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Showing posts from May, 2009

One Reason Why Condo Buyers Pay More to Get their Mortgages

I helped some clients sell their condo apartment yesterday. As we sat at the closing table, the topic of conversation turned to the recent pricing increases and still tighter lending standards that were recently implemented for condo purchase money mortgage loans. The loan officer, real estate agents, and buyer were all commiserating & railing against the higher cost as being pointless and painful.

Then, on my return to the office, I saw an email from Kathleen Robson, a loan officer at Wintrust, that helped remind me why the lenders are still being so cautious.

She described 2 recent files she had worked on: The one involved a developer apparently had been collecting money from unit owners but then suddenly left town (presumably to a country with no extradition) and no one was left to run the condo association. The other involved a developer that simply was not collecting assessments from the owners of sold units (or paying assessments on the unsold units) but may have lied on pape…

NEGOTIATING A BETTER CONTRACT - SELLER CONSIDERATIONS

These days, it (still) is really very hard to find Buyers who are willing to submit a written purchase offer.and perhaps a somewhat less obvious truth:
That's just half the battle.Its just as hard (harder?) to get contracts to close. Doubt me on that one? Ask any realtor or real estate lawyer, mortgage broker or loan officer. Ask at the title companies too. They will all likely sigh heavy and confirm it. A great many contract are taken that never close. Even the contracts that can and do close have their problems.

However, with care and caution, savvy Sellers, and the real estate agents & attorneys that represent them, can minimize the risks of delay, and the disappointment of failed closings.

This series explores some steps proactive sellers can take to improve the odds

Tip #3
INSPECTIONS CONTINGENCIES ARE NOT FOR THE FAINT OF HEART

No buyer should go forward on a contract without a professional home inspection. That inspection give Buyers re-assurance that the home they are intere…

LEGISLATIVE ALERT: CHANGES LIKELY for ILLINOIS REAL PROPERTY DISCLOSURES

Our real property disclosure covers 21 specifically enumerated types of material defects ranging from unsafe drinking water, to defects in the roof or ceiling, to boundary and lot line disputes. This disclosure is a critically important safeguard for home buyers and is one of the very first things I look for when I am representing Buyers and Sellers.

Last fall, I blawged about an emerging trend on the National scene, requirements that Sellers disclose their knowledge of whether or not a home has ever been used as a meth lab.

Illinois seems poised to "go with the flow" on that one, and before too much longer, we will likely be adding disclosure point number 22. HB0214 would mandate the disclosure of known usages of residential properties for the manufacture of methamphetamine. The bill was introduced by Pekin, Illinois State Rep. Michael K Smith, and flew through the legislature, passing both houses last Friday (May 15) and awaits the Governor's signature.

Sure, it would be …

THREE THINGS SELLERS SHOULD EXPECT WHEN THE NEW LY REVISED ILLINOIS NOTARY REQUIREMENTS TAKE EFFECT

Things get a bit more complicated next month for Sellers who want to Close on Real Estate Transactions in Chicago, and the Lawyers who represent them.

We've watched the progress of Public Act 95-988 for some time as it winded its way through the legislative process last year. The new law takes effect in just two weeks. Based on my conversations with several other local practitioners and title company representatives, I think that sellers can certainly expect three significant changes with regard to their intended real estate closings.

First, a quick recap.
Public Act 95-988 creates a pilot project that is effective June 1, 2009 and terminates June 30, 2013.
The new law affects the notarization of transfers of residential real estate in Cook County.Illinois notaries public who notarize documents of conveyance of qualifying residential real estate in Cook County will be required to create a Notarial Record,
Take a thumbprint of the seller(s), and providing for record keeping of the Nota…

NEGOTIATING A BETTER CONTRACT - SELLER CONSIDERATIONS part II

PART 2:
DON'T DELAY- Do The DUE DILIGENCE NOW

Current market conditions present two unfortunate realities for prospective home sellers: prices are declining. Market times are not. As a result, there are a lot of unsold homes languishing on the MLS and many, many more that are not currently active, but are available if there were Buyers willing to Buy. Worse still, merely accepting an offer does not assure an actual closing.
A great many contracts are falling apart before the closing. So why do so many Sellers shoot themselves in their collective feet by not being fully prepared to go forward on acceptable offers?

Sellers simply MUST do better. A great start is to compile the necessary due diligence materials when the property is first readied for market, well in advance of that acceptable offer.

Every seller of residential real estate in Illinois must make certain legal disclosures, to be given to prospective Buyers. For homes and condominiums that are considered "re-sales"…

TAX RELEIF - for some Suburban Cook County Homeowners

CRAINS CHICAGO BUSINESS:
County to lower home assessmentsBy: Lorene Yue May 11, 2009 (Crain’s) — Residents in some suburban Cook County townships will see a reduction in the assessed value of their homes as the tax system catches up with the real estate downturn. But because tax bills are paid in arrears, it won’t be known if homeowners will see any benefit until next year. Homes in 30 suburban townships will have their assessed values lowered by 4% to 15%, Cook County Assessor Jim Houlihan announced Monday. The reduction is being made to accommodate market changes at a time when suburban areas are not up for reassessment, which happens every three years. “After careful analysis of market sales and foreclosure data, we determined those townships should not have to wait until their next reassessment for the impact to be reflected,” Mr. Houlihan said in a statement. River Forest Township will receive a 5% reduction, while Cicero Township gets a 15% reduction. “Areas hit hard by …

NEGOTIATING A BETTER CONTRACT - SELLER CONSIDERATIONS

PART 1:
QUALIFY THE BUYER BEFORE ACCEPTING THE OFFER

Current market conditions present two unfortunate realities for prospective home sellers: prices are declining. Market times are not.

As a result, the general perception in the marketplace is that Buyers now have the upper hand over Sellers. To the extent that there are so many more Sellers than Buyers in the active market this may be so. This makes many Sellers uneasy and quite understandably so. Once they get past the lowest low-ball offers, many Sellers are quick to accept the first "decent" price offered and then hope for the best.

Reality is showing us however that merely accepting an offer does not assure an actual closing. There are still many perils and pitfalls that are keeping a high number of contracts from closing.

Sellers MUST plan carefully to better the likelihood that the contract will close. This post and others that will follow in this series will offers specific suggestions to help sellers write better bette…

NEGOTIATING A BETTER CONTRACT - 6 THINGS EVERY SELLER NEEDS TO KNOW, NOW

Two days ago, I wrote about the re-emergence of multiple offer transactions. In response, I heard from a number of real estate agents who confirmed that they are encountering this phenomenon. I also have heard from another of others who essentially groaned and who all collectively wished for just one stinking offer, at this point, any offer.

They are, almost certainly, still be in the majority - which lead me to states an obvious truth:
These days, it (still) is really very hard to find Buyers who are willing to submit a written purchase offer.and perhaps a somewhat less obvious truth:
That's just half the battle.Its just as hard (harder?) to get contracts to close. Doubt me on that one? Ask any realtor or real estate lawyer, mortgage broker or loan officer. Ask at the title companies too. They will all likely sigh heavy and confirm it. A great many contract are taken that never close. Even the contracts that can and do close have their problems. These days deals are just as likel…

Hello Old Friend

Ladies and Gentlemen, mothers, fathers and children of all ages, please direct your attention to the center ring.back from an extended absence, returning to critical acclaim, and the jubilant cheers of its many fans,I GIVE YOU:MULTIPLE OFFERS!I don't have any statistical data to back me up on this one, but in talking to real estate agents over the past couple of weeks, I was pretty taken aback to hear multiple stories of buyers and sellers finding themselves in multiple offer situations (negotiations in which more than one buyer wants to purchase the same property... bidding wars). Bidding wars were well known in my practice, and in the larger marketplace during the go-go or boom years. Buyers were so desperate to win a Seller's acceptance that they were paying more than the asking price, and waiving protective contingencies such as inspections, mortgage financing and sale-of-other-property requirements.  I had not, until just recently, seen one in many, many moons. But now, i…

New Real Estate Contract to Debut Soon

Ready to make that real estate deal? Get it in writing. A written contract is essential to any purchase and sale transaction. But where are you getting that contract and who's form are you going to use?

Lets face it, the blank forms look like endless mad-libs that are already littered with unreadable prose, even before the "missing words" get added in. Which one are you going to use?

There are scores of contract forms available to get to the essence of a real estate deal (the buyer's promise to the seller to turn over a whole bunch of money if the seller forks over a deed and the keys.

By my last count, I have at least 20 of those forms in my collection of contracts accumulated over the last few years. I have worked with nine different pre-printed (form) real estate contracts over the last year alone.

That does not even include the various forms used by new home (and condo) builders or condo conversion developers, each of whom seems to use a different form from the othe…