Chicago Illinois Real Estate Blog and News

What’s Driving This Low-Inventory Market?


Here are my thoughts on where our real estate market might be headed.

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Back in April 2019, there were over 47,000 properties for sale on our MLS. In April 2020, we still had over 40,000 properties for sale. At the end of April 2021, however, there were under 20,000 properties for sale on the MLS. Inventory is down over 50% in just one year.

This market is being driven by this lack of inventory. Prices continue to rise as demand for homes remains high. When is this going to change?

"Take advantage of this extreme demand by selling now."

If I had a crystal ball, I’d tell you. However, we’re keeping a very close eye on things as we head toward the end of the foreclosure and eviction moratorium. I predict that we’ll see some more inventory hit the market at this point and things will get a little better for buyers. As inventory expands, the market will change.

If you’re a seller, this means that now is probably the best time for you to sell. Don't expect...

The Importance of Real Estate Attorneys


Here’s a quick explanation of the crucial role real estate attorneys play.

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A real estate attorney completes necessary tasks in every real estate transaction. They are going to order title, plan a survey, schedule well and septic inspections, and more. They charge a flat fee, usually around $500.

Sometimes there will be a postcard in the mail when you’re selling that advertises a real estate attorney for $199. You need to be careful about who you’re hiring. You want a real estate attorney, not somebody who is going to end up in court. The people who send these types of mailings usually aren’t true real estate attorneys, and they tend to cut corners.

"Your real estate attorney is there to protect you."

A true real estate attorney will maximize the money in your pocket. They can provide you with opportunities to save money on title, help the inspections to come out in a better place, and their knowledge of city/village requirements is paramount.

The most important thing is that your real estate attorney is there to protect you. Take this situation we had last week: Someone hired an attorney who spends time in court. The property did not close on time and...

4 Market Misconceptions That People Often Believe


I’m revealing the truth behind these widely-held misconceptions about our market.

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We have a hot seller’s market, but there are four common misconceptions about it that I want to clear up:

1. You need to know where you’re going before you can sell. The problem with that is that home sellers are not accepting contingencies in today’s market. They’d rather sell to a buyer without any contingencies, of which there are many. To get around this, you want to negotiate favorable terms when selling your current home. You may be able to negotiate a leaseback agreement or an extended closing to give you time to find and close on your new home.

2. Your home’s condition doesn’t matter. You may be able to get away with a little more today, but you will get more money for a home in better condition. Go through your home with a trusted professional and see where it makes sense to spend a few bucks to get a few bucks more back.

3. You can price above the market. Appraisal issues are going to get in the way. Pricing above the market may result in buyers staying away. If you do price above the market, your home’s just going to sit there....

Should You Sell Now or Keep Renting?


Here’s my advice to home sellers who are worried about becoming buyers.

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In a hot market like this where home values keep rising and rising, a lot of homeowners are asking if they should still sell today even if they won’t be able to find a new home right away because of how low the inventory is.

In my opinion, right now is a great time to sell even if it means you have to rent for a while before you’re able to find your new home. I recommend having an agent come out to your home, assess its value in today’s market, and give you an insight into what might happen if you wait versus if you were to sell now.

If you want to sell at the height of the market, the time might be right now. If you have any questions about your specific situation or real estate in general, don’t hesitate to reach out via phone or email. I look forward to hearing from you soon.

...

How Rising Rates Affect Homebuyers and Sellers


Higher interest rates can (and already have) affected homebuyers.

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If you’ve been keeping an eye on the real estate market, you’re probably aware that interest rates have gone up by 1% since last month. What does that mean for you? To keep it simple, if you were pre-approved to buy a house a month ago at $300,000, today you would only be approved for $270,000.

The general rule of thumb is that a 1% increase in the interest rate decreases your buying power by about 10%. This affects home sellers, too. Their pool of buyers shrinks as rates go up, and housing values will go down as well.

We could absolutely see a change in this market due to an increase in rates, so we’ll make sure to keep an eye on it for you moving forward.

If you have any questions for us about interest rates or real estate in general, don’t hesitate to reach out via phone or email today. I look forward to hearing from you soon.

...

What If You Need to Buy & Sell at the Same Time?


If you need to buy and sell a home, there’s a way to do it
that prevents you from needing to move twice.

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How do you buy a new house if you have to sell your current one and you don’t have anywhere to go in the interim?

I was recently asked this question by a home seller, but they didn’t realize that in this situation we usually close both transactions on the same day. We close on the house the client is selling in the morning, and close on the new home a couple of hours later. This way, no one ends up homeless.


You can sell and buy on the very same day
so you don’t have to move twice.


Granted, there’s probably a lot of stuff...

What Should You Do With Your Home?


If it’s time for a move but you’re unsure what to do with your home, today’s message is for you.

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Sometimes I’m in appointments with people who are struggling to figure out what to do with their home. They’re unsure whether they should sell, rent, or stay in their house. I like going over each option with them. What does it mean if you rent it, what are you going to get in rent, does that cover the mortgage, is there any extra money there? What does it mean if you’re going to sell it, how much money are you getting out of it, where are you going to move?

Occasionally people are in a position where they owe more than they can sell it for and they have to consider a short sale. We do many short sales, and I love helping people who are in a difficult situation and don’t know what they want to do. We lay out all your options and hopefully help you gauge what’s best. You don’t have to figure out your next step alone.

If you or anyone you know needs some guidance about your options, we’d be glad to assist you. Please give us a call or send us an email. Also, contact us if you have any questions about real estate. We’re happy to help.

...

What You Should Know About Extra Fees From Agents


When you’re looking to hire a Realtor to help you sell your home,
it’s important to know the total cost beforehand. Here’s what I mean.

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Some agents charge fees on top of their commission. I’ve heard of agents charging transaction fees, cancellation fees, and even fees for photos. Before you decide who the best agent is, you need to know what you’re going to be charged.

Like our team, some agents simply charge you a commission with no additional fees. Because we aren’t charging you these fees, we don’t get paid until you sell your property.


I don’t agree with charging extra fees.


I don’t agree with charging extra...

How to Reduce Your Closing Costs


As a buyer, there are ways you can reduce your closing costs.

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As a homebuyer, when you get to the closing table, you’ll need to pay closing costs to complete the purchase of your home. The good news is, there are ways to reduce those closing costs.

For example, you can ask the seller to provide a closing cost credit. In reality, you’re wrapping those costs into your mortgage, but it still reduces what you’ll have to pay at the closing table.

You can also elect to close at the end of the month (or as close to the end of the month as you can). If you close on the 6th you will have to cover 24 or 25 days of prepaid interest. If you were to close on the 28th you would only have to pay two or three days. The closer to the end of the month you close the less money you will need to bring to the table because you will pay less in prepaid interest.

Lastly, if you’re a veteran or active-duty member of the Armed Forces, you can get benefits through your VA loan.

If you have any questions about this or any other real estate topic, don’t hesitate to reach out to me. I’d love to help you.

...

7 Helpful Fall Home Maintenance Tips


By completing a few simple tasks, you can get your home ready for winter
and prevent a lot of future maintenance costs.

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Fall is here and winter is right around the corner. What should you be doing right now in order to prepare your home? Here’s what I recommend:

1. Seal the cracks. If you have any cracks in your foundation, driveway, or windows, this can create huge problems down the road. Consider having those handled before it gets too cold.

2. Paint your exterior woodwork. This is another place where moisture can get in during the winter and cause rot.

3. Remove your hoses from outdoor spigots.

4. Check your carbon monoxide and smoke detectors. Make sure those batteries are switched out, too.


Any cracks in your driveway or foundation
should be sealed before...

Homes Are Selling Quickly [INFOGRAPHIC]

Homes Are Selling Quickly [INFOGRAPHIC] | MyKCM

Homes Are Selling Quickly [INFOGRAPHIC] | MyKCM

Some Highlights:

  • The National Association of REALTORS® surveyed their members for the release of their Confidence Index.
  • The REALTORS® Confidence Index is a key indicator of housing market strength based on a monthly survey sent to over 50,000 real estate practitioners. Practitioners are asked about their expectations for home sales, prices, and market conditions.
  • Homes across the country are selling quickly, in an average of just 31 days.
  • 49% of homes sold in less than a month.
...

3 Reasons This is NOT the 2008 Real Estate Market

3 Reasons This is NOT the 2008 Real Estate Market | MyKCM

No one knows for sure when the next recession will occur. What is known, however, is that the upcoming economic slowdown will not be caused by a housing market crash, as was the case in 2008. There are those who disagree and are comparing today’s real estate market to the market in 2005-2006, which preceded the crash. In many ways, however, the market is very different now. Here are three suppositions being put forward by some, and why they don’t hold up.

SUPPOSITION #1

A critical warning sign last time was the surging gap between the growth in home prices and household income. Today, home values have also outpaced wage gains. As in 2006, a lack of affordability will kill the market.

Counterpoint

The “gap” between wages and home price growth has existed since 2012. If that is a sign of a recession, why didn’t we have one sometime in the last seven years? Also, a buyer’s purchasing power is MUCH GREATER today than it was thirteen years ago. The equation to determine affordability has three elements:  home prices, wages, AND MORTGAGE INTEREST RATES. Today, the mortgage rate is about 3.5% versus 6.41% in 2006.

SUPPOSITION #2

In 2018, as in 2005, housing-price growth began slowing, with significant price drops occurring...

3 Reasons to Use a Real Estate Pro in a Complex Digital World

3 Reasons to Use a Real Estate Pro in a Complex Digital World | MyKCM
If you’re searching for a home online, you’re not alone; lots of people are doing it. The question is, are you using all of your available resources, and are you using them wisely? Here’s why the Internet is a great place to start the home-buying process, and the truth on why it should never be your only go-to resource when it comes to making such an important decision.

According to the National Association of Realtors (NAR), the three most popular information sources home buyers use in the home search are:

  • Online website (93%)
  • Real estate agent (86%)
  • Mobile/tablet website or app (73%)

Clearly, you’re not alone if you’re starting your search online; 93% of home buyers are right there with you. The even better news: 86% of buyers are also getting their information from a real estate agent at the same time.

Here are 3 top reasons why using a real estate professional in addition to a digital search is key:

1. There’s More to Real Estate Than Finding a Home Online. It’s a lonely and complicated...

Be on the Lookout for Gen Z: The Next Generation of Homebuyers

Be on the Lookout for Gen Z: The Next Generation of Homebuyers | MyKCM
You’ve likely heard a ton about Millennials, but what about Gen Z? In the next 5 years, this generation will be between the ages of 23 and 28, and they’re eager to become homeowners faster than you may think.

According to realtor.com, “Nearly 80 percent of Generation Z members say they want to own a home before age 30,” and Concentrix Analytics said, “52% of prospective Gen Z buyers are already saving to buy a home.”

Wikipedia defines Generation Z (Gen Z) as “the demographic cohort after the Millennials. Demographers and researchers typically use the mid-1990s to mid-2000s as starting birth years.”

The report from Concentrix goes a little deeper on Gen Z,...

Existing-Home Sales Report Indicates Now Is a Great Time to Sell

Existing-Home Sales Report Indicates Now Is a Great Time to Sell | MyKCM

The best time to sell anything is when demand for that item is high and the supply of that item is limited. The latest Existing-Home Sales Report released by the National Association of Realtors (NAR), reveals that demand for housing continues to be strong, but the supply is struggling to keep pace. With this trend likely continuing throughout 2020, now is a great time to sell your house.

THE EXISTING-HOME SALES REPORT

The most important data revealed in this report was not actually sales. In reality, it was the inventory of homes for sale (supply). The report explained:

  • Total housing inventory at the end of August decreased 2.6% to 1.86 million homes available for sale.
  • Unsold inventory is lower than the 4.3-month figure recorded in August 2018.
  • This represents a 4.1-month supply at the current sales pace.

According to Lawrence Yun, ...

What You Need to Know About the Mortgage Process [INFOGRAPHIC]

What You Need to Know About the Mortgage Process [INFOGRAPHIC] | MyKCM
Some Highlights:

  • Many buyers are purchasing homes with down payments as little as 3%.
  • You may already qualify for a loan, even if you don’t have perfect credit.
  • Your local professionals are here to help you determine how much you can afford, so take advantage of the opportunity to learn more.
...

You Need More Than a Guide. You Need a Sherpa.

You Need More Than a Guide. You Need a Sherpa. | MyKCM
In a normal housing market, whether you’re buying or selling a home, you need an experienced guide to help you navigate the process. You need someone you can turn to who will tell you how to price your home correctly right from the start. You need someone who can help you determine what to offer on your dream home without paying too much or offending the seller with a low-ball offer.

We are, however, in anything but a “normal market” right now. The media is full of stories about an impending recession, a trade war with China, and constant political upheaval. Each of these potential situations could dramatically impact the real estate market. To successfully navigate the landscape today, you need more than an experienced guide. You need a ‘Real Estate Sherpa.’

A Sherpa is a “member of a Himalayan people living on the borders of Nepal and Tibet, renowned for their skill in mountaineering.” Sherpas are skilled in leading their parties through the extreme altitudes of the peaks and passes in the region – some of the most treacherous trails in the world. They take pride in their hardiness, expertise, and experience at very high altitudes.

They are much more than just guides.

This is much more than a normal real estate market.

The average guide just won’t do. You need a ‘Sherpa.’...

Homeownership is the Top Contributor to Your Net Worth

Homeownership is the Top Contributor to Your Net Worth | MyKCM

Many people plan to build their net worth by buying CDs or stocks, or just having a savings account. Recently, however, Economist Jonathan Eggleston and Survey Statistician Donald Hays, both of the U.S. Census Bureau, shared the biggest determinants of wealth,

“The biggest determinants of household wealth [are] owning a home and having a retirement account.” (Shown in the graph below):

Homeownership is the Top Contributor to Your Net Worth | MyKCMThis does not come as a surprise, as we often mention that homeownership can help you to increase your ...

What FICO® Score Do You Need to Qualify for a Mortgage?

What FICO® Score Do You Need to Qualify for a Mortgage? | MyKCM
While a recent announcement from CNBC shares that the average national FICO® score has reached an all-time high of 706, the good news for potential buyers is that you don’t need a score that high to qualify for a mortgage. Let’s unpack the credit score myth so you can to become a homeowner sooner than you may think.

With today’s low interest rates, many believe now is a great time to buy – and rightfully so! Fannie Mae recently noted that 58% of Americans surveyed say it is a good time to buy. Similarly, the Q3 2019 HOME Survey by the National Association of Realtors...

62% of Buyers Are Wrong About Down Payment Needs

62% of Buyers Are Wrong About Down Payment Needs | MyKCM
According to the ‘2019 Home Buyer Report conducted by Nerdwallet, many first-time buyers still believe they need a 20% down payment to buy a home in today’s market:

“More than 6 in 10 (62%) Americans believe you must put at least 20% down in order to purchase a home.”

When potential homebuyers think they need a 20% down payment to enter the market, they also tend to think they’ll have to wait several years (in some markets) to come up with the necessary funds to buy their dream homes. The report continues to say,

“The truth: 32% of current U.S. homeowners put 5% or less down on their home, according to census data.” (as shown below):

62% of Buyers Are Wrong About Down Payment Needs | MyKCM...