Top 5 Contract Negotiation Tips-North Shore Real Estate

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Spring on the North Shore seems to make it all the more profound, buying your first home is an exciting event, even for a seasoned North Shore buyer, it can be a challenging process. Some of the details can be intimidating for a first time real estate purchaser or experienced buyers may have forgotten a few key points. No need to panic, with a little preparation you’ll feel like an expert and you’ll be ready for anything!

The natural focal point of a real estate purchase contract is the selling price of the home, but the price isn’t the only factor that determines the net bottom line for both the buyer and the seller, especially in our current real estate market. Is a bargain for the buyer really a bargain if he or she is paying all the transaction costs? Is a top price for the seller really a top price if the buyer wants all the furniture to be included in the purchase price? Or what if the buyer can’t come up with the down payment or qualify for a mortgage?

Best Tip: Ask your experienced North Shore-Glencoe real estate agent to go over the standard contract with you before you receive or make a purchase offer. That way, you’ll know what to expect and be prepared to negotiate the best deal.

Before you decide to move forward, here are five other bottom-line points to consider:

1. What are the estimated transaction costs and who will pay for what? Typical costs include the brokers’ commission, a home inspection, a termite inspection, escrow or attorney’s fees, a title search, an owner’s title insurance policy, transfer taxes and recording fees. The price tags on these items can vary around the North Shore area. Who pays for what is a matter of both local custom and negotiation.

2. How much money is the buyer putting into escrow and when? A big deposit — called “earnest money” — and a substantial down payment are generally seen as a sign that the buyer is dead serious about completing the transaction. From the seller’s point of view, the more money the buyer places in escrow and the sooner the money is transferred, the better.

3. Is there a mortgage contingency and how specific is it? The mortgage escape clause is a must for buyers, unless they’re paying all cash for the home. Without this contingency, buyers could be legally obligated to purchase the home even if they can’t obtain financing. Further, an open-ended statement that says the buyer will obtain a loan “at the prevailing rate of interest” leaves the buyer completely exposed to interest rate fluctuations. A statement that says the loan must be at an interest rate “not to exceed xx percent” and on specified terms is ideal.

4. Exactly what furniture, fixtures and appliances, if any, are being sold with the property? Technically, anything that’s permanently affixed to or installed in the North Shore home is real property. Everything else is the seller’s personal property. This distinction is a narrow one and it naturally leads to a fair amount of confusion. Are built-in appliances real property or personal property? What about a shelving system? A chandelier? Window coverings? Potted plants in the yard? Sellers who intend to remove anything that’s attached to the home should have that specifically noted  in the contract. And the same goes for buyers who expect to acquire any of the furniture or other movables.

5. What happens if either side breaches the contract? Unless an unmet contingency triggers the abandonment of the contract, it’s a binding legal document. Buyers who fail to perform can lose their deposit or earnest money. Sellers who try to back out could be sued for “specific performance,” which forces the sale of the home to the buyer.

Our top performing Chicago’s north shore realtors provide legendary service and experience. Feel free to stop in our Coldwell Banker Office located at 640 Vernon Ave, Glencoe 60022. Our Glencoe realtor office has been providing outstanding real estate  knowledge for over 45 years. We look forward to assisting you.

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Glencoe-North Shore Market Trends: Update March-April2012

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North Shore real estate experiences the 8th consecutive month of home sales increases, according to reports released by the Illinois Association of REALTORS®! The 15.1 percent increase in North Shore sales is the strongest report since 2008 housing data.

Several factors contributed to the North Shore sales increases, including quick movement of distressed properties through the legal system, interest rates remaining at historic lows (The monthly average commitment rate for a 30-year, fixed-rate mortgage for the Chicago-North Shore region was 3.91 percent in February 2012) and prices that are seen by many North Shore consumers as a once-in-a-lifetime buying opportunity.

Statewide home sales including Chicago’s North Shore-Cook County (single-family homes and condominiums, foreclosure, short sale properties included) in February 2012 totaled 6,487 homes sold, up 15.1 percent from 5,634 home sales in February 2011. The statewide median price in February was $117,000, down 8.2 percent from $127,500 in February 2011.

“People seem to be feeling better about where the economy is going,” said Loretta Alonzo, CRB, GRI, president of the Illinois Association of REALTORS® “When you have interest rates and housing prices this low homebuyers are highly motivated to get back into the market.

” This spring surge is typical in a cyclical housing market with activity levels high when the weather warms. However, this year’s spring surge is stronger and came earlier than last year, according to Hewings- Dr. Geoffrey J.D. Hewings, University of Illinois. He added that the U.S. unemployment rate was unchanged at 8.3, a sign of stability in the economy.

In the nine-county Chicago-North Shore-Cook County Primary Metropolitan Statistical Area (PMSA), home sales (single family and condominiums) in February 2012 totaled 4,325 homes sold, up 14.8 percent from February 2011 sales of 3,769 homes. The median price in February 2012 was $135,000 in the Chicago PMSA, down 11.5 percent compared to last year in February when it was $152,500.

Sales and price analytics are generated by the North Shore Multiple Listing Service closed sales reported by 31 participating north shore realtors- Illinois REALTOR® local boards and associations including Midwest Real Estate Data LLC data as of March 7, 2012 through April 2012; and for the period February 1 through February 29, 2012.

Find Illinois housing statistics, reports, analysis, area conditions data and projections at the University of Illinois REAL forecast at www.illinoisrealtor.org/marketstats.   You may also stop by our Coldwell Banker office, located in downtown Glencoe, IL for updates on North Shore homes for sale, North Shore property sales, or to get other real estate related trends. We are your valued North Shore Realtors resource.

 

 

Home Renovations That May Reduce Value: North Shore Real Estate

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North Shore Spring break, vacations, and time off……optimal times for North Shore real estate renovations.  But beware, not every renovation promotes a return on investment. That old adage for North Shore  home renovations, furnishings and additions — is all well and good while you sleep under its roof, but if you plan to sell, your efforts could decrease rather than boost selling potential. The detail below will outline what may or may not be in your best interest for North Shore home renovations:

Headaches to look out for

A bright pink paint job and lawn cluttered with gnomes and flamingos is going to offer little in the way of optimal curb appeal. That koi pond you love so much may be just a headache for a new North Shore home owner.

Swimming pools can be a bonus in the minds of some North Shore home buyers, but for others, a pool can be a negative.

“Swimming pools and landscaping can both backfire,” says Brendon DeSimone, a Realtor® in California and New York and blog contributor for online real estate database Zillow who has been featured on the HGTV television shows “Curb Appeal,” “Bang for Your Buck” and “My House is Worth What?

“They are nice to have because they show really well and will lure buyers in,” he explains. “But when buyers are assessing pros and cons of the home or comparing it to other homes, the upkeep — or safety, in the case of the pool — will factor in. Some people just may not want to sign up for having to do landscaping or pay the landscaper. So while a swimming pool or beautiful manicured lawn might reel in potential buyers, eventually those things could turn them off. Gardening and over-the-top landscaping is for a very specific buyer.”

There are always exceptions to be had if the right buyer comes along. A pool in warm-weather Arizona or Southern California is certainly more attractive than one at a home on Chicago’s North Shore where it gets only a fraction of the annual use.

Jacuzzis and whirlpools are other luxuries that can be a hit or a miss for sellers. A young couple may love the additions; a family with small children may see them as a waste of space and potential safety hazard.

Be careful when changing or updating rooms

Renovating your basement, attic or garage into an additional room? That man cave or spare bedroom may fit your lifestyle, but Chicago’s North Shore buyers may lament the lack of storage space and place to park their car. A basement or dormer apartment may run contrary to local zoning and be a red flag during a home inspection. Converting a bedroom into an office may appeal to a work-at-home buyer, but eliminating that bedroom in the eyes of local assessors will decrease your home’s value.

External additions can be problematic if your bigger and better house is out of character with the surrounding neighborhood in size and North Shore style. It can be even worse if your do-it-yourself project lacks professional polish. Even more modest improvements — such as doors, windows or awnings — can hurt if they don’t match your home’s architectural style.

The National Association of Realtors and Remodeling magazine surveys remodeling and exterior replacement projects as part of its annual Remodeling Cost vs. Value report.
Overall, the 2011-12 report estimates that homeowners would recoup an average of 57.7 percent of their investment in 35 different improvement projects, down from an average of 60 percent last year.

Returns for decking and additions can vary depending on which region of the country where the home is located. SOURCE: formanconstruction.com

Guess which has more BANG for your buck?

According to the report, seven of the top 10 most cost-effective projects — nationally, in terms of value recouped — are exterior replacement projects. It deemed fiber-cement siding replacement as the project expected to return the most value, with an estimated 78 percent of costs recouped upon resale.

  • Vinyl siding projects were expected to return more than 69 percent of costs.
  • Steel entry door replacement was the least expensive project in the report, costing little more than $1,200 on average, and was expected to recoup 73 percent of costs.
  • Garage door replacements have seen prices fall more than 15 percent nationally and can be expected to return more than 71 percent of the cost.
  • A “midrange attic bedroom” is expected to return 72.5 percent of costs upon resale, in part because it is “the least expensive way to add a bedroom and bathroom within a home’s existing footprint.”
  • A minor kitchen remodel (budgeted at roughly $20,000) is expected to recoup 72.1 percent of costs.
  • A wood deck addition is expected to make back 70.1 percent of its price tag.
  • Among the least cost-returning projects are a sunroom addition and home office remodeling, both estimated to recoup less than 46 percent of what they cost. More info HERE

Feel free to stop by the North Shore’s top producing real estate office for guidance on homes for sale, homes for rent, housing statistics or reports. We can be found in downtown Glencoe, Illinois 60022. Coldwell Banker residential brokerage and mortgage services. The best in North Shore realtors.

Top Loan Types & Lender Checklist: North Shore Real Estate

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Chicago’s North Shore real estate buyers are benefiting from historic mortgage interest rates that continue to hover at or near 60-year low points. This is a great time to buy or sell for seasoned investors as well as first time home buyers. Every buyer and seller should have running knowledge or at least brush up on basic North Shore mortgage products and types. It’s also good to have a checklist of what’s needed to get the mortgage process rolling. Below are some handy-dandy tips to take note of:

  • Common mortgage terms.   Mortgages are generally available at 15, 20, or 30-year terms. In general, the longer the mortgage term, the lower the monthly payment.   However, you pay more interest overall if you borrow for a longer term.
  • Fixed or adjustable rate loans. A fixed rate allows you to lock in a low rate as long as you hold the mortgage and, in general, is usually a good choice if interest rates are low. An adjustable-rate mortgage is designed so that your loan’s interest rate will rise as market interest rates increase.  ARMs usually offer a lower rate in the first years of the mortgage. ARMs also usually have a limit as to how much the interest rate can be increased and how frequently they can be raised. These types of mortgages are a good choice when fixed interest rates are high or when you expect      your income to grow significantly in the coming years.
  • Balloon loans. These mortgages offer very low-interest rates for a short period of time —often three to seven years. Payments usually cover only the interest so the principal owed is not reduced. However, this type of loan may be a good choice if you think you will sell your home in a few years.
  • Government-backed mortgages. These loans (Fannie and Freddie) are sponsored by agencies such as the Federal Housing Administration or the Department of Veterans Affairs and offer special terms, including lower down payments or reduced interest rates to qualified buyers.

Slight variations in interest rates, loan amounts, and terms can significantly impact your monthly payment. For help in determining how much your monthly payment will be for various loan amounts, use an online mortgage calculator: HERE

North Shore Mortgage Lender Checklist: What you need for a real estate mortgage

  • W-2 forms — or business tax return forms if you’re self-employed — for the last two or three years for every
    person signing the loan.
  • Copies of at least one pay stub for each person signing the loan.
  • Account numbers of all your credit cards and the amounts for any outstanding balances.
  • Copies of two to four months of bank or credit union statements for both checking and savings accounts.
  • Lender, loan number, and amount owed on other installment loans, such as student loans and car loans.
  • Addresses where you’ve lived for the last five to seven years, with names of landlords if appropriate.
  • Copies of brokerage account statements for two to four months, as well as a list of any other major assets of value, such as a boat, RV, or stocks or bonds not held in a brokerage account.
  • Copies of your most recent 401(k) or other retirement account statement.
  • Documentation to verify additional income, such as child support or a pension.
  • Copies of personal tax forms for the last two to three years.

Our top producing Chicago-North Shore real estate office, located at 640 Vernon Ave-Glencoe, Illinois 60022 is a resource for mortgage product questions and guidance. Visit HERE for additional information on North Shore home loans, interest rates, homes for sale, homes for rent, and general real estate financing options.

Real Estate Outcomes February2012: Chicago’s North Shore

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Property Sales

As we make our way into March 2012, February North Shore real estate Property sales were up 33.3% from February of 2011 and equal to 0.0% 8 sales last month. February 2012 sales were at their highest level compared to February housing data of 2011 and 2010. February YTD sales of 16 are running -5.9% behind last year’s year-to-date sales of 17.

Prices

The Chicago North Shore Median Glencoe Sales Price in February was $482,000, down -47.4% from $916,000 in February of 2011 and down -34.6% from $737,500 last month. The Average Sales Price in February was $732,750, down -33.8% from $1,107,000 in February of 2011 and down -53.1% from $1,562,813 last month. February 2012 ASP was at a mid range compared to February market reports of 2011 and 2010.

Inventory & MSI

The Total Inventory of Properties available for sale as of February was 91, up 1.1% from 90 last month and down -12.5% from 104 in February of last year. February 2012 Inventory was at the lowest level compared to February of 2011 and 2010. A comparatively lower MSI is more beneficial for North Shore sellers while a higher MSI is better for buyers. The February 2012 MSI of 11.4 months was at its lowest level compared with February of 2011 and 2010.

Market Time

The average Days On Market (DOM) shows how many days the average North Shore Property is on the Market before it sells. An upward trend in DOM tends to indicate a move towards more of a Buyer’s market, a downward trend a move towards more of a Seller’s market. The DOM for February 2012 was 167, up 42.7% from 117 days last month and up 16.0% from 144 days in February of last year. The February 2012 DOM was at its highest level compared with February of 2011 and 2010.

Inventory / New Listings / Sales

This last view of the North Shore-Glenoce market combines monthly inventory of Properties for sale along with New property listings and sales. The graph (see above) shows the basic annual seasonality of the North Shore-Glencoe real estate market as well as the relationship between these items. The number of New Listings in February 2012 was 24, up 14.3% from 21 last month and up 4.3% from 23 in February of last year based on recent analytics and MLS statistics.

The top performing Coldwell Banker real estate office located in Glencoe’s downtown center-640 Vernon Ave, 60022; has been the cornerstone for North Shore community living for over 40 years. Feel free to stop in to discuss this report, or to gather information on current market conditions, get the latest on mortgage rates or simply a map to get you more familiar with the North Shore neighborhoods. We pride ourselves on providing exceptional service and attention for Chicago’s premier North Shore.