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Showing posts from 2012

CHANGES COMING AT THE CITY OF CHICAGO WATER DEPARTMENT?

Changes afoot at the City of Chicago, Department of Water Management may be having (adverse) impacts on real estate closings.  Over the course of the last several weeks, I have seen an uptick in closings being delayed as some Sellers are finding it harder to some required paperwork from the City. One source described a six week backlog for some certification requests. At least two contracts have been outright cancelled because of the delays. Buyers simply could not, or would not wait any longer.

In order to close on home purchase or sale involving Chicago real estate, the Sellers must present a "Full Payment Certification" to show that the water bill is current. These certificates are typically obtained directly from the water department's basement lair at the DePaul Center, 333 South State Street. If you have never been there, the offices are uninviting, inhospitable, and doing business there has long been (for my, anyway) unpleasant. Slow and unfriendly to say the leas…

Re-Habber's REJOICE: FHA Extends "Anti-Flipping" Waiver

by: Michael Wasserman

Good news for anyone interested in buying & flipping single family homes. The FHA has extended it's "90 day anti-flipping" waiver for another two years. The extension leaves open some great money-making opportunities for individuals and enterprises interested in real estate transaction. It should also be a benefit to communities burdened by vacant/run down/abandoned housing stock. (Not bad for those of us who facilitate home purchases and sales either).  In this context, "flips"  are two-step real estate deals where a distressed home is purchased cheap, fixed-up quickly and then resold at a profit. The art of the deal involves finding the right homes at the right price, making the right repairs, and then reselling as quickly as possibly to minimize the "carrying costs" associated with owning the property.
THE PROBLEM WITH FLIPS:
Historically, flipping can be a very profitable enterprise. Unfortunately, many such profiteers made …

Closing Cost Increase Alert - Zoning Certifications

by: Michael Wasserman

The City of Chicago Department of Buildings has quietly announced a January 1st increase in the cost of a Zoning Certificate of Compliance. In the new year, the fee will rise from $90 to $120.

The certificate is required at the time of closing for all single family homes and multi-unit buildings with up to five residential dwellings. It does not apply to the transfer or sale of condominiums or cooperative buildings.

A Seller applies for the certificate at the Building Department's City Hall offices (room 905), stating the number of residential units Seller believes exist at the property location. The Building Department either "agrees" with the Seller's representation and certifies, or denies certification as it believes another number may exist. The purpose here is to prevent buyers from acquiring property with illegal dwelling units. The process notifies both the seller and the buyer as to how many lawful units exist on site.

On the up side, t…

Fannie & Freddie to Halt Foreclosures over the Holidays

by: Michael Wasserman

The Federal Home Loan Mortgage Association and Federal Home Loan Mortgage Corporation have both announced that they will halt mortgage proceedings during the holidays. 

While this will not suspend pre-foreclosure collection or loss mitigation activity, at least delinquent home owners can have some peace of mind knowing that they will not likely loose their homes altogether, or be evicted before years's end. 

JP Morgan Chase & Citibank are expected to also announce a Holiday moritorium. Bank of America recently also made a similar announcement. 

Fannie and Freddie halt foreclosures for the holidays

This is somewhat comforting news coming out, considering that the New York Times is reporting today that the fastest growing demographic for foreclosure/delinquency activity is widows 50 years old and older, who's late husbands held home mortgages in their names alone.  

UPDATE:

Following suit, US Bancorp, PNC Financial, SunTrust, Wells Fargo & Bank of America …

Beware Illinois Small Business Owners -

by: Michael Wasserman

Illinois Secretary of State Jesse White is warning businesses to beware of a scam targeting
Illinois corporations.

A firm called Corporate Records Service is contacting Illinois businesses in an attempt to
collect a $125 fee to fill out a corporation’s “Annual Minutes Records Form.”  The Illinois Business
Corporation Act does not require corporations to file a “Minutes Records Form” or pay such a fee
with the state or any private entity.

“The problem is that the form this bogus firm is sending out looks similar to our Secretary of
State’s annual report form,” White said.  “We are concerned that companies are filing the form and
paying the $125 because they believe they are filing their annual report with us, as required by law.”

Although the bogus notice states that the fee must be paid by September 21, 2012, there is no
fee due to the state for that purpose.  The only fee that corporations must pay is the fee that is paid
with their annual report.  Illinois cor…

BUYING FLIPPED PROPERTIES

by: Michael Wasserman

Here is a really great article from a blog over at Zillow detailing some of the potential pitfalls of buying recently rehabbed / "flip" properties. Flipping is a "term of art" used to describe an investor's quick sale following the purchase of a home or condo, (hopefully with a tidy profit earned in the process).  There have been many reports in the media these days about  "flipping" properties, mostly touting them as investment opportunities, and the massive profit potential they offer.

Six years ago, those flips would have started with  pre-construction condo purchases, resold shortly after the properties were completed. These days, almost all the flips I see involve the "rehabilitation" of foreclosed or otherwise distressed real estate. (Including, ironically enough, flips of those new-construction condos from years gone by).

From a Sellers' point of view, there are great opportunities for profit here. I have se…

CURRENT MARKET CONDITIONS - GETTING YOUR NEXT MORTGAGE LOAN

Mark Greene at Forbes Magazine nailed it earlier this month in his article the perfect loan file, which really does capture the rigor with which lenders are scrutinizing every mortgage loan application these days. In my opinion, this should be mandatory reading for every buyer in the marketplace now.

Lenders demands for proper / acceptable supporting documentation can be pretty daunting.  I see many clients with qualifying income and credit scores being driven to tears by the excruciating process. In recent weeks more than a couple have simply quit. Some are using all cash to make their deals, avoiding the hassle altogether. Others are giving up their dreams of home ownership. If I never hear a loan originator ask for (or a client complain about) "just one more thing,"  I will be a happy man.

Certainly understandable that lenders are being very cautious while processing their loans applications. No one wants to see loan failures given the still-too-recent market collapse - p…

SHARING OUR SUCCESS - THANKS TO YOU

For a second consecutive year, I pledge to donate a portion of my fee from each successful Chicago area real estate closing that I work on to a worthy charitable organization.  Clients designate the specific recipient from a list of ten pre-approved organizations and all donations are made in their honor.

The Thanks to You program is intended to both express gratitude to the clients that hire me, and to help build a stronger community for us all. Together last year, we pledged more than $4,000 to organizations supporting better education, better health, and the fine arts.

This year should be even better.

I am pleased to announce the finalized list 2012 grant recipients:


WORKING IN THE SCHOOLS - Promotes literacy and the love of reading among low-income and minority students in Chicago Public Schools by providing one-on-one tutoring and mentoring.READING IN MOTION - Provides at-risk children from Kindergarten through 3rd grade with the key tools required to achieve grade-level reading, …

Must a Seller Disclose a Home's Macabre History?

A home being offered for sale was the site of a grizzly murder-suicide. Is the Seller obligated to warn prospective Buyers? A recent decision from Pennsylvania held that (at least in that Commonwealth) the answer is yes.

Back in 2008, we reviewed an Alaska court opinion in which a Buyer's lawsuit against a Seller was dismissed. In that case, the home's former occupant's badly decomposed body was discovered   long after her death. The Sellers said nothing to the Buyer. The Buyer sued the Seller, but the Court turned that claim down.

Working with an equally gruesome set of facts, a Pennsylvania Superior Court has held otherwise, upholding a Buyer's right to sue her Sellers and the real estate agents on both sides of the transaction  for failing to disclose a murder/suicide that took place in the house for sale.  Milliken v. Jacono, 2011 PA Super. 254
The crime in question took place in 2006. Konstantinos Doumboulis, allegedly shot his wife and then himself, leaving (ap…

Coming Soon: Cook County Property Tax Bills

The tax man cometh. Cook County first installment property tax bills should be hitting mail boxes everywhere this week. The bills will be due and payable by March 1st.

Taxpayers are reminded that the first installment bills are being sent out now, even though the County does not know how much is actually owed. These are "estimated" bills. For now, bills are simply computed based on a percentage of last year's tariff. A law change enacted in 2009 raised the estimated amount due from 50% to 55%.  The final reckoning will not be announced until later this fall.


In theory, those final bills will be mailed out at the beginning of August and will be due September 3rd. The actual due dates may be (and typically are) much later. Our County is notorious for tardy tax bills. Last year's final installments were due in November. Bills paid in 2010 were so late that they were not due until December!  The Second Installment due dates vary because they are computed based on the deli…

MORTGAGE LOAN DEFICIENCIES

Homeowners are not always "out of the woods" once their home is lost to foreclosure or sold by "short sale."  Foreclosures and short sales remove  the mortgage lien from a property, but do not eliminate the debt described in the note or loan agreement, or it's promise to repay the debt in full. That remaining balance due is the "deficiency." Contrary to public perception, banks are not only allowing short sales and completing foreclosures,  but they are still looking to borrowers to satisfy deficiencies well after closing.


The Illinois Appellate Court has started the new year with a "win" for mortgage lenders. The Court confirmed  a bank's right to pursue it's borrower for everything that was due and owing, over and above the recovery from a foreclosure sale. Banks can be awarded deficiency judgments as long as borrowers are given proper notice of the fact that they were being sued.   This case held specifically that even a notice (…

Home Buyers Assistance for Iraq/Afghanistan War Vets

There are a lot of great ways for real estate agents and mortgage lenders to add value to the service they give their clients. Certainly knowing ways to save clients money are always helpful.  Knowing the lenders and loan programs that do so help too.  These are, of course, the same reasons it makes sense for Buyers & Sellers to work with the best professionals they can find for their real estate deals too..

Here is a good one: First Advantage Mortgage has a new program benefiting members of the armed forces who have served in Iraq and Afghanistan. Qualifying borrowers are eligible to receive $10,000 in assistance towards the purchase price and/or closing costs on their next home. (Hat tip Bob Brandle)

These funds are available to all veterans using conventional, FHA and VA financing. Buyers on active duty or in the reserves are only eligible for first time home purchases.

The $10,000 grants are actually second mortgages (so do understand that there may be some additional closing…

FEES INCREASE at COOK COUNTY RECORDER

The Cook County Recorder of Deeds has announced a $2.25 fee increase for all document recording effective January 15th, 2012. Recording a standard two page deed will now cost $52.50, up from $50.00. The fees for longer documents increase based on the number of pages the document contains.

The Recorder's office maintains the County's official public registry of  real estate ownership, and record of persons (other than the owner) that may have rights over that property. The record helps owners prove their ownership rights. It helps mortgage lenders, judgment creditors, contractors and others assert their lien interests against those properties, and helps the rest of us research and investigate land transfers and sale histories.
Buyers who use mortgages to purchase Chicago area property typically pay for the recording of  two documents with each closing - the Deed and the Mortgage. Sellers pay to record a Release of each existing Mortgage that is being paid-off as a part of the t…

Chicago Abandoned & Vacant Buildings

We all know that the three most important factors in determining the desirability of a property are location, location, and location. As such, sharp Chicago area home buyers and the real estate professionals who advise them, are discovering - and embracing - Derek Eder's Vacant and Abandoned building finder tool.

Built on data from Chicago's 311 reporting service, this site shows detailed information about known "problem" properties on an easily navigated google map overlay. Mr. Eder built this as part of the Apps for Metro Chicago contest. This app was an AM4C community winner.

At best, abandoned buildings pose a visual blight on their neighborhoods. Unoccupied, they detract from the economic and social vitality to their surrounds.  At worst, they abandoned buildings can pose severe safety hazards, criminal and structural. Woodstock Institute research shows that vacate and foreclosed homes contribute to declines in neighboring property values and increases in violen…

ATTENTION CHICAGO CONDO OWNERS - TIME SENSITIVE CHANGES TO THE CITY's TRASH REBATE PROGRAM

Our great City of Chicago offers many many benefits to citizens. One of the less glamorous, albeit greatly appreciated services is garbage pick-up - at least for single family homes and small multi-unit buildings.
The recognized that condominium owners were paying for this service through their taxes, without realizing any benefit. The result, a rebate program to qualifying Condominium Associations to offset some of the costs of waste disposal.  The most recent City budget and recent changes to the municipal ordinance make some very important, and time sensitive changes:
An association can only file for the rebate for the 2011 operating year. Applications for prior years are not being accepted.  If your association did not apply for rebates for prior years, you will not be able to do so for 2011 or future years (lets call this one the "you snooze, you lose" provision). The rebate for 2011 will be limited to a total of$75 per owner-occupied residential unit. (the operative wo…

JANUARY is RADON AWARENESS MONTH

Show of hands, how many of you can name  the second leading cause of lung cancer in the United States?

OK, the headline was the give-away, but that would be Radon Gas.

Radon is released by the decay of uranium, a naturally-occurring ore found in our soil. When released, Radon can seep through cracks in basements and foundations into our homes.

According to the U.S. EPA, one in every 15 homes in the United States have radon levels that exceed the recommended radon action level. In Illinois between 2003 and 2007, 42% of homes tested for radon gas had levels above the EPA radon action level. It is believed that Radon is responsible for an estimated 20,000 deaths per year in America.

Unlike tobacco usage where you pretty much know how carcinogens are introduced into the body, Radon is a much more insidious health problem - it is an odorless, colorless and tasteless gas. It is a naturally occurring phenomenon. You will never know you are being exposed to it, unless you specifically test th…