Tips to Buying Your Chicago Condo

Are you thinking of buying a condo in Chicago? The condo market in chicago lakefront condoChicago remains hot as companies continue to move from the suburbs to the city.  There is also the draw of all the amenities and things to do in the Loop area.  In addition, for those not wanting to deal with exterior maintenance, condos are a great option.

The condo market in Chicago continues to  experiencing a seller’s market in terms of tight inventory levels.  The supply of condos / townhomes is 8.8% lower in Chicago than August  2016 levels.  However, despite the tight supply of condos available, the number of homes sold in the last 12 months is slightly higher than prior year levels.   The median sales price is also moderately higher. Continue reading “Tips to Buying Your Chicago Condo”

Millie C Lumpkin
Broker
Stages Real Estate
Phone: (312) 217-5644
Email:     millie.lumpkin@gmail.com
Website: ChicagoSouthHomes.com
Blog:       ChicagoSouthRealEstateBlog.com

 

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Have You Checked Your Property Tax Bill?

 

Cook County property taxes were due August 1 this year.  home financingUnfortunately, homeowners will notice an increase in their property tax bill.  The average tax bill in the city of Chicago is expected to increase 10%. This is largely due to increases for police, fire and teacher pensions.  However, suburban Cook County tax bills will also increase on average between 3.9% to 6.5% depending upon location.  The south suburbs are expected to be on the lower range of that increase at 3.9%. Continue reading “Have You Checked Your Property Tax Bill?”

Millie C Lumpkin
Broker
Stages Real Estate
Phone: (312) 217-5644
Email:     millie.lumpkin@gmail.com
Website: ChicagoSouthHomes.com
Blog:       ChicagoSouthRealEstateBlog.com

 

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Are You Planning to Buy in Spring 2018?

 

home for sale

Many potential home buyers still use spring as their target to “start looking” for their new home.  If you are planning to buy your home this spring, there are some things you can do now to be ready to GO in the spring.

Speak to A Mortgage Lender

Speak to a mortgage lender now to see if there are any issues with your credit, debt levels or income. A good loan officer will outline any “tweaks” needed and give you a loan amount you should qualify for if everything is in order.  Qualifying for a mortgage involves more than a good credit score and decent income.  An early start in making sure your finances are in order will make for a less stressful home search later.

In your conversation with your loan officer, you should also have a discussion about the different loan products available. Many people will automatically go for an FHA loan (which is great for a lower down payment) but you should also consider whether the other loan alternatives may be a better option.   Also, are you getting the best interest rate?  Note that there are other loans other than FHA which have lower down payments.  Conventional loans are now available as low as 3% down.  Conventional loans also don’t have many of the property condition requirements that FHA loans have.  Finally, conventional loans definitely make buying a condo or townhome easier.

Loan Down Payment

Regarding the down payment, most loans will require a down payment.  Down payments generally range from 3.5% for FHA up to 20%.  If you don’t already have the money saved, you will need a plan for getting it or closing the gap of what’s needed.  Your loan officer should also let you know about closing costs for your home purchase.  Typical closing costs are mortgage origination fees, attorney costs, escrow of property taxes, etc.  Expect about 3% of the purchase price.  Often, these can be negotiated as part of the offer but not always.  Again, you should have a plan for taking care of this cost.  You may also want to talk to your lender about available public funds (such as the IHDA down payment assistance program).

Interest Rates

Interest rates rose in the last weeks of 2016. In addition, the Federal Reserve announced that it expects to increase rates further in 2017. However, forecasts don’t expect rates to rise past 5% by year end 2017.  The importance for buyers is that an increase in mortgage increase rates may affect the selection of homes that are available to you.

Property Taxes

Property taxes may make a significant difference in how much home you can afford so you want to pay attention to this figure when you are looking at homes. In Chicago, property taxes are fairly affordable (especially for homes valued under $250,000).  However, in some of the suburban communities, property taxes can be pretty significant for even modestly priced homes.

Selling Before Buying

If you will need to sell your home before buying, there are some things that make sense to do now. If needed, now may be a good time to do those small repairs around the house that might be issues for potential buyers.  Are there rooms that would show better with a little de-cluttering and fresh paint?  Is your furnace more than 20 years old? Are the harvest gold kitchen appliances screaming from the 80’s?  Is the carpeting soiled or worn?  You may not be in a position to make major investments in the home you are selling but are there affordable investments that will counter the impression of your home being dated or lacking proper maintenance?  The investments made toward improvement or repairs should increase either the marketability or market value of your home.  Talk with a realtor so that you get a feel for the impact of these changes on the marketing of your home.

List of Wants and Needs

Now for the fun part …. Determine your wants and needs for your new home. It will help maximize your home search time if you already have a good idea of what’s important to you.  Think about location, schools, your lifestyle and which architectural styles appeal to you most. Do you want a family room, attached garage, big backyard, updated kitchen, etc?  What are your deal breakers?  The clearer you are in what you want, the easier it is for you to find your dream home.

Exit Plan from Current Home

Finally, what’s your exit plan for your current residence? If you rent, how will you handle it if you close earlier or later than your lease expiration date?  Do you need to discuss this with your landlord?  If you own your current home, do you need to sell it first? If you are selling your current home, call a trusted realtor to determine the value of your current home and get an idea of what you can expect to net from sales proceeds.

Buying a home requires some planning.  If you’d like a consultation to discuss buying your new home, please contact me.

Millie C Lumpkin
Broker
Stages Real Estate
Phone: (312) 217-5644
Email:     millie.lumpkin@gmail.com
Website: ChicagoSouthHomes.com
Blog:       ChicagoSouthRealEstateBlog.com

 

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Renting vs Buying Your Next Home

Renting vs Buying Your Next Home

renting vs buying

Renting vs buying your next home is completely a personal decision.  There is no right or wrong just what feels right or wrong for you.  Each option has its own set of pros and cons.

Pros of Renting:

  1. Not tied to the home – if you are new to a city and unfamiliar with the different neighborhoods, renting allows you to get to know your new home city before settling on a neighborhood or subdivision.
  2. Your desired neighborhood or community is too expensive for you to buy in but there are affordable rental options.
  3. Not responsible for home maintenance – renting puts the responsibility of home maintenance on the landlord

Cons of Renting:

  1. Limited control – it’s the landlord’s property so he/she makes decisions about whether you can paint the walls or have family or friends move in temporarily.  They also control how quickly things are updated or repaired.
  2. No tax deductions on rent – Your landlord gets the tax benefit from owning the home not the tenant.
  3. No control over paying the mortgage – You are paying for the right to occupy the space.  However, the landlord is responsible for paying the mortgage. This was a harsh reality during the foreclosure crisis. There were many instances during the crisis where the tenant responsibly paid the rent but the landlord was not as responsible about paying the mortgage.

Just as renting can be the right decision for some, buying your next home can be the right decision for others.

Pros of Buying:

  1. Your monthly mortgage payment is often less than rent – the mortgage (principal + interest) for a $200,000 home in today’s market is less than $900 per month. Interest rates are typically less than 4%. Even with property taxes included, your monthly mortgage can be significantly less than rent for a similar home.
  2. A monthly mortgage is a fixed payment compared to a rental payment which often has an annual increase. You can also pay off the mortgage and eliminate the expense (leaving just the property taxes). Renting is a perpetual expense.
  3. Owning a home often gives an increased sense of stability. Homeowners generally feel a stronger commitment to the community and feel more security about their home.
  4. Control over your property – paint the walls polka dot, upgrade the kitchen or feel free to have guests and family move in for a few weeks or a few months.
  5. Tax benefits – owning a home allows deductions for mortgage interest and property taxes which can be significant. This is an important benefit for many people.

Cons of Buying

  1. Short term costs of buying – although the monthly payment may be less than renting, buying a home involves having enough for the initial down payment and closing costs. Many renters find it difficult to save for the initial costs of buying a home.
  2. Home Maintenance – if there’s a leak in the pipes or the furnace goes bad, you are responsible as the homeowner.
  3. Tied to the home – there is less flexibility in terms of moving when you own versus rent.  Relocating for a job or changing neighborhoods for a better school district is more complicated when you have to sell before moving.

There’s just no right decision in regards to renting vs buying your next home. It just depends upon what’s important in your life and what are your current circumstances.

Millie C Lumpkin
Broker
Stages Real Estate
Phone: (312) 217-5644
Email:     millie.lumpkin@gmail.com
Website: ChicagoSouthHomes.com
Blog:       ChicagoSouthRealEstateBlog.com

 

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Chicago Condo Market Stats – July 2016

Home Prices in Chicago South Real Estate for July 2016 – Condos/Townhouses

Real estate market data for Chicago South real estate provided by Millie Lumpkin of Coldwell Banker Residential.

The Chicago metropolitan area condo market continues to experience a seller’s market with a median sales price for twelve months ending July 2016 of $183,500. This was 4.9% over prior year levels.

In Chicago, the median sales price for the condo/townhouse market is $305,000, a 0.3% increase over prior year levels. In addition to the basically flat price growth, the number of closed sales was a modest 2.8% higher than prior year levels.  The average days on market for Chicago condo/townhomes is 74 days.

The median sales price for Chicago overall is heavily weighted by condo prices on the north side and the Loop area.  These areas contain roughly 2/3 of the condo inventory in the city of Chicago.   These neighborhoods also tend to have a lower supply of inventory in relation to demand.

The inventory of condos in some south side neighborhoods reflect a more balanced supply than the citywide average of 3.3 months of supply.  Bridgeport, Bronzeville, Kenwood and South Shore have supply levels compared to be in balance with buyer demand.  The impact of higher supply in these areas appears to have resulted in average days on market in some neighborhoods to be significantly higher than the citywide average.

Listed below are some select neighborhoods south of the Loop.  For other Chicago neighborhoods and suburban areas, click here for full list of market activity by community for condos/townhomes.

 chicago condo market stats july 2016

 

Find Homes in Chicago South Real Estate Condo Market

Visit my website to search for homes in the Chicago condo market or to be notified when homes come on the market.

To find out what your home is worth in the current market, email me or call/text at (312) 217-5644.

Source: Midwest Real Estate Data

Millie C Lumpkin
Broker
Stages Real Estate
Phone: (312) 217-5644
Email:     millie.lumpkin@gmail.com
Website: ChicagoSouthHomes.com
Blog:       ChicagoSouthRealEstateBlog.com

 

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What Is the Difference Between Home Inspection and Appraisal?

 

home inspections

What is the difference between the home inspection and appraisal? Both are an important part of the home buying process. Both involve an inspection of your home.  However, they are intended for   different primary users.  The primary user of the home inspection report is the home buyer.  The primary user of the appraisal report is the lender.

Home Inspection

The initial home inspection is done during the first few days after the contract is accepted.  This inspection in Illinois is not mandatory but it is very highly recommended.  This is where you hire a home inspector to inspect the home’s systems such as the heating and cooling, plumbing, and electrical systems. He is also looking for items of concern – signs of leaks, structural problems in the basement, future or immediate repair items.  Finally, he will give you tips on home maintenance and where things like the main water valve and stuff like that is located.  This is also your opportunity to ask questions.  The home inspection should be scheduled at a time where it is convenient for you to attend.  Occasionally, a client will ask me as an agent to attend the inspection for them.  This makes no sense.  As a homeowner, you will want the information first-hand from the inspector.

The inspector will create a report that you can reference later.  The information is good in three ways. First, the information is good for you to reference once you are in the home from a home maintenance standpoint.  Second, if the items that need repair or improvement are more than you want to take on, this is your opportunity to withdraw your offer.  Generally, the inspector will not provide a quote for the repairs but can let you know if costs to repair are likely to be significant.  Finally, you may want to negotiate with the seller to repair some items.  The inspection report can be your guide to determine which issues are the most problematic and identify the deal breakers if not repaired.

Expect to pay on average $300-500 for the home inspection. Some home buyers are tempted to pass on the inspection if the home looks well maintained or if it is a rehab.  However, this may end up being a mistake.  It is worth $300-500 to find out if the roof needs to be replaced or there is structural damage in the basement.

Appraisal Inspection

The appraisal inspection is ordered by your lender for the primary purpose of determining an opinion of value for the home.  The value is determined by comparing your home to other similar or comparable homes sold recently within the same neighborhood with similar square footage, room count and architectural style.  The appraiser is not an inspector.  They will check whether the furnace is working or utilities are on but won’t be able to tell you if there are functional problems.  If you are getting a FHA or VA loan, the appraiser will also check to ensure that the home meets the property condition standards required for these loans.  FHA and VA loans require that homes not have peeling paint, missing handrails for the stairs, holes in the wall, damaged roof or gutters, etc.  If the property conditions for a home do not meet FHA standards, the lender will require correction of the issues by the seller or a 203K loan which will provide the funds to fix the problems after you move in.  You do not have the option of buying “as-is” for the items flagged in the FHA appraisal report.  Note that conventional loans do have some property condition standards but they are not as extensive as FHA/VA.

In addition to the appraisal inspection flagging property condition issues, there can also be a problem with the appraised value being lower than the sold price.  The lender will not approve a mortgage on a home that has a sales price higher than the appraised value.  For this reason, your realtor should have provided you with a market valuation prior to making your offer on the home to ensure that your offer price is in line with the market value. Many deals are lost because of appraised value.  It’s often a difficult conversation to ask the seller to reduce the price because of a lower appraised value and often sellers are reluctant to do so.

The cost of the appraisal should be between $300-400.  The appraisal is ordered by the lender.

Again, the primary purpose for the appraisal inspection is to set an opinion of value for the lender. It is not to assure the home buyer regarding the condition of the home.

Village Inspection

The city of Chicago does not require an inspection prior to sale but many of the suburban communities do.  Check with the village where you are purchasing to see what additional requirements are needed.  As a note, some suburbs are stricter than others so don’t wait to take care of village inspection.  The village inspection should not be considered as a substitute for a home inspection.  Home inspectors are licensed by the state and have continuing education requirements to maintain knowledge.

Millie C Lumpkin
Broker
Stages Real Estate
Phone: (312) 217-5644
Email:     millie.lumpkin@gmail.com
Website: ChicagoSouthHomes.com
Blog:       ChicagoSouthRealEstateBlog.com

 

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What to Expect in Your 2016 Home Search Process?

home search

If you are a first time home buyer or even a buyer that purchased 5+ years ago, the home search process may be at times either frustrating or confusing.

Here are some things to expect:

Prices Have Risen

The median sales price in the metropolitan Chicago area has risen 31% since June 2013 levels.  However, interest rates remain at historically low levels. Prices also have not risen in most areas to where they were at the peak of the housing bubble.  This means that if you were looking to buy in a community during the peak of the bubble (2006-2008), you may be surprised to find out that you can now afford to move there.

Foreclosures

The number of foreclosure sales for the Chicago area are about half of where they were at June 2013.  Foreclosures activity varies greatly at the different price levels. Foreclosures represent only 14% of total homes sold for 12 months ending June 2016 but 41.5% of homes sold under $100,000.   Also, don’t expect that foreclosed property to necessarily be offered at a discounted price. Most foreclosures are priced at or close to market value (taking into account property condition and time on market).
.

Multiple Offers Are the Norm

Expect your offer to not to be the only one being considered by the seller.  The supply of homes in the Chicagoland area is tight and considered a seller’s market.  The supply is 15.4% lower than prior June 2015 levels overall.  For homes sold between $100,000 – $300,000, the supply is almost 25% lower than 2015 levels.   Your realtor should prepare you for the realities of the current market while making sure you create the best opportunity of getting your offer sold. You can’t control what others offer but you can make sure that you are not paying more than market value.  You also don’t want to lose out because of a delay from not being prepared for the home search process.

Mortgage Guidelines Have Tightened

Mortgage guidelines seem to tighten year after year since the housing market fell.  As a matter of fact, FHA passed a number of guideline changes in 2015 including how student loans are factored, employment history guidelines and rules for down payment gifts.  I have heard many buyers assume that a higher credit score and great income will be a “slam dunk” for the home loan approval process.  However, that is not necessarily true.  Consult a lender early in the process.  You want to make sure how much of a loan you qualify for and if there are any issues to address.  Also, expect a 2nd and 3rd verification of the information given.  As a matter of fact, the lender is likely to make sure that nothing has changed in your information up to the date of the close.  This will be a third party verification so if you have a bankruptcy, past foreclosure or judgement not disclosed, it is likely to be discovered.

 

It is a great time to buy and sell.  For buyers, interest rates have been held at low levels for the past eight years.  This is likely to change after this year.  Prices will continue to rise.  For sellers, the current supply levels in the market favor sellers.  And if you are buying a new home in conjunction with your sale, you will want to take advantage of conditions that maximize your combined net effort.

Millie C Lumpkin
Broker
Stages Real Estate
Phone: (312) 217-5644
Email:     millie.lumpkin@gmail.com
Website: ChicagoSouthHomes.com
Blog:       ChicagoSouthRealEstateBlog.com

 

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5 Costs to Know Before Buying Your Home

home buying process

Amidst all the excitement of searching for your new home, buyers should be aware of these 5 costs of the home buying process.  These costs can be significant so you want to take them into account when starting your home search.

  • Down payment – The days of no down payment are largely gone. Lenders expect you to have some “skin in the game” when purchasing a home. Expect to need 3.5% for FHA loan. So, for a home that costs $150,000, this would be $5,250. Conventional loans will require down payments ranging from 3-20%.  Note also that there may be down payment assistance programs available. Your lender should be able to advise you on the availability of programs.  Although the loan product will define the minimal down payment needed, keep in mind that a higher down payment will lower your monthly mortgage payment.
  • Earnest Money – Once your contract is accepted, you will be required to make a “good faith” deposit of generally 1-2% of the purchase amount. This deposit is usually held by the seller’s broker in an escrow account. At the closing, this deposit will go towards the down payment needed to purchase of the home. There are generally contingency protections to ensure that this deposit is not lost by the buyer in case the purchase does not go through.  These contingencies generally include an inspection period, attorney review and mortgage contingency.  The contingencies should be written in to the purchase contract so make sure how they are handled in the contract used for your offer.
  • Closing costsClosing costs for buyers include such expenses as attorney and appraisal fees, loan fees, title costs, property tax and insurance escrow. Expect this to be 3-6% of the purchase price.  Buyers often request that the seller either partially or completely pay for these costs but that is not a guaranteed outcome. The seller does have the right to refuse the request  since this will reduce their net proceeds from the sale.
  • Home Inspection – The buyer should want to get a home inspection for the property they are considering purchasing. The inspector will make sure that the mechanics of the home (roof, foundation, furnace, plumbing, etc.) are in good condition.  The inspector will also take the buyer through the house to address any other functional concerns they should be aware. Inspections generally range from $300 – 500.
  • Attorney Fees – In Illinois, the buyer will generally have attorney representation for their purchase. An attorney in Illinois is not mandatory but it is highly recommended. This is a legal transaction involving a lot of dollars. Attorneys are involved in review of the contract and/or addendums, negotiation of issues and resolution of any title issues.  They also prepare the closing HUD and explaining the bulk of legal documents needed to be signed.  Generally, expect this to be $400-500. Attorney costs are often included on the HUD and paid as part of the closing costs.

All of the costs above are paid out of pocket as part of the home buying process.  They are separate from the amount financed with the mortgage.  Knowing what these costs are upfront may reduce some of the unknown in the overall process.

 

Millie C Lumpkin
Broker
Stages Real Estate
Phone: (312) 217-5644
Email:     millie.lumpkin@gmail.com
Website: ChicagoSouthHomes.com
Blog:       ChicagoSouthRealEstateBlog.com

 

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Home Selling Process – Presentation is Important

kitchen

No one will argue that appropriate pricing is key in the home selling process.  However, the presentation of your home for sale is also very important in attracting and keeping the attention of potential buyers.  Otherwise, your pricing has to work harder.  I am not suggesting that sellers be prepared to put forth an HGTV-style staging effort but some simple steps can go a long way.

  • De-clutter – Your potential buyer should not have to strain to see the potential of your home behind piles of clutter.  Buyers will look in closets and pull open those kitchen cabinets and drawers. Also, those extra items stored on the counters, on top of the refrigerator and in the corners detract from the features of your home.  Finally, for the pack rats out there, organized clutter is still clutter.  Less is more.
  • Clean – Enough said.
  • Maintenance – Finish those uncompleted projects. Fix those simple problems such as the dripping faucet, broken window panes, gutters filled with last fall’s leaves, patching the holes in the wall, missing thresholds, etc. Go through your home and make a list of these items. Take care of what you can but also consider hiring a handyman. Paying for a few hours of time can get a lot of things done on your list.
  •  Take a deep sniff – Strong smells can be a real turn off to potential buyers. Heavy cigarette smoke, pet smells, or past water damage in the basement can all either completely turn buyers off or reduce the price you can get.
  • Painting – If you have strong or overly feminine colors, 1990’s sponge treatments, or peeling wallpaper, consider painting.  Painting is cheap, easy and makes a big difference. Also, wallpaper generally translates as extra work or expense – consider removing yourself. It might really make a difference.
  • De-personalize – Personally, I love collecting refrigerator magnets from places I visit and having school notices right where I can see them. I love family pictures and try to display those cute knick-knacks collected over the years.  However, during the home selling process, I want the focus on the attributes of the house not the stuff.
  • Emphasize the Square Footage – You want to emphasize the square footage in your house.  Too many pieces of furniture or big bulky furniture make a room look smaller.  If the agent has to constantly direct the buyers attention to the MLS listing to verify that “the bedroom really is a nice size”, that’s not a good thing.  You want to have a feeling of an open, spacious environment.
  • Curb Appeal – Shovel the sidewalks and driveway, clean and mulch the flowerbeds, and take care of that peeling paint on the shutters and windowsills.  You may also want to consider power washing the deck and siding.  Make the outside inviting.

These are the basics…no ground-breaking advice.  However, these general tips can help make your home appear well-maintained and attractive.  They won’t allow your home to sell for more than market value but they definitely may make sure that your home is considered.  Of course, if you can afford to do more such as replacing older carpeting or updating that 1970’s bathroom, it can’t hurt.  However, in an economy where many don’t have the funds to invest a lot of money into staging, a little elbow-grease can make a difference in the home selling process.

 

Millie C Lumpkin
Broker
Stages Real Estate
Phone: (312) 217-5644
Email:     millie.lumpkin@gmail.com
Website: ChicagoSouthHomes.com
Blog:       ChicagoSouthRealEstateBlog.com

 

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Chicago South Real Estate Prices for February 2016

Chicago South Real Estate Prices for February 2016 – Condos/Townhouses

Real estate market data for Chicago South real estate provided by Millie Lumpkin of Exit Strategy Realty.

Consistent with the trends for the Chicago metropolitan area as a whole, the condo/townhouse market also continues to experience a south loop neighborhoodseller’s market. For the metropolitan condo/townhouse market, the median sales price for twelve months ending February 2016 was $180,000 which is 7.8% over prior year levels.  The number of these homes sold in last 12 months was 5.3% higher than previous period.

In Chicago, the median sales price for the condo/townhouse market is $305,000, a 3.4% increase over prior year levels. The average days for a listed condo or townhouse to get to contract in Chicago is 47 days.  As the number of foreclosures and short sales have declined, prices have seen an increase. Since February 2013, the median sales price for condo/townhomes has increased 35%.  Listed below are some select neighborhoods south of the Loop.  For other Chicago neighborhoods and suburban areas, click here for a full list of market activity by community for condos/townhouses.

Chicago South Real Estate Market Statistics

market_stats_-_feb_2016_attached

Find Homes in Chicago South Real Estate Market

Visit my website to search for homes in the Chicago South real estate market or to be notified when homes come on the market.

To find out what your home is worth in the current market, email me or call/text at (312) 217-5644.

 

Millie C Lumpkin
Broker
Stages Real Estate
Phone: (312) 217-5644
Email:     millie.lumpkin@gmail.com
Website: ChicagoSouthHomes.com
Blog:       ChicagoSouthRealEstateBlog.com

 

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