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Showing posts from December, 2008

Market Conditions: November Sales Plummet 41.3% Year Over Year

Its not like anyone in the Real Estate market needs numbers to quantify the severity of the pain, but just the same, here Crib Chatter's is a quick, dirty summary of Illinois Association of Realtors' November sales reports:

Chicago home sales continue to plunge, as November recorded the sharpest year-over-year decline in the city in 2008.Sales of single family homes and condominiums in the city fell 41.3% in November compared to a year ago. Only 1,057 sales closed compared with 1,801 in November 2007.The median price declined 23.3% to $222,500 compared to $290,000 in November 2007.“The REALTOR® Association is calling upon the federal government and mortgage industry to address continuing problems that are impeding the delivery of mortgage credit to potential homebuyers.” said David Hanna, president of the Chicago Association of REALTORS®.“Mortgage insurers need to make sure they have not over-corrected and added unnecessarily strict underwriting standards preventing people fro…

Mortgage Appraisals

Here's a head scratcher....

My client wishes to purchase a bank-owned property. His mortgage lender orders an appraisal to confirm the property value. So far, so good, right?

The appraiser visits the property, checks for comparables in the neighborhood and reports that the contract price is fully $20,000 belowthe appraised value. The comps are all higher, too.

Yes, you read that right folks. Buyer would be get the house for less than market value. An instant (paper) gain of at least $20,000. More equity for the borrower/owner. A lower "loan to value" ration. That is a good thing, isn't it?

Apparently not; the underwriter denied the loan. Blames the appraisal.

huh?

Property Disclosures - tales of the Macabre

Back in September, we discussed the emerging trend that requires sellers in some states to tell buyers whether or not a particular property was ever used as a meth lab. Today, our discussion of disclosures turns on quite a different circumstance. This is an actual case decided in the Supreme Court of the great State of Alaska.

Factually folks, this one is pretty gross.

Ida Mae Johnson owned a home in Anchorage. In April, 2003 police discovered Ms. Johnson's body in the kitchen of the home. She had died of a heart attack approximately one month before her body was discovered, and during that time her body had partially decomposed. It was later learned that fluids released during decomposition caused structural damage to the kitchen subfloor. The sellers (Ms. Johnson's surviving daughters) told the buyers that their mother had died in of a heart attack in the home, without mentioning any of the other gruesome details.

The buyers moved into the house shortly after…

Pointilism in West Lawn

Here is a fairly sobering graphic. The map shows ONE ZIP CODE on Chicago's South West Side, 60629.

The red dots represent all of the properties in that zip code that are either in pre-foreclosure or are already bank owned. In just the first four months of 2008 alone, there were nearly 600 foreclosure lawsuits initiated in this area. The map was put together by the Southwest Organizing Project and LISC/Chicago. It was the centerpiece of Senator Durbin's testimony to the Financial Services and General Government Appropriations Subcommittee Hearing last week.

Just about every real estate lawyer I know has handled closing involving distressed properties. I certainly have worked on FAR TOO MANY bank-owned properties; foreclosure-pending properties; and short sales. I have seen an unsettling number of other sellers pay money at closing to complete a closing. These are not happy transactions.

But they are each individual tragedies. Isolated deals. Each family suffers the pain once. They…

Happy New Year (TItle Fees are Going Up Again)

Well, what else would you do if the volume of your business is down; and if the pricing scale for your product is tied to real estate sales prices , and the stockholders are upset that the dividends are being cut? Raise the rates!

Chicago Title announced their annual fee increases a bit early this year. (This is the second increase in just five months). The new fees go into effect January 2.

Watch for the rest of the still viable title companies to follow suit soon.

Compare title rates on my web site, here.

What the puck? Blago a hit in Las Vegas....

Who knew they even played hockey in Las Vegas? Apparently they do, and oh boy have they got a promotion cooked up. Kudos to their promotions department for getting way out ahead of the rest of the hockey-as-political-satire poser organizations.

The Las Vegas Wranglers face off against the much feared Victoria Salmon Kings on January 30. They will wear vintage prison uniforms, featuring broad, horizontal black and white stripes and a prison issue number that begins "ILLGOV" with the last two characters representing a specific player's regular uniform number.

Those nasty, sweaty frocks will be autographed and auctioned off for charity at the game's end. A seat between the two benches will go to the highest bidder as well.

Sure its embarrassing for us, but the team wants you to have some compassion for the players. Apparently they were forced to wear pink for cancer research last year, and had to grow mustaches and wear light blue helmets to auction for prostate cancer. M…

HOW TO MAKE MONEY IN REAL ESTATE - December, 2008

For the most part, I try to focus my real estate practice on residential properties, but as someone who offices downtown, I was particularly taken aback by two news items reported this morning. Both involve what appear to be real estate plays that will generate sizeable revenue streams, even in this "down" market; We're talking about parking. That's right, parking. Basically, build the parking area and lay down a few stripes. Invest in some payment collection meters or machines, and voila, you can pretty much kick back and enjoy the ride. Its like printing money.

Don't quite believe me?

First off, read (and weep at) this November 17 Sun Times piece on the "skyrocketing" cost of off-street parking downtown. Next, check out the details of the newly announced privatization of on-street parking. (Spoiler alert: the cost of Off-Street parking downtown has gone up 20% over the last three years. On street parking is about to increase 400% over the next five.

Lo…