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The Growing Home-buying Power of Millennials

Millennials are an important part of the Chicago housing market. But how do REALTORS® best serve these 34-and-under home buyers? It’s not as easy as you might think.

The Illinois Association of REALTORS® recently ran a story focusing on the way Millennials buy homes. The feature provides an interesting look at this important generation.

As the story says, Millennials have a do-it-yourself mentality when it comes to most everything, including finding a new Chicago condo or single-family home. That’s because these buyers have far more information at their fingertips than older generations ever did. And they’ve had this information available to them for their entire adult lives, meaning that they’re comfortable with technology and what it offers.

Consider the home-buying process: Millennials today can access sites such as Trulia and Zillow to compare housing prices. They can find home listings on the MLS. When they do find a listing that interests them, they can call up virtual tours to see the insides and exteriors of these residences before they even schedule a showing.

Millennials are adept, too, at shopping for mortgages. They track interest rates, often know their credit scores and aren’t satisfied until they find the perfect loan.

Spoken by Andy | Discussion: No Comments »

Ready To Buy A Home? Try Not To Annoy The Sellers

We are entering the busiest time of the year for buying and selling homes in Chicago and across the country. And if you’re a home buyer viewing a home, be careful not to be an annoyance to the sellers.

Financial Web site Bankrate.com recently ran a feature story highlighting the most common ways that buyers annoy home sellers. If you want to forge a good working relationship with a home seller, you’d do well to avoid these big mistakes.

According to the Bankrate story, the biggest nuisance for sellers is when buyers schedule a showing of their homes but then never show up. Consider the seller’s point of view: Sellers, at least the smart ones, make sure that their homes are spotless before potential buyers show up. They vacuum, wash the floors and make sure all of the clutter is put away. To put in all that work only to have the buyers not show up? You can imagine how frustrating that can be.

Sellers also hate it when buyers treat a home for sale as if they already own it. You know what I mean: Some potential buyers unlock doors, turn up the heat or air conditioning, let their children play with toys or even use the toilets in homes for sale. If you’re a buyer, remember this rule: Just because a home is for sale doesn’t mean that the sellers aren’t still living there. Treat the home with respect.

Sellers don’t like it, either, when buyers who are ready to make an offer on a home become overly picky in an attempt to lower a home’s asking price. Buyers might not like the brown carpet in the den. But they shouldn’t include that carpeting as a defect as a way to lower the sales price. After all, buyers can easily replace the carpet once they purchase the home.

Buyers also shouldn’t needle the seller by requesting multiple visits to a house before the closing date. Often, buyers want to bring in decorators, architects, family members and friends during these visits. The sellers, though, are probably busy during this time, packing for their move or even making last-minute repairs that they agreed to as part of the sales contract. Buyers who constantly request their own visits during this busy time do little but burn through any good will built up during the process.

Spoken by Andy | Discussion: No Comments »

Lost A Home To Foreclosure? You Might Not Have To Wait As Long To Buy Again.

You might not need to wait quite as long to buy another home after losing one to a foreclosure or selling one in a short sale, thanks to a new program from the Federal Housing Administration.

REALTOR® Magazine recently covered the FHA’s Back to Work Program, which allows buyers to purchase a primary home much sooner after they’ve suffered through a foreclosure or short sale.

Traditionally, home buyers would have to wait 36 months after losing a home to foreclosure or selling a residence through a short sale before they could qualify again for an FHA mortgage loan to buy a primary residence.

The wait for conventional mortgage financing — a loan not insured by a government agency — is even longer after a foreclosure or short sale. Buyers in such situations typically have to wait several years to qualify for a conventional mortgage loan.

The Back to Work Program, though, allows buyers to qualify for an FHA-insured mortgage loan as soon as 12 months after losing a home to foreclosure or closing a short sale.

To qualify for the program, which ends Sept. 30, 2016, buyers must provide lenders documents that explain why they had to resort to a short sale or why they fell into foreclosure. As the REALTOR® Magazine story says, buyers might have to produce documents that show a 20%  loss in income for at least 6 consecutive months before losing their homes to foreclosure.

Buyers will also have to prove to lenders that they have taken steps to repair their income streams and credit. This usually means that buyers must have a FICO credit score of at least 640. Buyers might be able to qualify for the program after having undergone an HUD-approved counseling program on the financial responsibilities of owning a home.

Spoken by Andy | Discussion: No Comments »

Boost Your Credit Score Before You Hunt For A House

If you’re like many Chicago residents, you’re ready to start looking for a home, whether your dream is to live in a single family home in Lincoln Square or a condo in Ravenswood.

But one thing could keep you from finding your ideal Chicago residence this spring: a weak credit score.

Lenders today pay close attention to your three-digit credit score. And why not? Your credit score illustrates whether you have a history of paying your bills on time each month or whether you instead miss payments or make your payments late.

If you fall into the latter category, your credit score will be low. In general, mortgage lenders today consider a FICO credit score of 740 or higher to be excellent. If your credit score is lower than 640, you might struggle to qualify for a loan from any lender in the Chicago area.

Fortunately, if your credit score is weak, you can boost it. A recent story by the real estate Web site RealtyTimes takes a close look at some of the steps you can take to boost your credit score.

Most of the advice is common sense. If you want your credit score to rise, pay your monthly bills on time each month. Nothing will cause your score to fall faster than forgetting to make a car payment or paying your credit-card bill 20 days late. If you start a new history of paying your bills on time, your credit score will gradually, but steadily, rise.

Next, pay off as much of your credit-card debt as possible. Lenders view large amounts of credit-card debt as a warning sign: If you are burdened with too much Discover-card or Visa-card debt each month, you might struggle to make your mortgage payment each month. The more credit-card debt you can eliminate the higher your credit score will climb.

Of course, neither of these solutions are quick fixes. And if your credit score is low – say, near 620 or lower – it will take time to increase that score, often a year or more. This means that you might have to wait to purchase a home. If you don’t, you’ll either fail to qualify for a mortgage or your lender will saddle you with a sky-high interest rate to cover the risk of lending to you.

Spoken by Andy | Discussion: No Comments »

Pending Home Sales Down … But That Doesn’t Mean It’s Time To Panic

Don’t be surprised if home sales in Chicago and across the country continue to slow a bit in the coming months, even with the hot spring selling season on the way.

The National Association of REALTORS® recently reported that pending home sales declined for the eighth straight month in February.

Pending home sales is a forward-looking indicator based on contract signings. This means that when the pending home sales index dips — as it did in February — future home sales will fall, too.

This shouldn’t be viewed as a negative. Home sales across the country and in Chicago were on the rise for a long time, as buyers jumped into the market following the end of the housing crisis. Home sales were so strong for so long, a slight slowdown shouldn’t come as a surprise to anyone.

This doesn’t mean, either, that you won’t be able to sell your Chicago condominium or single-family home this spring or summer. Chicago is still a strong residential real estate market, especially in the most desirable of city neighborhoods, places like Lincoln Park, Lakeview and Lincoln Square. Buyers still want to live in the city. They’ll still be buying condos and single-family homes as warmer weather finally makes its way to the Chicago market.

There is a key, though, to closing a Chicago home sale this year. And it’s the same key as every year: You need to set the right sales price for your condo or single-family home. If you try to set a price higher than your market will bear, buyers won’t make serious offers. Buyers are smart today. They’ll simply move on to the next home that’s priced right.

If you’re serious about selling your Chicago home this spring or summer, then, you’d do well to work with a licensed REALTOR® who knows your neighborhood. This professional can help you set the right price, one that’s not so high that it will chase away potential buyers and not so low that you’ll be leaving profits on the table.

Spoken by Andy | Discussion: No Comments »

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