“What’s the Price?”

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@properties, agent, broker, chicago, cost, financing, first-time buyer, homeowner, interest rates, kevin van eck, Lending, mortgage, price, property, real estate, realtor

All too often we, as a society and consuming people, become caught up in the price. Whether it’s purchasing a new TV, a new car, or a new home, there is more involved than just the price.

Price

The price is what we actually pay. It’s the quantity of payment or compensation given by one party to another in exchange for goods or services. It only takes into account what you’re currently going to pay in order to obtain that good or service. It doesn’t, however, take into account what your future cost might be to use or continue functional use of that good or service. A new car owner may have received a great deal on a new sports car, but what’s the long-term cost going to be to continue using that car for the purpose for which it was purchased? In terms of housing, a new homeowner would pay an agreed-upon price for the acquisition of a new property. But, especially if financed, what is the cost of ownership?

Cost

For homeowners the cost of a new home is more than the just the price that was paid to gain ownership of the property. There are short term, long term, and monthly/annual costs to owning and maintaining a property for it’s intended purpose. One of the higher ticket items can be your mortgage, but we’ll get to that in a moment…

What COST can you afford?

The key here is to ensure that you have a monthly budget that you follow. Now, don’t get crazy and start creating a 16 sheet Excel workbook, but you should have a good idea of what you currently pay, in total, for housing. If you’re a renter, add your rent to your utilities, services that you’ll continue at your new property (upgraded cable, etc), additional parking fees, laundry, and anything else that could be considered an expense dependent on housing. Then determine, from your total net income, what you are able to pay for total housing cost.

Once you have a conservative number in mind, contact your real estate professional for a few lender references. They’ll need much of the same information you’ve already used to create your budget, so it should already be on hand. What the lender(s) will be able to tell you is what they will allow you to spend, based on what they think you can afford. Here’s the most important advice: just because someone gives you $xxx,xxx doesn’t mean that you should use it, or that you can actually afford it. Despite tighter lending and added regulations, I’m sometimes amazed at the borrowing power that buyers can be granted. Only you know what you can truly afford. Only you know what you are willing to pay, and what you will be able to continue to pay. This is where your responsibility comes in.

Determining Cost

As mentioned earlier, the cost of home ownership includes many things. Some are short term, like replacing an appliance that was defective or not aesthetically pleasing that you knew you would be replacing. Longer term costs may include roof replacement or the installation of new windows. They may not be needed immediately, but you know that at some point down the road it will need to be addressed. Recurring costs include monthly assessments (if applicable), the cost of heating/cooling and other utilities, and, most importantly, your mortgage. Several things are included in the cost of your mortgage. Of course your closing costs, but it gets interesting when we dig into how your interest rate affects your cost over time, your monthly payment, and your overall buying power based on your budget.

Price vs Cost – Your Mortgage

Nothing affects your monthly/overall mortgage cost more than your interest rate. In a surprising scale on the chart featured here, even small changes in the interest rate can greatly influence your borrowing power.

Let’s use an example:

You can budget a maximum of $1,950 per month for your basic mortgage payment.

Payment Based on Interest Rates

As shown in the chart, if interest rates are at 4.0%, you can then (all other costs being in line with your total budget) afford to take on a loan of $400,000. However, as soon as rates begin to tick up, you may be only able to afford a $380,000 loan when rates hit 4.5%, and then only a $360,000 loan when rates jump a full point to 5.0%. You can still afford the same payment, but you can’t buy the same property. There’s truth in the argument that property values somewhat follow interest rates, so as money become more expensive, prices come down. However, given our current market state, with cheap money available to borrow, pricing won’t come down further solely because rates increase slightly.

Bottom Line

Based on a HUD press release in January 2012, “Homes today are more affordable for average families than they have been since 1971. Median-income families today have nearly double the funds needed to purchase the average home.” Wow.

So when you hear that “now is a good time to buy”, it’s not just a ploy by the real estate market. The COST of home ownership is lower than we have seen, and will most likely will see in our lifetime again. When Warren Buffet “tells [his secretary] that it will be the best opportunity to buy a home in [her] lifetime”, we may just want to listen.

Look at what you can afford, ensure that you have the borrowing capacity to purchase, and then ensure that the overall costs fit into your budget. And know that right now the overall cost of owning a home is lower than we may see again.

Listing Your Home? What to Remove

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@properties, agent, broker, chicago, condo, home, homeowner, house, kevin van eck, listing, property, real estate, realtor

It’s common knowledge that you need to prepare your home prior to listing. The obvious goal is to make your property look as attractive as possible. Part of that is ensuring that a potential purchaser can envision themselves living in your home. The other part is to ensure that your belongings are safe throughout the sales process. Here are a few tips to ensure that both of those parts are covered:

Personal Photos  - I don’t recommend that every family photo is taken down in the home, especially if you don’t have other artwork to replace it. However, if you have rooms and hallways filled with wedding photos, children’s photos, travel photos, and other personal photos, it’s wise to remove most if not all of them. First, buyers are easily distracted. While walking through your property you want a buyer to focus on the floor plan, the room sizes, and the amenities and finishes. You don’t want them to ignore the open layout while they peruse your last trip to Central America. Secondly, you want buyers to envision themselves in your home. If a buyer feels uncomfortable walking through your home, and they feel as if they’re intruding on your personal space, they’re likely to not be able to relax and see themselves occupying the space. In a true story, a client and I were touring a home where the walls in the office space were covered with photos of a woman in a bikini, some very risque. Instead of focusing on the fact that the property had a separate office space, the buyer felt like they were looking at something they shouldn’t have seen, and quickly left that section of the room. Your goal is to move soon anyway, might as well get a headstart on packing.

Counters - We all have items on our kitchen and bath counters. Whether they are decorative, like pastas in jars or 10 bottles of infused oils, or functional like a toaster over, they take up prime real estate in your kitchen. Regardless of whether or not you have huge counters and an island, if they’re covered with appliances and decorative items, it can make the counter space appear small. Kitchens, according to Carla Hill at Realty Times,  kitchens sell a home. Whether a buyer is a master cook or a take-out diner, the kitchen is one of the focal points of a home. If you’re counters are cluttered, get them organized. If you use your toaster every day, make it easy and find a space in a nearby cabinet that makes it easy to put it away after use.

Junk Drawers and Cabinets – Buyers will open cabinets and drawers to see exactly how much space there is. For the first impression, don’t use your cabinets to hide the items on your counters by cramming in as much as possible. If a potential buyer opens a cabinet and things come tumbling out, not only is it annoying but it also creates the perception that you don’t have enough kitchen storage space. Box up the dinnerware, utensils, and appliances that are rarely (or never) used, and organize the items you do use on a daily basis. I recommend even going so far as to “store front” the canned and boxed goods. Sure, I know it can be a nuisance to keep everything organized from day to day. But you’re trying to sell you most valuable investment, right? Make it happen.

Magnets – It’s great you’ve been to 38 of the 50 states in the Union. But the potential buyer doesn’t need to know that, and your fridge doesn’t need to verify it. In the same way that personal photos can distract, so can magnets on the fridge. Also, magnets and postings on the fridge, whether they’re in disarray or not, can create a perception of clutter. In order to keep your home showing as well as possible, take down the kids’ drawings, the photos, the wedding invitations, and the magnets.

Mail, Bills, Personal Papers – If you’re a “pile-maker” as I am, you have stacks of mail and bills that are “organized”. But don’t leave them out. Besides the obvious part of creating clutter, they also give potential buyers the opportunity to peek at them. Whether it’s junk mail or a the lease statement for your new BMW, put away the personal docs, and get rid of the “organized piles”.

Valuables, Jewelry - It seems obvious, but don’t leave jewelry laying around. It only takes a quick motion for someone to slip something into their pocket unnoticed. If people can do it in a retail store with overhead cameras and security personnel, they can certainly do it in your home. Don’t give people the temptation.

Shoes – Piles of shoes at the entry are one of the first things a buyer sees but also the last thing a buyer sees. If they need to maneuver the door around your seven pairs of size 14 shoes, you must not have enough closet and storage space. Get them away from the entry and get them organized!

Closets, Clothing - You may see a trend here: creating a perception. The same way you don’t want things falling out of the kitchen cabinets, you don’t want clothing falling out of closets when they are opened. If a buyer needs to stuff the sleeves of your button-down shirts back into the closet to close the door, that closet “must not be big enough”. Remember that you’ll be moving soon (ideally), so pack up the out-of-season clothing, make a run to a donation drop box with the clothes you haven’t worn in years, and get it organized. Use baskets to get the shelved items like jeans and sweaters organized. Keep your socks in an attractive bin. Go to discount home stores, or the dollar store even, and pick up a few cheap wicker baskets. You don’t have to buy an expensive organization system for your closet, just make it look like you did.

This is definitely not a complete list of preparing your home for sale, but it’s a good start. The key is to ensure that your home is more attractive and inviting than the other homes on the market, and that purchasers can envision themselves in your home. If they can’t picture their day-to-day lives in the property, they won’t consider your home in their purchase decision.

 

As-Is Sales – What a Buyer Should Know

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AS-IS Sales – What a Buyer Should Know

We’re seeing “As-Is” sales more and more in every market across the United States. This shouldn’t be a surprise based on current market conditions, and we’ll talk about several things here, including:

- What “As-Is” Means
- Why “As-Is”?
- What to Watch For

But, before we start, disclaimer time: this is not legal advice, and the writer of this blog is not an attorney. Buyers and sellers should seek legal advice in any real estate transaction as laws may vary from state to state. Ask your attorney and real estate professional for guidance.

What Does “As-Is” Mean?

When a real estate listing states that the property is an “as-is” sale, it means exactly what it sounds like. The sale of the property will be in its current state, as it is and where it is. This means that the seller will not be making any repairs, replacements, or modifications to the property prior to the close of sale. Note that this does not mean personal property. The furniture and other personal property is not part of the actual real estate, and, unless disclosed otherwise, is not part of the “As-Is” sale.

Why “As-Is”?

There are several reasons why a seller/owner might list their property as an “as-is” sale. They can vary widely, and it’s important to be aware of what type of situation you’re in when you enter into an “as-is” sale purchase. Remember, an “as-is” sale means that the seller/owner will not be making any repairs or replacement of defects.

1. The sellers may not have the funds to pay for any needed repairs
2. The sellers may feel that, at a certain agreed-upon purchase price, making and paying for repairs is not feasible. Typically this is in a conventional transaction when the purchase price is lower than current market value.
3. The sale may be a short sale, a foreclosure, or an auction property.
4. Other reasons, may include: hassle of repairs, don’t have time to complete, out of area/state sellers, etc

There can be many reasons why a property is being sold “as-is”, but don’t be alarmed. Typically, a buyer’s rights are not diminished in any way. Now we’ll talk about what it means in a transaction, and what to watch for.

What to Watch For

First, ensure that you are working with an attorney and a real estate professional who are familiar with “as-is” situations. If you’ve done your homework and interviewed several agents, you more than likely picked one with significant experience, and one who probably has worked with “as-is” sales in the past.

Secondly, but the MOST IMPORTANT note is that: YOU CAN AND SHOULD STILL HOLD AN INSPECTION. It is my recommendation to all of my clients that every home purchaser gets an inspection done, whether it is a first-time home buyer or a seasoned investor. It’s important to know all of the details of the property that you are purchasing. You wouldn’t purchase a used car without knowing if it’s functioning properly, so don’t spend 10x as much on a home without knowing it’s functioning as it should.

So, in an “as-is” sale, the purchaser will typically still have the right to complete a home inspection. But know that the seller has already stated that they will not complete, nor pay for, repairs for defects in the property. Also important to know, most inspection contingencies (check with your attorney/agent) include the right for the purchaser to cancel the contract if something is determined to be unacceptable during the inspection.

After the inspection, the buyer can still approach the seller with concerns and ask them to provide a credit or make the repairs, but this should not be expected. The property was listed as an “as-is” sale and was probably priced accordingly. If there is something major, say the property needs a new roof to the tune of $15,000, then the purchaser has to make a decision as to whether the purchase price is in line with the repairs that need to be made. If the buyer determines that they are not prepared, financially or otherwise, to take on the repairs, the buyer may be able to cancel the contract.

Bottom Line

Don’t be afraid of “as-is” sales. Quite often, especially with short sales and foreclosures, “as-is” sales represent the best, below-market deals. It is important, however, to ensure that you are working with an experienced team of advocates, your agent and attorney, and that you still hold a property inspection. If you consult with your advisors and know the details, an “as-is” sale is much less scary than it sounds.

Short Sales 101 – Episode 4 – What to Expect From Your Lender

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@properties, agent, broker, chicago, foreclosure, homeowner, kevin van eck, Lender, loan, mortgage, property, realtor, short sale

For the fourth post on short sales here, I need to repeat the disclaimer: I am not an attorney, and if you are considering a short sale on your property, you must consult with a local real estate professional, an attorney, and your tax advisor.

So, down to the topic: What to Expect From Your Lender in a Short Sale

WHAT WILL THEY SAY?

Every scenario is different, every property is different, and every owner’s financial situation is very different. In the interest of time, I’ll present the majority of responses that you may receive from your lender, when requesting a short sale.

1. Lien-Release – Short Sale Approval – In this scenario, the seller receives a short sale approval letter that outlines the required proceeds that the lender needs to receive, as well as limits for closing costs. This approves the sale of the home, under the terms laid out in the letter, and allows the seller to sell the home to a buyer for less than the balance owed on the mortgage. However, this letter may not address the deficiency… see below

2. Deficiency Waiver – The approval letter described above may or may not include a deficiency waiver, so it’s very important for the seller to ask their agent and attorney about the status of the deficiency.  The deficiency is the amount remaining on the balance of the loan after the lender receives their approved proceeds from the sale. In example: A property sells for $250,000, and after paying the closing costs the lender receives $230,000. If the balance on the loan was $300,000, the deficiency is $70,000. A deficiency waiver, usually written into the approval letter, states that the lender is writing off the deficiency and that the seller has no further liability for the loan or the deficiency. This is important to know because, depending in which state the seller lives, the lender may be able to come after a seller later to try to recoup that deficiency. In some cases where deficiency judgments can be filed, they may be able to garnish your wages and take other actions against you. While most lenders are not taking action currently, and when they have it’s been in scenarios where the sellers have strategically defaulted and/or hidden financial information from the lender, it’s important to know that they may be able to come after the seller later. The deficiency waiver, well, waives their right to claim the deficiency in the future.

3. Cash Contribution – this is a requirement for short sale approval in some cases, or also may be requested to obtain a deficiency waiver. This is an amount determined by the lender or mortgage insurer that is usually based on a combination of the financial condition of the seller and/or the loss the lender or mortgage insurer is taking on the loan. These can range anywhere from $500 upwards of $40,000 depending on the property and the seller. In a case where the deficiency was over $1.7M, the lender had initially asked for a cash contribution of more than $50,000. Sometimes the amount of the cash contribution can be negotiated, and it’s a good idea to at least try to negotiate it down to a reduced total.

3. Promissory Note – This may be another requirement that a lender or mortgage insurer will request to approve a short sale. This may be in lieu of, or combined with a cash contribution. Typically, the promissory note will be for a term of 10 to 20 years with no interest. The terms of the promissory note will be detailed in a separate document that is issued with the approval letter. Sometimes the amount of the promissory note can also be negotiated to a lesser amount.

4. Rejection – There are many reasons a short sale may be rejected. They range from not having a documented hardship to not returning requested documentation within a timeline set by the lender. But, depending on why the file was rejected, a seller should not be discouraged. If there is truly a hardship, and the seller is not able to continue (or restart) paying their mortgage, there may be other options, or the ability to again submit a short sale package.

I cannot stress enough how important it is to work with real estate professionals that are experienced with, and have demonstrated success with, short sales. Remember, this is a situation that could may up affecting the seller for a decade or more if not handled correctly, so it’s imperative that you interview the real estate agent and attorney you will be working with, and are comfortable and confident that they have the experience and diligence to ensure they advocate for you along the way.

Whether or not you’re in Chicago, and whether you’re a potential seller or another agent, feel free to contact Kevin Van Eck  with The Chicago Short Sale Team if you have questions about the short sale process. We are part of a larger network of short sale agents across the US, so we can put you in good hands if you need someone local.

Again with the disclaimer? Yes! The Chicago Short Sale Team and Kevin Van Eck are not attorneys or tax professionals (although we have a great team of attorneys with which we work!). Please contact a local attorney, real estate agent, and tax advisor to help with your specific situation.

Inverted Warehouse-Townhouse in NYC

TRIBECA WAREHOUSE RENOVATED INTO UPSIDE-DOWN, NEW CONSTRUCTION TOWNHOMES

Arch Daily writer, Megan Jett, penned “The Inverted Warehouse/Townhouse is an addition and renovation of a Tribeca loft building. The existing structure, a traditional New York warehouse covers the entire lot, consuming the exterior space traditional in domestic construction. Inverting the conventional townhouse organization recovers this coveted ground. Dissipating energy into the dark center of this converted warehouse, three double story voids animate the missing ‘garden’ of the townhouse providing light, air, and visual contemplation.  Conceived as new construction built upside down into an existing building, they dissipate a radiant energy into the host.” Would this be a desireable design that would work in vacant Chicago warehouses? Check out the full article about this townhome renovation on Arch Daily, with an image gallery, here.  (photo: Paul Warchol)

Short Sales 101 – Episode 3 – How to Prepare for a Short Sale

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@properties, agent, broker, chicago, chicago short sale, condo, default, financing, foreclosure, home, homeowner, kevin van eck, Lending, loan, mortgage, property, real estate, real estate transaction, realtor, short sale, The Chicago Short Sale Team

If you’re considering a short sale, you’ve probably been emotionally drained. If you’re in default, you have most likely been receiving daily phone calls and numerous letters from your lender. Maybe you’ve had third party purchasers (with access to public data regarding pre-foreclosure status) reaching out to you, and you maybe have been contacted by real estate agents scanning those same databases.

Here is my advice, step-by-step:

1. Decide that you are not going to wait any longer, and you will take the situation by the reins. Decide that you are going to do everything you can in order to avoid foreclosure. By making this decision, you will control what happens instead of letting the process determine your future.
2. Find an experienced, competent, and highly-recommended real estate agent to represent you. Ask around (you don’t have to declare your situation), search online for exposure, reviews and professionalism, and most importantly: INTERVIEW THEM. Be sure you talk to at least two agents. Some basic questions to ask an agent can be found here. These do not include short sale specific questions, but those will follow on this very same blog shortly. But know that not all agents, regardless of overall real estate experience, are suited to handle a short sale transaction.
3. Find an experienced real estate attorney. When interviewing agents, be sure to ask who their recommended attorney partners are in terms of short sales. A very important thing to realize is that your uncle, the tax attorney, will not be your best selection for a real estate transaction, let alone a short sale. Find an attorney that specializes in short sale transactions, can clearly describe their experience, and is approachable. You must feel comfortable with your attorney as you are going to have many questions through the process.
4. Discuss the situation with your accountant or tax professional. Depending on the state, your property, and your financial condition, there may be tax consequences. Know about these before moving forward as they may be very impactful.
5. Prepare yourself for the short sale process. A great agent and/or attorney, experienced in short sales,will set candid expectations on how the process will run, what the pitfalls might be, and what the potential impact for you might be down the road. However, in all short sale scenarios you must prepare yourself to be patient, to be willing to provide all types of financial documentation, and to be comfortable asking questions of those representing you, including your attorney and real estate advisor.

This information is very basic, but it helps set a road map to move forward. Short sales are prevalent, and so no matter how large or small your community or real estate market are, there are sure to be great real estate professionals that specialize in short sales. In our next episode we’ll discuss, in more detail, how to choose the real estate professional you will decide to work with.

If you’re considering a Chicago short sale and you need more information feel free to reach out to me and we can help look at your options and prepare you for what’s ahead. I founded The Chicago Short Sale Team and we’re here, with empathy, experience, and dedication, to help Chicago homeowners in distress.

Short Sales 101 – Episode 2 – Why Short Sale?

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@properties, agent, broker, chicago, condos, default, financing, foreclosure, homeowner, kevin van eck, loan, mortgage, property, real estate, realtor, short sale

In the second episode of Short Sales 101 we address why you would contemplate a short sale. As we move forward, it’s important to remember that every homeowner’s situation is different, and we’ll be talking in generalities for much of this series. Every homeowner is different, every hardship varies, every lender handles things differently, and even within the same lending institution short sales are handled differently. The best advice always is to talk with an experienced short sale professional in your area.

WHAT TO DO BEFORE CONSIDERING A SHORT SALE?

A short sale is considered one of the final options prior to foreclosure. If a homeowner is having financial difficulties keeping current on their mortgage, or if they have already missed payments and are unable to catch up, there are a few options which they could pursue. The first is to contact your lender and let them know that you are having problems. There isn’t a reason why you wouldn’t want to be honest, and let them know that you are running into trouble. They may be able to offer you options such as a forbearance or a loan modification. These are the best options if you’d like to stay in the home. There are new HAMP guidelines that are coming out that open up the ability to refinance or modify your loan even if you’re underwater. One key site to check out through this is the Making Home Affordable site from the government. You can click through to it here. Beware of other websites claiming to be able to help and provide information. They’re most likely third-party services for which you would pay them to handle your request. More often than not, if you’re diligent, you can handle the requests of your lender for a modification yourself. If you’re looking at refinancing, contact your local mortgage or real estate professional and they’ll be able to point you in the right direction.

IF THAT DOESN’T WORK?

If you don’t qualify for a refinance or for a loan modification, make sure you keep the heap of documents you provided at the ready. It’s probably time to discuss a short sale. We stated at the top that a short sale should be the last option prior to foreclosure. It’s important to make clear that a short sale is far better for a homeowner than a foreclosure, and this is where we get to the meat of the title of this post.

You may want to short sale over letting your property drop into foreclosure for these reasons:

• The impact on your credit, whether you’re already in default or not, may be far less than that of a foreclosure
• In a foreclosure, your lender may be able to come after you in the future for the deficiency (the difference between what they net on the sale of your home, and what the mortgage balance had been). With a short sale, you may be able to obtain a deficiency waiver. This not only releases the lien on the property, but the lender will release you from all future liability related to the loan. This means that they will not be able to pursue you in the future for the deficiency or any other judgment related to your loan on the property.
• The ability to purchase a home again sooner if you short sale, rather than foreclose. In some cases, you may be able to purchase again in two years after a short sale, whereas with a foreclosure you may not be able to purchase for at least seven years.
• Depending on your lender, your financial state, and government programs that are available, you may be eligible for a relocation fee from the sale of your home. Two examples are the HAFA program and Bank of America’s Cooperative Short Sale program. Each one allows funds to be paid to the seller at closing for relocation. Additionally, the foreclosure process is halted during this time and there is typically a deficiency waiver given through these programs.

WHAT DO I NEED TO PURSUE?

We’ll touch on this heavily in the next post in Short Sales 101, but most lenders require documentation that shows a hardship. Before they agree to lose thousands, and sometimes hundreds of thousands of dollars in a short sale, they want to make sure that it’s justified. Something will have had to have changed in a homeowner’s life in order to justify a short sale. Whether it’s medical bills, loss of job or loss of income, divorce, or something else, there needs to be a reason why you are currently not paying your mortgage or will soon be unable to continue paying your mortgage. More on the justification and documentation to come…

TALK WITH A PROFESSIONAL

Remember, it’s great to search the web and read blogs, articles, and lenders’ websites. But nothing is as helpful as talking with a local, experienced, short sale professional. If you feel like you’re not getting the answers you want, or you want a second opinion, interview two or three. It’s important you are working with someone who you trust and who you believe will represent you appropriately.

If you’re in the Chicago area, and you’re having difficulty staying current, feel free to contact us at The Chicago Short Sale Team. We’re experienced and we treat our clients with confidentiality, honesty, and compassion.

Chicago Townhome Pursues LEED Platinum Certification

LEED PLATINUM IS THE HIGHEST LEVEL of certification that the USGBC offers in their LEED points-based rating system. For the first time (that anyone is aware of), owners of a Chicago townhome are undergoing a full gut-rehab of their 25 year-old townhome. This is a huge undertaking, however, it goes to show that townhomes can be converted to energy-efficient and socially responsbile abodes. While the LEED Platinum certification is certainly an enormous feat to accomplish, as shown by the 140 page LEED for Homes document here, there are numerous things that townhome owners can do to take small steps to reduce the impact on the environment, and their wallets.

Read the Chicago Tribune article here. It will be interesting to see if other Chicago townhome owners are willing to take as large an undertaking as this in the future.

Short Sales 101 – Episode 1 – What is a Short Sale?

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Short Sales 101

It’s an emotional subject, usually because the conversation surrounding a short sale is one of despair, embarrassment, and fatigue. But it’s a conversation that needs to be had, and it can be a life-changing event… for the better.

If you’ve Googled “Short Sale” (go ahead, try it), you first get Wikipedia, and then a slew of online articles, blogs, and general information regarding short sales. While there is a plethora of information on short sales on the web, there is an overwhelming amount of mis-information. Each week I talk with new clients and other real estate professionals, and I’m amazed at the bundle of wrong info and data that exists and proliferates. There are many well-versed and experienced professionals that deal with short sales, but there are just as many that don’t have experience and that are passing on incorrect information.

That being said, I’m going to start a blog series I’ve titled Short Sales 101 (creative, I know). Why am I qualified? To keep it short, I’ve taken nearly every class, seminar, and attended conferences. In 2008 I shadowed an agent who was already on top of the short sale process, and I began taking my own clients. I’ve worked with over 15 attorneys and short sale companies. But most importantly, I have immense first-hand experience of negotiating for clients. Most recently, in order to better serve the clients I represent, I’ve formed my own team, THE CHICAGO SHORT SALE TEAM.

This is Episode 1, and since I’ve already taken your time, this is a quick and easy one.

WHAT IS A SHORT SALE?

A short sale occurs when a lender agrees to accept less than the amount owed to payoff a loan as an alternative to foreclosure. This typically happens when an owner must sell, for various reasons, and the property value is less than the amount owed on the loan. The sellers do not have the financial resources to make up the difference by bringing funds to close the transaction, so the short payoff is negotiated with, and accepted by, the seller’s lender(s).

In later posts we’ll talk about eligibility, average timelines, repercussions, and how to interview and select a short sale professional with whom to team up. Each owner’s situation is different, and each situation has it’s own emotional burden. But it’s important to reach out to a local real estate professional for help early in order to avoid the devastating effects of foreclosure.

Stay tuned for next the episode…

Time to Service and Clean your HVAC!

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It’s something we rarely think of as we switch our HVAC from cooling to heating in the Fall, but if you haven’t had a tune-up and cleaning yet, make sure you get one before your furnace is running through the Winter! Without stating the obvious, Chicago Winters are tough enough; make sure you don’t lose your furnace during one.

From a real estate agent perspective, we see it all the time during inspections where there is no documentation of regular maintenance and no sign that the furnace has been cleaned or serviced. While furnaces can last 15 years (and often much longer), this requires regular preventative maintenance.

It’s recommended that the HVAC system is serviced by a professional when the seasons change from Spring to Summer and again from Fall to Winter. Ensure that when you have this done it is either documented on the furnace (often times the servicer will leave a sticker and log on the furnace) or that you keep any work order or receipt. This will help provide a potential buyer comfort, and possible eliminate you having to reduce the price or give a credit when you sell your property (or, worse yet, having to replace the furnace).

Definitely have your HVAC serviced by a professional to ensure you stay warm in the winter and protect your money, and in the meantime check out one of my older posts regarding winterizing your HVAC: Winterizing Tips