to explain what you’re likely to pay.
In the meantime, STATS Indiana hosts a really useful tool that gives you a breakdown of property tax rates at both a county and district level.
Learn More: How to Calculate Property Taxes
How Much Are Closing Costs for Home Buyers in Indiana?
Closing costs are another area of the home buying process that are often overlooked. These are the specific costs associated with closing the deal. This can include costs such as escrow fees, realtor commissions, real estate transfer taxes, and more.
In general, you as the buyer should expect to pay in the region of 3% of the final sale price. If you were to purchase a property at the Indiana median home value of $144,600, then you’d pay approximately $4,338.
Most closing costs require payment upfront, meaning that you will need to ensure you have sufficient savings at your disposal. This is especially true when you consider that the average time it takes to close (from the moment an offer is accepted) is around a month.
When it comes to real estate transfer taxes — which are state-wide fees charged to record a change of property ownership — were recently abolished in Indiana.
By using an experienced real estate agent based in Indiana, they’ll be able to guide you through all of the necessary costs you’re likely to encounter. This ensures that you have the required cash saved up to avoid any possible disruptions along the way.
Learn More: Who Pays Closing Costs on a House?
Clever Will Help Pay Your Closing Costs!
If you’ve read our guide up to this point, then you’ll know that the Indiana home buying process can be a costly one. Many buyers are unaware of their financial obligations when it comes to things like property taxes and closing costs. This is why you should always find a reputable real estate agent that has extensive knowledge of the Indiana housing market.
By using a Clever Partner Agent, you also stand the chance of getting a rebate on your purchase. The Clever Home Buyer Rebate program offers a $1,000 rebate on property purchases of $150,000 or more. This could go towards many of the closing costs outlined earlier.
After Clever connects you with a top-notch Indiana agent, you’ll also be able to get on-demand viewings. This could be crucial if you’re looking to buy during the busy season.
To find out more about how a Clever Partner Agent can guide you through the Indiana home buying process, simply fill out our online form.