How Do You Know if a Home Is Priced Fairly?

How do you know if a home is priced fairly? What is fair market value? We’ll answer both of these questions today.

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How do buyers know if a home is priced fairly?

Fair market value is determined by who’s looking and who’s competing because that changes moment by moment. So does the value of a home.

One of the ways a real estate professional can determine whether or not a home is priced accurately is to pull recent comparable sales. Your agent will look at similar homes in the same area that have sold within the last three to six months. They will compare those properties to the one you are interested in and see how the features and amenities stack up.

On the mortgage side of things, that is very similar to what the appraiser will do. The appraiser will compare other properties to determine whether the home is at, below, or above market value.

Fair market value is determined by who’s looking and who’s competing.

Now, what happens if the home does not appraise? Your loan is based on the value of the appraisal. Typically, the mortgage covers 95% of the purchase while you put 5% down. If the appraisal comes in too high, the consumer can decide to pay that or not. You just need to come up with extra money.

Recently, we had an appraisal come in $4,000 under the sales price. We worked with the seller and managed to pay the fair market value. That is fairly common. Even if you are receiving financing from the government, the contract needs to be renegotiated and revisions have to be made if the home doesn’t appraise.

If you have any other mortgage questions for David, you can give him a call at (708) 705-7911 or email him at Dave.Bowen@imortgage.com. In the meantime, if you have any real estate questions, please don’t hesitate to reach out to me. I would be happy to help you!

THANK YOU!

We wanted to say thanks today to everyone who helped us have such a great 2016. We wish you and your family a wonderful holiday season!

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Today, we just wanted to reach out and say thank you for a fantastic year. We can't tell you how much we appreciate your referrals and all the times you thought about us when it came to helping your family members and friends.

Here's to hoping next year is just as good!

We appreciate the questions you ask us, too, because they help us create helpful content for many people.

Here's to hoping next year is just as good!

We hope you have a wonderful holiday season with your family this year.

As always, if you or anyone you know have questions about real estate or mortgages in the Chicago area, always feel free to give us a call or send us an email. We'd be happy to help.

Welcome to the South Loop of Chicago

The South Loop is a fantastic place to live. Not only is it near Museum Campus, it’s also home to Soldier Field and more.

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David Bowen and I are here in one of our lofts in the South Loop and we wanted to take the opportunity to give you a quick overview of the South Loop area and what it offers.

The South Loop is a mix of cultural attractions and surrounding new developments. Museum Campus is great. They have the Adler Planetarium, which puts on the Adler at Night program every third Thursday of the month. Also in the Museum Campus area are Burnham Harbor, the Field Museum, and Northerly Island. The Museum Park Lofts are also located near Museum Campus.

Soldier Field is just one of many area attractions.

Soldier Field, the home of the Chicago Bears, is in the area as well. If we go south of the South Loop, of course we have a lot of car dealerships, the home of the annual Chicago Auto Show, and tons of new residential and commercial development. Depaul University is building a new basketball arena in the area as well.

As you can see, the South Loop is a great place to be right now. If you have any questions for us or are interested in taking a look at some of the great properties we have in this area, give us a call or send us an email. We would love to hear from you.

What Are the Benefits of Selling Now?

Is fall a smart time to sell your home? In Chicagoland, it is for a number of reasons.

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We are back again to discuss the benefits of selling your home this winter. A lot of sellers, prospects, and clients always ask us what the benefits of selling now are versus waiting until the spring to do so.

One big benefit is that the buyers in this market are more serious. During this time of the year, people aren’t going out in the cold to see homes if they aren’t serious about buying. They are in the market to purchase a home, and it could be yours.

There are more serious buyers out there now.

Tax advantages are another big thing. A lot of buyers want to take advantage of them before the end of the calendar year. Because we are in the winter, there are fewer sellers on the market, too. There will be 30% to 40% more of them in the spring, so right now you have limited competition that can translate into a financial benefit.

Finally, a lot of new job transfers will be coming here after the new year. They represent a segment of buyers that you can capture by listing your home now.

If you have any questions for us, don’t hesitate to give us a call or send us an email. We look forward to hearing from you.

What is the Waiting Period After a Short Sale?

The waiting period between concluding a short sale and buying a new home depends on the type of loan that was taken out.

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How long is the waiting period after a short sale before you can buy again? A short sale, for those who don’t know, means selling a property for less than what’s owed on it.

The answer depends on the type of loan you plan on taking out and whether it’s government-funded or insured by Fannie Mae. Fannie Mae takes longer, at least four years. There are extenuating circumstances where you can get it done in two years, but it can be very difficult to prove extenuating circumstances to an underwriter.

On a government basis, the waiting period is typically three years. Depending on your mortgage history, there are also situations where you can get it done sooner than three years.

How long you have to wait depends on what type of loan you take out.

From a credit repair standpoint, it would be wise to talk to a loan consultant like David before getting everything together. That way you’ll know what to expect down the road before you actually go through with the short sale and how long you can expect to wait afterward. It’s also important to keep the mortgage up-to-date and on time.

On a conventional basis, foreclosures usually take seven years. If you’d like to expedite that time period down to four years, there are guidelines you have to adhere to on a Fannie Mae basis, such as a higher down payment and a higher credit score. On an FHA basis, you can do it after three years.

For a full breakdown on the waiting period after a short sale, click here. 

If you have any questions regarding today’s topic, please feel free to give me a call or send me an email. I’d be happy to help you in any way I can.

4 Ways to Make Your Luxury Home Stand Out

How can you draw more buyers to your home if you are in the luxury market? We have four tips to help make your home appeal to more buyers.

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A lot of sellers want to know how to attract more luxury buyers into their homes. Which amenities should you include? We have four ways you can attract more buyers to your luxury home.

The first thing we recommend is creating an outdoor living space. Add an outdoor kitchen or fire pit and make sure there are enough areas for lounging and sun protection. You can also add a lush garden. If you have an old, blue pool, consider installing a more natural-looking pool. Natural pools are very attractive to buyers.

You should also pay attention to smart home features. Get the Nest thermostat to automatically adjust the temperature in your room. You can also get smart refrigerators that will alert you when your groceries are running low or about to expire. There are ovens available that can turn on automatically and adjust the temperature when you’re ready to cook. Security systems that connect to your smartphone are all the rage; you can make sure your doors are locked and the garage door is shut from across the country.

Luxury buyers are looking for outdoor living spaces and glamorous bathrooms.

If your home has an old wine cellar, you need to upgrade that. Old fashioned, dusty wine cellars are out. These days, luxury buyers are more interested in wine tasting rooms. Install a small, cozy fireplace, a bar, and make sure there is an area for guests to relax and enjoy some wine.

Finally, glamorize the bathroom. The European body spray shower is very popular these days, as are exposed stone tiles in the shower area. Make sure you get a rain showerhead; all of the five-star hotels have them and they will definitely appeal to buyers.

These four things will help your luxury home sell to quality buyers. If you have any questions for David, you can call him at 708-705-7911 or email him at Dave.Bowen@imortgage.com. If you have any other questions about preparing your luxury home for the market, give me a call or send me an email. I would be happy to help you!

How to Win a Bidding War in Chicago

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The real estate market in Chicago is highly competitive for home buyers right now. This is great news for sellers, but buyers aren’t completely without hope. Here are a few strategies you can use in order to push your offer to the top:

1. Offer the most money: This is easier said than done, but in this seller’s market, it helps. Don’t forget that some sellers are looking for the most money, and others might be looking for convenience in terms of a quick closing.
2. Get a pre-approval: This makes you nearly as good as a cash buyer, and most sellers will not even entertain an offer if you are not pre-approved.
3. Close as quickly as possible: Sellers don’t want to wait in this market. The quicker you close, the happier everyone will be.
4. Offer more earnest money: This shows the seller that you are motivated and very serious about buying a home. Offering a higher down payment will do the same for you.

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Sellers won’t even entertain offers from buyers that aren’t pre-approved.

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If you have any questions for myself or for David Bowen of imortgage, please don’t hesitate to contact us. We look forward to working with you!

The 6 Hidden Costs of Selling in Chicago

When you sell your home, there are six hidden costs that you need to look out for that can impact whether or not it sells. I’m joined again today by David Bowen of imortgage for assistance with today’s topic.

1. Repairs: If you’ve allowed the home’s maintenance to lapse, you might need a handyman or contractor to tidy things up and make sure the home is pristine and ready to show.
2. Landscaping: Trees should be trimmed and the yard mowed and maintained. You might need to hire a maintenance crew if you’re vacating before selling. Curb appeal is the first impression on the buyer, and research shows that good curb appeal can increase the home’s value by 12%.
3. Staging the home: In the higher price ranges especially, stagers can tighten everything up and make sure the buyer is able to walk in and visualize where their furniture will go and how they’ll live in the space.
Sellers have closing costs of around 2% of the purchase price.
4. Utilities: You don’t want the gas, water, or electric turned off if you vacate, as the home still needs to show well and be operational.
5. Photography: Since 90% of home buyers start their search online, photos make a valuable impression on buyers and whether or not they’ll go see it. Hiring a professional is important here.
6. Closing costs: Sellers have closing costs normally in the range of 2% of the purchase price in the form of transfer taxes, property taxes, an attorney fee, title expense, brokerage commissions, and specialty inspections such as the termite inspection.

If you have any financing questions for Dave, you can call him at 708-705-7911 or email him at Dave.Bowen@imortgage.com. If you have any further questions about real estate, please don't hesitate to reach out to me. We look forward to hearing from you! 

4 Components of Your Mortgage and How to Reduce Them

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Today I’m joined by David Bowen from imortgage to discuss PITI and how to reduce it.

PITI stands for the four components of your mortgage payment: ‘P’ stands for principal, ‘I’ stands for interest rates, ‘T’ stands for property taxes, and the last ‘I” stands for homeowner’s insurance.

Though your principal and property taxes are two components you don’t have much control over, you can keep in contact with your assessor’s office to make sure that you are receiving all of the tax exemptions available to you. You may even be able to get your property taxes reduced based on factors like your income and whether you’re a senior citizen or veteran.

As far as homeowner’s insurance, you can always contact your agent to find out what you can do to get your rate reduced. David says that he contacts his agent every year to review his policy. Changing companies from time to time can reduce your insurance payment as well.

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One extra payment per year can cut eight years off of a 30-year loan.

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Some other ways to reduce your PITI are to pay extra money down on your principal balance, which can speed up your timeframe. If you make one extra payment a year, you’ll probably cut eight years off of a 30-year mortgage. If you are able to bring your balance down, it may even be possible to refinance your 30-year mortgage into a 15-year mortgage.

If you pay your principal in cash, you can avoid the first two components of PITI, but property taxes and insurance are required and can’t be avoided.

If you have any questions regarding PITI, feel free to contact David Bowen at dave.bowen@imortgage.com or (708) 705-7911, or myself by phone or email. I look forward to speaking with you.

Why Lakeshore East Is a Great Community

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Lakeshore East is one of the premier communities in the Chicago Central Loop. There are a lot of different developments, family attractions, Chicago landmarks, and luxury condo and townhome developments.

This condo in particular is right by Navy Pier, a Chicago landmark that is over 100 years old and draws over 9 billion visitors each year. Not only that, but there are also many restaurants nearby, as well as the beautiful Lakeshore East Park.

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Lakeshore East is one of the premier communities in Chicago.

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Lakeshore East Park is only two or three minutes away from here. The park features a dog park, garden, and swingset. This building is also right next to the new Riverwalk development, which was just finished this year. The Riverwalk goes for a mile and a half along the river. You can ride your bike on the bike paths, check out restaurants, catch the water taxi, and even kayak down the river!

Finally, this condo is right by Millennium Park, one of the major tourist attractions in Chicago. As you can see, Lakeshore East is a great community filled with activities for the entire family.

If you have any questions, you can reach David at (708) 705-7911 or email him at Dave.Bowen@imortgage.com. As always, if you have any real estate questions, give me a call or send me an email. I would be happy to help you!

How You Can Afford One of My Chicagoland Condos

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Today I’ve brought in David Bowen with imortage to discuss how to buy one of my listings. Today we’re sitting in one of my downtown listings, a beautiful building in The Regatta just under 1,000 square feet with everything upgraded - marble baths, granite countertops, 42-inch cherry wood cabinets, hardwood floors, assessments under $570, and an unobstructed view of the Chicago area.

So, how can you buy this property? The condo is reasonably priced, but if you want to know the amount, just give me a call. According to Dave, in a building such as this, you’re typically looking at 5% to 10% down. The building is also Fannie Mae-insured, which basically means you can get a Fannie Mae insurable loan. This opens up the realm to a lot of different buyers.

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This condo is Fannie Mae-insured.

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If you need to know anything else regarding financing, just give Dave a call at 708-705-7911. If you have any questions regarding this condo or know someone who wants to buy it, call me at 312-497-1651.

A Loan for Every Situation with imortgage

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I'm joined by Dave Bowen, who you may have noticed was absent from the last few videos. He's back, and happy to announce that he's moved to join a new mortgage company called imortgage.

This is good news, because it will allow Dave to provide more products to his customers and better service to the clients. This is beneficial for Dave's customers, because he now has a loan designed for every situation on a home. He has a lot more possibilities to provide loans in particular situations, and that's why he moved companies. The service at imortgage is tremendous, according to Dave, who said their philosophy is to close loans on time, period.

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Dave's mortgage products and services with imortgage can appeal to the surrounding community.

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We have a myriad of clients who are first-time buyers and millennials, as well as move-up buyers and luxury buyers. Dave's mortgage products and services with imortgage can appeal to the surrounding community. For example, there are multiple options just for renovation loans. Dave's company is the only one in the country that can offer VA renovation loans! They're also licensed across the country, coast to coast.

If you have any questions for Dave, you can reach him at (708) 705-7911.

If you have any needs for buying and selling homes, give me a call as well. I look forward to hearing from you.

How Much Buying Power Do You Have in Chicago?

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For any buyer, there are a few different things that are very important when determining your buying power. The first is your credit score. It’s the first thing lenders will look at, and it determines how strong of a buyer you are to a lender. The next thing to focus on is a down payment. How much can you put down? The more the better, and if you put at least 20% down, you will eliminate private mortgage insurance. Finally, a lender will take a look at your debt-to-income ratio. The lower those numbers are, the more buying power you will have. An ideal ratio can vary depending on the program, but a good rule of thumb is having 35-40%. The next thing to focus on is assets. The more assets you have, the stronger you are as a buyer.

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The first things lenders will look at is your credit score.

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The most attractive buyer will be someone with a high credit score, high down payment, and low debt-to-income ratio. If you have any questions for us about buying a home, give us a call or send us an email. We would love to hear from you!

5 Tips to Accurately Price Your Chicago Home

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Today, I’m going to discuss how to price your home accurately in today’s market. Here are five things you should keep in mind.

1. Consider the comparables in the area. What have other homes sold for in your neighborhood in the last 60 to 90 days? How do they compare to your home in terms of size, upkeep, and amenities? 

2. Consider the competition in your area. Always be aware of which homes are for sale in your neighborhood.

3. What are your contingencies? Is there a certain time frame for your move? Do you need to be in the new property by a certain date? There are two issues that affect real estate sales in any market: price and the seller’s motivation.

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Price your home correctly from the start.

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4. Be accurate in pricing. According to the National Association of Realtors, if you are 3% higher than what the fair market value is, your home could take 20% to 30% longer than the average market time to sell. 

5. Know what offers you’re looking for. Know what you are willing to take before you even begin negotiations with the buyer. 

If you have any questions, give me a call or send me an email. I would be happy to help you.

Three Important Questions Sellers Ask Their Agents

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Today I want to discuss the three questions sellers ask when hiring a real estate agent. When I meet with sellers, there are usually three questions that come up the most. They are:

1. How much is my home worth?  

Fair market value is determined by who’s looking and who’s competing. Since that changes moment by moment, so does the value of your home. There’s no exact science for it.

2. How long is it going to take you to sell my home?

Price and motivation dictate when a home sells. Whenever a seller is highly motivated, the price is usually in line with fair market value, even sometimes below it.

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Price and motivation dictate when a home sells.

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3. What are you going to do to get my home sold?

I always tell sellers there are two different types of brokers. You should know that 95% of agents are passive. They will put your home on the MLS, stick a sign in the yard, and wait for business to come to them. An agent like myself, who is in the top 5%, is an active agent. An active agent is going to actively and aggressively market your home while talking to at least 42 different buyers each day who are looking for a home.

If you have any questions for me, don’t hesitate to give me a call. I would love to hear from you!

5 Reasons to Expect a Strong Spring Market in Chicago

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I’m here with David Bowen from iMortgage. Today, we’ll discuss five reasons you can expect a very strong spring market this spring in the surrounding Chicago area.

1. Strong job growth: This is probably the most important factor for the upcoming spring market. The job report just came out and unemployment is below 5%, which is great news! When people have jobs, they buy homes! There has also been job growth in the residential construction market, which means more homes are being built.

2. Rising home sales: Over the course of the last 30 to 60 days, we’ve seen sales increase by 8%. Last year, 5.26 million homes sold in the United States. This year, 5.3 to 5.4 million homes are expected to sell.

3. Steady price gains: Values are going up and new construction is becoming more steady, especially downtown. That is an excellent indicator that prices will remain strong.

4. Low interest rates: Interest rates are all below 4% for any product. Rates are expected to rise, but they should not go up this spring. They are going to be very careful about raising interest rates over time.

5. Rising monthly rent payments:  It is extremely expensive to rent right now, and it may actually be more affordable to buy a home.

There you go, five reasons why our real estate market is going to be very strong this spring. If you have any questions for David, send him an email at dave.bowen@imortgage.com or give him a call at (630)427-8420. As always, if you have any questions for me, give me a call or send me an email. We would be happy to help you!