Avoid These Two Big Home Mortgage Mistakes

home mortgage process

We all know that searching for and viewing potential homes is the fun part of the home-buying process. The not-so-fun part?  The home mortgage process.

However,  if you don’t pay attention to the details, your mortgage can end up dragging down the enjoyment of your new home and cause some major regrets. Here are a few mistakes to avoid to ensure that you love your home mortgage terms as much as your new home. Continue reading “Avoid These Two Big Home Mortgage Mistakes”

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 2017 Home Search?

Are you searching for a new home in 2017?  What should you expect?

Prices Have Risen

The median sales price in the metropolitan Chicago area has risen 22% since July 2014 levels.  However, despite concerns at the end of 2016, interest rates remain historically low.  Many buyers this summer have purchased with rates under 4%.

Home values have bounced back significantly since the crash.  However, the average median price compared to 10 years ago is still lower for the overall Chicago metropolitan area. For areas hit hardest by the foreclosure crisis, many remain significantly lower than price levels 10 years ago. Continue reading “What to Expect in Your 2017 Home Search?”

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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Chicago South Side Market Activity – April 2017

Home Prices in Chicago South Real Estate for April 2017

Real estate market data for Chicago south side neighborhoods real estate provided by Millie Lumpkin of Stages Real Estate.

Overall, the Chicago metropolitan area as a whole (as well as the city of Chicago) continues to experience a seller’s market in the 12 months ending April 2017.  The seller’s market in the Chicago area is a trend that started in 2013.  A seller’s market indicates that the supply of homes on the market is tighter compared to buyer demand. The supply of homes in Chicago is 6.0% lower than April 2016 levels.

In the most recent 12 months, the median sales price in Chicago was $220,000 which is an increase of 9.5% over prior April levels. The median days for a listing to get to contract is 23 days overall which is 8% quicker than prior year.  A number of south side neighborhoods are still impacted by high foreclosure activity.

Although the overall market for Chicago remains fairly strong, there are some neighborhoods which experienced a decline in the number of closed sales.   There are also some that have significantly longer time to get to contract. This is often indicative of homes being overpriced.  Just note that market activity may differ across neighborhoods.

Listed below is market activity for detached single family homes in several neighborhoods on the Chicago south side. For other Chicago neighborhoods and suburban areas, click here for full list of market activity by community.

Chicago South Real Estate Market Statistics

Detached Single Family – April 2017 (12 months ending)

chicago south side market activity

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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Are You Planning to Sell in 2017?

 

Are you considering selling your home in the next few months?  The Chicago area continues to experience a seller’s market which makes this a great time to weigh a move.  A seller’s market means that the supply of homes is limited in some Chicago neighborhoods and suburbs in relation to buyer demand. The median sales price for the Chicago metropolitan area is showing solid growth yet again and days on market is declining. Now may be the time for you to either move up or downsize. Continue reading “Are You Planning to Sell in 2017?”

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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Is it a good idea to remodel before selling?

couple-remodeling-home
Is it a good idea to remodel before you put your home on the market?  The answer …. “It depends.”

The goals with remodeling your home before selling it are to increase the value of your home and to attract more buyers.  Generally, upgrades to your home should achieve both goals.  However, before starting a major remodeling project, start with a walk through of your home.  Are there repair projects or other deferred maintenance that need to be addressed?  Are there cheaper updates that can increase value without a major outlay of cash.  You may want to start with the lower cost projects rather than an extensive kitchen or basement remodel.

Deferred Maintenance / Repair Projects:

There are three primary issues created from deferred maintenance or repair issues in the sale of your home. First, deferred maintenance and needed repairs can reduce the value of your home.  Secondly, buyers may either pass over your home or discount their offer price based on condition. Finally, these property condition issues might present a flag for the buyer’s appraisal or home inspection.  For an FHA appraisal, property conditions can prevent the sale if they fail FHA property standards. In addition, in many suburban Chicago areas, villages perform an inspection prior to sale. A poor village inspection can also block the sale.

Some deferred maintenance/repair projects to consider include:

  • Check the roof, gutter and downspouts (for both the house and garage)
  • Service the furnace
  • Fix any plumbing issues
  • Removal of mold or mildew
  • Repair any holes in the walls, windows or screens
  • Peeling paint around exterior windows or doors (FHA flag)
  • Check the deck and porch
  • Unfinished projects
Cheaper Updates

There are also some cheaper “updates” or projects that can result in a higher value for your home or at least increase the pool of buyers.  remodel homeThese projects can include:

  • DEEP CLEAN if needed
  • PURGE the excess and clutter to create the feeling of more space
  • Paint – fresh paint can go a long way to make your home feel less dated. This includes painting over that old wood paneling in the basement.
  • Remove old wallpaper and wallpaper borders
  • Replace the carpeting or get a good commercial cleaning (if there are hardwood floors under the carpeting, consider pulling it up)
  • New kitchen appliances
  • Sand and refinish the hardwood floors if stained or damaged
  • Change or add kitchen backsplash
  • Replace old vinyl tile flooring in kitchen or bath
  • Replace older faucets in the kitchen and bath
  • Replace kitchen cabinet door handles or pulls
Remodeling

There is no question that a quality remodel will generally increase the value of your home and attractiveness to buyers. However, before embarking, check out other homes in your area to see how much updating is expected in your neighborhood. If granite is not the norm or expected, then save your money and go with laminate counters.  This is a guard against “over-improvement”.

You also want to know upfront how much of an increase in value can be expected from your remodel. Consult with a real estate agent to pull comps of improved homes.  You don’t want to spend too much on improvements that are not justified by an increase in market value.   Again, guard against “over-improvement.

One last word on the decision about remodeling. There are many investors with the resources to do a complete “gut rehab” for the homes they “fix and flip”.  When you are comparing to sold properties in your neighborhood, choose those with similar condition and quality of remodeling. Don’t expect a “high end” price unless your improvements merit the comparison.  This frontend market research can aid you in directing your sweat and funds to projects that make the most sense.

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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Do You Need to Buy and Sell Your Home at the Same Time – Don’t Stress.

 

buy sell home

The process of buying your new home is way more complicated when you have to sell your current home too. Many homeowners are either intimidated or confused about the process but you can avoid some of the stress.

The ideal situation, of course, is to be able to purchase your new home first and then deal with selling down the line.  However, for most people, that is not realistic. Unless your current loan is paid off, you would be responsible for paying two mortgages.  In addition, outside of the financial burden, two mortgages are also likely to kick your debt to income ratio above acceptable levels for mortgage qualification.

Many buyers will need to buy and sell simultaneously.  This is doable with some advance planning.

Know the Market First

Before you start, make sure you have a solid understanding of both  the local housing market where you live and where you are planning to buy.  Is the market weighted toward buyers or sellers? This will affect both the pricing strategy for selling your home and set expectations for buying in the new location. You’ll also want to have a market analysis or appraisal done for your current home so that you have an estimate of the market value and expected proceeds from the sale of your home.  You’ll want to be sure that the proceeds from the sale of your home can not only pay off your existing mortgage but leave enough for the funds needed to purchase your new home (if that’s needed).

Talk to a Lender

Mortgage guidelines have likely changed since you bought your current home.  Your credit score and income might be great but if you bought during the housing bubble, you’ll find the process and guidelines much tighter than before.  Income documentation, debt to income ratios, impact of student loans are all things that may have changed and may impact your loan qualification. The lender will also be able to let you know the loan amount that you qualify for.

Decide Whether You Will Buy or Sell First

Should you buy first, then sell – or vice versa? Both options have their pros and cons.  Selling first makes getting a mortgage easier, but it also means you may need to find a temporary place to live.  Buying first means moving will be easier but you’ll be carrying two mortgages. This may not be financially feasible and it may make it harder to you to qualify for a new loan. Whichever order you decide, figure out how you will handle any wrinkles that may arise.

Know Your Solutions

If you are selling first, you’ll need to plan for the storage of your stuff and find options for a short term rental. One possible option to avoid two moves is the inclusion of a post-close possession clause in the contract.  With this option, you would make an agreement with the buyer of your home that allows you to stay in your home after closing and pay rent to the buyer for the period of time needed for you to close on your new home. This option may be less likely to succeed in a buyer’s market where the greater supply of available homes gives buyers less incentive to make this compromise.

If you are buying first, there are a couple of different options to decrease your financial burden and risk:

  1. Contingency on the Sale of Your Home – You may be able to include a contingency in the purchase contract where there is an agreement that the purchase of your new home is contingent on the sale of your existing real estate. This is more acceptable to the seller if you already have an accepted contract on your existing  home.  The option may be a challenge in a seller’s market where the stricter supply of homes favor sellers and make them less likely to make the compromise.
  2. Bridge Loan – A bridge loan is a short term loan that gives you the additional funds needed to carry two loans. The loan would be paid off from the proceeds of the sale of your existing home.  You would need to make sure that the sales proceeds allow you the funds needed to purchase the new home and pay off the bridge loan.  Do your research before committing to this option.

Don’t Let Fear Push You into a Bad Decision

Some of the uncertainty in this process can be managed by planning carefully. As stated above, know your market so you can price your home appropriately which should reduce the time on market. Take the extra step of getting pre-approved for your home loan rather than just pre-qualified. Also, plan upfront for the potential of things not going smoothly so that you won’t be forced into making a bad decision.  You may want to know your options for a short term rental (or staying with family) in case you end up selling before taking possession of your new home. Finally, have more than one home in your basket of alternatives for purchase in case there is a problem with your first choice.  If you don’t plan, you may feel forced into accepting a low bid on your current home or compromising on the things you want in your new home.

Selling and buying a house simultaneously can be stressful – but careful considering and planning can help mitigate the stress.

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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