Government proposal to help with short sales

If you’ve been a buyer looking to purchase a home and put an offer in on a short sale, you know that the paperwork and the wait times can be excruciating.  I’ve seen cases where buyers have had to wait months – as many as 6 – to hear from the lender about whether the short sale has been approved.  The Obama administration is working on a new proposal that would help streamline the short sale process and hopes to roll it out over the next few months.

As a reminder, a short sale is when the lender is willing to accept a less amount of money for the property than what is currently owed.  The lender needs to determine if they will make more money this way than if the home went into foreclosure by the homeowner no longer making payments and then being able to resell it.  This is what can lead to extremely long wait times. 

So what the government is proposing is quicker turnaround times.  They haven’t named a figure yet, but hopefully it will be a maximum of X number of days to get a response from the lender.  They’re also proposing uniform documents required by everyone.  No more specific paperwork for each lender that makes each short sale request different.  They’re proposing to pre-approved short sale terms.  This has the potential to mean that it will be accepted no matter what if it meets a certain percentage back to the lender or if the buyer has a certain amount of financing covered.  That’s still up in the air.

The proposal also includes financial incentives for everyone who takes part.  This includes $1,500 back to the homeowners to help out with relocation costs and having to move.  So a benefit to having to short sale your house will help a lot of people out.  Especially if they need to rent right away and don’t have any money at their fingertips.

Mortgage servicers would earn $1,000.  Investors purchasing the home would get $1,000.  That can help with a lot of remodeling costs, if they’re needed.  Even real estate agents wouldn’t be forced to cut their commission if the bank asked them to.  We’re still waiting to see all the details related to the plan, but the news seems positive thus far.  A streamlined process and money for all involved … what’s the negative?

I’d love to hear your thoughts on this.  Please leave me a comment or visit me online.  More info can be found here.

How to choose between hardwood and laminate floors

I’m working with clients who have severe allergies but the house they love is covered in carpet.  Because it’s such a good deal, they want to make an offer.  However, they plan on replacing all the carpet with either laminate or wood flooring before they move in.  They’re torn about what to buy.  So I figured this would be a great reason to list the pros and cons of both hardwood and laminate flooring to help others out there with the same decision.

Let’s start with laminate.  You may often here the term “Pergo,” which is a brand of laminate flooring.  Designed to look like wood, these floors can save you a lot of money.  They’re a lot less expensive than traditional hardwood.  Another bonus to save money with laminate is that you can install it yourself.  A lot of laminate comes in snap and lock pieces, so you don’t have to absorb the cost of paying a professional.  This flooring is extremely easy to clean and doesn’t dent or scratch like hardwood can.

Of course, the negatives have it not being as durable as hardwood.  Since it’s a fairly new product, we don’t know how it stands the test of time in the long run.  It can warp when exposed to water and moisture over a long period of time.   So it’s not so great in the bathroom.  It’s not as sound absorbent as hardwood.  And a lot of people don’t feel it’s as “cozy” as hardwood flooring is.

Hardwood floors can look great in any home and there’s a variety of finishes and styles to match any room.  Generally, hardwood floors can increase the value of your home.  They’re very durable and easy to clean.  And it acts as an insulator, meant to hold in heat.  If you walk barefoot, you can feel the difference between a real hardwood and  laminate.

Of course, there’s some downsides, too.  They can dent and scratch easily.  If you have pets with claws, this might not be the best option.  Don’t move furniture around without something to protect the floors.  You really can’t pull the scratches out.  You’ll have to refinish the floors.  And if they’re not sound-insulated, they can be noisier than laminate.  Plus they’re generally a lot more expensive.

If you do choose real hardwood, you’ll need to choose between pine, maple, birch, bamboo, oak, mahogany, and a handful of others.  Your best bet is to talk to someone in the flooring department at your local hardware store.  You can also find a great set of resources online, including here and here.

Please visit me online for assistance in buying or selling a home.

Tips for selling during the holidays

Now that Thanksgiving has passed, it seems like the Christmas and holiday decorations have started to go up.  If you are going to be selling your home this holiday season, I wanted to offer some advice to not deter buyers and to make sure it’s in selling condition.

1. Keep your decorations to a minimum.  I know that you love your 15 foot Christmas tree and it’s the focal point of your living room.  However, you want to make sure that buyers can see and appreciate each room for what it is.  You don’t want rooms in your home to be overshadowed by holiday decorations.  Buyers need to know the size and shape of a room and too much stuff can get in the way.  This is true with the exterior of the home, as well.  Don’t blind your buyers pulling up to your house.  Keep it simple.  The other reason you don’t want to go overboard is because not everybody celebrates the same holidays that you do.  It shouldn’t prevent someone from viewing or purchasing your home, but if you over do it, you could turn some buyers off.

2. Be wary of safety.  Make sure all plugs and extension cords and other plugs you have out for your decorations are safely tucked away.  Don’t cover staircase railings with decorations where buyers can’t grab on.  Hide all of your presents.  Don’t leave them out and wrapped under a tree.  You could get a curious child unwrapping your gifts before someone can stop them.

3. Make it easy to enter.  Keep your driveway shoveled and your walkway clear.  Throw down some salt if it gets really icy.  If you’re going to be out of town during the holidays, make sure you have someone planned to shovel for you.  I’ve had plenty of buyers unable to view a home because there was so much snow we couldn’t make it to the front door.  If you have buyers coming in from out of town, this could be their only chance to see your home.  Don’t risk losing that chance.

4. Along those same lines, make your home available.  I know it’s hard during the holidays to always want to show your home, especially if you’re entertaining.  However, try to move your festivities to another location so you don’t miss any showings.  

I’d love to her any additional tips you have for selling during the holidays.  If you are ready to sell, please be sure to visit me online.

Tips for renting out your home

If you’re having trouble selling your home, you might have considered renting it out instead.  This is a great way to continue to be able to pay your mortgage and be able to sell in a few more years once the housing market turns around.  However, if you are a first time landlord, the process of having tenants in your home can be traumatic.  And being the winter, it’s harder to find people who need a place now.  Here are some tips to find good renters quickly.

1. Make it look move-in ready.  If you were living there or did have tenants in there previously, just like selling a house, the home has to be in showing condition.  Tenants are like buyers and generally move in quickly once they find something they like.  Make sure the home is clean, smells good, and appliances/fixtures are in working order.  Clean carpets if they’re dingy or you had a pet in there previously.  Also, if you moved out but are going to be renting the home, make sure that you have appliances in there.  If you took the washer/dryer when you moved, a tenant is going to need one, too.  Put them in first.

2. Make it available to a wider audience.  Hanging signs and advertising on Craigslist can definitely help.  Generally, for the cost of only 1 month’s rent, putting your home in the MLS can attract a lot more tenants.  And they’ve already been pre-screened.  Most Realtors have been working with a lot more renters since the market turned around.  In order to find them a place, they will have a credit report and background check.  By listing the home in the MLS, you open the rental up to a lot more people, especially those working with agents already.

3. Know your competition and price accordingly.  Make sure you look at comps to know what similar homes are renting for in the area.  You don’t want to be the highest priced.  Make sure you base your price on location, amenities, schools, etc. 

4. Make it available.  Tenants usually don’t have much time to wait when their lease runs out and they need a new place.  If you’re not going to be around to show it, this can be another great reason to list in the MLS.  Your Realtor can show it for you and/or put on a lockbox so it’s always available for tenants to look at.  And you want to be more open to your tenants.  Allow pets.  You can always charge a pet deposit in case the pet does something to the home.  You’ll open it up to a lot more prospects this way.

Click here for more tips.

Again, if you do find someone interested, make sure to get a recent credit report and run a background check if possible.  Contact past landlords to make sure they’re good tenants and they paid on time.  Ask for the first month’s rent and security deposit from a cashier’s check, rather than a personal check.

If you need help renting your home and want some MLS exposure, please visit me online.

Understanding your property tax bill

For those of you living in Cook County, you’ve probably received your 2008 tax bill over the last few weeks.  I wanted to touch on a couple of points relating to this.  Most of you probably figure that given the recession and property values going down, you’re shocked to see your tax bill go up!  So how can this be?

There are multiple reasons.  First of all, this bill represents the 2008 tax year.  So the bill for the assessment done reflected home values as of January 1, 2008, which was before the housing market completely dropped.  All Illinois property taxes are paid in arrears.  That means we pay this year for what happened last year.  We won’t pay for this year until next year.  Better than prepaying, right?

Also, this bill was based on your home’s assessed value (as I mentioned before).  When home values were on the rise earlier in the decade, the assessments went up, too.  When this happened, lawmakers in Springfield gave every county the authority to impose a ceiling on assessment increases.  Well, Cook County was the only county to take advantage of this (Sorry, Lake!)  But the ceilings are slowly being phased out and the assessments are now allowed to begin to increase again.

Because of the housing crisis, it is possible that assessments will start to go down.  However, you will not see that reflected until you receive your bill in 2010 for the 2009 tax year.   There is a chance that even if your assessment does go down next year, your bill could still go up.  WHY?  Well, aside from being taxed on your value, you have to take into account any recent tax hike referendums, what level of financial support is going to local schools, and general assessments across a community.  (Visit your local town/village’s Web site for more complete information.)

So you’re probably wondering if you can appeal.  Unfortunately, you can’t.  If there is a mathematical error on the bill, you absolutely can.  But it’s too late to appeal your assessments for this bill.  Lake County residents have 30 days from receiving their assessment to appeal their assessments for 2009.  Visit Lake County’s site for more information on how to do this.

If you don’t pay your taxes, just like your mortgage, your house can be taken away from you and auctioned off at a sheriff’s sale.  But make sure to do your research to determine if you are being fairly taxed.  If you have any more questions, be sure to visit me online.

 

Tax credit extended and expanded

Just last week I blogged about how the first time buyer tax credit was set to expire on November 30, 2009.  Well, a lot has happened in the past week.  Earlier in the week the House of Representatives passed an extension.  And Barack Obama signed it into law early on Friday. 

The extension now runs through June.  In order to take advantage of the tax credit up to $8,000, you will need to sign a contract by April 30, 2010 and close by June 30, 2010.  Just be careful.  If you are signing a contract to purchase a home that is going through a short sale, please beware.  A lot of banks can take longer than 60 days to approve a short sale or that closing.  So you’ll need to get everything signed prior to April 30.  April 30 is the last day you can have a contract signed and June 30 is the last possible day to close to take advantage.

Again, how the credit works is this.  If you purchase a home for $80,000 or more, you are eligible for an $8,000 tax credit on your 2009 taxes.  Remember, you file 2009 taxes in 2010.  If it’s a home for less than $80,000, you can get a credit for up to 10% of the purchase price.  If the home is $59,000, you will receive $5,900.

Obama also extended the income limits of who is eligible.  Single buyers can now earn up to $125,000 per year in income and married couples up to $225,000 to be able to receive it.  If your income level is above those amounts, you are not eligible to receive the credit.

Obama also extended the credit to move-up buyers, not just first time buyers.  In order to qualify for this $6,500 credit, you must have owned and occupied a principal residence for at least 5 of the last 8 years.  So many more people will qualify under the new rules.  Congress and the President are hoping the economy will get stimulated a bit by this expansion.

Originally, Congress was hoping that this tax credit would start a domino-like reaction.  First time buyers would purchase homes from sellers who would then choose to purchase homes and so on.  Unfortunately, a lot of buyers turned to vacant/foreclosed/short sales, so these homes didn’t have sellers who needed to move up.  But they’re hoping that offering a tax credit to move-up buyers will start this domino effect again.

More information on the expansion can be found in this article. I also have lots of great info on my Web site.

Hurry to take advantage of tax credit

I had to write this week about the first time homebuyer tax credit.  If you haven’t heard of this by now, please continue reading.  The government is actually giving buyers who purchase a home up to an $8,000 tax credit.  They are giving you money to stimulate the economy.  It does not get any better than this.  There is some fine print, of course, so keep reading.

First of all, this credit is for all homes which close prior to December 1, 2009.  That gives you less than a month from now to take advantage.  There are talks in place to extend it, but nothing has been approved yet, so we’re going to continue on as if December 1st is the last date.  You can’t write a contract on a home on November 30th.  You have to close on a home prior to then!

Who qualifies?  The government is defining a first time homebuyer as anyone who hasn’t owned a principal residence in the past three years.  So let’s say you owned a home five years ago but sold it to move out of state.  You’ve been renting for a few years and now want to purchase a home.  You qualify!  If you are married, both you and your spouse can’t have owned property in the past three years.

What qualifies?  Any home qualifies that’s used as a principal residence.  So no second homes or vacation homes.  But any type of home will work- single-family home, townhome, condo, mobile home, house boat, you name it.

Remember that I said you can get a tax credit of up to $8,000.  So, basically, if you purchase a home for $80,000 or more, you get all $8,000.  If it’s less than that, you can get 10% of the purchase price.  So if the home you buy is $54,000, you would receive a tax credit for $5,400. 

This credit can be claimed on your 2009 taxes (payable April 15, 2010).  Since you’ve most likely already filed your 2008 taxes, it won’t work for those.  Talk to your accountant if you’ve received an extension through this point.

So what’s next?  Pick up the phone and call me immediately at 800-858-7917.  If you’re out of the Illinois area, I can refer you to an agent in your area, too.  We need to get shopping ASAP!  For more information, you can also visit my Web site.   I’ve set up a page exclusively to this tax credit with an FAQ section and other links.  Make sure to check it out.  Just click on the graphic on my home page that you see on this blog.  I hope to hear from you soon.

Halloween activities to enjoy around the North Shore

Since one of my favorite holidays is coming up this weekend, I thought I’d blog about some great activities taking place relating to Halloween around Evanston and other North Shore communities.  First of all, it’s great that Halloween falls on a Saturday this year so that kids can actually trick or treat on Halloween.  Trick or treating is open in Evanston this Saturday, 10/31 from 4-7 p.m.

The South Branch Library is hosting a costume party at 949 Chicago Avenue on Thursday evening from 6-7:15 p.m.  Let your children dress up and listen to scary stories.  Refreshments are provided.  Call the library at 847-866-0333 for more info.

The Fleetwood-Jourdain Center at 1655 Foster is hosting a “HallaDaze” party on Friday night from 6-8:30 p.m.  This party is meant for kids ages 4-12 with a magic show, face painting, and costumes encouraged!  Call 847-448-8254 for more info. 

Highland Park has trick or treating hours from 4-8 p.m. on Saturday.  The same hours are true for Wilmette.  In Skokie, trick or treating begins at 3 p.m. and lasts until 8.

If you’re in the mood to travel this Halloween and visit some haunted houses and yard displays, make sure to visit Haunted Illinois.  This great Web site provides a directory that lists these attractions throughout the state.  Some of the biggest haunted houses are located in Crest Hill at Statesville prison and the large Dungeon of Doom in Zion.  Gurnee also has their annual Fright Fest going on at Six Flags Great America.

I hope you have a very safe and fun Halloween this weekend!  Visit me online if you need any real estate advice.

 

Keep your home warm and your energy bills low

With some very cool temperatures in the Chicago area this week, I know most people aren’t ready to start worrying about snow and shoveling and below freezing temperatures.  Unfortunately, it seems like summer is over and those 30-40 degree temperatures are here to stay.  In order to save money on your electric and heating bills this fall/winter, here are some tips to keep your house warm without costing a fortune:

1. Check for air leaks and drafts around all windows and doors.  One poorly sealed window can cost you hundreds of dollars this winter in extra heating bills.  You can purchase inexpensive insulation kits at all major home improvement stores, as well as Walmart and Target.  The plastic makes sure that all windows are sealed to prevent any extra air from escaping in.  Also, take advantage of those sunny days.  Even if it’s chilly outside, if there is a day with a lot of sunlight, open your drapes to get the solar energy to warm the room for you.

2. Check for leaks and drafts everywhere else.  You don’t want to forget to close your damper on your fireplace when not in use.  Please remember to keep it open if you are burning a fire.  Wall plates, plugs, and switches can allow cold air in.  You can purchase pre-cut foam to place under the switchplate to keep that closed.  And check your duct work.  Duct tape can fall off or bunch up over the years.  Make sure there’s no open holes bringing cool air in.

3. Give your furnace a yearly physical.  Replace its air filter to get the most energy efficiency out of it.  Clogged filters can cost you a lot of extra money since the furnace is working extra hard to get the heat through those clogs.  Have it inspected by a licensed and bonded HVAC technician yearly.  This can save you money in the long run to prevent any broken furnace in the middle of the winter. 

4. Invest in a programmable thermostat.  This way you can keep the heat lower when you’re at work so it’s not as warm when you’re not home.  You can set it to start warming up just before you get home at the end of the day.  Or if you’re on vacation, you won’t have to worry about your pipes freezing (it does happen!) because your heat is completely off.  These thermostats are so reasonably priced now.  They can be purchased for as low as $20.

5. Consider running your appliances (dishwasher, washer, dryer) in the morning and evening when you’re home.  It will help to heat the house as its running.  While you’re at it, make sure that dryer lint vents are cleaned after every load and that you’re only running full loads of laundry and dishes.

More great tips for the winter can be found here and here. Make sure you read the tips on attic insulation, too.

Visit my Web site if you have any real estate needs or questions.

 

Location near Metra boosts sales

While the housing market is in flux throughout the country and the Chicago area, there is good news for those of you that live near a Metra station.  According to a recent survey by Re/Max, housing prices in 2009 declined less in the Chicago suburbs that were located near the Metra than in other Chicago suburbs.

Great news for those in the Evanston area and other North Shore suburbs with locations near the stations.  There were three lines that had the strongest results: North Line (that runs through Evanston, Winnetka, and Lake Bluff), the BNSF (Riverside, Western Springs, and Lisle), and Heritage Corridor (Summit, Lemont, and Lockport).  The number of homes sold in these areas were less than the rest of the suburbs.  They also showed housing price declines of less than 7% and an increase of market time as less than 10%, much lower than the rest of the suburbs as a whole.

More results on the study can be found here.

So what does this mean for those in the area?  This is what sellers should do if they are listing their homes for sale:

1. Include your location to Metra in all remarks and advertising.  Advertise if you can walk to the station.  Let buyers know it’s only a 5 minute drive.  This is a huge benefit to buyers, especially those that are moving in from out of state and aren’t completely sure how they’ll get to their jobs in the city.  Even those that have gotten a new job might not know how easy it is to get downtown if they’re used to a previous job in the suburbs.  This can be a huge selling point.

2. To go along with that, insert a map to the Metra station in all of your brochures that are created for your home.  Show how easy it is to get to, and you might even want to include a Metra brochure with all the different lines and train schedules for your buyer.  If you’ve got a great looking station near you, include a few photos of that in your brochures, as well.  A map will definitely help prove how close you are.

3. Post flyers of your home at the Metra station, if possible, or hand out cards with your Realtor’s information to people you sit next to on the train.  You never know if the commuter next to you is looking to buy a home closer to the line!

For all map, schedules, and ticket information to provide to your buyers, you can view the Metra’s Web site here. If you’re ready to sell your home on the North Shore and need the expertise of a Realtor who frequently sells in the area, please visit my Web site.