What Should We Expect for the Market in the Year to Come?

Today we have your real estate forecast for 2018. Learn what to expect for the market next year based on trends we’ve noticed this year.

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As we conclude 2017, which has been an excellent year, we wanted to give you a quick market snapshot of what’s to come in 2018.

One of the key driving forces for next year will be in the increase in new construction home sales, which will increase from 1.22 million this year to 1.33 million in 2018. With regards to home sales, they predict a 4.9% increase in the number of homes for sale in terms of average sales price in 2018, as compared to the 6.3% average we’ve seen in 2017.

With the job growth and rate hikes we’ve seen this year, we expect 2018 to be even better.

On the mortgage side, 2017 has been a great year, probably one of the best that we’ve had since the meltdown. With the job growth and rate hikes we’ve seen this year, we expect 2018 to be even better.

Rates are expected to increase next year, in addition to the increase just levied in December. This isn’t a bad thing—it’s a good thing. It means that there’s a lot of expansion in the job market. And though rates are expected to rise at least a couple more times next year, I don’t see that being a problem in terms of the real estate market. The job report that was recently released was phenomenal. Since people have jobs, that means they’re buying houses.

If you have any questions regarding buying or selling real estate, contact me via phone or email. You can also contact David Bowen for any questions about pre-qualifying or pre-approval for a home loan. We’d love to help you out.

Top Reasons to List During the Holidays

Today, I’d like to share a few key reasons why you should think about listing over the holidays.

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Some people think that the holidays aren’t a good time to list, but this is just a myth.

Traditionally, sales are down in our Chicago area by just 15% to 20% around this time of year. This means that there are still active buyers right now who need your home on the market to buy.

So, what are the top reasons to list your home with this holiday season?

First, many buyers are on the market at this time of year specifically for tax reasons. There are also fewer homes on the market to compete with. This means your listing will see more demand, which means you may earn more money.

If you wait until January or later to list, you’ll be dealing with a much higher level of competition.

Over the holidays, your listing will see more demand, which means you may earn more money.

Another reason to list over the holidays is that buyers at this time of year are more serious. These people are not only looking at fewer homes, they’re also going to be making faster decisions.

Finally, there are a number of buyers being relocated for their careers over the holiday season. If you want to take advantage of these relocation buyers, you’ll need to be on the market at the end of the year. 

There are a number of other reasons you should think about listing over the holidays. To see the full list, click here.

If you have any other questions or would like more information, feel free to give me a call or send me an email. I look forward to hearing from you soon.

Why an Annual Checkup Is Important to Any Mortgage

Today we're to talk about annual mortgage checkups.

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Today's topic is annual mortgage checkups.

Something David suggests to all of his clients is to review your mortgage once per year. Usually the best time to do this is toward the end of the year when things begin to slow down.

Pull your statement out and find out if you need to re-evaluate or update your homeowners insurance. Most people simply pay their mortgage without paying attention to their statements, but it’s actually very important to check for these kinds of necessary updates.

As your situation changes, so should your mortgage.

Also, determine if your escrows are in line. You also will want to contact your county assessor to check on your deductions or exemptions, since these can often change.

Another important thing to look at is your mortgage rate. Doing so could potentially save you money. However, this year, rates are unfortunately expected to increase in December. So if you’re thinking of making a purchase, now may be a good time to do so.

Additionally, you should find out whether you need to restructure your mortgage. As your situation changes, so should your mortgage.

If you have any other questions or would like more information, feel free to give me a call or send me an email. I look forward to hearing from you soon.

What’s Happening in the Chicago Real Estate Market?

The Chicago real estate market remains strong as we head into fall. The steady demand for homes has led to a lack of inventory.

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We’ve got a quick update for you today about the Chicago real estate market, as well as a great mortgage tip from David Bowen.

As we head into the fall season, we are still seeing low inventory in places like Hyde Park and the South Loop. However, this low inventory is more due to the fact that demand is high. The average sale prices in some of these areas are now up over $1 million.

Demand for homes is high in many areas.

If you want to buy a home in one of these highly sought after areas, you can get financing in a few different ways. If the price is below $424,000, you can finance the home with a regular 30-year fixed mortgage. However, that’s not likely. David and Loan Depot offer a jumbo loan, which can cover up to $1.5 million. It requires a 10% down payment, but you won’t have to pay mortgage insurance. They offer this jumbo loan as a 30-year fixed product, which is almost unheard of.

Even though we’re well into fall, the real estate market is still not letting up. It’s been a crazy year out there. If you’re thinking about buying or selling a home in the near future, don’t hesitate to give us a call or send us an email. We would love to help out in any way possible.

Don’t Start Your Home Search Without Getting Pre-Approved First

Getting pre-approved before you start your home search will save you a lot of headaches down the road.

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Prospective buyers always ask me why they can’t look for a home before getting pre-approved.

I have some colleagues who show homes to buyers before they’re pre-approved, so you don’t technically have to get pre-approved before starting your home search, but I highly recommend you do so to determine your buying power.

Getting pre-approved relieves a lot of potential headaches down the road. Buyers who start their home search without getting pre-approved run the risk of finding the right home only to learn that they don’t qualify for it.

Getting pre-approved relieves a lot of potential headaches down the road.

The pre-approval process starts with a lender checking your credit for any potential issues so they can be addressed right away. Then, they verify your income to find out exactly what you can qualify for and how much money you’ll need up front for your down payment.

A listing’s purchase price and property taxes are two more factors that play into your purchasing process. Here in Cook County, property taxes can swing dramatically from one town to the next.

If you have any more questions about pre-approvals or would like to get pre-approved so you can start your home search now, don’t hesitate to give us a call or send us an email. We’d be happy to help you.

How to Find the Right Lender

To know if you have the right lender, there are multiple factors you must consider.

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Even after they’ve chosen their lender, many people still don’t know if they’ve made the right decision. How do you know you have the right lender?

One thing you can do is make sure you submit all your information so you receive a valid pre-approval letter. We talk to a lot of borrowers who don’t send the proper documentation to their lenders and don’t receive the correct pre-approval letter.

Communication and trust are also key when it comes to the relationship you have with your lender. Make sure they answer all of your questions and return your phone calls, because that’s important in building that trust.

Make sure your lender answers all of your questions and returns your phone calls

Rates and costs are two more factors to consider. Everyone wants a lower rate, but there’s a delicate balancing act you have to follow. As the saying goes, “You get what you pay for.” You can get a great rate if you look hard enough on the Internet, but you’ll have no idea what kind of customer service that entails or what kind of expertise comes that cheap.

To that end, a local, experienced loan officer can give you great information on the types of programs available in your area.

If you have any questions about finding the right lender or need to get pre-approved, don’t hesitate to give us a call or send us an email. We’d be happy to help you.

Why You Shouldn’t Relist Your Home With the Same Agent

If you’re listing has expired, here’s what you should do instead of relisting with the same agent.

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Have you had your home on the market for a long time or has it just expired after being listed for six months without selling?

If so, you shouldn’t relist with the same agent. I speak with a lot of sellers every day with canceled listings who wonder why they should relist their home if it didn’t sell the first time around. That’s a valid point—you shouldn’t do the same thing and expect a different result. This is why you should relist with a different agent.

I’ll price your home competitively and price it to make a great first impression.

For example, if it’s me who’s selling your home the next time around, there are three things I’ll do actively and aggressively to succeed where past agents failed:

1. I’ll price your home competitively and price it to make a great first impression. 
2. I’ll monitor the market on a weekly basis and report back to you honestly about what it has to say about your home compared to others that have recently sold or are still on the market. 
3. I’ll network with the agents in town, prospect for a minimum of four hours, and speak with a minimum of 44 people each and every day. 

Did your previous agent do these kinds of things? Probably not. Otherwise, your home would’ve sold by now.

If you have any questions about how I can get your home sold, give me a call or shoot me an email. I’d be happy to speak with you.

How Can You Use an FHA 203(k) Loan?

If you don’t want to pay any out-of-pocket expenses to make repairs on a house you’re interested in buying, the FHA 203(k) loan might be perfect for you.

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Every once in awhile, I come across a buyer who’s interested in a property that needs some remodeling or retrofitting, but the buyer doesn’t want to have any out-of-pocket expenses.

In this type of situation, using an FHA 203(k) loan is one of your best options. There are other programs available at Loan Depot that can take care of repair issues, but the FHA 203(k) is the most popular.

This loan can help you make your next house perfect.

There are two types of 203(k) loans. The first is the streamlined version, which goes up to $35,000. This amount can cover a bad roof, a faulty furnace or air conditioning unit, and any required light updates around the kitchen and bathroom areas. The second is the regular 203(k) loan, which can go all the way up to the maximum limit if you need to do a complete remodel. The key thing to remember is you still have to use part of the existing structure.

The down payment for the buyer is the same as a regular FHA loan—3.5%. Interest rates are typically higher with the 203(k) loan, though, because it’s a rehab loan.

You’ll never find the perfect house, but this loan can help you make your next house perfect. If you have any questions about this topic or are thinking about buying or selling a home in our Chicagoland market, please feel free to give us a call. We look forward to speaking with you.

What's Involved in the Closing Process?

Buyers and sellers alike are often confused about the details of the closing process. Here is a step-by-step guide of what to expect.

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One of the most common questions we get from both buyers and sellers once a contract has been accepted is: “What does the closing process look like?”

Once a contract has been executed, the first thing that happens is the home inspection. Buyers hire a professional inspector to examine the home and while this is happening, the loan application is also in the works. This happens following pre-approval.

The application is held off until the results of the home inspection come through but once they do, then comes an appraisal order.

After the appraisal comes back to value with no required repairs, the underwriting process begins.

At that point, they’ll sign off on the loan and we’ll issue a clear-to-close. Assuming everything goes as planned, this process takes about 30 days from the time the contract hits to the time you actually close.

The next step is for a real estate broker to perform a final walk-through with the buyer to ensure that the property is in an agreed-upon condition.

This process takes about 30 days from the time the contract hits to the time you actually close.

After this comes closing. Here in Illinois, many buyers use an attorney who will go through all the loan papers, mortgage, and other documents to make sure things are in order so that the title officer can disperse out on the transaction.

Finally, the seller is paid. This is also the point where a seller will receive a check in the event that they’ve overpaid.

If you have any other questions or would like more information, feel free to contact us by sending an email or giving us a call. We look forward to hearing from you soon.

Should You Be Worried About the Recent Interest Rate Hike?

Interest rates are on the rise again, but is it really a cause for concern?

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Interest rates are on the rise again and it could have an impact on you if you're thinking of buying and/or selling a home.

Right on schedule, the Federal Reserve raised interest rates mid-June by 0.25% and they're expected to raise them again at least one more time before the end of the year. This means interest rates for homebuyers will go up, but things like car loans and home equity lines of credit will go up as well. Credit card rates will rise, also.

The good news is that the Fed is acting on schedule.

Homebuyers seeking financing will also qualify for a little bit less in terms of purchase price. It won't be a huge impact—depending on your mortgage amount, the monthly cost will increase by about $50. The good takeaway is that the Fed acted on schedule with this increase; when unexpected things start happening with interest rates is when things can get sticky.

As jobs and the market improves, the Fed will raise rates to combat inflation, so it's a good sign for the economy. If you have any questions about interest rates and how they affect you when buying or selling real estate here in the Chicago area, give us a call or send us an email soon. We'd be glad to help.

How to Buy Your Next Home With a Contingency

There are two types of home sale contingencies that can have a big impact on your home sale and your ability to buy your next home.

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There are two types of home sale contingencies when a seller needs to sell their current home before they can buy the next one.

First, there's the contingency on sale day. In this case, the buyer has either listed or not listed their home yet, but regardless, it's not under contract, so they haven't closed. Under these circumstances, the seller may be apt to accept the offer, but unfortunately for the buyer, the seller can still market the home. If another buyer comes to the table with a better offer, the first buyer will typically have a day or two to either drop their contingency or back out of the deal and get their earnest money back.

The contingency on close is common with move-up buyers.

Then, there's the contingency on close. In this case, the seller will have their home listed and have a contract in place; all they have to do is go to the closing table. It's a much stronger contract. Under those terms, the buyer can still do their due diligence while waiting for their home to close. If the sale doesn't work out, then the contract is terminated. If the deal closes, then the buyer can close on the next home.

Homebuyers need to be aware of a few things with these contingencies as well. First, you need to find out if you can qualify for both homes at once if you want to buy the new one before closing the sale of your current home. This is a common scenario for buyers who are trading up into a newer, nicer, or larger home.

If you have any questions about home sale contingencies or about buying and selling a home in the Chicago market, give us a call or send us an email. We're here to help.

5 Things for Homebuyers to Consider

Location may be the most important consideration for homebuyers, but it’s not the only factor in making a decision. Here are four other items that play a role as well.

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We all know that when buying a home in Chicago, location is the most important factor. However, there are a number of other things you should consider when deciding where you want to purchase your next piece of property. Here are the five top items on our homebuyer checklist:

1. School district. Many people move to different areas because of the nearby school districts.

2. Transportation. What’s the commute like to work or to school? Are you near the metro? The blue line? The red line?

3. Lifestyle. Do you want to live in the hustle and bustle of the loop? Do you want to have a quieter life out in the suburbs? The area you want to be in will depend on where you are at in your life.

4. Resale value. You have to think about the resale value of the home down the road. Are you more likely to gain equity or lose it if you hold on to the home for 10 or 15 years? Have a licensed agent help you determine your potential return on investment.

Have a licensed agent help you determine your potential return.

5. Local amenities. Do you want to be close to shopping? Entertainment? Restaurants? Maybe somewhere out in the suburbs.

If you have any other questions for us about buying a home or anything else relating to real estate or the mortgage industry, give us a call or send us an email. We look forward to hearing from you soon.

1st Quarter Chicago Market Update

The Chicago market is still going strong this year, but one big factor has been a challenge across the Chicago area.

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What's been happening in the Chicago market this spring?

The first quarter was a great one with strong sales and prices. In fact, it was the strongest first quarter since 2006.

Interest rates went up very slightly as expected and they're expected to rise twice this year. We think that we'll definitely see at least one rate hike, and possible a second depending on home sales and things like job reports.

The first quarter was a great one with strong sales and prices.

The big factor in our market—and all markets throughout the country—is a shortage of homes for sale. Here in Chicago through the month of March, inventory is actually down 13% compared to this time last year. Many people are holding off on selling their house because they've got a great interest rate on their mortgage and don't see a big benefit in moving.

We also know that only 13% of the first quarter home sales were distressed sales, whereas last year distressed sales made up 22% of sales. That figure has dropped each year since the financial crisis hit, making it harder and harder to find those kinds of deals like foreclosed homes.

If you need to sell your house, now is an outstanding time. Just give us a call or send us an email soon, we'd love to help you!

How to Sell a Downtown Condo in Chicago

Selling a condo in downtown Chicago? We’ve got some tips to help you increase your sale price.

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There are a number of different ways to go about selling a condo in downtown Chicago. The condo’s location and unique features are some of the things that could really impact the pricing.

One of the most important things to remember when selling a condo is to stage it, declutter it, and make sure it’s clean as a whistle. Putting it in the best light possible will help ensure you get top dollar when it comes time to sell. Try and differentiate your unit from the other ones like it through staging.

Marketing is an essential aspect of selling a condo.

Marketing the condo is also an essential aspect. Determine what the key differences are in your unit vs. the other ones on the market. Does it have a unique view? A pool? Nearby entertainment?

Finally, there’s the financing aspect. The main concern lenders have with condos is how strong the association is. Do they have enough money in reserve to replace outdated roofs, windows, and other things? As long as there aren't a lot of problems, financing usually isn’t one.

If you have any other questions about selling a condo in downtown Chicago or anything else relating to real estate, give us a call or send us an email today. We would love to hear from you.

How Will Rising Interest Rates Affect You?

Interest rates have recently gone up, making homes more expensive for homebuyers. Here’s what this rise in rates means to you and why it’s actually a good thing.

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The Federal Reserve recently announced another interest rate hike. What does that mean for homebuyers in the Chicagoland area?

For one, the cost of money will be a bit higher. It will cost a little more to get your dream home, and your monthly payment will be a little higher. However, this rate increase is due to our improving economy. Job and economic growth are at their highest level since 2008, and the fact that rates are going up is actually a good thing.

Although rates are up, economic growth and job growth are too.

We expect rates to go up at least once more this year. Although this will make homes even more expensive, keep in mind that rates will still be very low, historically speaking.

If you have any questions for us about interest rates or anything else relating to real estate, give us a call or send us an email today. We look forward to hearing from you soon.

The Do’s and Don’ts of Flipping a House

Today we’re going over the do’s and don’ts of home flips to help ensure your rehab project goes smoothly.

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There are many do’s and don’ts when it comes to flipping houses, and if you’re thinking about taking on a flip, you need to be aware of them.

The Do’s:

• Do hire the right people. Make sure you don’t have a contractor or a site manager that will take advantage of you and your resources. 
• Do secure your financing ahead of time. Make sure you not only have the cash to buy the house, but also to pay your workers throughout the duration of the flip and cover unexpected costs. 
• Do pay attention to the market. Look at the area to see what the return on the investment will be. 
• Do pay attention to the neighborhood. Buying a home near schools and shopping centers will attract more buyers post-flip. 

Buying a home near schools and shopping centers will attract more buyers post-flip.

The Don’ts:

• Don’t ignore red flags. For example, make sure the property doesn’t have mold, or if it does, be prepared to deal with it. You also need to be on the lookout for any structural issues. 
• Don’t go ‘too big’ on your first project. You want to make sure you can cover all the costs as well as maintain your personal life. 
• Don’t do the bare minimum. You won’t make any money by simply repainting and putting in new carpet. 
• Don’t blow your budget early. Make sure you watch your budget closely and keep your emotions from influencing purchases or financial decisions. 

If you have any questions, feel free to give us a call or send us an email. We’d be happy to help you! 

When Does the Chicago Spring Market Really Start?

Usually the spring market starts in late March or early April. This year, however, the spring market will be here much, much sooner.

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When does the spring real estate market actually start?

In general, the real estate market begins in late March or early April. However, it’s 70 degrees out there in Chicago. Since the winter has been so mild, the spring market will begin in the next week or two. 

In other words, if you’ve been thinking about putting your home on the market, now is the time to do it.

Now is the time to put your home on the market.

There are a ton of buyers out in the market right now because interest rates are expected to go up on March 15th. They want to make their move before that rate hike happens.

That said, inventory is extremely low. Compared to January 2016, January 2017 saw a 14% drop in inventory. While this is frustrating for buyers, this is good news for sellers because demand is strong and you won’t have much competition.

If you have any other questions about the spring real estate market or about selling your home, give us a call or send us an email. We would be happy to help you!

What to Expect From the 2017 Real Estate Market

What can you expect from the 2017 real estate market? We’ll go over a few important things about home sales, interest rates, and housing inventory today.

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What can you expect from the 2017 real estate market?

According to the National Association of Realtors, 2017 homebuyers are still very confident in their ability to buy a home. Buyer demand remains strong as well.

In 2016, there were 5.42 million home sales, the highest we’ve seen since 2006 when 6.5 million homes sold. Our market is recovering well. In 2017, we should see 2% growth, or 5.52 million sales.

That said, there are a number of factors that will impact home sales this year.

For instance, there are a couple of things that will help keep the buyers in the market: interest rates and expected job growth. Interest rates are expected to increase, which means buyers will want to purchase before buying a home gets too expensive. That said, we should see a couple million new jobs in the market, which will help buyers tremendously.

Our market is in desperate need of more inventory.

Not only that, millennials are expected to enter the market in a big way this year. Millennials are finally ready to make a home purchase.

One thing our market desperately needs is more inventory. If you’ve been thinking about selling your home, stop kicking tires and enter the market. Now is a great time to put your home on the market.

That said, if interest rates go up more than expected, some sellers may decide to hang onto their homes a little longer. If you refinanced your home recently, you might not want to re-enter the market with a higher interest rate. That could be why inventory remains so low.

If you have any other questions about our current market or about buying or selling a home, give us a call or send us an email. We would be happy to help you!

5 Tips for Upgrading Your Home Before Listing in Chicago

To sell your home successfully, it needs to be in tip-top shape. Today we have five tips to help you update your home for a top dollar sale and a high return on your investment.

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When it comes to selling a home, it really has to be in tip-top shape. Sometimes that means freshening the home up, making some minor updates, or even renovations. If you plan to renovate your Chicago home to help you earn more from your sale, we have three compelling reasons to do so now:

1. Renovations always take longer than expected. Even minor renovations to your kitchen or bathroom might seem like they'd only take two weeks, but you want to plan ahead because it will take longer than you think.
2. You might come across issues you weren't aware of. If you're making updates and your contractor discovers an issue, it needs to be addressed. 
Wouldn't it be nice to enjoy your renovations before you move?
3. You get to enjoy the updates before you hand over they keys to the buyer. 
4. Many updates are inevitable. If you have an old roof, it needs to be updated anyway, for example. You might as well make the renovations now!
5. You will get a better return on your investment if you effectively plan ahead. 

If you're not sure which renovations are right for your home or will bring you the biggest return on your investment when it comes time to sell your house, we have a great cost vs. value resource you can use.

If you have any questions, don't hesitate to give us a call or send us an email. We'd be glad to help you!

Should You Sell Your Home or Rent It Out?

The rent vs. sell debate is a complicated one. It really comes down to where you’re at financially and where you want to be.

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We are excited to talk to you about today’s topic, which comes to us courtesy of our good friend, Ed Erickson. He wanted us to give some information on the benefits of selling and the benefits of renting, so those in the position to do either can make the decision that’s best for them and their family.

One reason someone may need to sell instead of rent is because they need the net proceeds from the sale to purchase a new home. Another reason is because they don’t want to be a landlord or have to deal with a property management company. Maybe they just have some really good equity in the property and want to cash out to take the money and invest it in something else.

They each have their own benefits.

However, renting out a house has its fair share of advantages. If you have negative equity, renting can help you build it back up. One of the great benefits of renting out a property is the many tax advantages. Depending on how your accountant handles things, renting out a property could help you out a lot. Finally, renting allows you to start a real estate portfolio while also providing a passive income stream. 

The stock market is always up or down, but the real estate market is a much safer bet. You can make a good deal of money investing in properties if you do it correctly. Thanks again to Ed for providing us with the topic. If you are in need of any business coaching needs, please give Ed a call at (773)-672-7418 or visit ericksoncoach.com. He will take great care of you.

If you have any questions for us about whether you should consider selling or renting your house, we would love to help you out. Just give us a call or send us an email. We look forward to hearing from you.