Living in Lincoln Park Blog

I don’t typically send my blog readers to others’ articles without at least sharing my own thoughts and opinions, but this article in the Wall Street Journal by Laura Saunders really seems to cover everything. The increased numbers should have a favorable effect in the Chicago real estate market because our average prices are substantially higher than most parts of the country

I’m still not sure if I agree or disagree with the extension. On the one hand, it should continue to give buyers incentive to buy a new home and stimulate portions of the economy. On the other hand, are we supporting portions of the economy on a weak foundation? Will buyers continue to hold off on their buying decisions, waiting to see what other incentives the government will throw at them?

What are your thoughts?

Cold weather is here, and your Chicago home utility bill may be bearing the brunt of the weather.  To get started, you may want to check out how efficient your home is now. There are a few simple things to reduce the amount of money you have to pay out this winter.

Your windows are the most common place that your home is vulnerable to the elements.  Here are a few things you can do to minimize energy loss around your windows:

Find The Source Of The Leak

In order to know where repairs need to be made, you have to find the source of the leak.  One way is to feel for drafts along all the seams of the windows.  If the leak is too small to be felt by your hands, you can hold a candle near each window.  When the flame changes, you’ve found the leak.

Seal the Windows

You can use silicone caulking or weatherstripping to seal the seams of the window.  Both can be found in most Chicago home improvement stores.  You’ll need to buy a caulking gun to apply the silicone.

To use a caulking gun, you simply insert the caulk into the gun.  Slice off the tip of the caulking tube, and gently squeeze the handle to push the caulk out.  Maintain an even pressure as you apply the silicone caulking.  This way, you’ll get a thin even line of caulking.

If you have old, wood windows you may need to seal the window off completely with plastic.  Fortunately, you can buy plastic sheeting with double-sided tape already attached from any hardware store.  To apply the plastic to your windows:

• Clean the windows with warm soapy water.
• Measure the window and pre-cut the plastic.
• Remove the non-stick backing off the tape.  Attach it along one corner of the window. Continue applying it to the rest of the window.
• Use a blow-dryer to shrink any wrinkles in the plastic.

By insulating your Chicago home against the cold weather, you can avoid spending a lot of money on your utilities this winter.

The more weather proofing you do early in the season, the more you’ll enjoy a warmer, more comfortable and more cost efficient home throughout the upcoming winter months.

More questions? Feel free to email me at Doug@LincolnParkLiving.com and will do what I can to help!

If you have a Lincoln Park home for sale or you’re thinking about buying a home to flip it, here’s something to keep in mind: walking distance. Why? Because a new study commissioned by CEOs for Citiesshows that homes within walking distance of amenities sell for more. And after all, isn’t that a large part of the reason for living in an urban market – accessibility to all the wonderful neighborhood amenities!

More & more people are going green! More people are walking or taking public transportation whenever possible and trying to avoid driving. However, not all urban homes are convenient to the neighborhood amenities. So, if there is a Lincoln Park home for sale within walking distance to schools, parks, restaurants, coffee shops, libraries and shopping areas, it’s more likely to be snatched up…and at a higher price than other less conveniently located homes.

This is true even in the current economy. “Walk-ability,” says Joseph Cortright, the man who analyzed the data, “adds value to residential property just as additional square footage, bedrooms, bathrooms and other amenities do.”

In many places, walk-ability can lead to a sales price of as much as $34,000 more than in areas where you can’t get around without a car. Of course, this isn’t true for every city. In Las Vegas, more walk-able areas correlated to places with lower housing cost. Bakersfield, California, didn’t show any difference at all.

Why is being able to walk around such a big deal? Several reasons:

• The more walk-able neighborhoods usually have better mass transit systems.
• People living in walk-able areas generally weigh less, by at least seven pounds.
• Less money is spent on gas.
• Car owners don’t need to drive as often, and when they do, they don’t have to go as far.
• Quality of life

What does this mean for you, the homeowner? If you live in a walk-able neighborhood and have a Lincoln Park home for sale, you have an excellent selling point. Make sure you tell your real estate agent how easy it is to get around. With this knowledge, they can market your house towards all those people looking to use a little bit more leg power and a little bit less engine power. What’s your walk score?

Many who have put their Chicago home up for sale in the past year are still waiting to put that “Sold” sign in the yard.  If this is you, don’t panic! There’s still hope for closing the sale this year.

 According to the National Association of REALTORS®, home sales have risen five months in a row. Great news for everyone currently in the real estate market. Why are they rising? A few reasons:

• Mortgage interest rates are very low.
• Home prices are stabilizing to become more affordable.
• Buyers have a large selection to choose from, which encourages buyers that might otherwise have held out.
• First time buyers should be rushing to buy before the $8,000 tax credit ends, which means closing the deal before November of this year.

 Here are a few tips to help you get your Chicago home sold before the year is up:

• Pricing- The key for most home buyers seems to be the price. In fact, lower priced homes are selling the fastest. Go over your pricing with your real estate agent. Discuss whether you can afford to drop your home price, and if so, by how much.
• Valuation – A major reason for some of the sales falling through is because appraisals were performed by home appraisers outside of the area. Unfortunately, many of them appraised homes lower than the price the buyers and sellers had negotiated. Because of this, Freddie Mac and Fannie Mae push for appraisals to be done by home appraisers in the local area and appraisers who are more experienced with the local area’s housing trends and market. So, when it’s time to have your house evaluated, choose someone in your area, and ask that the buyer does the same.
• Competition – Because there is so much competition, it’s always a good idea to take one last look at your Chicago home. Take your real estate agent with you and go over the home with a fine-toothed comb. What can you do to up the value? What can you do to make it more appealing?

 Lastly, don’t give up hope! You have a great house to sell and buyers are looking. Do your best, listen to your agent and stay relaxed.

Are you looking to buy new construction?  Many people are, but just as many aren’t aware that their newly built Lincoln Park home comes with options and add-ons.  In addition, they see a handsome price on new construction and think they’ve stepped into an unbelievable deal, not understanding that the price they’re looking at is for “bare bones.” 

Here are just a few of the options and upgrades you might want to have your real estate agent talk about with your chosen builder:

• Flooring – The “standard” for flooring is cheaper carpet and thinner padding.  If you’re going for hardwood floors, you also may not get what you envision.  An important thing to keep in mind is that most builders make their money on the upgrades and options.  While they may offer upgrades for high quality flooring, it may actually be cheaper for you to buy it yourself later than through the builder.  Do your research and either have your real estate agent try to negotiate down to a price closer to what it would cost you, or have the builder use the cheapest material possible and ask them not to glue or tack it down.
• Plumbing and fixtures - Whether you want improvements or additional plumbing and fixtures (such as for a wet bar or a different location for the washer and dryer), these are easier to do before the Lincoln Park home is finished.
• Appliances - Check to see what brand and model cooking appliances the builder expects to use as well as what your refrigeration options are. Most times, your real estate agent can negotiate a better model, if not your preferred brand.
• Value added goodies - steam showers, wine cellars & refrigerators, surround sound & whole house audio/video wiring, heated floors in the lower level and under all stone floors, to name just a few.

Make sure you understand your options, upgrade packages and deals for your new Lincoln Park home before signing the contract! And most importantly, keep in mind that most builders would rather “give” you upgrades than negotiate the price!

 If you’re thinking of buying new construction, let me negotiate the best price, and all the details, for you.  Call me before you start shopping for your new construction home. The best ways to reach me are via my mobile – 312.953.8685 – or email –   Doug@LincolnParkLiving.com.

If you’re looking to get a good deal by buying a foreclosure in Chicago, keep in mind that many of the homeowners not only didn’t have money for the mortgage; they probably didn’t have money for the upkeep of the house either.  If you’ve found a home you’re interested in, here’s a short checklist to follow even before you decide to contact a home inspector.

Structure

For some Chicago foreclosures, structure is a definite issue.  Pay close attention to the following, as they may indicate more severe problems:

• Are the interior walls in good condition?  Any cracks and stains?
• What’s going on in the basement – water damage, visible cracking
• Are the floors in good condition?  What are they made of?  Some floors are made of substandard materials, unsafe for more than casual use.
• Is the roof in good repair & what type of a roof is it – rubber, tar, shingle?
• Are the gutters, downspouts and flashing in good condition?
• Do the doors and windows stick or glide freely?  When closed, do they block out weather or is there a draft?

Water

• Is there mold and mildew on the basement walls or a dark, scaly surface?  This can indicate too much moisture, and can mean a leak in the foundation.
• Is the ceiling bubbling, have brown spots, patches or new paint?  New paint might be a sign of covering up stains from water leaks.
• Are there drainpipes and downspouts around the foundation?  Do they lead away from the foundation?  Are there cracks or a lot of weeds around the area? 

Inside Hazards

Many older houses haven’t been updated or may not be up to code.  Here are some of the more common issues:

• Is there asbestos around exposed pipes for the furnace, heating system or water heater?
• Can you see any signs of vermin or insects?  Mice, termites, cockroaches and bats all leave signs of habitation behind.

It might even be worth having an inspection prior to writing an offer, this way you already have a sense of what costs to expect and it might give you a head start if you’re looking at doing an FHA loan with the 203k rehab loan for the renovations. While doing multiple inspections can get expensive if you’ve found multiple homes of interest, I think it’s better to be as informed as you can when writing an offer to purchase a foreclosure in Chicago. Personally, I like to use Bruce Niedzwiedz at Inspectorbruce@aol.com. His reports are very thorough and he can do or connect you with other specific types of inspections – mold, radon, lead based paint, etc.

Although there are many other things to consider when looking purchasing a Chicago foreclosure, these three are essential to a healthy living environment.  Most importantly, make sure you’re an informed buyer.  If you’re looking to buy a foreclosed home, I can help.  Call me on my mobile – 312.953.8685 – or email me at Doug@LincolnParkLiving.com for more information.

The other day, I had the privilege of being interviewed by Mark Saxenmeyer of Fox Chicago News. He was doing a story on the road to recovery in Lincoln Park. So, that got me looking at the sales numbers and comparing how prices are doing in the 1st 1/2 of 2009 vs all of 2008. While condo and multi unit prices are slightly down, single family home prices are up. Not bad given all that we’ve been hearing over the past 12+ months. I think this reinforces what I’ve been saying for some time, real estate is a local business. The national numbers, even the Chicago metro numbers, provide general, broad information and don’t truly reflect what might be happening in our own backyard.

So, if you really want to know what’s going on in your back yard, how your home value is faring in this crazy economy, consult with your local real estate professional. If you don’t already have one, I would be happy to help!

There are several indications that the new stimulus bill passed by Congress will have a positive influence on the struggling housing market. If you are considering buying a home in Chicago for the first time, the stimulus plan may help make that happen.

How the Stimulus Bill Stimulates the Bottom Line

The biggest effect the stimulus plan will have on new home buyers is a tax incentive. We all want to get more money back on our tax returns and the stimulus bill has an $8,000 tax credit for first-time home buyers purchasing a home in Chicago.

How You Qualify

In order to qualify for the stimulus tax incentive you must:

• Not have owned a home in the past three years.
• Use the new home as your primary residence.
• Have gross income of less than $75,000 per person or $150,000 per couple.
• Report the purchase on your income tax filings.  Should you sell your home within the first 3 years of owning, you will need to re-pay all or a portion of the stimulus money. After 3 years, all of the stimulus money is yours! It’s my understanding that if you owe money to the IRS, that amount is deducted from the $8,000 incentive and you would be refunded the difference! Not a bad incentive!!

Stimulating Interest on Lincoln Park Home Purchases

The stimulus bill also gives first-time home buyers a chance to get into those big ticket houses. Houses with market values over $417,000 will be eligible for lower interest rates to make them more affordable. The luxury home industry has stagnated in the failing real estate market and this should give it a vital boost.

President Obama’s stimulus plan is serious about improving the housing market and has a lot to offer the first time buyer. The bill gives people looking to buy a home in Lincoln Park reason to hope. What are you waiting for…all of the ingredients are here, waiting for you to take advantage of them!

Finally, someone has deciphered the 1st time home buyer tax credit! I’ve been wanting to share this information for some time, but it seemed to be a moving target. We’ve heard that the $8,000 was a credit, or a deduction on your taxes to a loan to be paid off over 15 years. According to the article, “it looks like it’s a credit, which is typically more valuable than a deduction, since it eliminates your taxes on a dollar-for-dollar basis — and in this case, you may get it even if you don’t owe any taxes.”

So, if you’re looking to jump into the Chicago real estate market, now is an excellent time to do so…rates are still low, prices are great and if you meet the income criteria you can take advantage of the $8,000 credit.

We’ve all read the articles about how bad the national real estate market is. And we have had conversations about Chicago real estate and this being a great time to buy. While I see both sides, I lean towards the “great time to buy side.” And though there are some great deals to be had, the wild card now seems to be the lenders. In the past, buyers were able to tell the lenders what they were willing to put down – 5%, 10%, even 0% + throw in the closing costs and go for a 103% loan! Or to make it even more interesting, “let’s do an interest only loan.”

Oh how the times have changed! Now the loan criteria seems to be a moving target. As I have been telling my buyers looking for Chicago real estate over the past few months, we are no longer in a market where you can say “here’s the loan I want,” or “here’s what I’m willing to put as a down payment.” The ability to get a loan is now pretty much dictated by the lender…they will tell you how much of a down payment you will have to come up with in order to get a loan.

So before you go out and find the home of your dreams, make sure that you can get a loan. Mortgage calculators will give you a sense of what you can afford, but it is up to the lenders to make it happen.