Foreclosure and Bank Owned (REO) Properties in Chicago: Buying the Hype?

Any real estate genius can tell you that the foreclosure market and "bank owned" property markets have been hot Hot HOT! Or not.

I have limited time today and little time to write the details of buying an actual foreclosure in the actual world, but it ain't what you think it is. Recently, a big time money manager type friend of mine told me over drinks that clients are pushing the "F" word on him. "What about foreclosures?".

His response is if it were easy to buy a discounted property in foreclosure, fix it up and sell (or hold) for big bucks, he'd be doing it already for himself (and his wife is a big time Realtor type after all).

Teresa Boardman at St. Paul Real Estate Blog describes another annoyance in this fiasco of vouchers picking up the pieces. REO properties are hell to buy.She suggests all the mortgage folks getting out of the game in St. Paul switch over to the REO side and sell off some inventory. That's why she is brilliant and we are not.

The banks make terrible sellers and are infamous for taking too long, as in never, to negotiate and accept a deal (remember the movie Three Amigos where Martin Short convinces his compadres that the IN-famous El Guapo actually meant he was "more than famous"?).

My clients and I came across an REO last weekend that we call the Mold Palace. See, the home was left vacant and was allowed to flood. It's a total shame because it's in a top flight neighborhood of North Center (almost Lincoln Square).

Anywho, it could be a go for these experienced buyers if we could get some communication going. The bank wants folks to pay good dollar with ZERO information. A joke. I know, I know... if you can't stand the heat, don't buy the mold farm.

My point here is, they are still priced at a pretty high market rate. Is it worth preparing an offer and sending off to the abyss without knowing who or what we are dealing with? Is the bank price negotiable? Many times it is not. So, a week later you get a "no" response... that's it.

The bank should hold an auction with a much lower minimum bid and let this thing sell in the open market place.

Chicago and Illinois Mass Transit Put on Hold

The Chicago Tribune ran this story immediately after a Illinois House vote on mass transit. No bueno.

I have not been posting about the ongoing transit issue in "mass", but have followed the story like most Chicagoans. Sites like the CTA Tattler linked in the sidebar are better aggregates for stories like these. However, most people I know are not talking about this. There are comments about the length of commute on the CTA Red and Brown Line, but few bring up the transit crisis. My guess is we see the new Brown Line stations being built on the North Side and think that progress is being made.

I'd just like to see modernized, quieter tracks and some electric buses after 100 years of the same old, same old.

Chicago Community Guides from Pioneer Press

You may find these guides helpful. Nice compact source of neighborhood information.

Map by Brittanica

Rehab? Try Edgewater Glen in Chicago

Photo by yochicago.com

I have been looking at many single family homes on the North Side for under $700K and feel you can get a solid home on a nice sized lot in the Edgewater Glen area (located along side of Andersonville and Lakewood-Balmoral) for under $600K. There are a couple homes in the $550K range that will need about $50K in professional renovation (or really good self help handy work) to be very pleasant. The area of Edgewater located roughly 5600 N to 6400 N and 900 W to 1400 W really supports updates and structual improvements when looking to re-sell the home.

Your local Red Line stop would be W Bryn Mawr at N Broadway.
Edgewater includes the following neighborhoods: Andersonville, Edgewater Beach, Edgewater Glen, Edgewater Triangle, Highlands of Edgewater, Lakewood Balmoral, Magnolia Glen and Rosehill.
ZIP codes: 60660, 60640
This isn't flip your house material. Just a great place to buy a single family home to live on the North Side and add value.

Andersonville three-flat

We came across an interesting situation this weekend. A woman is selling her three-flat in Andersonville for $750K. Two units are rented out at about $1300 each. The third is vacant and could be upgraded as an owner's unit. Great location in the Lakewood-Balmoral neighborhood.

However, the woman told us she needed to close on the place by the end of the year, or else she will lose the tax benefit she is looking to take advantage of. If no sale happens, she said she'll rent the unit out and keep the building until retirement (5 years down the road).

So, what is her situation? What benefit will she get? Currently she, she lives in another two flat of her's in the neighborhood as well.

Nice three-flat if you're interested.

Roscoe Village and North Center for under $700K...60657 and 60618

I am working with a couple single family home buyers that live in Lakeview. They would like a single family home for under $700K. I feel the best combination of neighborhood, price and best quality homes can be found in Roscoe Village.

The fall and winter months can be a good time to pick up a deal. Without sounding too much like a salesperson, the facts are just there. At this time of year you can find a few situations. First, you have homes that were well overpriced or in "non-showing" condition that went on in the spring. They missed that market and now need to sell at a reasonable price. A strong buyer with good finances and quick closing date can demand a good price on a single family home.

Second, you have builders and re-habbers looking to get there product off the books before year's end. This can be a good time to get upgrades or closing money to purchase the home.

And third, you have the new listing gems. These are sellers that decide they need to sell for any number of reasons; They received a new job that starts early next year... they have a new child on the way... they can't handle their payments. Whatever the reason, they simply list a nice home for a good price with less competition on the market. You have to be ready for these. If you have looked at many single family homes with me, and the new guy just looks awesome for the price... it probably is awesome for the price.

I see this happening in Roscoe Village in the 60657 and 60618 zip codes. There are several single family homes carried over from the spring in the boundaries of Belmont to Addison, Ashland to Western. This area has move -in -ready single family homes with two car garages, yards, good interiors and some updates for under $700,000. There are a few row home opportunities as well.

And don't count out new listings. There are a few homes that just hit market in the last three days.

Any Chicago single family homes on sale this Black Friday?

The scenes of "Black Friday" actually put fear in my heart. Check out the Chicago Tribune photo album of the carnage HERE. The barrage of door buster ads on T.V. gives me anxiety (and also interrupted my giddiness yesterday watching my 10-1 Green Bay Packers wax the Detroit Lions).

I'm afraid to leave my house on Black Friday.


The only shopping I'm worried about is for a well located single family home under $800K or a awesome two-flat under $900K. Now, you want to see me run wild towards a "door buster" just list a four bedroom (three bedroom and den/office okay), three bathroom home with a nine foot basement, two car garage near a CTA "L" for under $800K. I'll probably have foam coming from my mouth when I bust the door down.

You would think you could get a great house for this price... but Chicago is an amazing place to live. Everyone is looking for the above attributes.

Thus, the adventure continues through Lakeview, Southport Corridor, Ravenswood, Lincoln Square and Lakewood Balmoral for that great space. My clients are flexible, have great vision and are not afraid of doing some improvements.

Anyone have a door buster out there for me?

Stock market down, oil prices up... Buy near the CTA Brown Line

Today's stock market report has given many the jitters I suspect. Some of the "blame" of the sell off could go to oil prices hitting $99 a barrel. Yep.

Luckily we have a elevated train system and those pesky buses to get around (CTA). Well, at least for the time being.

For some reason, I see the happy condo owner near public transportation in say... Wrigleyville or Lincoln Square... hopping on the Brown Line near their house tonight on the eve of Thanksgiving. Off to their local pub to grab a pint of Guiness. Not a worry about oil prices.

It's a nice life.

By the way, if you think Chicago real estate near an "L" station isn't hot, you have not been in the market for awhile.

Comments feature on the fritz

I'm having trouble getting comments from the posts to show up on my sidebar. The comments will remain on the actual posts. I just have to figure out how to get them to the sidebar again.

Nothing against you or your comments. It's me.

Chicago and Illinois home market statistics in

The Chicago Tribune reports on third quarter statistics this year... again, sales down but prices steady and even up.

I just had this conversation today with a client who asked me where I see the market going (and we Realtors get this question every day). My answer is the over- building in less desirable areas is done. Those who bought on speculation in up-and- coming neighborhoods are being hurt the most right now. There are less people buying in these developments, so sales are down there... bringing the average numbers down for sales.

But sales prices remain strong in good locations. We see this time and time again. Unfortunately, there are folks with the attitude that home owners and developers are all losing their butt.... everywhere. Not the case. So, we see average prices up.

There are a TON of Chicago homeowners out there that bought 1999 to 2005 in Lincoln Park, Lakeview, Lincoln Square, Ravenswood, Gold Coast's best locations etc... they are in great shape, so don't expect to get the place for a song.

It also needs to be understood that if you like the new construction more than the re-sale there is usually a premium.