from Local Attorney, Michael H. Wasserman

Sunday, January 20, 2013

Tools of the Trade -

Assessor's Web Site Screen Grab

by Michael H. Wasserman, Attorney at Law

Whenever a client hires me in connection with a local real estate purchase or sale, one of the first things I do is check out the local county assessor’s web site. For Cook County transactions, that would be here. The property search function allows home buyers, owners, and the professionals that represent them, many data points that can be critical to their deals. I am on this site every day.

What the Assessor’s Office Does

The Assessor sets the valuations (worth) of each of Cook County’s 1.8 millions parcels of property. These assessments are then plugged into the mathematical formula used to calculate our annual property taxes. Your property’s assessed value, in part, determines how much you will pay in property taxes. Taxes are likewise impacted by the use (or failure to claim) any of several recognized tax “exemptions.”

Why I Search

A check in with the County Assessor helps me assure clients that their purchase/sale deals are property documented and that they are being treated fairly in the allocation of real estate property taxes. I look for a couple of different things:

Property Identification

As obvious as this may seem, it is pretty important to confirm that the property my client is buying is the one that he or she actually intends to buy, and that it is described correctly in the contract. First stop is always a search to confirm the correct Property Index Numbers (PINs). Far too often they are wrong, or incomplete, or missing altogether from the contract. Likewise, a street address may be wrong or incomplete too. Searching a property by PIN can confirm a street address. Similarly, searching by street address can help identify the correct PIN. Knowing the PINs enables a searcher to check and confirm property tax amounts,  payment statuses & delinquencies, and make a preliminary title determinations.

Assessment History

Knowing the property's assessed value is pretty critical too, as it may help in evaluating the risk of a steep tax bill increase or decrease in the coming year. This is important in order to allocate property tax liabilities at closing. The County re-assesses every parcel of land once every three years. The Assessor's web site shows two years of assessments. We can see if an assessment has changed or if it is due to be changed soon.   A large drop off may possibly result in a lower tax liability. A steep rise may lead to tax increases. Knowledgeable buyers and sellers can leverage this information while negotiating their contract tax pro ration factors.

Exemption Status

Many homeowners are entitled to claim any (or all) of seven types of “exemptions” that can lower overall tax bills.  The search function allows two different paths to determine a property owner's historical use of these exemptions. Homeowners and Sellers who discover that they have failed to claim exemptions they were otherwise entitled to may be able to file “certificates of error” to claim a refund of such over-payments. These most commonly seem to involve missed “homeowners exemptions.” Very often, those refunds more than cover my legal fees for the overall sales transaction!

Buyers who discern that an exemption is going to be lost going forward may also be able to negotiate with their Sellers to either preserve the exemption or to adjust tax allocations accordingly. This happens most often in cases where the sellers are senior citizens or estates of recently deceased elders.  Successful efforts here can also realize significant property tax savings.

New Construction / Condo Conversions

New construction and condo conversion/rehabilitation deals present unique tax liability challenges for Buyers, their counsel, and their mortgage lenders. Very often a single tax parcel will be divided into separate pieces for each new apartment in a building or home in a subdivision. Taxes for prior years may also have been  assessed against vacant/undeveloped land. In such circumstances, Buyers face likely steep tax increases going forward, once the county adjusts property assessments to allow for the new construction. Knowing the timing of such changes are critical for the Buyer's planning purposes and for any Lender tax escrows.

The assessor's web site also includes some excellent other resources including a well stocked forms library and tools to help owners appeal to have their property assessments lowered.

Wednesday, January 16, 2013

How to Keep Your Mortgage Approval Approved

by Michael H. Wasserman, Attorney at Law

A must read from Broderick Perkins over at Realty Times for all home buyers who want to use mortgage financing. A shocking number of folks manage to sink their own ships by making one of these four mistakes along the way.

  1. Do Not make random, large, undocumented cash deposits, transfers, or withdrawels - Your lender is going to see these on your bank statements and unless you can explain / prove where the money came from / is going, you are at risk
  2. Avoid Big Purchases - Resist the temptation to buy a new car or furnishings for your new home until after the closing. It will show up on your credit report, lower your score, and scare the bejeezus out of your lender.
  3. Pay your Bills - Harken back on the advertising slogan - Just do it. Even if you want or need to dispute the charges with your creditor. Timing is everything and now is not the time to slip up. Credit scores man. They mark down for late payments. 
  4. Do Not open a new credit line or account (and as Perkins notes, even the one with that sweet o% interest teaser). You will get plenty of credit offers once you close. Trust me.
  5. Keep your day job, (don't give it away). OK, you cannot always control for this one, but do not take chances by switching employers or switching industries before the closing. Your lender's underwriter has evaluated your loan based on your current job and earnings. Not on what you hope to make, or what you want to do, going forward 

Other mistakes buyers make here? Please do share.

Realty Times - How to Keep Your Mortgage Approval Approved

Tuesday, January 8, 2013

Doing Good, Doing Good Work

by Michael H. Wasserman, Attorney at Law

My clients, and the friends that refer them mean the world to me.  In their honor, I donate a portion of my fee from each successful Chicago area real estate closing to a worthy charitable organization selected by my clients from a list of ten pre-approved organizations.

The Thanks to You program - now in its third year is both my expression of gratitude to my clients and our collective efforts to build a stronger communities.  Together, we have shared nearly $10,000 with worthy organizations that support better education, better health, and the fine arts. 2011 marked the first time a client matched my pledge. 2012 marked the first time a Realtor did so too. I work with some terrific people.

This year's program should be even better. Our 2013 grant recipients will be:

  • 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, through the power and discipline of the arts.
  • ALZHEIMER'S ASSOCIATION - The leading, global voluntary health organization in Alzheimer care and support, and the largest private, nonprofit funder of Alzheimer research.
  • RESPIRATORY HEALTH ASSOCIATION - A Chicago agency that promotes healthy lungs and fights lung disease through research, advocacy and education through community-based interventions.
  • WEST TOWN BIKES - Promotes bicycling among Chicago’s youth with a focus on under-served populations. WTB teaches independence, professional skills, environmental stewardship, & the importance of exercise & good nutrition. Earn-a-bike youth programs offer instruction in bike building, mechanics, & bike safety. (Even a little science too!)
  • GIRLS IN THE GAME - Girls who grow up playing sports develop into healthier, happier and more successful women. Chicago’s leading girls' health and fitness organization empowers making healthier choices and develops confidence and leadership skills needed to succeed on and off the field. 
  • EMERGENCY FUND - Provides immediate no red tape, short term financial aid to low income individuals and families on the brink of crisis. Crisis Solution Grants may cover transportation passes, food vouchers, eye glasses, prescription medicine, and clothing, rent, and/or utilities of clients in need.
  • GREATER CHICAGO FOOD DEPOSITORY - Chicago’s food bank, distributes donated and purchased food in Cook County, equivalent to  135,000 meals every day.
  • TREE HOUSE HUMANE SOCIETY - A cage-less, no kill cat shelter dedicated to the rescue & rehabilitation of sick, injured & abused stray cats, with a particular .focus on the care and placement of stray cats with special physical & emotional needs.
  • TIPITINA’s FOUNDATION - Supports New Orleans’ & Louisiana unique musical culture by providing youth band instruments, workshops, internships and coop work spaces to local artists

Do let me know if you want to know more about this project, these organizations, or of course, if you are interested in working together on your next home purchase or sale.