Real estate is not simply buying or selling properties

I had a fun afternoon today, helping a client search for just the "right" condo or apartment to rent for awhile. The search is focused in Chicago's Loop area, which means investigating numerous hi-rise buildings with varying amenities.

Yes, licensed real estate agents can help a client with a rental property, either to list the property in the multiple listing service, or to work on behalf of a would-be tenant. As a listing agent, the compensation for handling the rental process is typically the equivalent of one month's rent. As the tenant's agent, compensation is paid out by the listing broker. The client pays nothing for a Realtor's assistance in finding the right rental home.

We are in Chicagoland, which means there is a huge offering of rentals on the internet, particularly CraigsList.com. Often we find that Craigs List provides larger numbers of rentals than does the MLS. I always advise a client to search Craigs List, in addition to having me arrange suitable rental property appointments.

Choosing the best rental property for a client might involve coaching that client to go down a mental checklist of features and benefits that sometimes parallels a home purchase, sometimes not. In the case of hi-rise buildings in Chicago's Loop, considerations are these: 1) location - does this address give you easy access to your daily activities; 2) car parking - do you have a car, and if so where will you park it, and what price will you expect to pay to park this car; 3) monthly rental fee - can you afford it!!?; 4) VIEW VIEW VIEW - Chicago means Lake Michigan for preferred views from a unit's windows (no lake view? thumbs down!); 5) condition of the unit - are the kitchen and bathroom updated? Walls painted? Carpet clean?

My client found a perfect place to rent today, and was confident the moment we walked in the front door of the unit. This confidence came from having viewed many other units over the past several days, giving a basis for comparison. When this perfect place was revealed to us today, we knew it was "the one." Everything was right: location, price, views (this is a corner unit with lots of sunlight and attractive things to watch out the windows, not just the rooftops of neighboring buildings), good general condition, etc. We pounced on it immediately, got an application form and lease from the listing agent, and expect to tie down the lease tomorrow.

Client happy. Realtor happy. Job done.

Movin With Susan: So... How's the Market Doing?

Movin With Susan: So... How's the Market Doing?

HUH?

Here is one creative seller! I received an internet "lead" in my email today, a lead which comes to me from a MLS listing I have posted on the national Realtor.com website.

The "lead" I received, which is intended to put a person in touch with me because they saw my property listing and want either to purchase that property, or otherwise ask me to assist in a purchase or a sale of their own property with the aid of a Realtor.

When I opened this email, I found it was a solicitation from a private condo owner to bring her a buyer for her property. This condo IS listed on the local MLS with a local brokerage, a brokerage that is known to be a "discount" broker. I find it very curious that this owner/seller is now putting in obviously considerable time to market her condo, despite being listed with a broker in the MLS. Think I'll give her a call!

When the Owner Sets the Price

Ok, it's not a science, pricing a home correctly to sell.

But it IS an art! An art based on careful analysis of "comps" and knowledge of the market trends, pertinent community information, the exterior and interior decoration/staging, etc.

When a homeowner decides to sell his/her home without representation by a real estate agent and sets the price for the public to consider, the result is usually a vastly overpriced home. Heck, even agents who have their OWN home to sell tend to set the price way too high to start with. We can't help it - it's our own castle we're talkin' about here! ;-)

And FSBO (for-sale-by-owner) sellers are not only those folks who have a sign stuck in the front yard that they purchased at the local hardware store. These sellers also might choose a high profile internet-based FSBO service, or one of many so-called discount brokers to get their home entered into the local MLS.

The FSBO discussion is a large topic, not to be even skimmed over in this post. Suffice it to say, if the home is overpriced, it won't sell. And what's the point? I have personally watched a homeowner in my own neighbor try to sell his home for over a year now. He first tried selling with an internet FSBO service all last summer and fall. He is back on the market this spring with a real estate broker, but still vastly overpriced. I know this gentleman wants and needs to sell the property, but I also know he won't get what he is asking. The homeowner is wasting precious market time, the broker he has listed the property with is spinning his wheels trying to sell a property that won't sell at anything close to the list price.

Sellers, the message is this: The buying public won't pay you what you think you NEED to get for your home. The buyer does not CARE what you need to get from the sale. The buyer will only pay you what the correct market value of the house is, or LESS, depending on how desperate the seller becomes. Price it right, the first day on the market, and find your buyer quickly!

What is "the closing"????

Somebody has a home to sell. Somebody wants to buy it. The stage is set!

The usual process goes like this: buyer writes a contract offer to purchase, the offer is negotiated, eventually the buyer and seller agree on all terms and conditions (or not!), perhaps some "earnest money" is deposited on account by the buyer, home inspection happens, attorneys for both sides hammer out the fine points, and .... Ta Da!!... this thing called "the closing" appears on everyone's calendar. What is it? Who attends? What happens? When?

In truth, quite a bit happens at the closing, but in keeping with the spirit of good blogging, I'll keep this brief.

The buyer and the seller (or their legal representatives) sit down with a title company officer ("the closer") to finalize the transfer of the property. Mortgage documents are signed and faxed to the lender, any monies that are pertinent to the transaction are accounted for on the "HUD-1" (otherwise known as the RESPA form), any past-due accounts on the property are verified as satisfied (property taxes, liens, special assessments, condo assessments, etc.), the "closer" asserts all the documents are correct and the money columns balance for the transaction, approves the deal, and suddenly thousands, maybe hundreds of thousands of dollars, or a few million dollars (houses can be costly in Chicagoland) suddenly fly around the closing table. The mortgage company gives the buyer his/her loan dollars, the buyer gives the seller his/her funds to purchase the property, the attorneys get their fee, the Realtors for both sides take home commission checks to their brokerage, the title company collects its fee,...

If any of these pieces do not fall property into place, the closing is blocked from its normal conclusion. And any seasoned real estate agent can tell you, that is one stressful situation. Every person involved in the transaction has a lot riding on the closing, not the least of which is the property transfer. If the deal does not close, somebody might not have a place to sleep that night (buyer or seller), moving company plans are blown off track, the subsequent closing for the seller might be delayed because they seller does not have the funds to close on their new property they planned to close on that same day. You get the picture.

Extreme preparation and cooperation is key in making a closing happen according to plan. If you have never purchased a property before, take heed, follow your lender's instructions, your attorney's instructions, and your agent's instructions. Or be prepared for a very troubling episode.

Some Fun This Weekend

Summer in Chicagoland - so many opportunities to have some fun with family or friends, or just by yourself!

The headliner for this weekend is probably the Printers Row Book Fair, an outdoor affair that centers around South Dearborn in Chicago, between Congress Boulevard and Polk. Admission is free, but some events with special guests require a free ticket (http://www.printersrowbookfair.org/). With some famous guests whose names appear on world-class literature like Sara Paretsky and Joyce Carol Oates and Studs Terkel, you just can't stay away. Something for everybody, including special events for the kids. The weather for Saturday and Sunday promises to be sunny, around 80 degrees both days. Be green, take public transportation, and enjoy!

So... How's the Market Doing?

Time to take a look back at the month of May on the North Shore where my Baird & Warner office is located. I thought it would be interesting to see how many properties came on the market in May (defined as a listing date between May 1 and May 31), and how many of them are already under contract (or perhaps even closed!) This is just a quick snapshot, covering the broad spectrum of property offerings: new construction, resale, a cancelled/new listing situation (ask your friendly realtor what that means!), etc. Generally speaking, it seems there is plenty of buying opportunity on the North Shore.

ROLL CALL:
Single family/ condo or townhome
(# under contract or closed) (# under contract/closed)

EVANSTON 107/ 193
(24, or 22.4%)/ (27, or 13.9%)

WILMETTE 84/ 4
(15, or 17.8%)/ (0)

KENILWORTH 4/ 0
(1, or 25%)/ (0)

WINNETKA 45/ 1
(8, or 17.7%)/ (0)

GLENCOE 26/ 5
(5, or 19.2%)/ (2, or 40%)

These numbers are gathered from the Multiple Listing Service of Northern Illinois.