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.