Chicago Illinois Area Real Estate Trends, and Tips for Home Buyers

Foreclosure Forecast and Bernanke Finally "Gets It" -- 2 Years Too Late

2008-12-04T09:19:00.000-08:00

Lenders appear to be on track to initiate 2.25 million foreclosures this year, up from an average annual pace of less than 1 million during the pre-crisis period, he said.

To provide additional relief, Bernanke outlined a number of what he called "promising options" to reduce preventable foreclosures.

Under one plan, Bernanke called on Congress to ease the terms of a government program called "Hope for Homeowners," which lets distressed homeowners refinance into more affordable, federally insured mortgages if the lender writes down the amount owed on the mortgage and pays an upfront insurance premium.

Bernanke suggested Congress lower lender's upfront insurance premium as well as reducing the interest rate borrowers pay, which presently is quite high, roughly 8 percent. To bring down this interest rate, Treasury could buy Ginnie Mae securities, which fund the mortgage program, or Congress could decide to subsidize the rate.

Another option would ease the terms of a loan-modification plan put forward by the Federal Deposit Insurance Corp. that seeks to make monthly mortgage payments more affordable. The FDIC put this plan into effect at IndyMac Bank, a large savings and loan that failed earlier this year, and has used it to modify mortgages at other financial institutions.

Under the so-called IndyMac plan, struggling home borrowers pay interest rates of about 3 percent for five years.

Rates are reduced so that borrowers aren't paying more than 38 percent of their pretax income on housing.

Bernanke suggested this threshold could be lowered to perhaps 31 percent of income, with the government sharing some of the cost.

Yet another option would have the government purchase delinquent or at-risk mortgages in bulk and then refinance them into the "Hope for Homeowners" or another government program that insures home mortgages.

Other options include a broader push for lenders to forgive a portion of the home loan for certain borrowers, and other permanent modifications over the longer term so that people don't fall back into distress again.

The housing crisis has driven up foreclosures and forced financial companies to take massive losses on soured mortgage investments. The housing debacle touched off the worst financial crisis since the 1930s that Bernanke and Treasury Secretary Henry Paulson have been desperately trying to bring under control.

All the fallout has plunged the country into a painful recession.

*****Bernanke stressed the importance of curbing the foreclosure mess because it is so inter-linked with the economy's health.*****

"Weakness in the housing market has proved a serious drag on overall economic activity," he said.

(Comment - Gee Ben - no kidding. Why didn't you have the rate drop program put into place back in early 2006 - when you should have? You finally "get it" - 2 years later...)

Paulson and his colleagues within the Bush administration have come under fire by Democrats and some Republicans for not doing enough to help Americans at risk of losing their homes.

Paulson has been opposed to tapping the bailout pool to fund a mortgage-relief program championed by FDIC chief Sheila Bair. The $24 billion FDIC plan would use some of the rescue money to help back refinanced mortgages that would lower monthly payments.

Kimbell Hill Homes - Rolling Meadows Going Out of Business

2008-12-03T10:28:00.000-08:00

Kimball Hill Homes announced today that it was going out of business.

Kimball Hill Homes, the Rolling Meadows-based home builder that has operated under Chapter 11 bankruptcy protection since April, said late Tuesday that it would wind down its operations after failing to find a buyer.

The 400-employee company, which has been a prominent player in the west and northwest suburban Chicago housing market, has a significant presence in California and four other states. Kimball pulled out of the troubled Florida market earlier this year. A year ago, it had 1,100 employeesIt will refund the earnest money to buyers with whom it has written contracts but has not started construction.

Some 700 homes are in various stages of completion around the country. Locally - 150.

Mortgage Applications Surge

2008-12-03T06:45:00.000-08:00

Mortgage applications are way up -- suggesting that more buyers are coming into the market. I know that we are pretty busy - with more clients than normal for this time of year. But - buyers are taking longer to decide - on average.

homeless shelters need your donations in lake and cook county illinois

2008-12-01T10:22:00.001-08:00

As the weather turns wintry, Chicago suburban homeless shelters are preparing for what's expected to be a record-setting demand for services.

For many PADS organizations, the not-for-profit groups that run shelters and other services for homeless people throughout the Chicago area, the 2008 fiscal year was their all-time busiest.

But because of rising unemployment, the foreclosure crisis and other worsening economic factors, PADS representatives predict the current fiscal year, which began this summer, will be worse.

With temperatures dropping in recent weeks, more people are turning to PADS shelters for warmth and safety.

Cedric Lee, is community outreach director of Lake County's PADS Crisis Services - and sees numbers up.

Scott Block, is division director with McHenry County PADS. His agency operates seven shelter sites at area churches, with one open each night of the week, between October and April, and a year-round day center with additional beds for emergencies.

There's room for about 50 people each night - and they've found themselves out of space already this season.

During the 2008 fiscal year, McHenry County PADS served about 400 homeless men, women and children - a record for the group. The agency is on pace to exceed that total in 2009.

Dennis Hewitt, is executive director of PADS of Elgin, which operates a single year-round shelter in that city for residents of Dundee, Elgin and Hanover townships.

Most people who lose their homes first rely on friends or family for shelter. Then people turn to churches and social-service groups to help them get by temporarily. When those wells run dry, people turn to PADS.

DuPage PADS operates three shelters every night, at rotating sites throughout that county. Maximum capacity is 140 people.

The number of people seeking shelter through DuPage PADS in October was 37 percent greater than it was a year earlier, Executive Director Carol Simler said. She attributes the increase to people with low-paying jobs who saw their hours cut and no longer could afford rent.

During the last fiscal year, Lake County PADS served 787 adults and 114 children. This year, Lee expects more than 850 adults and at least 150 children will seek emergency shelter at his group's 14 rotating shelters and one permanent site.

Demand typically peaks in January,

Donations of goods are appreciated. But cash gifts are needed, too, so organizers can buy specific things that people need that may not be among the donated items.

the feds talf program and its impact on upcoming mortgage rates

2008-12-01T09:59:00.000-08:00

The Federal Reserve's plan to spend $600 billion buying mortgages is driving down lending rates and boosting home affordability, which combined with decreasing inventories may signal a 2009 recovery for the battered home-building sector, some Wall Street analysts said.
My comment --- The Fed's announcement last week pushed rates on 30-year fixed-rate mortgages down - and they are now about 5.5%. I expect they will have to go into the 4's or less - and if I may be radical - perhaps even the 3's to get things really moving again - to counter the glut of foreclosures and tighter lending standards. So - if you are a buyer - now is probably the best time to buy in the history of the US. (You just have to have good credit, a job (fancy that), and a nice downpayment now...)

Many people who had short sales or foreclosures will be out of the market for a number of years....unable to buy. Also - though
lower rates can help borrowers seeking to refinance - many of those may have been "no doc" in the first place - and they won
t have an opportunity to do a "no doc" refinance. So - they are stuck with the loans they have.

The Term Asset-Backed Securities Loan Facility (TALF), may lead to a significant improvement in affordability.
A one percentage-point decline in mortgage rates has the same impact on affordability as a 10% decline in housing prices. However - changes in affordability often take nine months to a year to result in improving home sales.

Under TALF, the Fed plans to buy up to $500 billion of mortgage-backed securities issued by Fannie Mae and
Freddie Mac
and other government-sponsored enterprises, as well as $100 billion of debt.

Credit Suisse estimated that the mortgage payment on the median-price home now represents 16.7% of median household income, down from 21% this past summer, with most of the decline taking place last week after TALF was unveiled.
That's well below the long-term average of 23% from 1981 to 2007, and housing is the most affordable it's been since February 1994 when the mortgage on the median-price home equated to 18% of the median income.

"Importantly, affordability is also returning to attractive levels in key building markets," the analysts said.
"We do not expect a snap-back in sales activity given the negative consumer sentiment toward housing as of late, as consumers are nervous about spending money on what is now generally viewed as a depreciating asset," they wrote. "However, we expect that this improved affordability will help and will likely lead to at least a bottoming of sales in 2009."

After a historic boom in home prices fueled in large part by easy credit, the U.S. residential housing market is caught in the grips of one of the worst downturns in recent memory. There is an enormous overhang of unsold homes on the market that could rise further if foreclosures spike.
Buyers lacking pristine credit scores have had difficulty getting loans, while worries about the health of the overall economy have dampened sentiment. However, falling home prices and lower mortgage rates could finally entice wary buyers.
With some foreclosures selling at rock-bottom prices, Credit Suisse had anticipated an incremental 15% further decline in home prices over the next year, but said the drop-off in mortgage rates could make this figure less.

Finally, Mortgage Interest Rates to Come Down!

2008-11-25T21:22:00.000-08:00

Comment -- Finally - at Long Last - Mortgage Rates to Come Down! Everyone had thought that with the government bailing out Fannie and Freddy and guaranteeing those instruments - that rates would come down after that. But they only came down in the few days after that govt action - and then went back up again - and stayed up - until recently - when they have been trending down. Now - rates should trend down even more -- something that has been needed for a long long time to bring more buyers into the market for housing. In my opinion though - it will still take quite some time for an increased foreclosure rate to work itself out. Rates may have to drop into the 4 something percent area for things to really start being absorbed in greater quantity..

Excerpt from a Yahoo Finance Article --

Total bailout commitments, loans and pledges of backing has now neared a staggering $7 trillion. (almost half the US GDP)

(comment - unreal eh?)

Treasury Secretary Henry Paulson, who has been criticized for constantly revising the original $700 billion rescue program, said the administration was considering even more changes in its final two months in office.

Reports on the nation's economic health weren't getting any better. The Commerce Department said the overall economy, as measured by the gross domestic product, declined at an annual rate of 0.5 percent in the July-September quarter, even worse than the initial 0.3 percent estimated a month ago as consumer spending fell by the largest amount in 28 years.

The Federal Reserve will purchase $200 billion in securities backed by different types of debt including credit card loans, auto loans, student loans and loans to small businesses. That market essentially froze in October. These types of loans as a result have become harder to obtain and have carried higher interest rates

The Fed also announced that it would spend $500 billion to purchase mortgage-backed securities guaranteed by mortgage giants Fannie Mae and Freddie Mac and another $100 billion to directly purchase mortgages held by Fannie, Freddie and the Federal Home Loan Banks.

This would greatly expand an initial modest effort announced back in September in which Treasury spent $26 billion to purchase mortgage-backed securities. The current credit crisis was triggered by soaring losses on securities backed by subprime loans.

******Analysts predicted the program could send mortgage rates down by as much as one-half to a full percentage point in coming months, helping to spur demand in the beleaguered housing market, which is suffering its worst downturn in decades.

The programs to buy mortgage-related assets and securities backed by consumer debt have the same aim: to boost demand for those assets. In doing so, the government hopes to lower the costs being charged for consumer loans. That would make loans on everything from mortgages to cars more available.

This is one of the key actions we've been advocating," said Charles McMillan, president of the National Association of Realtors, referring to the purchase program for mortgage-backed assets.

As for Tuesday's actions, the mortgage-backed securities the Fed will buy will be investment-grade assets -- not the toxic mortgage-related assets that the administration initially had said the $700 billion financial rescue program would buy.

By focusing on investment-grade securities, the Fed will be able to help provide a functioning secondary market. It will pay the prices for these securities that are being set by the market. Had the Fed needed to buy bad assets, it would have had to develop a mechanism to properly price assets that weren't being traded.

The use of Fed resources also gets around another problem Treasury faced: a limited amount of money in the program. The $800 billion being committed to buy mortgage-related assets and other assets backed by consumer loans will come from the Federal Reserve's vast resources. It will not count against the $700 billion rescue program.

The Treasury Department also announced Tuesday that the rescue program had spent another $2.91 billion in direct purchases of stock from 23 regional banks around the country. These institutions ranged from HF Financial Corp. in Sioux Falls, S.D., to Centerstate Banks of Florida Inc. in Davenport, Fla.

The government has now injected $161.5 billion in 53 institutions. The goal is to spend $250 billion of the $700 billion bailout fund to buy bank stock as a way of encouraging banks to resume more normal lending to bolster the shaky economy.

I Believe That if There was Ever a Market Bottom in Real Estate - This is the Mother of All Bottoms...

2008-09-08T14:29:00.001-07:00

I think things should pick up for sellers now - due to the govt takeover of Fannie Mae and Freddie Mac on Sunday.

The government just gave potential home buyers and investors a very visible market bottom. (which is going to last for the next month or two at least - as it takes time to absorb inventory)

But if you are a home buyer or investor - and you miss the market bottom - not to worry - there are always very flexible sellers to be found at any time.

Rates just dropped a whopping 3/8 of a percent today to about 5 7/8's. If rates stay low - home prices should not only stabilize - they should start moving up again at some point - as buyers flow into the market.

Are you ready Chicago?

There has never ever in the History of Real Estate in the USA been a better time to buy than right now. You now have an amazing confluence of

low rates and low prices. It doesn't get any better...

Sunday's Government Takeover of Freddie Mac and Fannie Mae

2008-09-08T13:05:00.001-07:00

The bottom line? It will likely translate into lower mortgage rates and greater availability of credit. Rates could drop by 1 percentage point from the approximate 6.2 - 6.4% for a 30-year fixed rate mortgage. That would ultimately stablize home prices and perhaps help them go back up again over time.

Fannie Mae stock was down almost 6 points to 1.2 from 7.2 - and Freddy is down 4 from 5.15 to 1.15.

For people who bet on their fall with "put" options - they made a lot of money.

Mortgage rates borrowers pay are dependent on the yields that investors demand when buying mortgage-backed securities from Fannie and Freddie.

Investors' doubts about the companies' viability have sent interest rates on those securities soaring. Despite regulators' July promise that they would step in to save the mortgage companies, investors were demanding rates of 2.25% to 2.45% above Treasuries. . Historically, the spread has been 1.25%.

With the government now taking over the companies and minimizing the risk associated with their debt, investors may be willing to ease off their need for higher rates.

Lenders are demanding credit scores above 700 these days, up from 620 in the past, and downpayments of 20%, up from zero in some cases, experts said.

Just last month, Fannie Mae announced higher surcharges for loans to weaker borrowers. For instance, applicants with credit scores between 640 and 659 who are putting down 15% to 20% will pay an additional 2.25% charge.

The same borrower would pay 1.7 percentage points more because of higher fees and rates for the same loan today as he or she would have paid 18 months ago.

The government bond market is suffering today - as investors reasoned the bailout would vastly increase the amount of debt needed to fund the government's obligations over the medium term. Yields on two-year Treasury notes jumped nearly a half percentage point on the news.

Under the government takeover plan announced Sunday, the Treasury took $1 billion in preferred senior stock in each company, but its equity stake could reach as much as $100 billion in each!!!

Government talk on an aid package ended abruptly in the past few days as policy-makers decided to seize the firms.

What Caused the Implosion of Fannie and Freddie to Get Taken Over By the Government Yesterday?

2008-09-08T13:02:00.000-07:00

Fannie Mae and Freddie Mac both issued Bonds which over time mature, and Fannie and Freddie need to pay back the principal on the maturing Bonds.

The way they raise capital to pay these maturing Bonds is to issue new Bonds. This happens every month.

And as long as Fannie and Freddie can sell new Bonds this system works well. But the problems in the mortgage industry reduced investor appetite to purchase these Bonds... Without the ability to sell new Bonds, Fannie and Freddie are less able to meet the capital requirements to pay off the maturing Bonds.

The government's fear was - if Fannie and Freddie were to default and become insolvent, it would throw the beleaguered mortgage and housing markets even deeper into the abyss.

Freddie and Fannie Take Over,Mortgage Rates drop,reduced mortgage rates,refi now,lock you rate now,buy home now,purchase real estate nowThey recently had to make their Bonds more attractive...so they offered their bonds at higher yields to gain more investor interest. However, since they couldn't go back and raise rates on loans that had already been closed, it sucked even more profits out of them reducing their capital even further, and exacerbating the problem.

That's why the Treasury has stepped in and said that they will back the payments on these Bonds. This action has given investors a lot of confidence to step in and now buy Mortgage Bonds.

For a higher rate of return, investors can now buy Mortgage Bonds with the same guarantee as lower yielding Treasury Bonds!

Mortgage rates have reacted this morning with a huge DROP to a national average of 5.93%! We have not seen a mortgage rate drop below a 6% national average since 2005! Many lenders are quoting 5.75% this morning! Couple this with the hundreds of billions capitalization of Fannie and Freddie by the federal government and we may have the start of a housing recovery! So this means:

1. It may be time to refinance now!
2. It is time to buy real estate now! If there was ever a preditable bottom - this is it.
3. It is time to purchase investment and new homes now while prices are still low and sellers are still motivated.
4. If you were borderline on a mortgage approval in the last 6 months, check again! Things are changing daily!

Call our officee today if you are looking for a new home or investment property! We can help! We specialize in representing home buyers in the Chicago area with expert negotiation - so our clients have the best possible price. It's all we do - day in and day out. As a result - we are very very good at what we do.

You can learn more about us on our web site -- www.relocationadvisorsgroup.com or call 847-566-7558.

Currently - a known methamphetamine lab in Illinois does not have to be disclosed...

2008-04-29T19:00:00.000-07:00

I think disclosure should be required....

Thankfully - the Illinois House is considering a bill that would add “methamphetamine lab” to the list of disclosures home sellers and real estate agents must make to potential home buyers.

The bill is sponsored by Rep. Mike Smith, who says there had been a rash of meth lab discoveries and arrests in his district south of Peoria in recent months.

Representative Smith says he sponsored the bill because residue from meth labs can cause serious health problems, including cancer, neurological damage and damage to the

Currently, there are no real standards to determine how cleaned up a meth lab must be before the home can be returned to the market.

What should a buyer look for before choosing an agent to represent them?

2008-04-17T10:53:00.000-07:00

What should a buyer look for before choosing an agent to represent them?

1. Ability to help a buyer evaluate homes
2. Skill in negotiation
3. Undivided Loyalty
4. Proof of savings and past client satisfaction.

An Exclusive Buyer Agent covers the negative aspects of a home as well as the positive - in a consultative role - versus a "sales" role. We give them the pros and cons of a property rather than trying to sell them one. I might show my buyer a number of homes in a given day - and it might be that I would not recommend any one of them (or unless the price came down to an acceptable level - as price fixes everything at some point.)

A couple of people who were referred to us - said that a past client (or past clients) - told them that we had told them when "not to buy a property" and that is what they were looking for.

An Exclusive Buyer Agent buyer agent is focused on:

1. Finding the best home for the buyer
2. Helping the buyer buy it at the best possible value (frequently aligning their compensation with the buyer's interests vs. adverse to their interests as is typical - ie - an agent representing the buyer getting paid more when the buyer's price goes up.)

3. Helping the buyer save money on a loan (shopping lenders) - vs. referring them to an "in-house" lender.

An Exclusive Buyer Agent's role is to consult and counsel and protect a buyer.

They typically have:

1. A higher level of experience serving buyers and better negotiation skills.

2. They also have unwavering/undivided loyalty to buyers - never having any "dual agency" conflicts of interest.

Questions to Ask Any Agent Before You Hire Them

The Ummel Verdict Is In - Buyers Need to be Careful in Choosing Their 'Buyer Agent'

2008-04-17T10:08:00.000-07:00

The Ummel Verdict Is In - Buyers Need to be Careful in Choosing Their 'Buyer Agent'

Good article. Exclusive Buyer Agents go way beyond analyzing comps (which is a given) - to looking at recent market trends and statistics, neighborhood information, city plans, community plans, and helping the buyer do Due Diligence on other things.

Interestingly - the general public and many Real Estate agents - don't even know that Exclusive Buyer Agents exist.

Exclusive Buyer Agents are experts at collecting information on the seller's situation - while keeping their buyer client's situation confidential.

Because Exclusive Buyer Agents are specialists - they a very good at what they do.
Since they are generalists - some "buyer agents" may spend 95% of their time listing property for sale and representing sellers - or may have dual agency conflicts of interest.

Village of Deerfield Files Suit versus ComEd

2008-04-17T08:27:00.001-07:00

Nothing like a city getting angry over the quality of power that it receives...
This is one thing to consider if you are planning on buying a home in Deerfield.
Perhaps it will get fixed due to the suit..... Time will tell.... Excerpt -

The Village of Deerfield filed a class action lawsuit today against Commonwealth Edison charging the utility company with gross violation of its agreement to provide reliable service to its 18,000 residents.

Deerfield officials say that during the period from 2000 until 2007, the village suffered 82,347 individual customer power outages during 1,377 separate electrical failures. They said "Only 13% of these outages were weather-related."

Steve Harris, Mayor of Deerfield said - "ComEd has given us no other option than to seek a legal remedy to their gross and willful dereliction of duty." "After years of patience while listening to ComEd's unfulfilled promises to fix these problems, we now turn to the courts to adjudicate our claims."

Reportedly - several Deerfield residents have been told by ComEd employees that the infrastructure in the Deerfield area "absolutely needs to be updated."

Judith Adamson, a Deerfield resident for thirty years said, "ComEd tells us that the problem is that our utilities are underground and connect to old above ground poles and switch boxes and it would be too costly to revamp the system."

The class action lawsuit filed in Lake County Circuit Court on Thursday charges that ComEd violated the Illinois Public Utilities Act and their franchise agreement with Deerfield and its residents by failing to provide adequate and reliable electric service and failing to maintain infrastructure necessary to provide that service. It calls for compensation for actual damages as well as punitive damages for ComEd's willful refusal to repair and maintain its electrical systems and circuits.

From 2000 to 2007, ComEd's Franchise Reports confirm Deerfield suffered 1,377 total outages that lasted 5,576 hours. The reports show only 13% were attributed to weather related causes. The Franchise Reports also show that the total amount of outages have increased steadily during the last three years. During this period, outages due to failure of ComEd's electric underground equipment have risen dramatically.

ComEd's Annual Reliability Reports cite ten circuits that serve Deerfield as appearing on their list of top 1% worst performing circuits in its Northeast service area from 2001-2006. In addition, these reports show at least one circuit serving Deerfield has been included as a top 1% worst performing circuit for ComEd's Northeast service area in every year from 2001 to 2006. Moreover, the report proves there are other circuits serving Deerfield that are performing even worse than those on ComEd's 1% worst performing list, but they do not appear on that list.

"I have been told by ComEd workers that the feeder to our area of the Village is very old and worn out and that is one reason for the outages," said Deerfield resident Richard Beaton.

Article About Buyer Potentially Losing 50k Deposit With Builder

2008-03-19T08:41:00.000-07:00

Here is a good story about why any buyer needs representation when dealing with a builder

The three biggest mistakes are indeed:

1. Not using a buyer's agent
2. Opting to use the builder's preferred finance company

3. Signing a standard builder contract without adding any of your own protections and contingencies.

Agree with the article - that many builders insert carefully worded fine print into sales contracts that naturally favors them in court -- language that necessitates careful legal interpretation by a party on the buyer's side -- before the documents are signed.

Many builders make it a practice to retain deposits after buyer cancellation due to wording that favors the builder - and not the buyer.

Agree that builders are in a world of hurt now and grasping at straws like others in the housing game - and as the market tightens, they are simply less likely to be flexible.

Builders offer extra incentives if you'll just be so kind as to use their mortgage company (or the incentive is a great rate - but an inflated sales price.)

Feel free to read my other articles about builders: (It's a pet peeve of mine because the public is getting raped - without the knowledge they need before going in.... They sign in without representation because "we were just driving buy" "we didn't realize" "they never disclosed that if we signed in alone we'd lose our ability to obtain the representation we want. No one told us."

Builders in the Chicago Area Offering Nice Price Off Discounts on New Construction

Don't Visit New Construction Without Representation

Article About Toll Brothers Hawthorn Woods Country Club Development. Don't Sign In Alone Without Representation!

Interested in Del Webb Grand Dominion in Mundelein Illinois? Don't Sign In Alone Without Representation!

As an Agent - Make Sure you ID a Short Sale Situation Up-front. Listing Agents Aren't Revealing it. Protect Buyer Clients Who Have a Timeline

2008-03-14T07:23:00.000-07:00

Many homes that are for sale in various neighborhoods in the Chicago area, are not occupied anymore - and a number of them are pre-foreclosure or foreclosure properties. Others - will be short sale situations.

Homes that are currently occupied may be listed for a figure where the seller will come up short after paying off the principal balance of their loan(s).

If the seller can't cover the shortfall - it will be a short sale situation - meaning that the lender will have to pick up some of the shortfall.

It is important to note that many agents are not advertising that their listed property will be a short sale in the remarks section of the MLS sheet - because they don't want to dissuade a buyer from writing an offer on the property.

Short sale situations can drag on for quite some time - and many buyers have certain time-lines. Negotiations with the lender about how much of the deficiency the lender will pick up can take time.

If a buyer client wants to get into a home in the next 60 days - it might not happen if they are buying into a short sale situation.

So - it is important that the agent representing the buyer find out as soon as possible from the other side what the seller's equity is (which can sometimes be gleaned from the tax record) at the moment - and if there will be a short sale situation - and if so - how much -- so that the buyer isn't blindsided with delays.

As a rule of thumb - the larger the deficiency - the longer the negotiation can take with the lender.

With any short sale situation - we give the buyer "an out" in the contract - if the seller's short sale negotiations with the lender are not concluded within X days.

Our buyer client can then seek a deal elsewhere.

Another Article About The Buyers's Market

2008-03-13T18:40:00.000-07:00

I enjoy reading various articles that supposedly knowledgeable journalists write - because there are usually quite a number of mistakes or gross generalizations in every article that need to be picked apart...

We agree - buy smart & buy cheap and read Ilyce Glink's

"100 Questions Every First-Time Home Buyer Should Ask."

We don't agree that you should conduct preliminary research online at Web sites like Zillow.com, Trulia.com and greatschools.net -- these are pretty awful sites in general.
Zillow is extremely inacurrate. Trulia only has a small subset of homes in the MLS (very small subset).

And you won't need cash for your closing costs if you purchase a home through us. We have the seller pay for all of your closing costs.

By the way - there are MUCH better databases on schools than greatschools.net
(Something we provide our clients with..)

Just want to get a handle on what is out there? Email us at info@relocationadvisorsgroup.com and we'll set you up on a familiarization feed - of exactly what you are looking for (please be as specific as you can) -- from the ENTIRE MLS - not just a small sub-set of it.

Should you think about becoming a client at some point - we'll sit down with you in a mutal Q&A session to really explore your needs in greater depth.

Have a nice day :-)

The Definition of an Exclusive Buyer(s) Agent

2008-03-10T17:52:00.000-07:00

Exclusive buyers' agent: A licenced real estate practioner who represents only buyers and neither accepts listings nor works in an brokerage which represents the interests of sellers or accepts listings.

Exclusive buyer agency

1. A real estate brokerage that employs only buyers' agents and never engages in the agency representation of sellers.
2. A real estate brokerage that exercises a fiduciary obligation to serve only buyers interests, thus being independent of all obligations and inducements owed sellers.

Exclusive Buyer Agency observes the virtue of the Common Law axiom that an agent may represent a seller or a buyer, but never both.

We believe most buyers want their interests to be represented -- but not necessarily by a "buyers' agent" that is employed by and owes allegiance to a "seller agency"

There are real differences between being the agent for a buyer, whose primary goal is to find and beneficially purchase the ideal home, and the seller agent, whose goal it is to reap the highest possible profit for the seller.

We are building a business based on the principle of providing consumers with a clearly defined choice -- representation independent of interest or obligation to any other party.

Thus, we provide our clients with the opportunity to make informed choices based on purely objective guidance - in what is usually the most expensive and important purchase of their lives.

Hilarious Parody of the Typical Real Estate Salesperson

2008-03-10T15:54:00.001-07:00

This is pretty funny.....A parody of the typical Real Estate "salesperson"

It was apparently paid for by the Virginia Assn of Realtors to help "train" agents in the state not to be so sleezy...

In contrast - as Exclusive Buyer Agents - act as your trusted advisor, advocate, and personal Real Estate coach - guaranteeing you unbiased home showing and no dual agency conflicts of interest (since we are never on the seller's side and never list property for sale)

We tell you what is WRONG with a property - not "selling" you on it....so you don't have to worry that you are being "sold up a river"

I can't stand salespeople myself.....

That's why I do what I - consult - rather than "sell" a buyer something.

Unfortunately - many people fall for the slick sales type...

We don't SELL homes in the Chicago Illinois area - we help people buy them - with their eyes wide open...

Buyer Agent Article - San Francisco Chronicle

2008-02-29T07:28:00.000-08:00

Newspaper article in San Francisco on using a buyer agent. Too bad they didn't educate people more about the difference between a buyer agent and an exclusive buyer agent...

There is a nice valid point here about traditional agents:

"Buyers should keep in mind, however, that because the agent receives a commission only when the deal is done, there is an incentive to close a sale - possibly at a higher price to earn a bigger commission - even when it might not be in the buyer's best interest. To get around this conflict, some buyer's agents work for a flat fee."

The other way around this is via use of retainer agreements - where the retainer is reimbursed to the buyer at closing - but if the buyer doesn't buy anything - the agent still gets compensated for their time. In addition - this doesn't happen when an Exclusive Buyer Agent structures their compensation where they have a flat fee - plus perhaps the addition of an incentive plan. IE - make less when the buyer's price goes up - and a little more when the buyer's price goes down.

Some exclusive buyer agents structure their compensation to be aligned with the buyers interests. (We do for example - if our buyer client chooses that) When the buyer's price goes down - the agent can make a little more - and when the buyer's price goes up - the agent makes less.

The tendency of a traditional buyer agent can be to get the buyer to come up to get the deal done since it is easier and less time consuming than getting the seller to come down in price. Since many of them don't work on retainer - they only get paid if a deal gets done. The buyer is none-the-wiser that they could have perhaps gotten the house for 20k less if their agent had taken a few more days in negotiation and really worked over the seller - with everything they had. But time is money to the agent - it is easier to just "make a deal" - which really isn't in the buyer's best interests...

When an agent's incentives are aligned with the buyer's incentives - that is when you see them work their butt off to get the best possible price for the buyer. There is no substitute for an experienced, professional negotiator. Many traditional agents are poor negotiators unfortunately...

A good negotiator is worth their weight in gold.
Exclusive Buyer Agents are specialists - always working for the buyer - never on the seller's side.

A "buyer agent" may spend 95% of their time listing property for sale - and only calling themselves a buyer agent when they are working with the buyer. Their main priority is their seller clients - and they don't have much experience working with buyers. But of course - the buyer hears "buyer agent" and they think differently...

Unfortunately - the public is in the dark about the existence of Exclusive Buyer Agents. Only two states (Ohio and California) disclose their existence to the people in their State. The other state Real Estate Associations are too controlled by the mega-brokerages to be willing to disclose this consumer option...

About Short Sales...

2008-02-27T15:31:00.002-08:00

If you are in the market to buy a home, or if you are selling a home - you have no doubt heard the term "Short Sale".

If a seller owes more on the property than what it is worth - a short sale is one option. A seller in this situation needs the lender to accept a "short" loan payoff, or in other words accept less than the full amount due on the loan.

So how does that effect you - the buyer? A short sale require the lender to agree to the reduced pay off. Therefore, when you negotiate on a short sale, you are negotiating with two parties:

1. The seller who owns the property
2. The lender who holds the loan.

You need the approval of both parties to get your offer accepted - so the process can be long and tedious.

It is important to make sure the seller has received preliminary approval from the lender, because if the lender does not agree to the terms you will have no contract.

We question the seller and/or the seller's agent to make sure the process is in place, and that the bank will cooperate. This process requires the seller to submit documentation to the lender demonstrating hardship, along with evidence that the market value is less than the outstanding loan.

It can be a long, drawn out, and ultimately aggravating experience. Often, you are dealing with layers of bureaucracy, and this can slow the process down.

You want to make sure that you have interest rate protection during this process. In a normal transaction, buyers will typically lock in interest rates for 30 to 60 days. That may not be enough time for a short sale, and you want to avoid being 45 or 60 days into the sale only to find out that your rate lock expired, and your interest rate just went up 1/4%.

We usually include in the purchase agreement a time frame for lender approval, with a clause that gives the buyer the right to cancel the transaction if the lender does not approve the sale after a certain period of time. In this way - our buyer client is free to pursue other properties if the lender is dragging their feet.

There can sometimes be issues at closing - if the owner is still living in the home. Often times, sellers in this situation are angry and frustrated, and on occasion can damage the property, remove appliances, fail to maintain the landscaping, leave the property dirty and full of debris, or take other actions that will cost you money.

We protect you with a walk through prior to closing - and if the seller is still there - we would make certain demands (depending on the situation) at the closing table to compensate you.

Since the seller theoretically has no money, any issues at close typically have to be negotiated with the bank.

Lenders like to sell properties "as is" in these situations, as they do not want to get into negotiations over property repairs. This is okay, if you have a good inspection - and know what you are dealing with (or not.) We will cancel the contract for you - if the inspections uncovers issues with the property that you don't want to deal with.

We can certainly request that the bank resolve certain issues. They are under no obligation to do so, but if the request is reasonable and it makes business sense for the bank to agree, they usually will.

Short sales can be fairly straightforward, or very complicated. This depends on the stance of the lender. Some banks are much easier to deal with than others when it comes to short sales.

As always, you should seek out an experienced, professional Exclusive Buyer Agent to help you navigate these waters.

Countrywide Exec's go on a Skiing Trip

2008-02-22T09:08:00.001-08:00

This seems a bit over the top" for Countrywide exec's to go on a skiing trip etc. with their financial problems A little extravagant - especially in light of public perception and their performance - don't you think?

Good News - The Illinois Association of Realtors is opposing state legislation that seeks to restrict cash rebates to home buyers

2008-02-20T15:23:00.000-08:00

The Illinois Association of Realtors is opposing state legislation that seeks to restrict cash rebates and other rewards offered by real estate professionals to unlicensed persons who engage in real estate transactions.

Thankfully - our state association is a bit more advanced in their thinking in some areas - than other state associations such as Wisconsin - which is back in the stone age with it's rules that really put a buyer at a disadvantage most of the time.

The U.S. Department of Justice has taken legal action in other states to undo restrictions that prevent real estate agents and brokers from rebating a portion of the money they receive in a home sale to consumers.

Unfortunately - flying in the face of the DOJ and what is best for the consumer - Illinois state Rep. Robert S. Molaro, D-Chicago, in House Bill 4313 - seeks to amend the state's Real Estate License Law Act of 2000 to state that "no licensee shall give or pay cash rebates, cash gifts or cash prizes to an unlicensed person who is a party to a contract to buy or sell real estate."

When our clients have a buyer brokerage agreement with us - anything extra in a commission payout by the listing firm goes to our buyer client. In this way - we can ensure totally unbiased home showing in relation to the payout.

Traditional agents could potentially have biases in pushing a higher commission payout properties, on their buyer client - all else being equal. Why? Because the agent (split w/their broker from the broker) may get 4% vs. 2.5% for example.

The Illinois Association of Realtors (IAR) was mostly opposed to the bill because they felt that it put Realtors at a disadvantage as compared to builders - who were excluded from the proposed rules.....

The IAR legal counsel stated: "We think it may put some of our members at a disadvantage because it only applies to licensees," he said, as it would allow builders and developers to offer rebates and other cash rewards to consumers that Realtors, as real estate licensees, could not offer.

The IAR STILL does not allow consumers in Illinois to learn about the existance of their option for Exclusive Buyer Brokerage representation in the State's Consumer Disclosure Brochure - claiming that Exclusive Buyer Brokerage is a "business model" - falling under buyer agency. Nothing could be further from the truth.

Use of a buyer agent (they and their company list property for sale) has significantly different implications for a buyer as compared to using an Exclusive Buyer Agent (they and their company never list property for sale / represent sellers.)

Buyer agents are "designated agents" (which is dual agency in sheep's clothing) that can still get in dual agency situations in Illinois if their broker allows it - whereas - every agent in an Exclusive Buyer Brokerage can be behind all of the brokerage's clients. They are not a designated agent - but rather a true agent for the buyer. Buyers have no chance of Dual Agency conflicts of interest using an Exclusive Buyer Agent in Illinois - because EBA's never represent sellers.

Unfortunately - the only State Associations making the public aware of Exclusive Buyer Agency as an option are Ohio and California.

In any case - regarding the main topic of this post.....the bill, introduced Jan. 9, was assigned to a committee on Feb. 13 and a staff member for Molaro said it will not likely be heard in committee this week. The good news is - because of this - from a practical standpoint - the bill might be dead since state sessions are short.

Toll Brothers Co-Founder's Daughter Walks Away From Buying a Toll Brothers Home

2008-02-18T18:50:00.000-08:00

Ok - I've heard of people walking away from the purchase of their new construction property - but this one is pretty funny.

Wendy Topkis - the daughter of Vice Chairman and co-founder Bruce Toll of Toll Brothers - informed the company last month that she and her husband "did not intend to make settlement" on a $2.47 million home they had previously agreed to purchase.

Toll Brothers said it intends to pursue its rights under the agreement of sale.

Toll Brothers said expects a 22 percent decline in home-building revenue for its first fiscal quarter, ending Jan. 31st.

I wonder how hard they will hold Wendy's feet to the fire.....

Locally - sales at Toll Brothers Hawthorn Woods Country Club has been slower than expected - and they are dealing with re-sale units in that same complex - competiting with their new construction.

I live just up the road from there - in what I consider to be a much better development (more unique and better built custom-built homes and a beautiful lake) - and in any case - I created a real golf green in my backyard.... complete with sand traps and water hazard.... :-) So - I can golf for free anytime I want :-)

Interesting in purchasing a home in Hawthorn Woods Country Club? DON'T SIGN IN WITHOUT AN AGENT! Obtain representation first. Builders will not pay out their commission if you want to be represented by a professional after you sign in alone. They love it when you do that - because you'll have no one on your side - fighting for your best interests.

If you are thinking about purchasing a home in Hawthorn Woods Country Club - as professional negotiators (We are Exclusive Buyer Agents - never representing sellers or builders - so we are always on YOUR side) - we'll help get you a much better deal than you'd ever be able to get on your own. Feel free to contact us for more information.

Are you 55 and older in Lake County Illinois & want to retire in Lake County?

2008-02-18T18:48:00.000-08:00

You may want to consider 55 and older retirement communities. They offer you a no-maintenance lifestyle - giving you more free time. For example - Dell Webb Grand Dominion located off of Route 176 in Mundelein is a fairly new development. Pre-opening pricing is already gone - though we can help you negotiate a similar deal if you work through us.

When touring there with clients - unfortuantely - we still see many people signing in without any representation. Unknown to most consumers - you lose your ability to have representation on properties you tour on your own. (unless you want to pay a rep what the builder normally would have paid out)

The builder doesn't pay out their typical 3% once you sign in on your own - and they don't discount the property by that for you either. You don't have an expert negotiator on your side at that point. Reps at communities such as Del Webb or other new construction developments start salivating when people sign in on their own.

The Dell Webb Grand Dominion development pricing starts at $277,500 for a 1.197 sq ft Fairlawn model, and goes up to $491,000 for a 2,833 sq foot Rosemor model with a 3 car garage. There are 12 single family ranch floorplans that are available.

The monthly assessments range from $152/month to $178/month for "The Estate Series" Landscape care, snow removal (after more than two inches of snow), seal coating every other year, use of the recreational facilities incluidng the fitness center, bocce ball courts, tennis courts, indoor and outdoor swimming pools and spa are included for a maximum of two residents per household.

Dell Webb Grand Dominion has some golf deals worked out with Steeple Chase Golf Club as well.

All in all - the development can be appealing to those who want to retire and not do it down south.

If you want to go to the southern part of the US or Mexico to retire - contact us - as we know of some very nice places to retire - and agents who can help you through the process.

If you are considering Dell Webb Grand Dominion - please please please - for your own sake - have representation.

Give us a call - and you'll save thousands - and most likely - tens of thousands of dollars when you purchase into Dell Webb Grand Dominion. Our office is located right around the corner from the development. Call us at 847-566-7558 for more information.

Maryland thinks about Reducing re-set time to 60 days from 180 days for listed property. In Illinois - it is 91 days

2008-01-24T21:22:00.000-08:00

In most states - the MLS calculates the number of days a property has spent on the market as a consecutive figure. That amount resets to zero if the property is taken off the market for a certain amount of time. Maryland had it at 180 days - but is thinking about reducing it to as little as 60. Here is an article about the re-set time in Maryland.

In Illinois - for many years - a property had to be off the market for 181 days before being re-listed if the market time was to show zero in the MLS. Then in 2004 - that figure changed to 91 days - and it has been 91 days ever since (re-ratified in November, 20007) with the exception of the summer of 2006 - when the board changed a rule - which only lasted a few months. See the attached for the reason they dissolved it.

At that time - if a property was de-listed and then came back
on the market - it would show zero days on the market - even if it had only been
off the market for a day or two. MLS rules states that if a property is re-listed - it had to have a new listing agreement.

What happened in the summer of 2006 - was that there were so many "new listings" with no new listing agreements - MLSNI had to fine the agents a few hundred dollars - but nevertheless - the statistic in the MLS still zero'ed out. There were so many agents doing this -- re-listing property without new listing agreements - that it became a big headache for MLSNI - and they could not keep up with all the infractions. Here is the postcard that they sent out at that time after they re-thought everything.

So - in September of 2006 - they re-instituted the 91 day rule again. Agents and brokerages put pressure on MLS systems to minimize the number of days a property is off the market - to reset the clock to zero. In some states where total market time (including time with past agents) isn't listed on the agent copy of the MLS sheet (it is in Illinois) -- this can help sellers (if agents are lazy and don't look up the property history).