Dream Homes - Chicago's Best Real Estate

Marketing Real Estate in 2008

2008-05-02T09:07:00.000-07:00

There is one thing that will never change and that is: we all have to adapt or perish. Surely someone has written this before me, so try not to accuse me of plagiarism. So, here at Chicago Home Estates, we have embraced this change and adapted to the way you, our customers, do business and how we market property.

In the past it was a phone call, a visit and off we went to buy or sell a piece of property. Now we have more tools as brokers and consumers, when it comes to buying and selling homes. So, where to put our time and resources as brokers? That part is easy: the internet. The net has become the tool of choice for consumers, at least buyers. It is the first place they look. How much easier can it be than to Google: Chicago Real Estate or Luxury Homes in Chicago . . . The key to selling property is having the exposure to get noticed, and this takes a lot of work. Adds, blogs, .com address listings (for example: 4144 Sheridan), Craigs List, Realtor.com, Tribune.com, a great web site with tools that keep people coming back . . . and the list goes on and on.

But the power to draw buyers and seller to a good campaign dose not start or stop here, it evolves here, each piece adding a layer that further impacts the search engine. The more exposure, the more layers, the more importance the web places on the information provided and the more it works, the more it spiders through the web.

In all honesty, I hardly understand it, which is why we have two really great technical support guys working in our office. Without their support, I could not do my joy, which is looking at property and evaluating the value of the property I see. I could not take care of the day to day operations of buying and selling. So, it is not the business of old. It is changing and over the last two years it has changed significantly. So, we evolve, and I for one thank our tech guys for all their help in getting my properties, your homes, noticed where it counts most.

Buyer's Agent and Good Credit

2008-01-23T08:49:00.000-08:00

There is a lot going on in the world of finance and real estate today, most if it bad if you believe all you read and hear from the media. But the property buying opportunities will rarely be better. Low demand for housing is easing prices, pressure on stricter lending requirements is pushing loan executions down and there is lots of money floating around, relatively cheap.

So, what does the successful buyer need? Good credit. . . Lenders are returning to the basic rules of lending: credit, capacity to pay and collateral. Before you embark on your quest for that perfect place, have a long discussion with your real estate agent and your mortgage broker. If you are working with seasoned brokers, they will share good advice and have several sources for finding good properties and suitable loan programs. Brokerage is a people business and good agents want your transaction to go smoothly, so financing for the right property is your key to getting started in this market.

Why loose the place you want to another buyer who is familiar with the market and ready with their financing. It is a tough market right now and agents will advise their sellers to consider financial strength over price at present. It is more than just getting the best offer to sign, it is more about follow through and closing in this market. I have been in several multiple offers in the last year. So, I know that good properties are still selling. We have a very resilient market her in Chicago. And, for that, we can be grateful.

Free Credit Analysis

The Aggressive - Low Ball Offer

2008-01-08T09:46:00.000-08:00

I have had a few clients make very low offers recently. Even though I discouraged the offers, knowing their potential for turning a seller away from us and the inevitable outcome, I wrote them to help my clients understand the folly of the unfounded offer. As expected, those offers were turned down and the sellers refused to even negotiate with us, assuming the buyers were unable or unwilling to bring an acceptable offer to the table. So, if you plan on making an aggressive offer consider the following when making the “Low-Ball-Offer”.

There are three factors in making a successful offer that is 5% to 10% below true market value. And, when I say true market value, this negates the over priced property, but the same holds true when trying to convince the overpriced seller to accept your bid.

First off, you need hard facts on market time and selling data of comparable properties. The pick-a-number-out-of-the-air method wont work, you will loose credibility and you will only set yourself up for rejection and disappointment. You or your agent needs to know the market in your area and present your offer very sympathetically. This is the “Know Your Facts” part of the argument. And, only a sound argument will turn a seller around to your point if view. If they understand you and feel you are genuine, they may consider your argument and ultimately your offer. If they have no idea where you are coming from, they will instantly dislike you, which is the worst possible outcome.

Secondly, if the seller has moved or is scheduled to move, consider their carrying costs and point them out. Typically, costs can run 1% a month and if it takes 5 to 10 months to sell, this could be your main argument. But, you are going to have to convince the seller and doing some homework is necessary. Your agent should be able to find statistical proof and argue on your behalf. This is simply the “Motivation Factor” of the seller. If you can make them understand that your offer is valid and why, you may have a deal.

Lastly, this type of negotiation takes time, so understand that the seller will use your offer to get a better one. A good seller can create urgency with the next potential buyer with your offer. Even if the next offer is only a $1,000 more, the seller will be happy he did not sell to you if he feels insulted. Also consider that time is never on a buyer’s side with a nice property. If you like it, it is safe to say others will too. So, unless you are willing to loose out, make your best argument understood by presenting your thoughts logically and negotiate your best price quickly.

As a final thought, try not to make your next home purchase all about the money. Everyone wants a good price and a fair deal, even a good deal, but a home is more that just a good deal. It is about location and quality of life. If you buy something that is just a good deal, what do you really have. . . Never pay too much, but never loose a nice property over a few dollars and never settle for just a good deal. Life is too short and it makes the entire process too painful.

A Bit About Lincoln Square

2007-12-08T06:39:00.001-08:00

Long before the intersection at Lawrence Avenue and Western Avenue was called the Lincoln Square Neighborhood, the area was mostly tranquil hardwood forest and lush green pasture land. Horse-drawn carts carried sleepy workers up a sandy path that was Western Avenue. It was the outskirts of Chicago where people would camp in the forest as immigrants found work in pickle and onion fields or tended livestock on the farms. After the Chicago fire, strict building codes forbade the construction of wood-frame homes within the city limits. So, people moved to the less congested, green acreage North and West of the city’s center. Many of them German immigrants, they built less expensive wood structures in what became the Budlong Woods Neighborhood, the Ravenswood Neighborhood, and the Winnemac Neighborhood. In 1923, when the area’s growing prosperity gained the attention of the city, it was annexed and given the Lincoln Square Neighborhood name. In time, the plodding horse-drawn carts would be replaced by swift streetcars running up Western Avenue and in 1907 the clamor of the Elevated train brought the masses to a bustling business district with a bank, commercial cleaners, clothing stores and other shops. Backers of the “L,” in customary Chicago fashion, bought up large plots of land as traffic on the new train reached 10,000 riders per day and the building boom was on.Today, the area is still fairly wooded and speckled with some of the best examples of vintage-Victorian structures in the city and new construction quickly fills the space of the unkempt property. Condominium dwellers also get a little more for their money in Lincoln Square, as they move, like so many before them, to the greenery and away from the more congested city’s center.

Multi-Unit Buildings

2007-10-16T07:57:00.000-07:00

The multi-unit building is starting to look like a better investment as of late. In the past, investors were content with backend profit and tax breaks, when holding and selling investment property. It was a good place to park cash, but the highly leveraged property rarely cash flowed and, if by chance, a property did came on the market that could financially sustain itself, it was gone in a flash.

But that has changed recently. Perhaps it is due to fewer buyers and tighter lending practices on jumbo loans; one of my clients just told me he has to provide more financial documentation on a three flat we are purchasing than he has ever given before. Additionally, higher rental income is favorably impacting these assets, and the combination of these factors make the multi-unit property a flexible purchase option and investment.

Seemingly enough, it is the rental income that makes the equation work: Prices are coming more into alignment with rental incomes as investor-anticipated, real property appreciation comes back to a more historical, single digit figure. And this is a good sign in my opinion. It means prices are stabilizing and stability in housing prices signals an easing of anxiety over current housing concerns.

Another of my clients is purchasing a two flat now with plans to convert it to a single family home within the next three years. He gets a good price now, fair rent and plenty of room to expand. How can he go wrong . . .

2007-08-06T10:58:00.001-07:00

First Time Buyers Program

2007-06-12T08:09:00.000-07:00

Did you know the City of Chicago is willing to pay 4% of your closing costs when you buy a new place? And, it may only cost you a few hours of your time. That's right, the city will help you buy a place if you take a first time home owner's class. There are some qualifications and parameters, but it's worth checking into. So, click on the attached link and see if you qualify: First Time Buyers Program

It will only make you a better citizen, in the eyes of the city, and it isn't just for first time buyers. If you haven't closed on a property in three years, you may also qualify. Good luck.

How to find a Realtor to sell your home.

2007-05-30T10:41:00.000-07:00

Funny thing we noticed the other day: in the toughest real-estate market in the past few year, agents are having a tough time getting into see property. Here is a list of some of what I and my counterparts have heard lately: "Sorry, I'm only a part-time agent and I can only show after 5:00". "I can only show on Weekends." "I have a hair appointment at that time." "The seller is showing the property and he is out of town a lot." And, the list gets sillier ever day.

As a listing agent, I know some of the showings are going to be a poor use of my limited time. But, I still go because that is the job. And, you never know. I once sold a difficult listing on Easter Sunday between church and dinner, and I'm a Catholic. I was reluctant to accommodate them, but I had a responsibility to my clients. It is less about my convenience and more about my responsibility to my clients. No matter how inconvenient.

So, do yourself a favor when you are selling your home and make sure your agent is a full time, professional agent. You will be helping out all of us in the field. So, I will thank you in advance for your consideration.

Summer is Finally Here

2007-04-23T12:29:00.000-07:00

Ah, nothing like 70 degrees, sunny and living in Chicago. I have a few rules about living here, most of them are about doing more. Some of them I take a little heat for, like not going to Wrigley Field until the Ivey has turned green. There are about 40,000 people, per game, in the early weeks of baseball that disagree with this one. But, we have options here; you can visit some of the pubs in the immediate area, watch the Cubs and still get the feel of the ball park. And, no lines or bitter winds that accompany early season play.

But the cold won't matter much longer, because it's starting to warm up and the canopy of green comes pretty quickly in Chicago. In a couple more days our weather beaten, barren trees will dawn beautiful new suits of green leaves. There is just so much activity this time of year: smiling people in the streets, sidewalk cafés start to fill up and the outdoor gardens open - it's Weiss beer season and yes, I'll have one, maybe two and get my friend one, please.

At this point it may sounds like all we do is eat, watch baseball and drink beer, but that is just the beginning of summer here. I can't wait to go sail and at least watch some of the regattas. I also make a point of chartering a boat, from the Chicago Sailing Club, for my clients. Last year I took about 60 of my clients on three evening trips to Navy Pier, a beautiful fireworks show and a little wine and cheese.

We have great music venues, too. The Grant Park Symphony is something that I don't get enough of each year and a trip to Ravinia is a must. And, we have street fairs every weekend with live music and great food. One of the first I make it to is the Andersonville street fair on the north side of Chicago. And, there are many more. Each weekend has several all over the city. Great food and great music are the foundations of summer life in Chicago.

Little Fish In A Big Pond - The Business Of Foreclosed Property

2007-03-16T11:34:00.000-07:00

I have gotten a number of calls recently about buying foreclosed property. Most are people looking for a bargain. I have a few clients who do this for a living and they have been doing it for decades. So, if you think buying foreclosures could be for you. Here is what my investor and builder clients have to say about it: "it's a tough business," for the pro and novice, alike. You are swimming with sharks, big smart ones. They have a pretty good idea what will make a buck and they know what to stay away from.

The investor knows the risks, just like any other seasoned gambler. But, the investor also knows the local real-estate market. They will often sell for a slim profit, if they can get in and out quickly. The contractors at the auctions are looking for properties to keep their guys working. They have crews that work in construction everyday. They, too, know the market, how long it will take to rehab and what it will cost. They use agents to sell the properties when they are finished. So, you better get a good crew, or be prepared to spend some time and money bidding out the work and scheduling all the trade workers. And, make no mistakes, because that will cost you. Time management is the key to making money. Your subcontractors will move on to other jobs if you are not ready for them when you said you would be. One sub-contractor out of line could delay the entire process, and delays eat up budgets.

But, if you still like the idea, there are a few things to know: First of all, this is a cash business and you have to pay the auctioneer within 24 hours of making a purchase. And, you had better know exactly what it is that you bought: did you buy a first mortgage? A second mortgage? A third mortgage? Because this is really what you get; the property is almost secondary. Then you should know what state of payment the taxes are in. Are they paid, delinquent or did someone else buy them? How about a title search and satisfaction of leans against the property? What happens when you sell the property and find out there is a mechanics lean against the property from 5 years ago? You pay it at closing. . .

As you can probably tell by now, I discourage most of my buyers from the idea. There is a lot of research that goes into the purchase of distressed properties. And, you have to do your due diligence for lots of properties first. One of my investor clients said maybe 15% of what he looks at is worth buying.

So, if you still like the idea, and after you have done your research on ten or twenty properties, you buy one. Now you have to go to court to make sure the sale is approved by the judge in charge of the foreclosure. Often times, lawyers for the previous owners have filled legal document to get the property back. So, you have to wait 30 days to 6 months and then you may have to evict the residents. All the while they are stripping the property of cabinets, personal property and even the copper pipes and wiring in some cases. In effect, they are trashing the place. You will have to face the fact that, the past owners are not happy about loosing there home, so they strip the property bare, at best. You could even drive by one day and the property is gone, demolished by the city for being unsafe or an eyesore. And, who do you think gets the bill for that? Right, you do.

However, if you are still interested, there are some classes you can take. Check out the following: SHARK BAIT If you are still interested, I can introduce you to one of my clients. He will work you through the process for a percentage of your first sale. And, this is money well spent, believe me.

You are swimming with the sharks on this one, and plenty of those sharks have scars. No one in this business gets away unscathed: seller, buyer and banker, will all pay a price. The bank just wants its money back. The responsibility lies with you to turn a buck.

A Bit About Andersonville

2007-02-28T09:32:00.000-08:00

Andersonville is the area around the intersection of Clark and Foster. It was home to many German and Swedish immigrants and the location of the first grade school in the area. To the east of this intersection was a tranquil cherry orchard, planted by the first immigrant farmers, and farm land flanked all sides of this fertile junction, north of the city's center and just west of Lake Michigan.

Andersonville, which was or still is part of Edgewater, experienced expansion in the late 19th century. As a result of the Great Chicago Fire of 1871, many residents began moving out of Chicago proper when wood frame construction was banned within the city limits. So, financially limited residents began moving out of the city's center, where they could build less expensive wooden homes and businesses. A portion of Edgewater that is now Andersonville, became a center for the Swedish population and today remains one of the greatest concentrations of Swedish descendents outside their homeland.

A diverse and accommodating group, the community built several churches in the area that loom large over the neighborhood: the Roman Catholics built St. Gregory's, north of Foster on Racine, in the classic style of Gothic Revival in 1904, considered by some as an architectural first for the Archdiocese of Chicago, it reflects the influence of the early French on English architecture. Much of the artwork was restored at the turn of the millennium, but nearly lost to fire towards the end of renovation and much of the restoration had to be reworked.

Ebenezer Lutheran Church, originally know as the Summerdale Church, was a humble frame structure constructed in 1892 at Berwyn and Ravenswood. They moved several times within the neighborhood, taking their church with them as they went, until two lots were purchased at Racine and Foster in 1904, the present location and dominating feature at this intersection. A towering Gothic structure, it was built mostly by Swedish Immigrants and became the center of the Swedish community. In the late 1980's the church refocused its mission to "Reconciling in Christ, under God all may serve" which included the gay and lesbian community and invited them to join its ranks and blessed their unions.

Today the area is continually blessed with a rich cultural diversity and abundance. Its restaurants and shops are usually filled with residents and travelers alike, enjoying everything for tacos to sushi, Mediterranean and Middle-Eastern foods to Italian and French cuisine, with many open-air sidewalk cafes and back-yard bear gardens. The Swedish Cultural Center and Museum has preserved the stories of the past and new arrivals continue to write the thriving history by offer their wares in the form of second hand goods to custom designed furniture, in vogue to vintage clothing, art and antiques, and some if the best baked goods on the planet. The Clark Street shopping districts continues to expand both north and south of Foster, while branching off on all side streets, connecting it firmly to a growing community.

Excess Housing Stock or Pent-up Demand?

2007-02-27T09:12:00.000-08:00

Existing home sales soared in January, reflecting a pent-up demand for housing. Some of this also reflects the fact that people were very concerned about housing prices in the last quarter of 2006, and the correction took place. There were also rate jitters, economic forecasts of doom and very little urgency to make a move in the overall market, but that seems to have changed. It has been very busy lately, at least in Chicago. And, this desire for the American dream is going strong nationally, too. See the attached article on a record rise in existing home sales.

JanuaryExistingHomeSalesRise

My personal experience as of late, half of my current activity is directly connected to business that should have been conducted in the fourth quarter of 2006, which was dismal at best. But 2007 looks like it could be better than anticipated, with more buyers getting better deals and a little more for their money. The data is a little confusing, but it all looks good for the home buyer. Prices falling, rates holding or potentially falling in the wake of bad economic news, unemployment is still very low and People Still Love Chicago. So, if you are thinking of buying, get started now because the Spring Market is coming a little early this year.

Housing Inventory Not The Only Cost Factor

2006-12-22T07:09:00.000-08:00

The supply and demand factor greatly influences the selling price of any new home. But, it's only one factor in pricing pressures that affect the cost of a new home. Disregarding rising land prices, labor eats up about two thirds of your construction budget. The rest is materials. And, the costs of building materials have soared over the past few years for several reasons: global demand, the war effort, natural disasters and the housing boom itself. The cost of plywood nearly tripled, gypsum dry wall board was nearly rationed two years ago and the cost of concrete tipped the scales on rising construction costs.

But, the real news is that this is changing and the overall feeling is the real "bubble" is built into the commodities markets. Now for the good news: the commodity prices affecting home construction are falling sharply. The lumber index chart looks like a black diamond ski slope, copper is well off its record 2006 highs and now flirts with multi-year lows. The average home has 300 pounds to half a ton of copper in plumbing pipe, electrical wire and upgrades like nice rain gutters, etc. And, the gypsum shortage, used in the manufacturing of drywall board, has softened over the past twelve months.
So, good news for all of us. . .Buyers and builders alike.

The Chicago Housing Market Is On The Rise And Interest Rates Hold Steady

2006-12-21T12:01:00.000-08:00

It's a Happy Newyear for the optimistic and the doom and gloomers are going to be left behind in the land of the misfit toys. But there is still hope for them, too. The Chicago Housing Market experienced a stronger than expected holiday sales season, and rates and better than last year. See the attached story and have a great holiday season. Here's looking forward to a robust 2007.

Interest Rates Lower Than A Year Ago

Economy Looking Up

2006-12-07T12:20:00.000-08:00

With consumer credit hitting record lows, new mortgages on the rise and mortgage rates falling, and a better than expected employment picture, the economy is looking better every day. And, the real estate market in Chicago is picking up after a few slow months (ok, maybe four or five slow months).

As a real-estate consultant, the biggest threats to a healthy housing market are over extended bank accounts, uncertainty in the employment market and higher interest rates. Fortunately, all seem to be looking up. Take a look at the attached: Consumer Credit Hits 14 Year Low.

Best of all for buyers is that the volume of real-estates loans is up and mortgage rates are down. View current rates.

Finally, it is always good to see employment and real wages holding strong. See: Better than expected numbers to be released on Friday.

Should be a good season for the retailers, too, during this holiday
season. Do your part for the economy and shop early and often.

Chicago: Still One Of The Best Real Estate Markets

2006-11-29T11:51:00.000-08:00

Home prices are still rising in Chicago. While other areas of the country continue to see declining home prices, Chicago continues to eke out a modest gain. See:

Chicago Housing Continues to Appreciate

There are good reasons for this, too. Chicago is a growing community and, lets face it, we like living here. With the lake and hundreds of parks, plenty of public and private golf, easy get-a-ways to Wisconsin and Michigan, great food and night life, and two regional airports when you really need to get far-far away. We have a well balanced workforce, ethnic diversity living in reasonable harmony (considering world events), a relatively well educated population and opportunity for higher education or technical training for anyone who desires something better. All this adds up to a great place to live. The next logical step is finding a home.

Most people in Chicago buy property to live there. It is an investment you can live in, but primarily it satisfies one of our most basic needs - shelter. In areas of the country suffering from real-estate deflation, there was an indulgence in speculation in real estate. This hurt everyone. Short-turn loans with absurdly low interest rates fostered over buying and unsustainable inflation. Thankfully, those teaser rates are over. And, rates are still historically low for buyers. Real estate is a necessity and a long term commitment. It is also the only real tax break left for the regular guy.

Existing Home Sales Up in October

2006-11-28T10:47:00.000-08:00

Existing home sales were up in October, but it is hard to hear that if you listen to the lemmings in the news media. Such negativity. . . Truth is - we all need a place to live. And, we buy a place because we refuse to rent any longer or we just want our own space. Forget the tax advantages or the fact that no one ever made a dime renting. And, sure, we remain cautious, but informed buyers are only reasonable cautious because, they know a good deal when they see one. They work with professionals in the housing market where they intend to live. They shop online, talk about what they see and make appointments when something looks interesting. Then they can confidently snap up the undervalued and fairly priced properties when we see them. The best time to buy any investment is when sales volume is low and, it has been that way now for nearly six months.

Do I Really Need a Realtor?

2006-08-28T12:44:00.000-07:00

I was talking to one of my clients a while back. He is a trader at the Chicago Mercantile Exchange and has been so successfully for over 20 years. I asked him about some investments I was thinking of making. I wanted to buy some stock options for a company I though was over bought and subsequently over valued. His first question to me was, "are you getting out of real estate". I replied, “no”. He then cautioned me to stick with what I know, and stay away from risky speculation in the stock market. It takes up too much time, and there are some pretty smart, successful people working on Wall Street - because that is all they do – full time. So, he gave me the name of a couple good advisors, and I have been working with them ever since. This conversation came back to me today, when I was reading an article concerning the need for Realtors. I found it quite apropos, considering the fact that, once upon a time, I considered day trading online while still selling real estate fulltime.

Similarly, there is a growing population of people who what to do everything themselves – online. And the real estate transaction is no different. Some would have us believe that we just need to subscribe to there service and order their proven marketing package and buyers will just pour in with full-price offers. And researching a purchase online is all they need to do, even when it is their fist purchase of real estate. I have a few stories of friendly sellers turning quiet vicious when little things like appraisals did not go there way.

With technology what it is today, we have more information within our grasp than ever before. And, interpreting volumes of information can be a daunting task. Similar to the Wall Street investor, when Realtors watch their local market, and study it each day, they see patterns evolve. Sometimes markets are driven by legitimate factors, such as changing demographics, employment trends and local economies. . . and, some times markets are driven by illegitimate factors, like fear and anxiety, or an over bought market. Interpreting this data and knowing what to believe takes a great deal of time – full time. In an article published by Market Watch for 8-28-6, the question of "Do I need a Realtor" is explored:
http://www.marketwatch.com/news/story/Story.aspx?guid=%7B7A2570BB%2DC704%2D45EF%2DB904%2D2B8B7FD5AB9D%7D&siteid=. Take a look and tell me what you think.

Housing Sales Lower, but Still Setting Records

2006-08-22T08:07:00.000-07:00

According to a new Coldwell Banker study, housing starts and sales are down by 7%, but it is still a record year for home buyers. In an interview for the Wall Street Journal with James Gillespie of Coldwell Banker, Gillespie sites tax benefits, boomers, immagrants and minorities with some of the credit for keeping the housing market alive and well. "Minority ownership is up 10% over the past ten years," reaching nearly 50%. There are also 78 million baby-boomers in the market buying a host of alternitives. "Real Estate is still a solid investment. . .where else can you leverage an investment, like Real Estate, and live in it?" With tax benefits and the ability to right-off mortgage interest, it is still one of the only tax breaks left to most working class people.