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Asked Questions :

Chicago Neighborhoods -

  1. What's makes a good neighborhood to live in?

    I think the most important characteristics for you might be:
    1) convenience to transportation (highway or public transit) 2) convenience to shopping and support services 3) your perception of personal safety 4) proximity to your friends and family 5) other reasons that are unique to you.

    There are several resources that you can check out to answer some of these questions or concern: http://www.walkscore.com gives a score from 1-100 based upon the convenience of transportation and other daily living activities which are close to the property address you input. Also http://www.peekacity.com provides the proximate locations on a map of services and businesses in the area around the subject address. You can obtain crime statistics at the Chicago Police Dept website http://gis.chicagopolice.org/ which gives you the ability to input an address and search the crimes stats closeby.

 

Chicago Sales Trends and Data -

  1. What do you see happening to housing prices?

    What I see varies from one neighborhood to another throughout Chicago. Chicago is a city of many neighborhoods; the better the neighborhood the less volatility there has been and the depreciation levels have been less. This is due to the fact of supply vs demand. There are more buyers looking to buy in the better neighborhoods thereby stabilizing housing values. Also, because mortgages are "harder" to get because they are full documentation, only good, qualified buyers are able to get them; again supporting the values in the better, more established neighborhoods. I have also found that there are fewer short sales and foreclosures occuring in these neighborhoods which is another economic factor helping to maintain higher property values. If you'd like to see specific sales data for a specific neighborhood (zip code) let me know and I can post it for everyone to see.

  2. I live in Wicker Park. How are the condo prices doing here? Are they still going down?

    Looking at the Year-to-Year comparison of 2009 - 2010 - 2011:
    The 1-2 Bedroom Median Sales Prices have gone from $350,000 (2009) to approx $290,000 (2011)
    The 3 Bedroom Median Sales Prices have gone from $470,000 (2009) to $400,000 (2011)

    We'll have to monitor the trend in 3-6 months to see where the Median Sales Prices are heading...stay tuned.

  3. I live in the Lakeview neighborhood. Have 2 bedroom condo prices bottomed out?

    The data comparing 2009 vs 2010 vs 2011 sales indicates the following:
    1) The median sales prices have dropped approximately 15 - 20% from 2009
    2) The months of inventory have gone from an average of 6 mos in 2009 to over 10 mos in 2011
    3) The average market times have gone from approx 90 days (2009) to 160 days (2011)

    It remains to be seen if we have "bottomed out" on sales prices. But these are the market data/facts.

 

Money and Financing -

  1. Is it a good time to refinance? Rates seem to be very low and will they go lower?

    Yes. They are extremely low now around 4% and going lower because of the instability/uncertainty in the European financial markets. If you're going for a 30-year fixed rate it may be as good a time as any to refinance; however, compare your current rate with the new rate (your new payment vs the current one), compare the costs to refinance and how long you plan on staying in your current home. If there is a large enough savings by the refinance then do it.

  2. What's involved in getting approved for a mortgage?

    Mortgage loan approval is a full-documentation process now. 2-years' tax returns, 2 month's bank statements, employment/income verification, full credit report and credit score. Loan approvals are taking 30 days or so for conventional and 45-days or so for FHA loans. There's an application process upfront along with a fee. Make sure to ask for an estimate of all the lender's fees and closing costs.

  3. How difficult is it to get a mortgage?

    Getting a mortgage is a "full documentation" process now. Payroll statements, bank statements, 2-years' tax returns, credit report w/ credit score.

  4. How do I know that I'm getting a good deal on my mortgage?

    It makes sense to talk to several lenders to get their written estimates of their costs so that you can compare their differences and select the best one. It's not just about the interest rate; there can be other costs which are greater to offset the low interest rate being quoted. So look at the overall picture interest rate and all of the other loan related costs and charges.

  5. I'm a first time buyer. Is it more difficult for me to get a mortgage because of this?

    Being a first-time buyer is not really the issue. The important factors are credit score/history, employment history and verifiable income as well as assets (money in the bank). Check with your mortgage advisor to see if you are qualified. Ask them for advice on what needs to be improved so that you can easily get approved for a mortgage. I strongly advise that you get a pre-approval for a mortgage BEFORE you start your home search in earnest. This way you can shop with confidence and when you find the home you love that you know that can afford to buy it.

 

Own vs Rent -

  1. I am currently renting but am considering buying my first home. How do I compare my situation renting now with buying my first home?

    I have a resource link on the site -- "Rent vs Buy Calculator". It's located on the right side of the website near the lower half. You can plug in your information and it'll calculate the comparisons for you. If you're curious on what you can afford for a mortgage payment go to the "Mortgage Pre-Qualification Calculator" located below that. Let me know if you have any other questions as you investigate this.

  2. I currently pay $1200 per month rent. I also pay my own utilities. What could I buy for this same amount of money a month?

    Well, assuming an assessment of $200/month, real estate taxes of $250/month leaves $750/mo for a mortgage payment. That translates into a roughly $155,000 loan at today's rate of 4%/30 years. If you put 5% down then your purchase price would be about $163,000.

 

The Buying Process -

  1. I am thinking of buying a condo and I'm a first time buyer. Where do I start?

    That's a really good question. There are several topics which you need to research and get answers to: 1) Location - where do you want to live? 2) Size/Space - how large, how many bedrooms/baths? 3) What kind of property? Single Family? Condo? 2-Flat? 4) What can you afford?
    I think once you have #4 answered (What can you afford?) that the other questions will get answered. Having an idea of each of these will allow you to look at your neighborhood options in relation to price, size and property type.

  2. I was thinking of buying a condo but wasn't sure which was a better value, newer or older construction?

    "Value" is a relative term. If you prefer new finishes then you're going to prefer a newer rehab or newer construction property. However, this comes with a higher price. If you want the most space (sq. footage) for the $$ then a vintage (older) property will be more attractive. Just remember that new doesn't mean better because if the construction was done cutting corners or substandard workmanship was used then there will be future repairs/replacements required to correct these faults. On the other hand older construction ones will need to have their kitchens, baths, electrical and plumbing as well as common area items such as roof, porches, etc repaired or replaced. Whichever way you go make sure that you have a really thorough home inspection done to expose what needs or will need to be done now and over the next 5 years.

  3. How long is the process of buying a house? How long does it take from start to finish?

    Well there are a few stages to this process: (1) education (2) search process (3) finding your property, going through the due diligence phase, getting a mortgage and closing. Stage (1) can take 1-3 months Stage (2) can take 1-6 months Stage (3) will take 45 - 60 days. Best to get started early so that you're not getting stressed out with a deadline looming over you.

  4. I'm in a lease which ends on 4/30/2012. How soon should I get this process started?

    You should get started as soon as possible because the part which takes the longest is to get educated about the market. Also, to expedite the process get pre-approved for a mortgage upfront so that you know what price range you should be looking at. Try to narrow down your search so that you can focus on location and property type in your price range. Once you've done that it'll be easier to concentrate on that. If you're not sure of location and property type that will take some time to figure out and to make your final determination.

  5. If I have a Lease thru 4/30 when should I close -- on 4/30?

    In my experience it's better to close a couple of weeks before your lease expires. It gives you some breathing room to paint, cleanup, do some work and complete the actual move. Having the extra time to complete these things will reduce your stress levels. Since your mortgage payments are in ARREARS, your first payment is not until the first of the 2nd month after your closing. i.e. close on 4/15 your first mortgage payment is due on 6/1.

  6. How do I make sure that I'm not making a mistake when I choose a property to buy?

    First of all make sure that you have several "protection provisions" in your purchase offer documents; 1) subject to getting a mortgage 2) subject to having a property inspection completed 3) subject to your attorney's review. In 1) the lender will do an appraisal and this will help to confirm that the purchase price is verified by an outside appraiser 2) have a good quality home inspector look at the property to make sure that there are no serious issues or defects relating to the property 3) your attorney will review the condo documents and all other related financial information to make sure that there are no serious legal or financial issues currently or around the corner which would adversely affect you.

  7. I was thinking about buying a 2 or 3-flat. Can you give me some insight about this and if it makes sense?

    The idea of owning and living in a 2-3 flat makes alot of sense. You've got other tenant(s) paying rent who help you cover the costs of the mortgage, real estate taxes, insurance & operating costs. You also have a hedge against inflation with the rentals because you can increase the rents to help cover the increased costs of ownership. Eventually, if you move out you can rent your apartment and have the additional income and possibly a positive cash flow as additional income for yourself. The downside is making sure that you have good quality tenants who are timely in the payment of rent and take good care of the apartments. Issues with problem tenants can make a nice investment turn sour very quickly. Also, you will need to make sure that you have the proper upkeep and maintenance of the property and all of the systems. Letting a small issue go uncorrected can become a larger (and costly) problem over time if unheeded. In the recent real estate downturn the values of 2-4 flats have been hit the hardest of the various property types in Chicago making them an excellent opportunity.

 

Featured Articles -

  1. What's the pricing data like for Bucktown and Wicker Park where I currently live?

    I will be working on creating the data graphs to be posted so that you will see the last 3-year comparison of sales prices for condos and single family homes.

 

Others - 

  1. How do I know the utility bills won't be too high for me to afford? I was lied to previously.

    At least in Chicago there is a legal requirement that the owner of a property provide you with the annual heating estimate from the utility company so that you have some idea of what the cost will be for heating. Either the owner of their representative can request this "Annual Heating Disclosure" from the appropriate utility company and you must sign an acknowledgment of receipt for it.