North Shore Views

Archive for the 'Buying a home' Category

10 Mortgage Pitfalls to Beware of

During the boom years, anyone with a pulse could get a mortgage. Not so anymore. There are lots of things that can torpedo your ability to get a home loan even if you have good income and a great credit score.

MSN Money ran a great piece called “10 Things That Can Kill a Home Loan”. Here is their list of things that can keep you from getting a loan:

1.  The house needs too much work – beware if you’re buying distressed property or a real fixer-upper.

2.  The house doesn’t “appraise out” – the appraiser says the house is worth less that the price you and the seller have agreed on.

3.  You have too much debt – if your monthly housing and other debt exceeds 40% of your income, you might not qualify.

4.  You are self-employed and your income has declined – your lender will look at two years’ of tax returns and use the lower income of the two.

5.  You recently started being paid on commission – you may have to qualify based on your spouse’s income, or wait a couple of years to get a loan.

6.  There are issues with your tax return – things like second home expenses, a too-small estimated tax payment or unreimbursed employee expenses can be a problem when trying to qualify for a mortgage.

7.  You can’t get private mortgage insurance – which means you may need a bigger down payment.

8.  The lender doesn’t like the condo association’s finances – lenders may balk if the association’s cash reserves are too low, someone owns more than 10% of the building’s units or the association’s fidelity bond is too small.

9. Your loan takes too long to get approved because the lender has had to cut back on staff- your deal could fall through or your rate could go higher while you are waiting for approval.

10. You don’t stay on top of the paperwork required by the lender – be prepared to prove everything and anything and respond quickly to requests for information.

The bottom line: the mortgage game has changed and there are a lot more rules and restrictions nowadays. The best way to win the game is to educate yourself on the requirements and potential pitfalls, and get your ducks in a row before you try to get a loan. Ask your Realtor for recommendations about mortgage professionals who can advise you well and guide you through the process.

Read MSN Money’s “10 Things That Can Kill a Home Loan“.

Tags: home buying tips, home mortgage

How to Get Your Deal Closed in an Hour

If you have your ducks in a row, your closing can be quick and painless.  Bonnie Vasilion of Ist Advantage Mortgage offers these tips on how to ensure that your closings go quickly:

1.       Make sure your lender has cleared as many conditions as possible BEFORE the closing date: “Cleared to close” just means the file can be sent to a closing; it does NOT mean that all the conditions are cleared.  Lenders have “At Funding” conditions, meaning items to be provided at the closing table prior to funding approval.  I try to clear the “At Funding” conditions for my clients in advance of the closing date.  That eliminates a lot of waiting around.

2. If you’re going to have a morning closing, make sure the buyer AND the lender wire funds to arrive at the title company the afternoon before: I have heard that some lenders don’t initiate a wire until closing documents/conditions are signed and returned for lender  review.  Our company sends the wires out the day before when necessary.  This is an extra expense to the lender (an additional day’s cost of interest to the lender), which is why many lenders will not do this.  Due to our large size and warehouse line capacity, we are usually able to offer this convenience to our borrowers.

3. Work with a Loan Officer who attends closings: Although a Loan Officer is technically not supposed to have any role at the closing table, their presence can expedite communication between the title company and the person authorizing funding.  I cannot logistically attend every closing, but I do whenever I can.

4. Work with realtors and attorneys who solve contract issues prior to the closing: I have noticed that sometimes people think the sticky issues will go away under the pressure of “getting the closing done”, but the opposite seems to be true these days.  Buyers and especially sellers are very emotional, and even the smallest unresolved issue can cause people to become irrational and blow up a closing. 

Finally, I am still noticing that title companies are under-staffed and doing “triage”/putting files off until the last minute, even when figures and documents arrive several days early, so clearly some of this is beyond all of our control.

Tags: closings, home buying tips, Real estate

House Hunting is Like Going Through Airport Security

I don’t fly enough anymore to remember the little things that can make going through security quicker and more efficient. For example, I usually forget to put my liquids in a zip-lock bag. And even when I do, I forget to pull the bag out of my suitcase and put it in the bin to go through the scanner. Luckily, the TSA people don’t usually notice (What does that say about our airport security?). But when they do, it’s a giant hassle because they stop me and take me aside to go through my suitcase. At least they haven’t put me through the dreaded full-body scan… yet.

The other thing I never think about is my shoes and socks. Namely, to wear socks and to wear shoes that slip on and off easily. I always think I’m smart by wearing comfortable sneakers when I travel. But I’m forgetting that I’ll need to untie and re-tie them to go through security, which definitely slows down the process. And half the time I’m not wearing socks, which means I’m walking barefoot in the airport (which is kind of gross when you think about it, and cold to boot).

House hunting is pretty much the same thing. Chances are you’re going to have to remove your shoes just about every time you go into a new house, because a lot of  sellers won’t have those little bootie things to slip on over your shoes. And doing that ten times in one day can get old.

So do yourself a favor and wear slip-on shoes with socks when you go looking for your dream home. It will make house hunting so much more pleasant.

Tags: home buying tips, house hunting

5 Reasons to Hire a North Shore Agent (if You’re Moving to the North Shore)

This past Sunday was a beautiful spring day here in Wilmette and the open houses were hopping. I held two houses open and the one that is listed for $690,000 had a lot of interest from buyers looking to cash in on the tax credit before the April 30 deadline. Most of them were young families from the city who were looking to make the big move to the suburbs. And several of them mentioned that they were working with a city agent (the same one who had listed or sold their city home) to help them buy their dream home in the suburbs.

Now, I just don’t get that. Whatever agent you use is going to get the same commission. The question is, which one will really earn it?

And the home that you are about to purchase is possibly the biggest and most important investment you will make in your life. So wouldn’t you want the most qualified person you can get to represent you in this transaction? I’m not saying your city agent isn’t a terrific agent. But that agent (in all likelihood) does not know the North Shore market as well as the agents who live and work here.

It would be like me hiring my dog’s veterinarian to operate on me because he did such a great job on my dog. Yes, he is a doctor and yes, he does surgery. But he’s not an expert in the kind of surgery that I need.

Here is why it’s important to hire an agent who specializes in the area in which you plan to buy:

1. She knows the inventory of houses and can better guide you though the process of selecting a home you will be happy with. She can also make the process more efficient for you because her in-depth knowledge of the market enables her to sort through the options quickly, eliminating homes that she knows do not fit your requirements.

2.  As important as the house itself is the community, the neighborhoods, the schools and the amenities. Only an agent from the area can provide the kind of valuable insight that will help you make smart and informed decisions about location.

3. She can easily preview new homes that come on the market and alert you if there is one that is perfect for you. In fact, because of her local network, she will probably know about suitable homes even before they come on the market. That perfect home may be snapped up before your city agent even finds out about it and lets you know.

4. She will be able to provide good local resources you will need both during and after the transaction (inspectors, architects, contractors, decorators, painters,  handymen, etc.).

5. She understands relative property values in the area and why one house is worth more or less than a similar house. She can prepare a comparative market analysis (CMA) that gives you the knowledge and the confidence to successfully negotiate an offer.

Bottom line: a good local agent can help you avoid the two biggest home buying pitfalls: choosing the wrong house  and paying too much for it. And it doesn’t cost you anything.

Tags: hiring an agent, home buying tips, Real estate

Time is Running Out on Home Buyer Tax Credit!

If you are a buyer seeking to take advantage of the home buyer tax credit, you have only 60 days left to get a home under contract to be eligible for the tax credit. The deadline is April 30, 2010 to have binding contract. You then have 60 days (til June 30) to close on the transaction.

Sounds like a lot of time, but believe me, in this environment, it’s not.

First you have to sort through all the homes that meet your criteria and find THE one. Then you have to negotiate an offer. And get approved for a loan (actually, you should get pre-approved before you even start looking, so you know exactly what you can afford). This whole process can take time, so you should probably get started soon.

Here are some facts about the tax credit:

First Time Home Buyer Tax Credit = $8,000

• A first time buyer is defined as anyone who has not owned a home in the last 3 years.

• Income limits are $125,000 on a single return and $225,000 on a joint return.

• Maximum home purchase price allowed is $800,000.

Repeat Home Buyer Tax Credit = $6,500

• Buyers must have lived in their home for 5 consecutive years out of the last 8 years.

• Income limits and maximum home price are the same as for first time buyers.

• Home must be primary residence. Cannot be vacation home or investment property.

Whether or not you qualify for the tax credit, another reason to consider buying now is that interest rates are at an all time low right now and are predicted to begin rising in the next few months.

Tags: home buyer tax credit

Best Buy in Wilmette

No I’m not talking about the big box chain. I am talking about best buys in real estate.

The market has been in such turmoil and there is so much inventory to sort through that it can be downright overwhelming for buyers, unless they have a lot of help from their agent. Naturally in my line of work I see some great buys out there and I am going to share them here.  Sometimes they will be my listings or my partner’s, but mostly not. I am going to be as objective here as I possibly can.

Today’s pick:
811 Ouilmette Lane in Wilmette.

It is currently listed at $710,000 and
here’s why it’s such a great value:

• It is the only home for sale in Wilmette or Winnetka below $799,000 that has 5 bedrooms and 3.1 baths. At this price point you will find mainly 3 bedrooms or 4 at the most. To have both 5 bedrooms AND 3.1 baths (including a separate master bath) is a real find. Plus it is a solid brick home in a classic colonial style.

• The property, located west of Ridge Rd, east of Hunter and south of Lake, is on a quiet street in the desirable Harper school district. The downside of some of the other homes in this price range is location on a busy road.

• It is in pristine condition and needs no work. The kitchen is new, as is the family room. Some of the other homes you’ll find at this price in Wilmette and Winnetka are fixers or need considerable updating.

Now, in the spirit of full disclosure I will tell you that this one is my partner’s listing. But that is not why I wrote about it. It really is a great bargain. Take the virtual tour and see for yourself. If you’d like to see it in person, just give me a call: 847-687-5957.

Tags: Homes for sale, Real estate, Wilmette

Luxury Condo Values at Mallinckrodt in the Park

If you’re looking for a home that has the character and charm of a vintage building, but with all the modern amenities, a condo at Wilmette’s Mallinckrodt in the Park might be for you.

Prices have been significantly reduced on the remaining units at  Mallinckrodt at 1041 Ridge Road. These luxury condos feature high end finishes, in-unit laundry, heated indoor parking, convenient location and gorgeous park setting. Most of the units can be customized to the client. Three finished models are also available for sale.

Attention dog lovers: this is one of the only condo buildings in Wilmette that allows dogs as well as cats.

Several different floor plans are available in sizes ranging from 1,180 to 2,193 square feet.

Prices ranging from $235,000 to $499,000 are 30% below original list prices.

Mallinckrodt is an age-determined building, meaning that at least one of the deed-holders must be 62 years old. No one under 18 years old can be a permanent resident.

Mallinckrodt is a 5 story 180,000 square foot Italian Renaissance structure built in  1918 as a convent and a college. It was converted to 81 condos after a group of citizens petitioned to prevent the historic building from being torn down for development of single family houses. The adjacent 14 acre park is held in perpetuity by the Wilmette Park District as open space.

The models are open most weekends. Or, give me a call at 847-687-5957 if you’d like an appointment to see the available units.

Tags: dog-friendly condos, Real estate, Real estate listings, Wilmette, Wilmette condos for sale

What's Ahead for North Shore Real Estate?

Predicting the future is popular at this time of year and, when it comes to real estate, there is no shortage of opinions about what’s ahead for 2010. Some economists, like Lawrence Yun of the National Association of Realtors, are fairly optimistic about the housing market’s prospects. Others, like Mark Zandi of Moody’s Economy.com, are downright pessimistic. Since real estate is my livelihood, I would like to believe Lawrence Yun, but unfortunately his track record hasn’t been all that great, so his predictions need to be taken with a grain of salt (or two).

Having read the economists’ and other experts’ reports and scrutinized the local market data, I’ve come to my own conclusions about how the North Shore will or won’t reflect what’s going on nationally:

1. On a national level, sales will continue the positive momentum begun in mid 2009, at least through May, as buyers take advantage of the tax credits, low interest rates and attractive prices. This will hold true for the North Shore of Chicago too, but much of the activity in our area will be at the lower end of the market (<$800,000). And once the tax credit expires this summer, the market will probably stall again,  at least temporarily.

2. Based on recent trends, I think that prices will decline another 2-3% over the next three to six months, before stabilizing. So, if potential sellers are waiting to see if prices will rebound before listing their homes, they are in for a long wait. It will take at least five years (and probably more) before we see prices anywhere near 2006 levels.

3. The Fed will do its darnedest keep interest rates low for as long as it can to avoid sabotaging the recovery;  but we should expect rates to rise somewhat, probably to around 6%, later in 2010.

4. Foreclosures have not been as big a problem on the North Shore as elsewhere, but we are not out of the woods yet. We will likely see an increase in short sales and foreclosures as adjustable rate mortgages reset and those who took bigger risks when the market was good find themselves unable to refinance now. Unemployment in the neighborhood of 10% will continue to plague us at least through mid-year, putting a further drag on the housing recovery.

5. New construction of spec homes will be at a virtual standstill until existing inventory works its way through the system. Builders just can’t compete with the discounted prices of distressed properties and will be unwilling to build without a buyer lined up in advance.

6. The shift away from McMansions towards smaller, more efficient and greener homes will accelerate, driven by first time buyers and downsizing empty nesters.

I certainly hope that my predictions turn out to have been too pessimistic. That is,  except the one about the McMansions. I, for one, would be happy never to see another McMansion built again.

Tags: Home prices North Shore, North Shore market data, North Shore real estate market predictions, North Shore real estate trends

Wilmette’s Neighborhoods: Indian Hill Estates

Not to be confused with the Winnetka country club community of Indian Hills, Indian Hill Estates is in Wilmette. Developed from subdivided farmland in the 50’s and 60’s and laid out by architect Philip Mayer, this neighborhood looks more like a typical suburban subdivision than most of the other Wilmette neighborhoods. It has winding roads, cul de sacs, big lots and stone gates at the entrances to the subdivision.

Indian Hill Estates covers a 170 acre area north of Lake Street, west of Hunter Road, east of Hibbard Road and south of Illinois Road and Thornwood Avenue. Lots are often irregularly shaped and range in size from 8,000 to 30,000 sq. ft. Houses are typically larger than those in neighboring Kenilworth Gardens, with 4 to 6 bedrooms, 3 to 5 baths and price tags to match. Housing styles include Tudors, colonials, French country, Arts and Crafts and a few ranches sprinkled here and there. During the recent housing boom many of the smaller homes were torn down and replaced by new construction.

Homes in the area are served by Harper Elementary School (K-4) at 1101 Dartmouth Street.

Housing prices in Indian Hill Estates range from $800,000 to $2,000,000 (a few even higher).

At this writing there are seven homes for sale in Indian Hill Estates. Here is a sampling. If you would like more info on homes currently for sale in Indian Hill Estates, go here. And if there is a home you’d like to tour, just call me at 847-687-5957. I’d be happy to show you.

Tags: Indian Hill Estates, Wilmette IL, Wilmette neighborhoods

How Move-Up Buyers Can Profit from a Down Market

I have some clients who want to buy a new home in the worst way. They see some great buys on the market, houses that have  the features they really want. And their earnings enable them to qualify for a bigger mortgage. But, after looking and dreaming, reality sets in, because they are saddled with their existing home, which they would need to sell before they can buy.  And they realize that they can’t sell their current home without taking a hit.  Like many other people who bought when the market was up, they have a house that’s worth less today than it was three years ago and the thought of selling it for less than they paid makes them cringe.

When I tell them that if they really do want to move, they can actually come out ahead, they look at me like I have three heads. But I’m serious. Because, while their house has decreased in value, so have the other houses, and if they are moving up, they can save more than they lose.

Let’s take their house as an example. Today, based on comps, I would list their house somewhere right around $700,000, which is about 21% less than it was worth back in 2006 ($885,000). One of the houses they are interested in buying is listed at $1,200,000, which is also 21% less than it was worth in 2006 ($1,519,000). Now, let’s say they sell their house for $630,000 or about 90% of the list price of $700,000. And let’s say they can negotiate a deal for $1,080,000 for their dream house, also 90% of asking.

They’ve “lost” $256,000 on the sale of their current house (vs. the market high in 2006), but they’ve “saved” $439,000 on the new house vs. its high price in 2006, a net gain of $183,000.

When you do the math, you see that the current market conditions CAN work in your favor in some situations. Not only can my clients afford a house that they could not have afforded at the 2006 prices, but interest rates are near historic lows, making this a great time to buy. Of course I would NOT advise them to run right out and put an offer on their dream house UNTIL they have sold their current home. If they are serious about moving, they should price their house to sell and then, once they have a contract, negotiate hard for their dream house. Once they have sold they will be in the driver’s seat and have the leverage to negotiate a very attractive deal for themselves on the buy side.

Tags: home buying tips, move-up buyer strategies