I looked forward to helping my seller market his home – he was an original owner, and had enjoyed beachfront living for many years. When he invited me in for the first time, I found gorgeous views to the south — both city and beach, but not so great views inside.
6007 N Sheridan Road - The Malibu - Views South to Chicago
It can be easy for home buyers to overlook home insurance costs. Most buyers tend to focus on factors such as quality of neighborhood, property taxes, school districts and available recreational and cultural outlets. But the seemingly mundane detail of home insurance can add up to a big investment. The size, location, construction and overall condition of a house can affect insurance cost, choice and availability, according to the Insurance Information Institute. When looking at prospective homes, the Institute recommends that home buyers consider the following:
Where is the nearest fire department? Houses located near a fire station usually cost less to insure.
Are the plumbing and electrical systems in good condition? Poorly maintained, unsafe and/or outdated systems are more costly to insure than well-maintained ones.
Is the home vulnerable to wind damage? A beach home may be more susceptible to wind damage and can be more costly to insure than homes located inland.
Is the home at risk for flooding or located in a flood zone? Most standard homeowners’ insurance policies do not cover floods, so you may need a separate policy, which you can get through the National Flood Insurance Program, which is serviced by private carriers, or from a few specialty insurers.
Is the home located in an earthquake-prone area? If so, earthquake insurance requires an endorsement or a separate policy.
Is the house well constructed and well maintained? Homes built with disaster-resistant materials and designed to meet current building codes are more likely to withstand natural disasters.
Your home is your biggest investment. Make sure you protect it with the right type of homeowners’ insurance policy.
A copy of the Declaration, by-laws, other condominium instruments and any rules and regulations.
A statement of any liens, including a statement of the account of the unit setting forth the amounts of unpaid assessments and other charges due and owing.
A statement of any capital expenditures anticipated by the unit owner’s association within the current or succeeding two fiscal years.
A statement of the status and amount of any reserve for replacement fund and any portion of such fund earmarked for any specified project by the Board of Managers.
A copy of the statement of financial condition of the unit owner’s association for the last fiscal year for which such statement is available.
A statement of the status of any pending suits or judgments in which the unit owner’s association is a party.
A statement setting forth what insurance coverage is provided for all unit owners by the unit owner’s association.
A statement that any improvements or alterations made to the unit, or the limited common elements assigned thereto, by the prior unit owner are in good faith believed to be in compliance with the condominium instruments.
The identity and mailing address of the principal officer of the unit owner’s association or of the other officer or agent as is specifically designated to receive notices.
It’s up to the buyer to ask for this information, but knowing that any buyer’s attorney worth his salt will ask for it, I always come prepared to listing presentations ready to ask the questions. The answers to these questions can actually be useful in attracting and keeping buyers.
Wouldn’t you be interested right away in a condo where
100% of the condo owners are up to date on paying their assessments?
the condo reserves (i.e. savings account) equal 24 months’ worth of assessments?
an engineering study (less than 6 months old) shows that no maintenance items are anticipated in the next 2 years?
no outstanding lawsuits exist against the building?
any improvements to the condo are definitely in compliance with the rule/ regulations and declarations?
Of course you would!
Buyers want to know that there is little risk in buying your unit — no special assessment will be levied against them a month after closing, no big project is about to commence, and they won’t be required to yank out the hot tub you advertised and they paid so dearly for.
So tell the buyers NOW! Don’t wait for them to ask! Have me tell them in print and during the showing just how wonderful your home really is!
What are the reasons for owning real estate? In a nutshell here are 7 reasons for home ownership…
1. Tax breaks.The U.S. Tax Code lets you deduct the interest you pay on your mortgage, your property taxes, as well as some of the costs involved in buying your home. If you buy before April 30, you may be eligible for the federal tax credit of$ 8000 first time buyer tax credit
2. Appreciation.Real estate has long-term, stable growth in value. While year-to-year fluctuations are normal, median existing-home sale prices have increased on average 6.5 percent each year from 1972 through 2005, and increased 88.5 percent over the last 10 years, according to the NATIONAL ASSOCIATION OF REALTORS®. In addition, the number of U.S. households is expected to rise 15 percent over the next decade, creating continued high demand for housing. When you own real estate, it can be a provide great appreciation. 3. Equity.Money paid for rent is money that you’ll never see again, but mortgage payments let you build equity ownership interest in your home. Owning real estate can generate equity.
4. Savings.Building equity in your home is a ready-made savings plan. And when you sell, you can generally take up to $250,000 ($500,000 for a married couple) as gain without owing any federal income tax. See this link for home real estate capital gains information.
5. Predictability.Unlike rent, your fixed-mortgage payments don’t rise over the years so your housing costs may actually decline as you own the home longer. However, keep in mind that property taxes and insurance costs will increase. When you own your home, you can budget and plan, keeping monthly costs down.
6. Freedom.The home is yours. You can decorate any way you want and benefit from your investment for as long as you own the home.
7. Stability.Remaining in one neighborhood for several years gives you a chance to participate in community activities, lets you and your family establish lasting friendships, and offers your children the benefit of educational continuity. There is no better way to establish a connection within your community than by owning your home.
Online resources: To calculate whether buying is the best financial option for you, use the “Buy vs. Rent” calculator atwww.GinnieMae.gov.
Call Anne Rossley today to find out if owning real estate is right for you. Anne can be reached at Prudential Rubloff — 312.620.5333.
Traditionally, Chicago’s real estate market kicks off after the Super Bowl. Our market is usually busiest between February and April — ahead of the suburban market.
Why? Probably because of the traditional May 1 – Oct 1 lease renewal dates. Why and how that started is a mystery to me, but it makes sense that if most apartment leases are up May 1, then home closings need to be in April, which means househunting hits its peak in February and March to allow for 45 days to acquire a loan.
Therefore, for maximum impact and to reduce “market time”, Realtors usually prepare their listings for a post-Super Bowl debut.
This year, however,
most Prudential Rubloff agents advise otherwise…
Yesterday I polled my colleagues (the most experienced and successful agents in the city*) and got the following results:
Nearly 70% of agents recommended listing NOW.
With inventory down 17% over last year, pent up demand and fewer homes to choose from make your listing stand out
Business is picking up
one agent listed a singe family home Wednesday, and he has 8 showing appointments already.
Agent after agent reported being busy with buyers and showing appointments
Which neighborhood is best for dog owners? Are dogs welcome in condos?
Dogs are welcome in Chicago condos most of the time, but there are often limits to the number and size of the dogs, as well as some neuter requirements. Make sure your Realtor works diligently to find out the condo rules for the building you’re looking at. I’ve heard too many horror stories of buyers having to choose between Fido and the condo of their dreams…
Here are the currently available condo statistics for dogs:
This video from Pat Callan, President of the Illinois Association of Realtors, discusses key housing provisions in the American Recovery and Reinvestment Act. In it, he talks about how Illinois residents can benefit from the $8,000 first-time homebuyer tax credit, increased Illinois FHA loan limits and energy-efficient housing tax credits.
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This week, I enjoyed an afternoon lecture by Steven Briggs of DePaul University’s College of Commerce. Dr. Briggs is an expert in negotiating and arbitration, and his MBA class on Real Estate Negotiation was open to guests. Always looking for new tricks in representing my buyers, I stopped by.
While the lecture described Dr. Briggs’ home purchase 15 years ago, the lessons are still relevant. These tips are MY take on his lecture, as he included much more detail for implementing these strategies. In any event… here are some tips that will help you on your next transaction…
1. Buyers’ Brokers are compensated when the real estate transaction closes, and therefore have “skin in the game”.
This made me uncomfortable — I have always prided myself on putting the needs of my clients first, and to be reminded that real estate brokers may have some self-interest was an affront. After all, I have worked 22 years to get my buyers the best deals possible … After considering his comments, however, I realized that in concept, Dr. Briggs is right. Theoretically, one can be a buyer’s broker and represent the client’s best interest, but at the end of the day — the agent is still paid by the proceeds of the sale. Since Dr. Briggs has not been represented by me, and since he’s not a “fly on the wall” during my negotiations, he couldn’t possibly know how I put my clients’ needs first. That’s why buyers need to find their brokers by recommendations or word of mouth. (I will devote another article to buyer’s agency later this month.)
2. Appear disinterested and don’t give away your “poker hand.”
Here, I would agree. From the time a buyer sees the property until the closing, it’s best to not “show love” for the property. Even better, no good negotiator should have emotion about a real estate asset , i.e. be willing to walk from the deal if it doesn’t suit your financial needs. How many of us, though, really see our primary residence as ONLY a rel estate asset?
3. Structure the offer with the seller in mind
Find out as much about the seller as you can… When does he have to move? Where is he going? Is it a job transfer, and if so, what is the timing? Is relocation involved? Is this an empty nester who is less than excited about downsizing, and net proceeds is more critical than the timing of the closing? and so on… You may discover ways to encourage the seller to drop the price based on closing date or other “perks” that can result in a lower purchase price.
4. Add “throw – aways” to the offer
In other words, an offer should be structured so that contingencies are included that can be negotiated out later with no harmful effect. For example, as a buyer, you might include a book case or flat screen TV in your offer, knowing that you can certainly live without them, and the seller can “win a point” by your relinquishment of these items. If you have a strong stomach for risk, maybe you will leave out the mortgage contingency clause, knowing that you are sure to get financing. I can’t tell you how many sellers’ agents were drooling over my buyer last week, since he didn’t have a sale contingency. “We will really play ball with a no-contingency buyer,” they said.
5. Initial offers can be ridiculously low
It’s important to NOT offend the seller so much that he refuses to negotiate, but a well structured offer demonstrating your sincere intent to purchase should get the conversation started. Remember, no real estate agent can refuse to present an offer. No matter how low you price it, if your offer is in writing, it’s our job to get it to the seller. Obviously, if your first offer to purchase is immediately accepted, then you are paying too much.
6. To know the seller has reached his bottom, everyone chips in
Here’s where I part company with Professor Briggs. Conceptually, I understand that the buyer knows he has gotten the seller’s bottom price when the only way to bring the deal together is by getting the agents to pitch in a part of their commission. HOWEVER, buyers are going to be sorely disappointed if they count on us to reduce our commissions. That’s a topic for another day, too, but for a buyer putting 10-20% down and financing the balance, a couple dollars from a real estate broker is not going to ensure a great deal. Hiring a true buyer’s broker who helps negotiate on your behalf is worth every penny that the seller pays. (Notice the article’s title — FIVE tips…!)
One thing he and I agree on without doubt — this is a buyers’ market, where anyone who CAN buy property SHOULD by looking for a deal. If you are contemplating getting into this marketplace, please let me help you find and negotiate a great real estate investment.
It was a well-spent afternoon, and my thanks go to Dr. Briggs for letting me sit in and learn his tricks — my real estate “bag of tricks” is enhanced, thanks to his insights.
Dr. Briggs has a PhD in Industrial Organization. His focus: Employee compliance and grievance systems, conflict management and dispute resolution. He has served as labor arbitration panelist for various government agencies, including Federal Mediation and Conciliation Service. Member of National Academy of Arbitrators.