I've written about the decison to buy a new conversion or new construction unit versus a re-sale in the past.
Lately it seems all the entry level buyers have been choosing new conversions. There is a glut of these units for sure and you will pay a premium to be the first owner. So here is a few things that you need to think about if you go this route in Chicago...
Does the unit offer outdoor space, parking and in unit laundry? In unit laundry is almost a 99% sure thing for most new conversions on the North Side. But parking and outdoor space is rare. Many times you can find an older unit with parking and outdoor space for about the same price as a new conversion without these features. Otherwise, you will have to adjust down your needs for a new unit.
How close is the new conversion to the "L"? This is huge. These developments will sell.
Who is the developer? Will they be around to fix problems with the building?
Is the new development priced at the top of the market? It is very hard to negotiate price of a new development. This is for many good and legitimate reasons on the developers part. However, the flash of a brand new unit may not outweigh the fact you are buying at the top.
Re-sale units may be more negotiable and reasonable considering market conditions.
Entry level resale units can be boring! The finishes may be average and evryone has the same thing.. not only in your building, but in others too. You have the opportunity to customize a re-sale unit and benefit fromadding value when you sell.
Saturday, July 29, 2006
I've written about the decison to buy a new conversion or new construction unit versus a re-sale in the past.
Posted by Eric Rojas at 11:45 AM
Thursday, July 27, 2006
I'll be attending an after work event for the Albany Park Chamber of Commerce this evening at Merles Coffee Shop located at the Brown Line Francisco stop.
It's important to participate in Chamber events due to their direct impact on the quality of life and property values of each neighborhood. For instance, Crain's mentioned that Albany Park did not explode due to lack of retail in a recent story about neigborhoods that "have not hit like advertised". But, there is quite a bit of retail in and around Albany Park that provides the essentials. However, hip and trendy places, stores, bars and restaurants that attract new residents from outside are few.
So, the Chamber addresses these and other concerns. As a member of the business community, and a person who has invested in and sold condos to clients in Albany Park, I am as concerned as anyone. I'll be asking questions of some of the longer standing business community members. And I hope to ad some insight, energy and participate in solutions to pressing matters.
Number one on my list is really cleaning up the neighborhood. I feel for too long, trash in the neighborhood has been a larger issue than in many "hot" areas. I refuse to accept that we should have a greater trash problem for any reason. Lawerence and Kedzie need a sweep and business owners should take responsibility for the front of their stores and their parking areas.
Albany Park is situated on the Brown Line, has awesome parks and is near terrific public and private universities. It is adjacent to Ravenswood Manor and Lincoln Square is close. It should be a winner and look like a winner. Events like tonight help with this progress.
Posted by Eric Rojas at 5:16 PM
Wednesday, July 26, 2006
Tuesday, July 25, 2006
Show of hands... how many of you have presented an offer to an agent close to list on an nearly sold out building... only to have the developer NEVER get back to you?
This just happened to my clients in a Hyde Park deal I brokered for them. Mind you, the selling agent and I had discussed the offer before hand, had a good relationship, and we were very close to list price with no contingencies.
My clients and I were told we should have a signed contract back over the weekend... then Monday came... Tuesday... Friday! I spoke with the agent every day and was assured by him the deal would get done. It was urgent due to the fact my clients are relocating and had only one month to find a home.
Well the developer never communicated to us... leaving his agent and I out to dry. I had a back up place lined up for my clients... we wrote on that condo over the weekend, still giving the other developer a chance. Even though it was a week later!
Long story short... you have to prepared for the unknown. My clients ended up with a new construction place nicer than the one they offered on first. And we got a great deal. I worked behind the scenes as soon as I did not get a clear response to our offer.
A case of developer insanity? Who can afford to walk away from a solid offer from qualified buyers?
Posted by Eric Rojas at 11:38 AM
The Chicago Tribune's Mary Umberger writes a sharp real estate column. But this week, she also featured a huge Real Estate section cover story that provided a sort of "state of the market" address.
The key points made for sellers?
-Price your unit right or plan on sitting for a long time. You must be at the tipping point (just under the last real comps sales) to sell fast.
-Do the basics... paint, clean, repair, de-clutter... put on a happy face.
-People are getting desparate and offering incentives because they are shocked their condo is not selling... even when we don't know if incentives work or not. And there is no market analysis that proves they do. This is a trump card I reserve to push a close deal over the top for my clients.
If these things are done, and Realtor like me can help assure that they are manuvered correctly, a strong marketing plan by your practioner should make it happen.
Of course, there is a ton of properties on the market... so be realistic. Buyers are taking their time and are not throwing offers around. But don't believe me... just put your place on the market over-priced.
Posted by Eric Rojas at 12:44 AM
Okay, I've had one of those weeks (already) where I've had to go Buddhist to keep calm. Meditation, mantra, meditation... Understand, my week starts over the weekend and goes to the next weekend... my life is one long work week.
Anyway, an interesting and annoying issue came up. When listing a condo in a 37 unit building this season, I put up a for sale sign on a fence in front of the building. The rules and by-laws of the condo association state an owner may put up one sign of reasonable size etc, etc... This is very typical in Chicago. As the season went on, and my unit dragged in this market, several other signs were placed on the fence as well. This happends from time to time as well in Chicago.
Later, I received an email, then a phone call, from another real estate agent selling a unit in the building. She suggested we all take down the signs and put up a "multi property flyer" for people to take. I told her to take a hike (in so many words). What is this... a Realtor voluntarily taking down a for-sale sign? What is this world coming to? Besides, my client has not indicated I take down the sign... and I'd be crazy to do it anyway.
So, time went on. Suddenly, there was a notice this Sunday taped to the front door of the property. The property manager indicated that it was decided at an association meeting the signs looked tacky (okay, I'm offended already) and all must be taken down to be fair...FAIR? Is this kindergarten? However, my clients were not notified directly and I was the only one to leave my sign up.
So, I arrive this evening at the condo to do a showing... some unscrupulous character took my sign down. I have no idea where it is. Notice no exclamation marks in this statement... I'm taking very deep breaths to stay calm.
Here is the issue at hand; was the rule changed properly? Can the board vote to change this rule about sales signs? And if so, did they follow proper procedure? Is the rule part of the by-laws? If so, it would take a significant owner vote to change and amend the by-laws.
And who stole my sign? It's private property and my clients had the right to put it up. Of course, I've called the building management and hope to get an answer... but I have to whine a little here.
Clients! "Read your rules and by-laws". This is a direct order from your Realtor. When buying a condo you need to read certain areas of the condo rules and by-laws and make sure they are compatible with your lifestyle. Dog owner? Want to lease the place in two years? Are the decks and balconies common areas or totally your responsibility?
This is not meant to scare you and most subjects are clear and simple. However, these rules can come in handy... and you should know where to look and how to interpret them. I'll help with that during the transaction process and after if needed.
But for now, this remains an open issue. My clients need an answer if the rule was changed properly. I mean, others were able to leave their signs up for past sales. What about the future, when one of these board members is selling their place? Will they get to put a sign up?
And where the hell is my sign?!
Posted by Eric Rojas at 12:09 AM
Wednesday, July 19, 2006
Okay, not really. But, here is an idea that makes economic sense and has been around for a long time.
Borrow money from friends, family, whoever. Sounds like a seriously bad road to go down. But I'm talking about a real loan from private lenders... charging interest.
Last Sunday's Tribune Real Estate section was really excellent in general and ran a story about this "alternative borrowing". It is a strategy I have used when finding ways to borrow for investment property. Sure, you can burn some bridges with family and friends... but not if you pay the the monthly.
Posted by Eric Rojas at 10:37 PM
Many of you may have followed the story about the Canadian guy who placed an ad to barter a red paper clip for something that would eventually lead to a house. That eventuality would take many trades of various objects, services and values...and ultimately come true.
Well, the guy was successful and he has traded up to a home in a small tourist town of Kipling, Saskatchewan. You can view a synopsis of the journey at various stories or read from Kyle MacDonald's blog (the Canadian guy who pulled this off).
I like this story for many reasons; blogging, real estate, craigslist, ideas, integrity and principles, drive and personality.
Let me explain. Kyle was able to find a creative way to get a home. The whole thing caught my eye due to the goal... a house. I've made the statement before how obsessive I am about real estate in general, so I really wanted this guy to get the house. As a writer, he has been a little short on cash but used his ability to blog with wit and smarts and recognize a community that may help him out. As a blogger myself (albeit, a relatively new one) I understand how committed this community is to communicating with each other.
Kyle blogged and posted on craigslist (click my link to craigslist in the side bar). Again, he understands the power of this online community of sellers, buyers, traders, and seekers of all things local. But interesting enough, his local craigslist post ended up globalizing his quest. People found him, he found people.
Blogs and craigslist have become real tools in real estate. I believe you can know someone through their blog and get a good feeling about how they conduct business. It is a terrific way for a real estate practioner to pass on up to date information, stay current by commenting on the market and to connect with current and future clients.
I also post all my listings on craigslist. This may be "below" some Realtors, but I find it necessary to reach the most real estate consumers. Some properties are just simply posted there and in no other place. I want mine right next to those because I know people are looking.
And that's just it. You have to be where people are looking.
Kyle also showed alot of personality and integrity. The media really caught on to the story and he had many chances to "trade" for lucrative sponsored opportunities. But he did not. Kyle's goal was always to make trades with people who actually needed, wanted, or could use the item he was trading. He said what he was going to do and stuck to it. And he had a great time doing it.
So, Kyle got a house to move in to... a place to write his first novel. But I really liked his story for the many layers and lessons about how things can be accomplished. This is not my best writing and I'm a bit cliche here, but I think his story is a good one for entrepreneurs. Basically, that's what I am as a real estate agent. You have to create a new business plan with each client, be committed to the goal, get creative, come up with ideas, solutions and options, be flexible, have a personality capable of dealing with various complications and change... and do what you said you would do while having fun doing it.
We get it Kyle. We get it.
Posted by Eric Rojas at 10:27 PM
Friday, July 14, 2006
There have been a couple of stories over the past couple weeks that have brought out the public policy/planning nerd in me.
John McCarron, a local expert on city planning type stuff, pointed out in a Tribune column that transportation expenses may wipe out savings on housing in far flung locations.
Of course, this is nothing new at the Chicago Real Estate Local blog. I've made the case a few times for choosing proximity and lifestyle over huge pre-fabricated homes.
McCarron is right to point out rising gas prices have but a black eye on the sprawl of developement. I'm all for larger density planse with city centers and excellent public transportation.
But McCarron takes some strange shots at developers and real estate agents:
"There are good economic reasons why it should. If young families did the math, they might discover that buying a bargain-priced split-level on the suburban fringe isn't such a bargain after all, what with automotive expenses. Better to buy closer in, near a Metra line or a bus route, within walking distance of schools and stores.
Trouble is, that kind of math rarely gets done. Who's going to bring it up? Not the developers, who've got a sure thing buying farmland by the acre and selling it by the foot. Not the real estate agents and mortgage brokers, who want their fat commissions. They don't mention how many hours a week you'll be driving once you buy that dream four-bedroom in Minooka, Oswego or Pingree Grove.The people who turn farms into front lawns have a vested interest in shielding people from the reality of what stuff really costs. They don't want the folks who already live in the Minookas and the Oswegos, or those about to move in, to total up the cost of all the roads, sewers and schools that soon will be needed.
It's all legal, of course, this good old American way of hiding the cost/benefit reality. It's a business in which the main economic benefits are realized upfront by a savvy few, while the bulk of the costs are distributed over time to the unaware many. Sure, you can technically become one of the few by buying the stock of a corporate home-builder. But that's the hard way. Better you should buy raw farmland and wait for the home-builders to come calling."
John, give me a break! His sweeping generalizations and total lack of faith in the consumer take away from the real discussion: We do have a choice.
And according to McCarron (who's work, writing and appearances on Chicago Tonight I enjoy by the way) the housing consumer is too stupid to realize they live way out on the dark side of the moon. How did they get there... knocked out and blindfolded, only to be dropped in the yard of their dream home without knowing how much gas or time it took to drive out there?
Anyway, Crain's followed up the story with a later release citing the Center for Neighborhood Technology, a nonprofit research and advocacy group for urban communities. In what they call the Affordability Index, CNT combines transportation cost and housing cost to reach a ratio of annual household income spent on these two categories. Chicago ranks number 2 in affordability with many suburburban location registering a very high percentage in transportation and housing costs.
Of course, we would have to delve deep into quality of neighborhoods, household income (they site averages of $20-70K), workplace etc, etc... to make sense of this for ourselves.
At any rate, those seeking to move anywhere to own a single family home may want to adjust their thinking. Is it really worth the drive?
Posted by Eric Rojas at 4:37 PM
Thursday, July 13, 2006
A series of recent contract offers has revealed a flaw in my operating style.
Show of hands... who out there has no idea what to do once you find a place to buy? Most people are clueless. I was (I know, I know... still am about most things). However, it's second nature to me now. Buying and selling homes is my life. I'm not talking about any get rich quick investing scheme or all those snappy HGTV real estate shows. Plainly, I get people from A to B in a home transaction. That's my niche.
So why do I forget this is the unknown world to most. Tunnel vision my friends. I think everyone is as obsessed with real estate as me. Maybe they are, considering a recent study cited by Realtor Magazine suggested that 32% of time spent surfing the NET at work is spent surfing real estate. More than personals/dating sites! Real estate trumps sex!
My greatest mistake, then, is assuming the client knows more than they do. I love to teach, but sometimes I fear I'll patronize my clients. Additionally, I'm aggressive and find properties that my clients want to see. They are into the shopping phase, they are not into the details at first.
But when it's offer time, look out. These are smart people... doctors, nurses, attorneys, engineers. But, put a real estate contract in front of them, sans attorneys, and they do a spit take (if you do not know what a spit take is, call me and I'll demonstrate). Put me in an operating room and tell me to go at it and I'd do a spit take too.
Most have no idea how to even offer on a place. What do you do? What do you ask for? Consider the purchase process for a moment:
* Initial Consultation (Screen/Interview Buyers Agents) * Mortgage Preapproval * View Prospective Homes * Identify a Property * Present Purchase Contract To Listing Agent * Initial Earnest Money ($1,000 Made Out To Listing Office) * Negotiate Offer (Counteroffer, Price, Terms, Close Date) * Acceptance Of Offer by Seller (Agreement) * Final Signatures And Initials On Original Contract * Contact, Fax Documents To Attorneys, Lenders, Etc. * Contingency Periods Begin (Mortgage, Home Sale--Ususally 30 Days) * Attorney Period Begins (Usually 5-10 Business Days From Acceptance) * Acquire Budget And By-Laws (Condominium) * Professional Home Inspection * Attorney Approval on Contract (5-10 Business Days After Acceptance) * Balance of Earnest Money Due to Listing Office (5-10%) * Appraisal (Lender) * Loan Committment * Communicate With All Parties * Acquire Homeowners Insurance Policy * Interview With Condo/Co-Op Board (Usually In Highrise Buildings) * Await Closing * Transfer Utilities & Change Of Address * Schedule Movers * Estimate Of Funds Needed At Closing (Good Faith From Lender including $7.50 per $1,000 City Transfer Stamp to be paid by Buyer) * Final Walk Through Or Punch List (New Construction) * Closing * Celebrate! You're A Home Owner!!
This stuff has to be maneuvered and coordinated, assured, written, clarified, double checked. It's putting together a puzzle man. Also, you want good people on your side. How much time are you willing to invest in all this?
So, my greatest mistake is not having a drink with all new clients and going over this list! Then, it's up to you to trust my managing of the transaction. You'll sleep better if you do.
Posted by Eric Rojas at 12:33 AM
Tuesday, July 11, 2006
Most consider the pushy Realtor to be the someone who wants you to buy everything... now! This can be your buyer's agent or the selling agent at a home sale center. I can be pushy... when a real deal comes on the market, the stars line up, the other agent is not a jerk... etc, etc... I will push a little on that place because I know it will sell quickly. Often it does. You'll know this moment of pushiness from me. I will tell you it's coming.
However, your LISTING agent is rarely considered pushy. That is because we walk a very sensitive line between upsetting the seller and losing a listing that we know we can sell. We compromise on price... but then push to make the client top dollar. The truth hurts, and the best Realtors dish it out on a regular basis. For this favor, the truth, many Realtors lose a listing and must live to sell another day.
I, on this day, resolve to be the pushy listing agent, dishing out the truth about market prices in a single bound. Sheilding myself from the backlash of clients and firing back with a laser beam of facts, market data, gut feeling and experience. It's the only way to go.
Posted by Eric Rojas at 9:10 PM
Sunday, July 09, 2006
I think I'm developing a reputation with my readers as the king of the understatement. Yes, the South Loop neighborhood has ALOT of construction. Don't take my word for it... just read the Chicago Tribune's expose on the South Loop from this Sunday's real estate section.
Stats of note:
"The South Loop outperformed other parts of downtown in 2005 new-construction residential sales and has increased its share of the downtown condo market to 44 percent, according to Appraisal Research Counselors, a Chicago firm that tracks residential sales."Huge activity is going on in the South Loop. It's the most active part of the city," said Gail Lissner, vice president of Appraisal Research. "The South Loop has had dramatic growth. In 2000, the area had 7,700 housing units. By the end of this year, it will have 13,600, almost double."
"Lissner said of the 6,200 units in the South Loop on the market now, two-thirds have been sold. "In the next couple of years, 6,100 more units are proposed."
My eye has been on the South Lopp for a few clients in the past year... from the under $300K with a parking spot for one and up to $400K for another.
It's seriously hard to believe how many high rise units that are proposed, under construction and completed (and the number of units already for sale). That is, until you think about the proximity to the central business and financial districts. And, that centralization can sprawl along the lakefront too I suppose. So far, it has been mainly residential development that has dominated the landscape, as pointed out in the Tribune article. Retail has had a tough time due to the density of people and their cars. It seems even though people are buying in the South Loop, they are taking their cars with them.
But that's boutique retail that has been slow to develop and thrive... it took awhile, but their is a ton of major retail stores that will now anchor the Roosevelt and Canal area. This should be plenty of stores and more for the new wave of South Loopers and welcome to the old wave. It's far enough off the lakefront as to not disturb the cityscape, but close enough to walk to (bring your folding cart and a backpack for your stuff on the way back).
Let's face it... the only thing that has slowed this gold mine by the lake front (and museums) is clean up of old industrial warehouses and displacement of the "have nots". Nothing exclusive to the South Loop, and every desirable location of the city seems to eventually have its day of gentrification vs. displacement and affordibility. I mean, look at Uptown... its still a 50/50 proposition there. Near the lake and transportation... some beautiful enclaves. But crime, elements of poverty and social ills still lace the landscape.
Posted by Eric Rojas at 9:56 PM
Saturday, July 08, 2006
Quick hit II...
I sent clients out today to Old Irving Park for new construction/new conversions near the Metra Union Pacific Northwest Line.
Great area if you need to commute to the burbs for work or just want a nice tree lined block to live on. BIG places for under $400K.
More on this later!
Posted by Eric Rojas at 11:45 AM
Quick hit... Z Gallerie on North Avenue is having a weekend long "scratch and dent sale". The prices there are reasonable and alot of my friends shop there (I haven't purchased there as of yet).
Started at 10AM today and 10AM tomorrow (call ahead).
Heather at Z Gallerie has me on their list to call for these sales... pretty cool. I try to meet as many furniture dealers as I can... they do the shopping for you. Big sale coming up and you'll be the first to know.
Posted by Eric Rojas at 11:41 AM
Thursday, July 06, 2006
Postings have been a little skimpy lately... but guess what? I've been doing real estate stuff.
According to author/scholar/New York Times columnist Thomas Friedman, the world is flat... that is the globe is synergy of commerce, competition and communication. It seems there is no longer far off lands around the globe, but just a new level playing field. Friedman asks the question; has this flattening come too fast for politcal systems, cultures and traditions to adjust?
This term, "the world is flat", has been used in a recent Tribune column by leading financial analysts to describe the global investment community... the global economy seems to be in lock step and there is less that diversification and hedging can protect us from. If you invest, you are along for the ride.
So a colleague the other day over holiday celebrations suggested that this real estate market is flat... "the world is flat" he said. This can mean many things to describe what is going on these days. Although desirable properties in good locations sell well when priced right, the flattening comes into place when a seller can no longer expect leaps and bounds of appreciation form year to year.
It also means that over zealous buyers and investors can not turn and "flip" their properties in a short time for large profit margins. Gloom and doom for some, normal to most.
But there is another interpretation of the flattening real estate market in Chicago. One that is more in step with Thomas Friedman's revolutionary term"the word is flat". To be a Realtor in Chicago for the coming ages, one has to know more neighborhoods, possess technology skills in marketing and responsiveness, and change their model of business to the consumer of information.
So, politcal systems may not deal with the flattening of the world, but can your Realtor deal with the revolutionary flattening of the Chicago Real estate market?
BTW, things have been crazy coming out of this last Independence Day long weekend. No flatness in my office!
Posted by Eric Rojas at 12:47 PM
Sunday, July 02, 2006
Hope everyone had a teriffic Sunday... the weather turned out good and you're probably enjoying the long weekend... sadly, I've been catching up today (did manage a morning read of the paper and a run however).
So, while scanning the news, I caught this story by Crain's concerning rising forclosure rates around the City (you may have to register for the free trial to get this story). This was covered by the Tribune not too long ago, by ABC nationally, and has been on the radar screen of cautious "do-gooders" for quite some time.
Well, the do-gooders may have been right. It seems folks either did not understand the implications of complex and creative mortgages or just did not have the fiscal fortitude to hack it. Throw in your usual dose of unfortunate events and ... Whammo! Forclosure are up in some neighborhoods.
But before a national emergency is declared, there are a couple numbers to look at.
-Sub-prime mortgage foreclosures are down.
-Prime rate mortgage forclosures are up.
-The net increase of forclosures in Chicago is 1%.
This from the story:
"In Chicago, foreclosures on prime-rate mortgages — home loans for borrowers who qualify for market interest rates rather than the higher rates paid by those with spotty credit — increased 43% in 2005, the survey shows.
More alarmingly, the NTIC analysis found a 93% increase in foreclosures on prime-rate mortgages that had been issued less than two years before. Some 82% of those problem mortgages were ARMs or loans with scheduled payment increases, known as balloons."
So, it looks like the ARMs and baloons are having an affect. The ABC story (I believe it was on Nightline) featured those unscrupulous characters that buy forclosure homes at auction, or swoop up a home from a person in default... before the process hits forclosure.
Just when I thought this game was getting too crowded it seems there will be more homes available for purchase. (If you would like to buy a home this way, give me a call... it's a tough game but doable. Also, I know some folks who do purchases for investors).
ABC also stated that forclosures are down in historic terms, lower than the 1970s... the last big spike nationally. So, know your mortgage product (ARMs can be good, people), buy less house and move up as you build your finances over time.
Posted by Eric Rojas at 8:44 PM