So You Want To Buy a Foreclosure: Tip Number 1
Posted at 8:05 AM, Sep. 23, 2009
Most every buyer that I have sat across the table from is convinced the best deal they are going to get is a foreclosure. Don't be so sure.
First, this is not a segment of the housing market for the faint hearted. You have to be quick to act on a property, and frankly, too many buyers are still dragging their feet.
Secondly, don't assume they are a great deal. Yes, many are priced well,and, many are not, especially for the amount of work needed.
A number of foreclosures have been scrapped. What that means is, the kitchen is missing, the bathrooms are missing, plumbing pipes are missing, you get the idea. So, for the average buyer using a lender, this is a no go. Why? The properties do not have the very basics to be considered habitable so lenders won't put down their money on the hopes you will make the necessary repairs. Now mind you, there are construction loans out there but at a higher interest rate and in need of great credit scores.
Stay tuned for more foreclosure tips to come.
Foreclosure Grace Period Now In Action
Posted at 6:57 AM, Apr. 9, 2009
On April 5th, 2009 Gov. Pat Quinn signs into effect a new policy that can give homeowners up to 90 days of a grace period from foreclosure. Read about the new act here.
Give Your Furnace Attention
Posted at 9:58 AM, Feb. 27, 2009
A furnace filter purpose is to help keep your furnace clean, not your home. Filter manufacturers do an excellent job marketing filters that clean your air, the only thing they do is restrict the air flow throughout your home and stress out your furnace and a/c. There are some excellent air filters on the market that are seperate from your furnace, you can also install a UV lite in your furnace that kills mold spores. After all this spending on air quality remember that the clean air is outside, the answer is to exchange the air in your home. Check out the EPA's website. Just buy the cheap $1.00 filters and at a minimum change every three monts but I recommend every month.
Courtesy of:
Tax Cap for Three More Years
Posted at 5:24 AM, Oct. 1, 2008
One of the biggest challenges for homeowners is to keep ahead of the rising costs of living. Fuel and energy bills are on the rise, so it is only natural that any increases of property taxes are enough to put many Chicagoans over the edge! Luckily, the House Bill 664 will remain in effect for many. What this entails is a 7% cap per year on property tax increases which will protect homeowners from runaway assessments. It will also raise the income eligibility for seniors from $50K to $55K so that more seniors qualify for the "freeze". Let's continue to show our support for this program which will end in 2011.
Protecting Your Assets
Posted at 5:36 AM, Sep. 24, 2008
It is a sign of the times. Recently, my in-laws had their home broken into for the first time. What is shocking about that it is that it was in the middle of the afternoon, the neighbor was outside working on his house, and my in-laws are retired. Whomever robbed them took a great risk at guessing when they would leave the house and for how long. As you can imagine, they were very distraught about it. They had lived in their home for over 35 years and had NEVER experienced something like this. To make matters worse, the theives stole very specific items that in reality, weren't worth a whole lot, but were priceless in my in-laws eyes. Items that were handed down generation to generation.
Here is a question you should ask yourself. Could you list everything in your closet from memory? If not, take this opportunity to make it a priority to catalog items of value. Do you know how much it would take to replace your family's clothing? How about furniture? Electronics and computers? Your entire kitchen-ware? Start by listing items with current value and supported video/pictures along with any identifying marks such as serial numbers. Do your best to gauge current market value. You may have a video camera that is 10 years old, but if you had to go out tomorrow to replace it, what would you realistically spend? Place your inventory list with sales receipts in safe keepings like a safety deposit box or burn it onto a CD and store elsewhere.
For extra tips, video tape individual rooms from top to bottom. Then take close ups of items of high value, i.e. silverware, china, crystal and such. When you have finished each room, go to closets, attics, basements and garages and do the same. Don't forget to catalog tools and appliances. These items are costly and easily overlooked. Leave yourself a reminder to update every 3 years.
If you have any collectibles or items without a bill of sale, get them professionally appraised. You want documentation of what it would cost to replace the items, even those items that are considered irreplaceable.
By taking some preventive steps you can ease the suffering brought on by a theft or loss. It can happen to anyone.
Property Taxes in Chicago
Posted at 5:58 AM, Sep. 22, 2008
Here are some of the basics you should know regarding property taxes. First being, What role do property taxes play? Property taxes support local governments with a district. About 62% of that goes to schools. The tax cycle is generally every two years. A tax year is the year of assessment and reflects the value of the property as of January 1st of that year. We pay our tax bill in two installments and in arrears, which means, the 2007 tax bill will be paid in 2008.
How is a property assessed? The level of assessment is 33 1/3 percent of the property's fair market value except in Cook County. You will be notified of any increases. Every four years, all properties are reassessed to detect any market changes such as:
*The property values in the area are increasing.
*Improvements were made to the property (deck added, extensive remodeling, additions added).
*The property was under-assessed in relation to other properties and this error has been corrected.
*The property has an homestead exemption or senior-freeze that has been removed.
How do I know if my property has been fairly valued? Your first step is to make sure the information on the public records is accurate. Secondly, contact your local Realtor for comparables of homes in your immediate area. If you believe you have been wrongly assessed, you can file an appeal with the Illinois Department of Revenue.
Lenders Giving The Cold Shoulder
Posted at 7:24 AM, Jul. 11, 2008
It has been an unexpected surprise to many. While in the midst of home renovations, major banks have either capped or suspended home equity lines of credit. With today's mortgage crisis, banks are finding any and every reason NOT to loan you money.
For many homeowners, this has come at the most un-opportune moments. Literally after they have written checks to contractors for work currently in progress on their homes.
Did you know that most home equity lines of credit have hidden language that states if you are late on a payment or if housing values decline, they reserve the right to cap or cut-off credit? Many banks now are limited how much they are willing to give in the first place. Yesterday allowed homeowners to borrow up to 100% of their home value. Today, don't expect anymore than 65%, if that.
This should put out the warning signals to those getting ready to embark on some home improvements. If you currently have an unused home equity line and are planning on doing some work to your home, get a working budget and then write the check out in advance to yourself and cash it before you commence work. That way, if your bank pulls the rug out underneath you, you are not sitting on a unfinished project and no funds.
Or, plan on saving for half the cost. If renovating your bathroom is projected at $10K, be prepared to cough up $5K (leave a margin for unexpected costs) and write the deposit check with your home equity line. Again, if it bounces, you haven't started making your home a construction site.
Making home improvements can help a home increase in value, or improve it's saleability. A recommended course of action is to ask your local real estate expert if the renovations you are thinking of, add up before you put out.
Shopping For Doors
Posted at 5:26 AM, Apr. 7, 2008
If you are in the market of door-replacement (or addition for that matter), here is an article by Angie's List to aid the process.
3-4-2008
Door to door
Doors are one of the few upgrades that will add a dramatic new look to both the interior and exterior of your home. Today’s doors are more energy efficient; carry better warranties and come in hundreds of styles. Whether it’s for looks or to increase energy savings, consider these tips when shopping for new doors.
Materials
- The front door is a great way to increase curb appeal, but don’t forget the back and interior doors.
- If your door is 15 years or older, chances are the weather stripping is worn out.
- Three options when it comes to exterior doors – fiberglass, wood and steel. All three can be painted, but only fiberglass and wood can be stained.
- New insulated fiberglass doors have very high U-values and are sealed much like a refrigerator door to dramatically reduce energy loss. More durable than wood and steel and require less maintenance.
- Durability is especially important for doors that aren’t shielded by a porch or overhang.
- Composite frames hold up better than wood and require less maintenance.
- Window installers tell us French doors have become more popular than sliding doors. This is due mostly to aesthetics, but French doors also offer more accessibility – you can open up both sides which makes moving furniture easier.
Price
- Prices vary from $200 – several thousand depending on size, style and glass options. Steel is the cheapest, while fiberglass and wood are similar in pricing.
- Hardware also adds to the price and can range from $100 - $500.
Hardware
- Choose a high-performance deadbolt lock that is durable and secure.
- According to the experts we spoke to, the door frame itself has historically been the weak link in terms of security. Ask about steel reinforced frames and plates behind the jams.
- Multi-point locks with rods that go into the header and sill and strike plate reinforcement can provide extra security.
Energy savings
- Every home is different, but, on average, you can reduce 80 percent to 90 percent of the energy loss by installing a new, energy efficient door.
- Virtually every door meets the minimum Energy Star requirements, but the amount of glass is the biggest determinant to how energy efficient the door is. It’s a trade off between energy efficiency and aesthetics. U-value for a door typically ranges from .15 (no glass) to .33 (full decorative glass).
Maintenance and installation
- Most door installations can be done in one day or less.
- Hire a reputable installer. It’s critical that the door is hung and framed properly.
- Spring through summer and early fall is busy season for installers.
Window Shopping 101
Posted at 5:56 AM, Apr. 2, 2008
Here is a handy article from Angie's List.
Window shopping 101
3-10-2008
Windows can account for 10 percent to 25 percent of your energy bill. If your house is among the nearly half of all U.S. homes with single-pane windows, consider replacing them with high-performance glass that will add a fresh look and decrease your energy costs. In addition, new windows can increase the safety of your home as older models can easily be forced open. Here are some tips on selecting the best windows for your home.
Materials
- When it comes to windows, price, aesthetic and level of maintenance will determine whether you choose vinyl, fiberglass or wood.
- If you want zero maintenance, go with vinyl. These windows come in a variety of color choices and wood grain laminates, are less expensive and once they’re installed, you’re done – no painting, staining or caulking is required. They also come with better warranties.
- If you want to customize the window trim with paint or stain, go with wood or fiberglass.
- Different window hardware (handles and locking mechanisms) are also available – so you can choose bright brass in one room and antique brass in another.
- As with any product, brand matters. Ask your installer which brand they recommend and why.
Pricing
- Vinyl starts at $400/window installed (double pane), while wood and fiberglass are nearly double that at $750/window. And keep in mind, once you have the wood or fiberglass window installed, you’ll still incur the cost of paint or stain.
- Double pane windows are the most popular, but triple-pane is also available. They cost about $50 more per window installed, but offer more energy savings, and if sound insulation is important, this is the way to go.
Energy savings
- Look for the Energy Star rating. It’s still the way to go, even though tax credits are no longer being offered.
- Windows typically range from a .28 - .35 U-value (there are windows that are .5); the lower the number the higher the energy efficiency.
- In colder climates, a U-value of 0.35 or below is recommended. In warm climates, look for windows with double glazing and spectrally selective coatings to reduce heat gain. In temperate climates, look for a low U-value and low solar heat gain co-efficiency (SHGC).
- Air leakage ratings of 0.3 cubic feet per minute or less are recommended.
- Double-pane windows with low-e coating (argon gas-filled panes and low emissivity) on the glass will reflect radiant heat back into the room during colder months.
- If you’re in an older home and don’t want to lose your leaded glass windows, consider adding a traditional storm window to the exterior for added energy savings.
Installation and maintenance
- Reputation and experience is key when it comes to window installation. If installed incorrectly, windows will leak air and water can penetrate the seal leading to mold or wood rot.
- Homeowners are asking more and more for the window grids to be inside the pane because they’re easier to clean.
- Window installers can handle five to 10 windows per day on average so disruption can be kept to a minimum.
- The installation crew will need to come inside the home, so if you have valuable art on the walls or high-end furniture nearby, consider removing it yourself just in case.
- Busiest time of year for window installers is April – May and September – October.
Mortgage Deadbeats
Posted at 3:53 AM, Mar. 21, 2008
This is not to sound like an attack on serious people in default, but I came across an article from the Wall Street Journal that stated the willingness of borrowers to "walk away" from mortgage debt has contributed to extraordinary high levels of early default reported by analysts at Fitch Ratings*.
Their reports to investors have indicated that such behavior is not willful fraud, but clearly shows that American homebuyers are not the victims of their lenders as previously perceived. In fact, they are perfect capable of making rational decisions without political intervention.
What appears even worse with this report, is that borrowers who are, in theory, able to afford their homes, are opting to ditch once they become cognizant that what they owed is more than what comparable houses in the surrounding areas where selling for and would be unable to make their return on investment anytime in the near future.
Is this the new bankcruptcy trend?
The upside, is that those willing to take such bold moves will suffer a hit on their credit. Until people are willing to change their behavior, the market will not change.
*RealEsateJournal.com,Commentary:The Rise Of the Mortgage Walkers, Nicole Gelinas, February, 11, 2008.
Foreclosure Facts
Posted at 7:12 PM, Feb. 20, 2008
Despite a growing number of loans due to reset, it is important to realize that most home foreclosures are not due to payment adjustments on mortgages. In fact, the primary reason people lose their home is due to job loss or other means of a serious income reduction.
Just look at the two states that have held the number one and two slot for the most defaulted loans, Michigan and Ohio. Both have suffered tremendous setbacks with a declining manufacturing base (which accounts for a large population of jobs), low to no population growth and a low demand for housing.
Other factors such as illness and divorce can add to the above as cash-flow problems which collectively, account for 80% of all mortgage defaults. Payment adjustments alone accounted for only about 2%. This helps to keep things in perspective when we see homes in our marketplace that bear the un-mistakeable sign of foreclosure. Very real circumstances outside of the real estate industry dealt cards to homeowners that had negative effects that perhaps without all the media hype revolving around the mortgage meltdown, would probably have gone unnoticed. I think overall, we can learn to look at the faces of foreclosures with a bit more empathy as we have all but witnessed it could happen to anyone.
Proposed Hike in Property Taxes in Chicago
Posted at 6:08 AM, Feb. 4, 2008
Chicago has a new tax on the horizon. The Governor among others have tried to get this passed in order to help a very troubled CTA pension fund. Realtors have joined forces in order to protest this hike in transfer taxes since it already poses as one of the largest expenses for homebuyers in terms of closing costs. There are enough obstacles to tackle with homeownership without adding to them. The Chicago Association of Realtors have posted to their site a calculator that puts into “real” terms, exactly how this raise in property transfer taxes could hinder buyers, especially, first time ones.
JOIN US IN TELLING YOUR LOCAL ALDERMAN NO TO THIS INCREASE!
Property Tax Relief Extended in Chicago
Posted at 2:33 AM, Aug. 23, 2007
There is much to celebrate with extension of House Bill 664. This bill was put into place a few years ago to come to aid the soaring property values with the surge of New Construction and city improvements to many neighborhoods in Chicago. Many people who have lived years in their homes where finding out that even thought their homes tripled or more in unrealized value, so did their property taxes. As you can imagine, this was forcing a lot of long time residents to either sell their homes (many living on modest incomes) or fight back.
Hence, the 664 bill was enacted. This bill put into place a 7% cap that prevented home values to dicated new tax amounts past that. This of course isn't a end to tax increases, but it did allow residents time to adjust. Unfortuately, this was temporary.
Now according to our state representative John Fritchey, the House and State legislation has extended the bill for another three years. In addition, the exemption cap has increased from the previous level of $20,000 to $33,000 in the first year, $26,000 for the second year, and $20,000 in the third year.
This is really good news to many deeply affected by gentrified areas. To read more about the bill, you can visit his website at www.fritchey.com
Changes to the City of Chicago Zoning Certificates
Posted at 4:32 AM, Jul. 2, 2007
The City of Chicago has recently made a major change regarding its policies concerning the zoning certificate process for buildings containing 2-5 dwelling units. (Note: the procedures for single family structures are not affected).
Starting on May 7, 2007 the zoning department no longer allows the person submitting a certification to "sign off" as per what the city records show. In other words, if you request a three unit certification, and city records only show two, the Department of Zoning will require you to submit a Freedom of Information request to verify the number of dwelling units, or submit the property for an inspection.
The Freedom of Information request can take anywhere from 3-5 weeks to receive a copy of these records. The Zoning Department then asks seven days to complete the inspection which is dependent on if the inspector can make contact with the person with access to the property in question.
Because the city now assumes that there is an illegal unit involved if the city records show fewer units than initially requested it is important to make absolutely sure the number of units at the property or it could cause a major delay in obtaining the certification. It is also imperative that the certification is ordered as early as possible in order to avoid any delay.
Also, beginning June 1, 2007, the City of Chicago Department of Zoning will be requiring completion of a new Zoning Certification form. Along with all the basic information such as Property Address, PIN Number and Client Information, the City now asks us to list exactly where each unit is located on the premises specifically disclosing which floor in each building. If not completed in full the City may reject the certification request.
Should you have any questions please contact the City of Chicago Department of Zoning at (312)744-6317.
Tips for Holding a Yard Sale
Posted at 4:10 AM, Jun. 29, 2007
Hold a yard sale to reduce the clutter in your home and get rid of items you don’t want to move.
1. Check with your city government to see if you need a permit or license.
2. See if neighbors want to participate and have a “block” sale to attract more visitors.
3. Advertise. Put an ad in free classified papers, and put up signs and balloons at major intersections and in stores near your home.
4. Price items ahead and attach prices with removable stickers. Remember, yard sales are supposed to be bargains, so don’t try to sell anything of significant value this way.
5. Check items before the sale to be sure you haven’t including something you want by mistake.
6. Keep pets away from the sale.
7. Display everything neatly and individually so customers don’t have to dig through boxes.
8. Have an electrical outlet so buyers can test appliances.
9. Have plenty of bags and newspaper for wrapping fragile items.
10. Get enough change, and keep a close eye on your cash.
Reprinted from Realtor Magazine Online by permission of the National Association of Realtors. Copyright 2005. All rights reserved.
12 Tips for Hiring a Remodeling Contractor
Posted at 4:06 AM, Jun. 27, 2007
1. Get at least three written estimates.
2. Get references and call to check on the work. If possible, go by and visit earlier jobs.
3. Check with the local Chamber of Commerce or Better Business Bureau for complaints.
4. Be sure that the contract states exactly what is to be done and how change orders will be handled.
5. Make as small a downpayment as possible so you won’t lose a lot if the contractor fails to complete the job.
6. Be sure that the contractor has the necessary permits, licenses, and insurance.
7. Be sure that the contract states when the work will be completed and what recourse you have if it isn’t. Also remember that in many instances you can cancel a contract within three business days of signing it.
8. Ask if the contractor’s workers will do the entire job or whether subcontractors will do parts.
9. Get the contractor to indemnify you if work does not meet local building codes or regulations.
10. Be sure that the contract specifies the contractor will clean up after the job and be responsible for any damage.
11. Guarantee that materials used meet your specifications.
- Don’t make the final payment until you’re satisfied with the work.
Reprinted from Realtorâ Magazine Online by permission of the National Association of Realtorsâ. Copyright 2005. All rights reserved.
Five Things to Understand about Homeowners Insurance
Posted at 4:43 AM, Mar. 29, 2007
1. Look for exclusions to coverage. For example, most insurance policies do not cover flood or earthquake damage as a standard item. These coverages must be bought separately.
2. Look for dollar limitations on claims. Even if you are covered for a risk, there may a limit on how much the insurer will pay. For example, many policies limit the amount paid for stolen jewelry unless items are insured separately.
3. Understand replacement cost. If your home is destroyed you’ll receive money to replace it only to the maximum of your coverage, so be sure your insurance is sufficient. This means that if your home is insured for $150,000 and it costs $180,000 to replace it, you’ll only receive $150,000.
4. Understand actual cash value. If you chose not to replace your home when it’s destroyed, you’ll receive replacement cost, less depreciation. This is called actual cash value.
Understand liability. Generally your homeowners insurance covers you for accidents that happen to other people on your property, including medical care, court costs, and awards by the court. However, there is usually an upper limit to the amount of coverage provided. Be sure that it’s sufficient if you have significant assets.
www.REALTOR.org/realtormag Addapted and Reprinted from REALTOR® Magazine Online by permission of the NATIONAL ASSOCIATION OF REALTORS® . Copyright 2003. All rights reserved.
The Bungalow Chronicles Part 1
Posted at 5:54 AM, Mar. 21, 2007
Like many optimistic homeowners out there, I join the ranks of those who renovate a home. My experience thus far ranges from the small to the large. Mostly because when we bought it, we knew upfront that the house needed updating not just from an aesthetics point of view, but also for function and growth. Here I will share with you how even someone in the real estate business suffers equally with finding competent help, working with dead lines and budgets, disillusionment, above all, exercising patience.
It is interesting how it begins. Hopefulness, desire, dreams of a better future, and for us what acted as our motivator, we believed in this house and all that it could be.
We purchased our home back in 2004. Similar to those I represent, the process was frightening and very stressful. I think I felt even more pressure to do right because of my profession. My family was counting on me to deliver. Even though I was fully aware of the potential pitfalls, I found that it shook my core when I was faced with specific negotiating items. Do I pass pushing certain issues that could eventually bite me in the behind? Or, do I take that leap of faith and trust that these items will get address in due time. It’s very hard to remain objective when you are in the center of things. This is where our journey begins.
Very first thing we did before moving in was refinishing the hardwood floors. We had a total of 4 rooms and a hallway that was in desperate need of a facelift. Certain rooms such as the two first floor bedrooms were quite atrocious. It had appeared as if some quick and sloppy job of staining the floors left them with uneven dark spots and what even appeared to be burns.
While trying to schedule that, we also removed the radiator heat and put in central heat and air. Now, I know the argument for which is the better source of heat is. Quite frankly, in order to enjoy any pleasure of central air (and I am not a person who enjoys sweating), we would have to go this route. To add what is called a sub Pac to an existing radiator heating source would still require eating into my floors and walls to run duct work AND cost about 4 times as much. Not to mention, my new home is not exactly massive in size so the current radiators were definitely space hogs. I kept trying to postpone the heating service waiting for a new Bungalow Initiative that credited homeowners with up to $2000 back towards their HVAC installation costs, however, at with only 3 weeks in the count down before I had to move in, time was running out.
So, between tearing out the radiators and adding a new HVAC system, we carefully (and stressfully) coordinated the two within the same time frame. If you are allowed this opportunity please do so. I strongly recommend any type of work that inhibits living conditions (and believe me, refinishing floors fits the bill, not to mention lack of heat) seize the moment before all else. You will be thankful. First rule of thumb, get estimates and don’t be shy with them. As a salesperson, I myself was becoming quite amused with the techniques presented to me of what I refer to as, the dance. Avoiding answering any substantial questions without a real commitment or conviction for that matter was a theme I was becoming more and more aware of. Don’t go for the cheapest for I believe something is being compromised and unless you are educated in that specific trade or skill, you won’t know what it is, or even to inquire about it. And don’t go for the most expensive. If the person who comes out to give you an estimate is a sales person and not the proprietor or the actual person doing the job, factor in the overhead.
I also find that if the person quickly finds something else to ask you about, such as whether or not something has been done recently, you can bet they are sizing up what else they can attempt to persuade you to purchase. It’s called, up selling. If they suggest additional work or materials, ask for it to be itemized separately from the original job quote and have them clearly state the pros and cons. Once they leave, Google it. There is a definite truism about home repair and improvement project proposals and estimates. Pricing can drastically vary, its up to you to figure out why.
Next week; siding, painting, and trim work.
The Six Steps of Home Improvement Recovery
Posted at 3:06 AM, Mar. 9, 2007
If you have ever taken on a serious home renovation, these are stages you will recognize. For those of you about to embark, we salute you.
Six Phases of a Project:
1) Enthusiasm
2) Disillusionment
3) Panic
4) Search for the guilty
5) Punishment of the innocent
6) Praise and honors for non-participants
Home Improvements That Pay Their Way
Posted at 4:12 AM, Mar. 5, 2007
Here is a recent article from the Wall Street Journal that emphasizes the importance of budgeting a nominal amount to not only improve your home's energy performance, but stay on top of your home's natural wear and tear.
Home Improvements
That Pay Their Way
Some low-cost upgrades to your home can save you money in the long run by cutting future energy bills.
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