Archive for the 'Investment' Category
BUY A FORECLOSURE OR AN REO? WHY NOT!
June 29th, 2010 categories: Buying, Investment, Market Trends, Real Estate Finance
The Chicago Tribune had a section recently that really is a primer of the basic things a buyer needs to know if they are considering buying a distressed property. Basically there are five articles in this section:
- Buying a foreclosure. Don’t let a complicated process keep you from considering a foreclosure purchase.
- Home inspections can help determine the scope of work that needs to be done. It is important that you hire a licensed inspector–don’t use a contractor friend. If possible, find an inspector who has done a number of foreclosure inspections.
- Fix it up or forget it. How to know when to tackle a rehab project yourself and when to get professional help.
- Unique situations. Foreclosures offer a wide range of surprises–from financial to structural. This article describes some additional things to think about when buying a distressed property.
- The financing ABCs of REOs. This article stresses the importance of having your financing in order when you make an offer.
If you are really serious about pursuing the idea of purchasing a distressed property–read all five of the short articles–or click on the ones that interest you and read them.
Questions? Call me, 312-607-1306 or e-mail me.
Other posts you might find helpful:
15 Year Mortgage VS 30 Year Mortgage
Conventional Sale vs Distressed Property Sale
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BUT I PAID. . . AND I NEED. . .
May 18th, 2010 categories: Buying, Investment, Market Trends, Real Estate Finance, Selling
My friend, Tyler Wood, a Realtor in Big Bear Lake, California, has a video that says it all. Why it doesn’t matter to a buyer what you paid or what you need or want. Even if it seems a seller is making a great deal of money on a property because they have owned it for a long time, why that seller is entitled to fair market value. Take a look at Tyler’s video–it says it all very well.
I guess my favorite example of what Tyler talks about is an estate sale. If you inherit a home from your parents, you paid nothing for it. And you are still entitled to fair market value–right?
Other articles you might find interesting are:
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SHAKY REAL ESTATE MARKET?
March 25th, 2010 categories: Buying, Investment, Lifestyle, Market Trends, Renting, Selling
Money Magazine published an article yesterday titled “6 Housing Trends In A Still Shaky Market.” As you know, I fervently believe all real estate news is local not national. And with that I do have to admit that I found this article about national trends extremely interesting. The six trends are:
- Distressed properties will keep prices under pressure.
- Big homes are lagging small ones in the recovery.
- Mortgage rates will rise as Uncle Sam exits the market.
- Financing for condos, second homes, and jumbo loans are especially tough to get.
- Buyers, rushing to beat the tax-credit deadline, will set off a flurry of spring deals.
- Going green this year can save you more money.
The article is rather long. I suggest reading the whole thing or if not that, at least the sections that apply to your current thinking or questioning. To find the whole piece, just click here.
Other articles that are useful:
How To Sell And How Not To Sell Your Home
How To Keep A Good Credit Score
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CHICAGO CONDOMANIA GONE FISHING
March 12th, 2010 categories: Buying, Investment, Market Trends, Selling
As you all probably know by now, Don DeBat is one of my favorite real estate columnists–he really has a knack for putting the news together in an understandable way. A couple of weeks ago Don published a piece about what is going on in the condo market in Chicago. Production has fallen to levels we would never have thought possible just a few years ago. If you are a first-time buyer with little money, this is your time! Many buildings have made dramatic price reductions and that coupled with low interest rates and the tax credit should make a home purchase irresistible. FHA loans can be had for as little as 3 1/2 per cent down. Rent-to-own is also being offered by some developers. To get the big picture for this buyers bonanza, do read the article.
Do you need someone to help you find that perfect first home? If so, please call me at 312-981-2360 (direct) or cell, 312-607-1306.
If you e-mail me, with your want list, I can e-mail listings to you and I can also locate FHA approved condo buildings.
Here are three additional posts you may find helpful:
Home Affordability and Mortgage Rates
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BABY STEPS FOR PAYING DOWN YOUR MORTGAGE
March 8th, 2010 categories: Buying, Investment, Market Trends, Real Estate Finance, Selling
Lew Sichelman seems to be my new favorite columnist. Something I knew but didn’t internalize is how much a small amount of money applied to the mortgage principal can shorten the length of your mortgage. Lew Sichelman recently published an article that gives a number of scenarios for shortening the time you pay on your home. If you do decide to make an extra payment on principal, be sure to tell the your mortgage company that is what the extra money is for. Just like so many things in life, consistency is the key to success. Even $50 per month applied to the principal can shorten the life of your mortgage. Lew also has some good information on PMI (Private Mortgage Insurance) and how to negotiate your way out of it. Refinancing from a 30 year mortgage to a 15 year mortgage is another way to save a large number of interest payments. My suggestion to you is to read the whole article if you want to pay down your mortgage with lightning speed.
Do you need someone to talk to about Chicago real estate–either selling or buying? Please call me if you do–direct dial, 312-981-2360, cell phone is 312-607-1306. E-mail works just fine too!
Other articles you might like to read are:
Why Get An Inspector For My New Home?
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HOUSING FROWNIES FOR 2010?
February 19th, 2010 categories: Buying, Investment, Market Trends, Selling
Usually the Spring selling season begins with the Super Bowl. This year that didn’t quite happen–it actually started in the first week of January. January activity was quite good and February has been a bit slower. Dan Oppenheim, a home building analyst with Credit Suisse, is predicting that we’ll see a strong Spring selling season. He feels that builders are shifting from survival to rebuilding profitability and he also feels that five threats remain:
- The Tax credit will expire–this should give urgency to buyers and help first-quarter sales. What could happen after that is a slowdown.
- Mortgage rates rise. Low mortgage rates have prevailed for a long time. Most analysts expect a rise in rates later this spring when the Federal Reserve stops buying mortgage-backed securities.
- Foreclosures continue. In spite of the government’s efforts, people are still losing their homes and nobody knows when the end will happen. Mr. Oppenheim writes that “The continued supply of foreclosures will mute any improvement in demand.”
- FHA tightens lending. Higher insurance premiums and ecreased seller-provided closing costs will likely cut new home demand between 5% and 10%.
- Jobs. Employment has to improve. People without jobs don’t buy houses.
I don’t mean to end the week on a downer, and I feel we have to look at what is going on carefully. It would be my very greatest plesure to write a post surrounded by wonderful dancing leprechauns–I am going to look for good news and there will be some soon, I’m sure.
Need someone to answer your real estate questions? That is one of the things I do best–just call me. My direct dial is 312-981-2360 cell is 312-607-1306. And there is always e-mail.
Here are a few posts you might find helpful:
Home Affordability–A Balancing Act
Kid Gloves Not Mittens For Today’s Buyer
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FHA–CAN IT HELP ME?
January 29th, 2010 categories: Buying, Investment, Market Trends, Real Estate Finance, Selling
In words of one syllable, YES, it certainly can. The Federal Housing Administration was founded in 1934 as a response to the banking crisis of the Great Depression. There are a few frequently asked questions about FHA loans and I would like to answer them here. A recent Realtors Confidence Index report states that 39 per cent of recent home buyers purchased with a FHA loan. My problem with that is the question of what is a “recent period of time?” Suffice it to say that this type of loan has become more popular because of the housing credit crunch.
1. Does the FHA actually provide the loans?
No, the FHA insures the lender.
2. Are FHA loans available only to low income borrowers?
No, there are loan limits, but the loans are available to any qualified buyer.
3. Is it true that FHA loans are only available for small homes?
No, they can be used for all sorts of properties. Single family homes, condominiums–even owner-occupied multi-unit properties. Repeat, there is a limit to the amnount that can be borrowed. Note: not all condominium associations are eligible for FHA loans.
4. What about first-time home buyers, are FHA mortgages only for them?
No, again, anyone who qualifies can have a FHA loan. If you have a low credit score or a smaller down payment, they are particularly helpful.
5. Are FHA appraisals more difficult than other appraisals?
The lender must use an FHA approved appraiser when they order the appraisal. It shouldn’t take any longer or be any different from any other appraisal.
6. Does FHA loan processing take more time and is it more difficult and complicated than conventional loans?
No, it coesn’t take longer. Any delay can have a variety of causes–incomplete paper work or a slow lender or any of a number of reasons. I have heard of FHA loans closing in 30 days.
7. Can all lenders make FHA loans?
Not everyone can make an FHA loan. The lender must be approved by the FHA.
This is the basic nuts and bolts of the thing. Let me know if you need more information. I can also give you a list of approved condominium associations in a given zip code. Just call me at 312-981-2360 or my cell phone, 312-607-1306 or e-mail me.
Here are three other posts you might enjoy:
Credit Boo Boo Down With Your Credit Score
Home Affordability and Mortgage Rates
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A REVERSE MORTGAGE? FOR ME?
September 3rd, 2009 categories: Investment, Market Trends
It’s an appealing idea, isn’t it–my income has shrunk as my investments have shrunk, I have a lot of equity in my home or it’s paid for, why not use some of that equity to make me more comfortable now? Instead of paying the mortgage company, they pay me–heavenly! Not so fast–it just isn’t that simple. There are three things you really need to know:
- How much you can borrow is limited. You won’t be able to use the full amount of your home’s price. There is a formula to determine how much you can borrow that takes into account your age, the value of your home and current interest rates. If you still have a mortgage balance, that and the fees you pay will be deducted from the amount you can borrow.
- The fees are high. A reverse mortgage is costly–in addition to the usual closing costs, there is a 2% origination fee on the first $200,000 of the loan balance and 1% thereafter. There is also a 2% monthly service charge as well as a mortgage insurance premium of around 2%. The total cost of the loan can go as high as $10,000 to $15,000. This is a considerable investment which should be made only if you plan to stay in your home for quite a few years.
- It can be riskier than it appears. Suppose you live longer than you think you will and run out of money–your home equity is gone!
It would seem best to consider all other options before tapping into that precious home equity. Consider down sizing, re-locating to a less expensive area or home, cutting expenses, or even a home equity line of credit. It would seem to me that the reverse mortgage is the loan of last resort.
Here are a few articles that might also interest you:
Questions about Chicago real estate? I would like to help you find the answers–312-981-2360 is my direct line or my cell phone is 312-607-1306. E-mail works too!
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NEW YORK LOVES US AND SO DO A LOT OF OTHER PEOPLE!
July 16th, 2009 categories: Buying, Investment, Selling
A New York Times article last Friday highlights the different places in the world and the different places in people’s lives that send them in search of a second home in downtown Chicago. As we all know, Chicago has not been as badly battered as many other areas of the country. Home affordability is really great right now with mortgage rates still low and inventory still high. It is a perfect time to buy new construction because most developers are offering sizeable discounts. I think you will enjoy the boost the New York Times gives the so-called “Second City.” One of the most interesting quotes is from a buyer from Lugano, Switzerland. He says they were looking to find a modern American counterpart to the slower European country living. I have always felt that Chicago is a bit slower paced, cleaner, more civilised, more beautiful and generally more livable than Manhattan. Nice to know a European agrees with me. The renaissance of downtown Chicago in the last 15 years is absolutely amazing. I began in real estate in 1989 and I never had to leave Streeterville, the Gold, Coast, Lincoln Park or south Lakeview–there was no place else to go! It has been mind-boggling and fun to watch the growth of so many new neighborhoods that I can’t begin to count them or name them. Viva Chicago!
How would you like to explore some of the new neighborhoods with an old hand at real estate? Just call me at 312-981-2360 (direct), or 312-607-1306 (cell). E-mail is fine too!
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HOME INSPECTION 101
July 15th, 2009 categories: Buying, Investment, Market Trends
Being a firm believer in home inspections for my buyers, it was good to read an article in the Chicago Tribune last Friday (July 10,2009). There is a lost of 10 questions that you should ask your inspector and some very good ideas. One of the main points is that you should hire an inspector who will inspect for two things: major hidden problems and potential deal breakers. As a Realtor, whether I am on the buy or the sell side of a transaction, I want both buyer and seller to know the truth about a property. I have worked with inspectors who seemed to enjoy deliberately destroying a transaction by fear mongering–exaggerating dangers and flaws. This is as bad as a lackadaisical inspector who only does a superficial inspection. Asking for a sample report is a good suggestion that the article makes–one I had never thought of.
If you have a question about Chicago real estate, please call me 312-981-2360, direct or 312-607-1306, cell phone. I can e-mail listings to you or answer questions by e-mail.
Articles that might interest you: Why Get An Inspector For My New Home:, 6-09; Vacation Home, Retirement Home, 6 -09: Real Estate Rock of Gibraltar Constants, 7-09; A Picture Is Worth 1,000 words, 6-09
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