Coming Soon — The 2015 Cook County Tax Sale

The 2015 bi-annual Cook County tax sale is due to begin August 3rd.home financing

What is the tax sale?
The Cook County Tax Sale is held bi-annually in early August.  The tax sale this year affects those who have delinquent property taxes for tax years 2013 and prior.  No one can actually take your house at this point by buying your taxes. The buyer is actually buying the “option” of taking your house if taxes, interest and penalties are not paid during the redemption period. They are purchasing what is known as a tax certificate which becomes a lien on your property.

Who is affected?
If you pay your property taxes  through an escrow reserve on your mortgage payment, you should be OK. However, if you have paid off your mortgage or paid cash and have no mortgage, you may be affected if your taxes are delinquent. This tends to be most seriously an issue for seniors who may lose track of tax payments after spending decades paying a mortgage.  Also, it may also be a problem for inherited property where heirs forget about property taxes or feel they can’t afford them.

How do I know if I am delinquent?
If you don’t have the PIN for your home (or you want to quietly check for a parent), you can get the PIN on the Cook County Assessor site. Do a search by property address and it will return the PIN.  You can then search on the Cook County Treasurer site or call the Cook County Clerk’s Office at 312.603.5656.

How long is the redemption period?
The redemption period is from six months to 2 1/2 years. Once taxes are delinquent, the county assesses monthly interest of 1.2%. Once taxes are bought at tax sale, the tax buyer is earns interest which can be up to 36% per year. In order to redeem taxes and get current, you will need to pay past taxes+ interest+tax buyer interest+fees. It can add up significantly over time.

Why would someone purchase property taxes?
In addition to having the opportunity to purchase the home for the cost of taxes, the tax buyer also earns interest during the redemption period. If they decide to take possession of the home, all other liens are wiped out including the mortgage and they have the deed free and clear.

If you think this may be a concern for yourself or for someone you care about, it is fairly easy to verify if there is a delinquency and the balance owed. I hope this information is helpful.

The process is also similar for the other counties in the Chicagoland area although timelines are different. Contact your County tax office for advice.

If you are looking to buy or sell real estate in the Chicago area, please give me a call or email.

Millie Lumpkin
Broker
EXIT Strategy Realty
Phone:      (312) 217-5644
Email:        millie.lumpkin@gmail.com
Website:   http://ChicagoSouthHomes.com
Blog:            http://ChicagoSouthRealEstateBlog.com

BREAKING NEWS — NEW FHA CHANGES

New Home

FHA has just announced changes that may have a significant impact for some buyers.  This may lead to greater urgency for some home buyers.

  1. Effective with FHA case numbers assigned on or after September 14th the maximum seller concession is being reduced to 3%.  Currently, the maximum seller concession is 6%. This is a 50% reduction.
  1. The down payment will continue to be 3.5%. However, if down payment proceeds are gifted to the buyer, lenders will soon be required to obtain a bank statement from the donor’s account, as well as source any large deposits to the account in order to document that the donor’s funds came from an acceptable source.
  1. Another big change is that student loan payments will be counted as part of debt to income ratio even if they are deferred for over 12 months.  This is potentially a significant issue for some buyers with major student loan balances.
  1. If an employee has changed jobs more than three times in the previous 12 months or has changed lines of work, the lender must take additional steps to verify and document the stability of the borrower’s employment income. Gaps of employment greater than six months will require six months on the new job, regardless of what created the gap. Raising a family is no longer an acceptable reason for the gap.

It looks like FHA is tightening up their guidelines a little bit. If you believe that any of these changes will impact your qualifications for a FHA loan, you may want to double check with your lender.  If you are looking to buy this summer, this may push up your decision timeline.

If you are looking to buy or sell a home in the Chicago area, give me a call or email.

 

Millie C Lumpkin
Broker
Exit Strategy Realty
Phone:  (312) 217-5644
Email:  millie.lumpkin@gmail.com
Website:  http://ChicagoSouthHomes.com

 

Saving for the Down Payment for Your New Home

downpayment pic

 

They say your home is your castle. If you’ve been renting your castle and dreaming of owning a home, you aren’t  alone. Homeownership rates have tumbled to a 20-year low – 63.9 percent in the wake of the Great Recession – as financial issues including unemployment, underemployment, student loan debt and tight credit conditions have weighed on potential homebuyers.

There are signs that may be changing, however. People 34 and younger are the largest group of homebuyers, according to a recent National Association of Realtors study that looked at 6,572 responses from a survey of homebuyers in 2014. Millennials represented 32 percent of all recent buyers, while Generation X, including those ages 35 to 49, accounted for 27 percent. The median age of millennial homebuyers was 29, their median income was $76,900 and they typically bought a 1,720-square foot home costing $189,900, according to the NAR.

“The No. 1 reason they want to buy is just to own a home of their own,” says Jessica Lautz, director of survey research and communications at the National Association of Realtors.

If you’d like to trade in your rental for a place to call your own, here are the steps you need to take.

Determine how much your monthly payment would be.  First, see what the price range is for homes in your desired community.  If the average price of a home in your desired neighborhood is $200,000, you can use an online mortgage calculator to calculate an estimated monthly house payment. Play around with different levels of downpayment to see how either increasing or decreasing the downpayment will affect your monthly mortgage payment.  By doing this exercise, you will have a better idea of what your downpayment will need to be for the house you want (closing costs will also be needed — this is an additional 2-6%).

Start saving now. It takes time to build up enough savings for a down payment. “Among first-time buyers, 28 percent save for six months or less, while 13 percent save for more than five years,” Traditionally, the typical down payment for a home has generally been 20 percent.  However, there are a variety of programs that can open the door to homeownership with as little as 3 percent or even no money down (USDA and VA loans are no money down options).

First-time homebuyers with low to moderate income levels may be able to qualify for a MyCommunity mortgage product through Fannie Mae with a 3 percent down payment. “Community mortgage products are better than [Federal Housing Administration] loans because the mortgage insurance is much less expensive and the down payment requirement is lower,” explains Gina Pogol, consumer finance editor at Charlotte, North Carolina-based LendingTree.

The FHA backs several kinds of mortgage programs. “The 203(b) is the most commonly used. It’s used to purchase or refinance homes with 3.5 percent down, as long as they have a credit score of 580 or higher and qualify for financing,” Pogol says.  Another FHA program is the 203(k), which can be used to buy or refinance property that needs to be rehabbed or just updated from a 1970’s decor.”

Start saving by setting up a special savings account and automatically transferring a set amount into it each month. Deposit any bonuses or gifts (or your tax refund) into this account as well. How long it will take to reach your down payment goal depends on the amount you need and how much you are able to sock away each month. “For someone buying a $200,000 property with 3 percent down, saving $500 a month, it will take a year. And there are still closing costs to deal with,” Pogol says.

Consider alternative down payment sources. There are other options in addition to your personal savings, which include gifts from relatives or friends or a withdrawal from your individual retirement account for a first home purchase. If you are lucky enough to have a generous relative or friend willing to gift funds for your down payment, you are required to furnish an official letter documenting that for your lender.  Speak with your lender so that you understand your bank’s rules in regard to documenting the downpayment gift.  Also, make sure that you understand what penalties or taxes may result from the withdrawal of funds from your retirement account.

Minimize payment shock. Consider how much you can actually afford, starting by looking at what you are paying in rent. If you are looking to buy more house than your current rent payment, Pogol recommends potential homebuyers “test drive” the higher monthly payment.

“If your current rent is $1,000 a month and you want to buy a home with monthly principal, interest, taxes and insurance – called a ‘PITI’ payment – for $1,400 a month, I’d recommend that you put $400 a month into savings and see how hard or easy that is,” Pogol says.

Consult with a lender early in the process.  In addition to saving for the deposit, you may also need to make other financial “tweaks”.  Will your monthly debt payments exceed the ratios required by the bank?  Are there judgements that need to be satisfied? Do you have past bankruptcies or foreclosures that affect your timeline for getting a mortgage?  While you are saving, make sure that you are doing all that you need to do to be financially prepared to buy.

Although the path to homeownership can take some time, there are financial benefits, including the mortgage-interest deduction on your income taxes, increase in net worth and stability of monthly home payment.  However, the intangible benefits often outweigh economic factors.  There is the pride of home ownership, the freedom to have your home reflect your personal style and the security of having your own space.

If you are looking to buy or sell your home in the Chicago area, give me a call or email.

 

Millie Lumpkin, Broker
Exit Strategy Realty
Phone: (312) 217-5644
Email: millie.lumpkin@gmail.com
Website:  www.ChicagoSouthHomes.com

NEW LISTING!! 5223 S PEORIA CHICAGO IL

Listing Details

5223 S Peoria Avenue, Chicago IL 60609
MLS #:  08970506
# of Units: 2
# of Bedrooms: 6
Building Sq Ft:  2,430

Call Millie Lumpkin at (312) 217-5644 to see if this property is still available and to arrange a showing. For similar multi-unit properties in this neighborhood, click here.

5223_Peoria Chicago IL
5223_Peoria Chicago IL

EXCELLENT INCOME PROPERTY FOR NEW OR SEASONED INVESTOR

The apartments in this 2-unit building show very well. There are three bedroom in both units. They have nice hardwood floors, newer kitchens and baths in both units, and a fireplace in the living rooms. The windows are newer, electric has been updated and the exterior has recent tuckpointing. The building has been well maintained and is Section 8 approved. The basement is fully finished with a family room, bedroom, kitchen, office and bath. It is not a legal unit but it can be used by owner while other 2 units are rented out or legalized as a third income unit. This property is perfect for an investor looking for a place to live while generating an income stream. It’s also great for a seasoned investor looking for a property with a strong cash flow.

Click here to see additional information and pictures of 5223 S Peoria in Chicago.

Call Millie Lumpkin at Exit Strategy Realty for more information or to schedule a showing for this property. Ask about other income properties in the Chicago area.

Millie Lumpkin, Broker
Exit Strategy Realty
Phone: (312) 217-5644
Email: millie.lumpkin@gmail.com
Website:  http://ChicagoSouthHomes.com

Understanding Closing Costs for Buying Your New Home

In addition to the down payment, you’ll also have to pay closing costs as part of the money that you bring to the table for your real estate purchase.  Closing costs are fees charged by those involved New Homewith the home sale (such as your lender for processing the loan, your attorney, the title company for handling the paperwork,  local government offices for recording the deed, etc.).  The average closing costs percentage is usually about 2-5% of the purchase price.

Your lender will give you an estimate of closing costs on the purchase of a particular house you’ve selected. This is called a “Good Faith Estimate” (“GFE”). The Good Faith Estimate is provided by the lender shortly after loan application is received.  There is likely to be some difference between the initial Good Faith Estimate and the final closing costs but they do give you a good idea of how much money will be needed for closing.  The actual “Settlement Statement” (aka “the HUD” or “the HUD-1″) is the final and complete form with all the numbers for the sale (including the actual closing costs).  It is provided 1-2 days prior to closing.  Your attorney will generally receive the information from the lender and provide you with the figure.  Starting in October 2015, lenders will be required to provide the final statement of closing costs to the buyer 3 days prior to the close.

Here are typical closing costs for the buyer:

  • A fee for running your credit report.
  • A loan origination fee, which lenders charge for processing the loan paperwork for you.
  • Attorney fees.
  • Discount points, which are fees you pay in exchange for a lower interest rate.
  • Appraisal fee (the appraisal is a determination of the market value of the home to ensure that sales price (and loan amount requested) is appropriate.
  • Survey fee, which covers the cost of verifying property lines.
  • Title insurance, which protects the lender in case the title isn’t clean.
  • Title search fees, which pay for a background check on the title to make sure there aren’t things such as unpaid mortgages or other liens on the property.
  • Escrow deposit, which is a reserve amount for future property taxes, home insurance and private mortgage insurance payments.
  • Pest inspection fee.
  • Recording fee, which is paid to a city or county in exchange for recording the new land records.
  • Underwriting fee, which covers the cost of evaluating a mortgage loan application.

For a cash purchase, there are still closing costs but a lot less since there is not a loan.  The closing costs for a cash buyer primarily include:  attorney fee, title insurance fee and other title related costs, and government recording fees.

Often, the negotiation process includes a request for the seller to make a contribution toward the buyer’s closing costs.  This can help reduce the amount of cash needed at closing.  This request is generally part of the initial purchase contract.  There may also be state and city funds available for down payment and closing cost assistance.  In Illinois, there are funds available up to $5,000 in 2015.   Click here for link to Illinois Housing Development authority for more information about state grants for home buyer assistance.

If you are looking to buy or sell in the Chicago area market, call or email me.  I look forward to earning your business.

Millie C Lumpkin, CDPE, SFR
Broker
EXIT Strategy Realty
Phone:     (312) 217-5644
Email:      millie.lumpkin@gmail.com
Website:   http://ChicagoSouthHomes.com

 

 

 

 

Buying A Condo in Chicago? — The Basics

urban_03-fireplace

The condo market in Chicago is hot!  Like the overall market, condos are experiencing a seller’s market and prices are rising (the median sales price for condos in Chicago is 7.4% higher than prior year levels).  Condos are attractive for those not wanting to deal with exterior maintenance and in Chicago — the location and amenities.

For those considering a condo purchase, there are a few things to keep in mind:

    • Financing: Financing for condos is more difficult than a single family home.  Credit score requirements are higher and the condo association has to meet certain requirements in addition to the borrower.  The biggest condo association qualifications that tend to be problematic are:
      • Less than 15% of association fees delinquent for 60 days
      • Less than 50% investor/renters
      • Adequate reserves in association budget (10% of budget)
      • Lack of condo association – with no association it will be very difficult to get financing
    • Association Fees: The association fees cover the costs of the property taxes on the building, utilities for the common areas, exterior maintenance, etc.  You want to be certain what amenities are included in the association fee.  With condos, the monthly association fees can sometimes be fairly pricy.  You want to factor in the amount of the monthly association fees in addition to the purchase price.  Often, the loan amount that you qualify for can be impacted by high association fees (it affects the amount of your monthly housing payment).
    • Special Assessments: Condo associations will levy special assessments for projects such as roof replacement and other capital improvements.  In addition, a building in great shape may need to shore up the budget reserves with a special assessment if needed.  Ask about any planned special assessments and the history of them in recent years.  You can request this information from the seller or association during your attorney review period.
    • Restrictions in the Bylaw: The condo’s bylaws set up rules and restrictions for the condo owners in the building.  It is recommended that you review these as part of your due diligence.  Some associations restrict the renting of units so if your future plans are to rent your unit for income, this may be an issue.  There may also be other restrictions that impact remodeling, etc.  Do your homework before you close.
    • IL Condo Act: This act in Illinois applies to the purchase of foreclosed condos only.  It basically holds the buyers of foreclosed condos responsible for paying up to 6 months of past due condominium assessments and all the legal fees associated with the association’s attempts to collect those assessments. You will want to confirm whether there are delinquent fees prior to the offer or definitely during the attorney review period.  Again, this is only an issue for foreclosed condos.
  • Other Concerns: Some other concerns when purchasing condos are whether parking is included (a real issue in some Chicago neighborhoods) and is there pending or existing legal action against the association.

Even though there are concerns that need to be kept in mind, a condo can be a great option for many people.  These are just items to routinely check off to minimize unexpected and unwelcome surprises.  If you have questions or are looking to buy and sell in the Chicagoland market, please give me a call.

 

Millie C Lumpkin, CDPE, SFR
Broker
EXIT Strategy Realty
Phone:     (312) 217-5644
Email:      millie.lumpkin@gmail.com
Website:  http://ChicagoSouthHomes.com

 

 

 

Choosing the Right Chicago Neighborhood for Your New Home

bungalows

As a future homeowner, you put a lot of thought into what you want your new home to be. You decide on how many bedrooms, and features like the garage, finished basement, fireplace, master bathroom, etc.  Equally important is finding the right neighborhood to make your house or condo feel like home.

In determining the right neighborhood, there are several points to consider:

  • Availability of homes in your price range
  • Amenities in the neighborhood that are important to you, i.e., shopping, parks, stores
  • Commute to work
  • Proximity to expressways or public transportation
  • Schools
  • Crime rate

Click here for a great resource for community information by zip code.

In today’s home buying world, potential home buyers are not waiting for their real estate agent to send them home listings. They are on the internet searching for homes that catch their interest and taking an active role in finding the homes they want to see.  In the suburbs, it’s easy to search by putting the name of the town in and then searching through what’s available in their price range.  In the city, it’s helpful to know the zip code in the desired neighborhood.  See below for a map of Chicago zip codes.

As you view homes in the neighborhood, you’ll get a “feel” for the neighborhood but a little objective data is sometimes helpful in firming your decision.  Here are some helpful tools for your home buying decision making.

Chicago public schools belong to one big district, 299.  However, not all schools are created equally. For information on the schools in your neighborhood (whether private or public), a great place to start is online.  Here is a helpful website that gives information on the specific schools within your zip code or town.  It includes ratings, parent reviews and test scores.  Click here for the site.

Safe neighborhoods can be a concern in Chicago.  It’s always great to ask friends, co-workers or family members that may be more familiar with the neighborhood.  You can also get a feel for the neighborhood by driving through to see how well the neighbors appear to maintain their property, are there lots of boarded up homes, does the neighborhood appear quiet (or energetic if that’s more your speed).  There is also information online about crime activity which may be useful.

As you drill down on your wish list for your new home, hopefully these tools will be helpful.  Of course, another critical tool for your home search is a great real estate agent.   I hope you will give me the chance to help you find your new home.

 

chicago_zipmap

Millie C Lumpkin
Broker
EXIT Strategy Realty
Phone:  (312) 217-5644
Email:  millie.lumpkin@gmail.com
Website: http://ChicagoSouthHomes.com

 

Sellers – Tips for a Successful Short Sale

short sale sign pic

The number of homeowners defaulting on their mortgage has declined compared to a few years ago.  However, in the Chicago area, short sales still comprise a decent amount of the homes available for sale.   In the metropolitan Chicago area, 25% of the homes that sold under $200,000 were a short sale.

Short sales can be frustrating for both sellers and buyers.  For the homeowner, there are some tips for a successful short sale:

  • First, sales prices in the Chicago area have improved in the last 2-3 years. You may be pleasantly surprised to find out that your mortgage is no longer upside down.  Speak to a real estate agent to get an opinion of the current market value for your home.
  • A short sale will not be approved unless there is a legitimate financial hardship. Make sure that you understand your bank’s criteria for a hardship and the bank’s process and documentation needed to consider a short sale. Most banks will have a section on their website highlighting short sales. Contact your bank’s loan modification area for more information.
  • In determining approval for a short sale offer price, the bank is primarily looking at market value not the amount of mortgage owed. Don’t hamper the marketing of your home by insisting on a higher price than the indicated market value.
  • A low ball list price may get a quicker offer but the bank is likely to either reject the offer or ask the buyer to raise their offer. Make sure that your agent does a CMA upfront to support the list price because the bank will be doing their own valuation of market price.
  • Make sure that you understand where you are in terms of the foreclosure timeline. This may determine how aggressive you need to be as far as pricing and in your communication with the bank. The timeline is different for each state. The normal timeline for Illinois is 210 days from the date of initial filing by the bank (usually after 3 months of default on the mortgage).  In recent years, Cook County has taken much longer in the foreclosure process but processing time appears to be shortening.
  • Make sure that you provide all the documentation requested on a timely basis. Most banks have established fairly systemized processes for the short sale process.  The systems have hard deadlines and a delay in providing requested information can cause the short sale process to be discontinued.
  • If you are selling a home with a homeowner or condo association fee, try to stay current. Associations have the authority to foreclose on your home independently of the bank holding the loan. Also, the bank may not be willing to pay these fees.
  • A preliminary title search will help to eliminate some surprises later. If there are multiple liens, e.g., two mortgages, each lienholder will be negotiated with separately. Federal liens such as IRS tax liens will need to be satisfied prior to the short sale.
  • Make sure that your agent is negotiating to have the mortgage deficiency waived (if applicable in your state). One of the primary benefits of doing a short sale is the ability to negotiate the handling of the deficiency. You want the resolution in writing. Be aware that there may be some residual deficiency remaining depending upon the negotiation.  However, without a short sale you don’t have a seat at the table when the decisions are made.
  • Finally, you are selling your home so the normal things still matter. Curb appeal, presentation of your home and marketing still need to be in place.

These are a few tips that should help sell your home as a short sale.  Keep in mind the benefits of the short sale as you patiently wait through the bank’s approval process.  If you are in the Chicago area, I would love to work with you in selling or buying your home.

Good luck.

 

Millie C Lumpkin, CDPE, SFR
Broker
EXIT Strategy Realty
Direct: (312) 217-5644
Email Me: millie.lumpkin@gmail.com
Visit My Website: http://ChicagoSouthHomes.com
Read My Blog: http://ChicagoSouthRealEstateBlog.com

Chicago Foreclosure Trends – March 2015

Nationally, the level of foreclosure activity has declined significantly.  However, in some states, foreclosures continue to be aforeclosure- next exit problem.  It appears that problems remain primarily in those states with a judicial foreclosure process.  Illinois is one of those states.

Illinois foreclosure levels have improved.  Since 2012, foreclosure levels have consistently declined month by month.  However, in March 2015, there was a sharp spike in new foreclosure filings in the city of Chicago.  In March, the number of properties that received a foreclosure filing in Chicago, IL was 200% higher than the previous month and 74% higher than the same time last year.

chicago_foreclosures_-_march_2015

According to RealtyTrac, the spike in foreclosure activity is not because of increased new mortgage defaults (those actually had a slight decline) but because of a clearing of the backlog in foreclosure cases.  Some of the most stubborn foreclosures are being flushed out of the foreclosure pipeline which has resulted in a dramatic increase in foreclosure auctions and judicial sales.  Hopefully, these homes will soon make their way to the market to increase the available inventory.  Note that although the bulk of increased activity is in Chicago, increases were also seen in nearby communities like Schaumburg, Aurora, Palatine, Cicero and Elgin. The backlog is most problematic for prices at lower end of the spectrum.

One good thing about this increase in auctions and judicial sales is that title to these homes are transferring out of the hands of homeowners.  One problem in Chicago is the presence of “zombie” foreclosures where homes remain stuck in the foreclosure pipeline because banks don’t complete the process of taking title to the home.  Many times, the owner has been in the foreclosure process for years and has little incentive to maintain the home or ends up abandoning the home.  However, it should be noted that as long as owner is still listed on title, they are subject to liabilities attached to the home.  These include:

  • the tax collector may come looking to collect back property taxes
  • an HOA may file a lawsuit to recover unpaid assessments
  • you could be threatened with fines for not complying with housing codes and ordinances (and even face jail time in some instances if you don’t meet repair deadlines), or
  • the local government may send you a bill for yard maintenance, repairs, trash removal, and/or graffiti scrubbing.

For these “zombie” homeowners, the clearing of the backlog is good news indeed.  For buyers, this may also result in a welcome increase to a market needing more homes for sale.

Millie C Lumpkin, SFR, CDPE
Broker
EXIT Strategy Realty
Phone:       (312) 217-5644
Email:         millie.lumpkin@gmail.com
Website:  http://ChicagoSouthHomes.com

 

 

Bronzeville Neighborhood in Chicago

Bronzeville is a community which enjoys a rich history in the city of Chicago.  In the early 20th century, Bronzeville was known as the “Black Metropolis”, one of the nation’s most significant areas of African-American urban history. Today, the Bronzeville neighborhood in Chicago is a popular neighborhood for many upwardly mobile families because of its proximity to both downtown and the lakefront.  There is also the abundance of graystones which are considered classical Chicago architecture.  In the last 20 years, there has been an abundance of renovations and new construction in the area.  As you travel the neighborhood streets, you’ll see a mix of newer construction alongside graystones that have lasted a century.  You’ll also see condo buildings and multi-unit buildings all which serve to attract a diversity of residents to the area.

Bronzeville also has several points of interest.  Residents are minutes away from Chicago’s lakefront and the establishment of the 31st Street beach and harbor has only increased enjoyment of this location on lakefront.  Also, of interest is the Harold Washington Cultural Center, Sox Stadium on 35th Street and both the downtown museum campus and Museum of Science Industry can be reached within 10-15 minutes.

Property values have remained healthy.  There have been a significant number of foreclosures in this neighborhood but due to the continued interest in the community, investors and potential homeowners have been quick to grab and renovate these properties.  At this time, a typical 3-4 unit  graystone with a quality rehab can easily realize an after repair value of $350-400,000.

If you’re interested in finding out if this community might be a good fit for you, please give me a call or email.

 

Millie C Lumpkin, Broker
EXIT Strategy Realty
Email:  millie.lumpkin@gmail.com
Phone:  (312) 217-5644
Website:  http://ChicagoSouthHomes.com/search