Living in Lincoln Park Blog

I usually write about Chicago real estate &  mortgages, after all, that is what I do.  Sometimes, however, I come upon a subject that  is worth moving outside of the normal bounds of expertise.  In light of the wet summer that we have had, I’ve come across more and more loans where homeowners are dealing with the  unfortunate aftermath of flooding in the basement.  For some homes it is a chronic issue, but for many it is only a problem when we deal with a Biblical rainfall that saturates the ground beyond the point that any drainage system can counteract.  Either way the end result can range from nuisance clean up with a shop vac to massive damage requiring complete removal of carpet,  dry wall and possibly even mold remediation.  Most of the time, the floor bears the brunt of the onslaught. 

Let me preface the unveiling of my particular solution by saying that I do not have a problem in my home.  I have been spared the bailing of many other Chicagoans, but I have 3 kids, which can put a floor through the punishment of a hurricane.  Additionally, I am ex-military and, therefore, habitually plan for any contingency and visions of soggy musty padding provided me sufficient incentive to avoid a full carpet job.  Bare concrete not being an option, I moved to the Internet for some ideas and there I came upon the essence of basement pragmatism, carpet tiles.

I am sure as you read this, you are thinking that this is nothing new, and it truly is not.  Home Depot, Lowes and many other outlets offer carpet tiles  that work.  The problem is in the economics.  I found retail purchasing of carpet tiles to be pretty outrageous from a cost standpoint, so I ventured further into cyberspace and experienced a eureka moment.  I came upon dealers who sell odd commercial lots of industrial carpet tiles at a major discount. 

The pros of this definitely outweigh the single drawback of limited selection.  I have found these to be a fantastic value with some costing as little as $0.50 a square foot.  They wear like iron as they are designed and constructed for extremely heavy traffic.  Installation is a breeze and can be done with a tape measure, straight edge and utility knife or strong scissors.  Best of all, if a tile or section of tiles get saturated with fluid from flooding or a spilled drink, you can merely de-install the affected pieces, dry them out and reinstall when dry.  In the case of major flooding, you can quickly pull up the entire floor. 

As I said, this was a good solution for me.  It is not for everyone and clearly does not offer the comfort of a professionally installed single piece of carpeting.  As I drive through areas like Westchester, which was hit badly by the recent rain, and see heaps of ruined carpeting and padding, I must say that I do pat myself on the back knowing that this is something against which I am protected.  Hopefully you will be as well. 

Some of the dealers who I shopped are as follows:

• Carpet Corporation of America, Inc.
• Owen Carpet
• iCarpetiles.com

Good news for young people who are considering Chicago as their new home.  A report recently published by Kiplinger rates Chicago #3 out of 10 as one of the Great Cities for Young Adults!

Criteria such as healthy economies, job growth, cost of living, culture, night life and transportation were considered and Chicago was considered ‘an exceptional value, packing the punch of Manhattan at nearly half the cost’.Catch the full story …

…then give us a call.  We’ll help you find one of the best homes in one of the best cities for young adults!

What prevents someone from taking action is usually fear.  And fear comes from a lack of understanding.

According to the Multiple Listing Service and the Case Schiller Price Index the price of Chicago homes is at 2002 levels.  Even so, many buyers don’t seem to realize that in the current environment of volatile mortgage rates, waiting for prices to go lower can actually work against them.  Buyers should be less concerned with the PRICE of the home and more concerned with getting the best total COST (home price plus expense of financing).

If home prices have fallen to pre-bubble prices, how can the COST today be much less expensive than it was then?  Because in 2002 the annual average mortgage interest rates on a 30 year mortgage was 6.54%.  Today that rate is much lower and therefore the total COST of purchasing your Lincoln Park home today is significantly less.

We are passionate about helping people find their new home.  And we take pride in helping you understand the home buying process.  We want to earn your trust, your respect and your business. Give us a call today to discuss the advantages of getting off the real estate fence!

It’s an interesting business, helping people to fulfill their dreams of home ownership in Lincoln Park. The number of people becoming real estate agents has been increasing for a number of years and with this increase in agent competition, it becomes even more important for buyers and sellers to have confidence and trust in their agent’s integrity and professionalism. You are entrusting Realtor®s to help you with one of the largest assets you may ever own.

In today’s crazy economy, I’m seeing agents of extremes…those that are willing to “give away” their services in the hopes of making it up in the long run, and those such as myself…viewing this market as an opportunity to re-invent themselves and how they conduct their business. Fast disappearing are the days when agents will spend all their money & time on the curious sellers hoping to get more for their home than the market will bear or buyers who “will know the right house when they see it,” yet haven’t taken the time to truly define what features their perfect home should include.

I am planning on being in the real estate business for the long term. That’s why I am constantly evaluating my business model, refining what works and eliminating what’s not. Are you curious to learn how I will help you sell or buy your next home? Email me and we can set up a time to talk.

TI time is here again and lenders throughout Chicago and the surrounding suburbs are cringing as they prepare to explain to home buyers and home owners in the midst of a refinance that they will have to bring a little more to the closing.

What, might you ask, is TI and why does it affect the bottom line? Well, TI stands for Title Indemnity and it provides a means for title companies to ensure that property taxes for transactions occurring at the end of the property tax billing cycle are paid in full.  While this should be as simple as looking at a property tax bill and paying the balance, it is more complex that that.  In many counties, the tax period has ended without actual property tax bills available to pay.  So the installment is due, but without a tax bill, there is no way to figure out the required payment.  The solution is to collect a best guess amount plus a cushion in anticipation of the bill and paying it when it comes due.

To execute a TI, a title company collects a multiplier of the last installment and holds it in escrow until the tax bill comes out.  The reason they collect a multiplier is to ensure they have a sufficient cushion to account for any tax increases.  The total amount is typically around 1.5%, but some title companies, such as Chicago Title, will collect as much as 2.5% of the last installment.  As an example, if the last tax bill was $5,000, you could be required to escrow as much as $12,500 with the title company for the period from the closing of your mortgage loan to the day the tax bills become available.  In most counties, like DuPage and Kane, this is only a month or so.  In places like Cook County, however, this period can extend for up to 5 months; so planning for this inconvenient aspect of real estate finance is a must.

Let me know if you need help navigating the lending process. And if you’re still in the home exploration process, there’s never a better time to ramp up your home search!

According to the National Association of Realtors®, approximately 90% of all home buyers*  begin their search on the internet. With all those companies and individual agents vying for such limited shelf space, how do you make sure you’re selecting the best agent to help you find your new home? As an internet savvy Realtor®, I’ve likened the internet home search to a funnel, National aggregators like Realtor®.com are at the widest part, then corporate sites and finally, individual agent sites being at the smallest end of the funnel. This means buyers start with generic searches and work their way to an individual.

With the “National sites” you can probably click through to schedule an appointment with a listing agent, but keep in mind, they represent the seller, not you, the buyer. The company sites are trying to get you to register or request a showing for one of their listings; odds are, they will be referring you to one of their agents and you’ll be you’ll have no idea what that agents’ level of experience is.

With the individual sites, you’re communicating directly with the person that you will actually be working with. You have the chance to build some rapport, making sure that your wants & needs will be listened to, that your overall style will mesh with your agent and if your home search is extended over a long time period, you’ll know that your agent is keeping an eye on the market and letting you know of new homes that hit that market that match your criteria. And isn’t that what it’s all about? Relationships, Trust & Confidence?

*Information sources used in home search courtesy of the National Association of Realtors Field Guide:

• Internet: 90%
• Real estate agent: 87%
• Yard sign: 59%
• Open house: 46%
• Newspaper ad: 40%
• Home book or magazine: 26%

If you’re still fence sitting, waiting for ‘a good time to make your real estate investment’, consider this:  May 2009 vs May 2010 Chicago homes sales are up 33.6 percent!! You might want to rethink that fence sitting strategy!

In the state of Illinois, homes sales activity increasedfor the ninth consecutive month and for the past 11 months straight in the Chicagoland Primary Metropolitan Statistical Area,  Dr. Geoffrey J.D. Hewings, director of the   Applications Laboratory (REAL) of the University of Illinois said  “The forecasts for the next three months (June, July and August) suggest a continuation of the positive changes for sales—in the 16 to 25 percent range in Illinois and in the 19 to 29 percent range in the Chicago region.  Price changes continue to be stubborn, with little or no movement over the three months in Illinois and in the 4 to 6 percent range in Chicago.”    Less formal Realtor polls validates a street level view of these statistics and suggests prices are leveling off at 94-96% of asking price.

With mortgage rates hovering at historic lows and prices leveling off, consider this: It’s never a bad time to make a good investment.  It’s time to get off the fence! So, if you still haven’t found that perfect home, now is the time to ramp up your search and take advantage of the favorable market conditions!

Homes and insurance are starting to go the way of people and insurance…both can have preexisting conditions and be uninsurable! Many people don’t realize that if a homeowner has had multiple insurance claims on their property, a new owner may not be able to secure the insurance they need and want to protect their new asset.

If you are negotiating for the purchase of a home, you might want to ask that the seller provide you with a CLUE (Comprehensive Loss Underwriting Exchange) report on their home. This report can provide you with invaluable insight as to what issues your potential new home may or may have had. However, a buyer cannot have a report pulled on any house they so choose. These reports are available only to those with a “permissable purpose,” in this case the seller must request the report from their insurance carrier.  So if you’re buying a home in a flood plain, garden and duplex down condo, and any time your inspection has found signs of water it may not be a bad idea to dig a little deeper and ask the seller to provide you with a CLUE report for their home.

If you are not at this stage of your home buying process, and are still searching for that perfect home, call or email me, I would be happy to help! And, if you need to get pre-approved for your home mortgage, contact Doug Katz, he’ll take good care of you.

It looks like the Seante has approved a 3 month extension for all those buyers that are already under contract and meet the home tax credit guidelines to close on their new home! This is great news for the estimated 180,000 home buyers that met the contract deadline but might otherwise miss the original 30 June close date and therefore the tax credit.

If you were not under contract by the 30 April deadline, unfortunately, you have still missed out on the opportunity to participate in the tax credit. As for the rest of the buyers that are still looking for their perfect new home, there are still plenty of homes available for sale, prices are stable with some reductions taking place and interest rates are low! If you’re not sure how much home you can afford or need a seasoned REALTOR®  to help you fine tune your search and guide you through the home buying process, please let me know!

Well, it is official.  Home values are getting better.  According to the S&P/Case-Shiller 20-city index, home prices moved up 0.6% year-over-year, with nine of the 20 cities in the index showing gains.  Much of this was likely fueled by the Home buyer’s Tax Credit, but psychology is a major variable in any recovery.  If you believe, as many economists do, that people are generally driven by fear and greed then there is a good chance that this recovery could continue as the greed to get the best deal on a property is replaced by the fear of lost opportunities of getting a good deal.

Chicago fared fairly well in the report.  While our metro area is still showing decreasing prices at -3.0%, it was far from the bottom of the barrel.  Additionally, historical data shows that areas hardest hit by a contraction usually emerge the soonest.  Among the top performing cities where coastal cities, which had reached unsustainable values before the crash.  The good news for current shoppers is that this is the canary in the coal mine.  It gives them a unique advantage of knowing that increases could be around the corner in our market and that good deals are still to be had.

Now that home prices on the move, are you ready to  get pre-approved for your new home? Or are you just interested in exploring the Chicago real estate market? Either way, let me know, I’m here to help!