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Chicago RE with Julie

Chicago, Illinois

A consumer-centric real estate blog with articles, tips, and tools geared for buyers, sellers and the curious.

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Chicago RE with Julie

Why a Home Inspection

Mar. 1, 2007
Categorized in: Buying Real Estate
 
Why is a home inspection so important? A home inspection is your physical check-up on the property. It is an informational and educational service that equips the future homeowner with an invaluable asset, knowledge. 
 
An inspection accomplishes a few very important things. First, you learn about the physical condition of the home and its mechanical systems. This information will give you an indication of what current or future repairs and replacements may be necessary. Though an inspector cannot give you estimates of any work needed, but they can give you an idea in terms what you will need to budget.   In addition, any major problems may be address during contract negotiations, saving you a lot of money.
 
Secondly, a home inspection can teach you the ins and outs of home maintenance. You will learn about the important ways to care for your new home. One thing to remember is, that no home is perfect. It has living, breathing components and will change as it ages. With proper care, you can extent the life of your home for many years of enjoyment. 
 
Never skip on a home inspection and make sure your inspector is currently licensed and is a member of the American Society of Home Inspectors, ASHI. They are valuable members of your real estate team. To learn more about home inspectors visit http://www.ashi.com.
 
Other inspections such as radon, asbestos, lead, termites, and mold are specialties and are not part of the regular home inspection.  If you require these services, you will need to hire them separately. 

Benefits of Home Ownership

Feb. 28, 2007
Categorized in: Buying Real Estate
 
Tax Advantage:
 
Depending on what your tax bracket is, you could save between $2,000-$3,000 dollars per year.
 
Example: Mortgage interest deduction: $120,000 loan @ 6.75%= $8,100 write off
                     If you fall into the 28% tax bracket, you would receive $2288 (28% of
                        $8100 back on your returns.
 
Build Equity:
 
As you make your monthly mortgage payment, a portion of each payment goes towards paying down the principal. 
 
TIP: If you pay above the amount owed, an extra $50 per payment (and be sure to have it designated towards principal and not interest), you can shave years off your loan. Another option is to do bi-weekly payments. You end up making 13 payments per year instead of twelve, thus, taking off approximately 8 years off your loan and save yourself thousands of dollars in interest.
 
Appreciation:
 
Over time your property will appreciate in value. Assuming a modest 4% annual appreciation rate, your $150,000 property will be worth $182,000 in 5 years. 
 
TIP: Worried about saving money for junior’s college education? You could purchase a multi unit property, rent and maintain it, and in about the time college applications are due, you have enough appreciation in this property to sell and pay for college.
 
Own vs. Rent:
 
With a mortgage payment of $800/month, your scenario would look like this (assuming 6.75% 30 year fixed rate, $120,000 loan, and annual appreciation of 4%)
 
                                    After 3 years               After 5 years               After 10 years
 
Mortgage Balance            $116,000                      $112,000                     $102,000
 
Est. Property
Value                           $168,000                      $182,000                      $222,000
 
Return on
Initial Investment        $22,000                         $39,000                        $90,000
 
With a rental payment of $800/month, you will have paid the following:
(Assuming your management company never raises your rent)
 
$28,800 over 3 years
$48,000 over 5 years
$96,000 over 10 years
 
Buy Now vs. Later:
 
Waiting to “save” more for a down payment.
Unless you are expecting a huge raise, winning the lottery, or a grand   inheritance; the rate of savings will never pace with home appreciation rates. Don’t believe me check your local bank!   Plus, there are dozens of options that may just suite your needs both short term and long.   Getting in the door of homeownership is what opens up the options for future dream homes.
 
Waiting for the “right” time.
No time like the present. If you ask any Real Estate Professional, when is the best time to buy? They will most likely answer “a year ago”. Coulda, woulda, shoulda plagues everyone when it comes to real estate investing. 
 
Waiting for “life” to happen.
If you are one of those individuals who is waiting due to fear of making the commitment, or buying on your own is giving up the dream of finding the perfect spouse, you are ridding the excuse train. Life is what happens when you make other plans, and opportunity comes to those who are prepared. Instead of thinking your life will become more complicated, or that you are giving up on a fairy tale future, think of it as taking care of your financial future, nothing could be more liberating and appealing!
 
 
 
 
 
 
 
      
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 

There is Gold In Them Hills...

Jan. 12, 2007
Categorized in: Buying Real Estate
There has been several articles in circulation lately about the Buyer's Market we are currently experiencing.  Of them, I find the behavior analysis to be the most interesting.  One recently described how buyers are now moving forward with actual earnest instead of watching from the sidelines.  I can't help but picture buyers watching the real estate market as if they were watching the stock market.  Looking for that bottom, then Buy! Buy! Buy!  Its like those of the old west waiting with their pitch axe for the pioneers before them to yell, Gold!

What I think perhaps is being overlooked is the fact that buying real estate is neither gold-digging or playing the stock market.  Buyers should focus on whether or not they are prepared to buy, regardless of the market conditions.  Unless you are looking for deals and steals as an investor, buying a home represents far more than gaining quick wealth.  It represents people.  It represents hope in a better future. 

If you happen to be looking for perfect timing, well, don't.  There is no such thing.  The only right time is the time that reflects your needs and circumstances.  Look for a home that best serves you.  How many times are we driven by "sales" and purchase things that quite frankly, we justified buying  based on it's price?  How many articles of clothing hang in your closet that seemed like a steal at the time but really just don't fit into your lifestyle? 

Of course it is smart to shop around and of course it makes sense if you can buy a better home at a good price.  Just don't approach it with a bargain hunting mentality.  When you find that right home for you, structure your offer wisely and approach the situation neither foolishly or arrogantly, your new home will always feel like money well spent.