About Chicago's Irving Park/ Mayfair

You have a home that you don't like, but you love the neighbors and its location. One of the things I do is help some of my clients redesign the outside and at times change the inside and expand their homes.

This home is a single family home but was bought and marketed as a two flat. Even though the home was designated with the Certification that is was a Single Family Home, the layout and usage of the property was in violation of the City of Chicago Building Code. Hence, this buyer had to use a licensed architect even though it was designated as a Single Family Home because of the Usage Violation.

So, if you look at the walls on the second floor outside they are 8' high but the pitch of the roof was wrong. The Building Inspector requested that we conform the pitch to the design.

To be quite frank, I didn't mind the request at all because the roof was really old and it had to be replaced. That was the plus. The cost was more because all new rafters were to be made as the original rafters were only 2 x 4's and because of the pitch, the fact that the roof had too many layers and was old ... the City made the requirement to replace the entire roof.

Here is the redesign. What I did was pull in the walls on the second fllor and added face brick to the corners to create a different look. There was to be railing only 12" high on the sides of the front bedroom to make it appear that you could actually walk out on the side two floor deck areas.

The roof was pitched up. Most people generally add on two feet from the front but there was no reason to look like every Sam, Dick and Harry. The point is when redesigning your home, is to be different but to conform to the neighborhood.

I designed the same roof over the front first floor bay window but extended it all the way across to give the home continuity and a grand appeal.

The base is stone - face stone and is supported by steel L brackets at the base and worked as usual for stone.

Why did we put the stone at the base? It didn't give the home the balance.

The gutters and downspouts were in dark brown, the color that copper eventually turns so to add to the appeal.

Here is the final product. The stairs were stained not painted. Paint Peels!!! Stain wears out.

I put in flower baskets in the windows

But pretty much, it is basic ideas that you want to incorporate and it all began on a piece of graph paper.

Oh, the shutters were made out of left over cedar that I stained and screwed together. Not nailed but screwed.

Hope this gives you some ideas to help you when you think your home doesn't have potential.

Think Again.

In Chicago, in Paragraph 10 of the Exclusive Listing Agreement it says:

"DUAL REPRESENTATION. By checking "yes" and writing its intials below, Seller acknowledges and agrees that the Designated Agent ("Licensee") may undertake a dual representation (represent both seller and buyer or landlord and tenant, as the case may be) in connection with any Transfer of Property. Seller acknowledges and agrees that Seller has read the following prior to executing this Agreement:

Representing more than one party to a transaction presents a conflict of interest since both parties may rely upon the Licensee's advice and the parties' respective interests may be adverse to each other...."

STOP THE PRESSES RIGHT THERE. I do not like Dual Representation because I am hired as the listing agent for the Seller. To do dual representation, I pretty much cannot guide the seller or buyer on what to counteroffer and usually the transactions in the end leave someone hurt.

I want to represent one side at a time because I know that I can guide my client, give them the proper information and we can have an indepth confidential talk.

I interviewed for a listing the other day and got it. I told the seller that I did not do dual representation because I am paid to get them the highest market value price and it just might not happen under dual representation. What I found out later was that another agent had interviewed but said that he would discount his commission by one percent to "save" the Seller in commission. Now, here is the big picture. He thought the property was worth $35K less then what I got on the contract. So, by doing dual representation he could have saved that seller $2,500 in commission but cost them $33,250 in additional final net price.

Then, the issue of lockboxes has come up big time. I do not put lockboxes on any of my listings. Yes, I am worn out from all the running around but my reasons are just not because of the safety of the property. Here are my reasons for not having a lock box on the property:

• Doors may be left unlocked
• Water may be turned on and not turned off
• Windows are opened and not shut
• Lights are left on

Then there is the real reasons why I want to be at the property: Some agents let their clients have the combo or give them their security thing (which, by the way is illegal to do in Chicago and the agent can be fined if found out that they did violate this rule). Then there are some agents who say that they are going to come at a certain time but really want the whole day to "waltz" into the property. Not a good idea if home occupied but still not a professional way of respecting the reason why we set appointments: To keep them.

Then there are the agents who don't sell much or may not be a closer and I want to make sure that the buyer is aware of the particulars of the property, the advantages of having that property and to answer questions of concern.

I take my job seriously and I treat my clients home as if it were my own, with TLC.

I received a call from a banker who had an appraisal for a two flat that was under contract today asking me for some cmoparables to argue the reviewing appraisers reduced value of the subject property. The appraisal came in at the purchase price. The reviewing appraiser said that the property was worth $80K less then the purchase price.

How can that be?

The agent representing the buyer didn't do the home work on what was really going on in the neighborhood. This property is located within a certain 4 block x 6 block radius of alot of mortgage defaults. Two flats are selling and closing out at $129K to $250K with a median of $220K right now. This property was originally acquired in the Spring of 2009 as a foreclosure sale. The buyers who are now the sellers, actually paid $100K too much on the foreclosure purchase! This foreclosure needed some serious work.

MISTAKES HAPPEN:

One of the problems that we have in buying and selling real estate is understanding the properties true value, where the market is, what is happening in the neighborhood (high foreclosures/defaults/shortsales). When inventory is flooded with short sales and foreclosures and one sees that there is a list of roughly 120 pre-foreclosures that still haven't hit the market let alone what the banks are holding on to, is the reason why it is so important that the consumer use a qualified real estate professional when purchasing and selling. One needs to understand the product that they are selling and know what the seller is up against, to be prepared with the comps to support the value and monitor weekly what is happening or NOT happening in that particular marketplace.

I shared with the banker what I knew but had to reconfirm it by analyzing the marketplace, the short sales, the foreclosures, the market time, where values stood two years ago and where they stood this past year and then re-evaluate for the past 90 days compared to a year ago.

THE CRITICAL SLIPUP was that the Sellers, who purchased this property in the Spring of 2009, DID NOT GET PERMITS when they did the work. A qualified appraiser plus the reviewing appraiser (generally more seasoned), will review the properties history in full. It is a requirement. This building had tuckpointing done (permit needed), electrical done (permit needed), and on and on and hence, the reviewing appraiser caught it and there is no value to lend because there are no permits! The Banks need to see permits. No permits - then the upgrades lend no value.

YOU THINK I AM KIDDING? A Realtor came to me and told me that she has a home under contract but that it was a former two flat that was converted into a single family home. The sellers purchased the property as a single family home years ago and now on the resale the appraiser is requiring proof on behalf of the bank that the property could be rebuilt as a single family home.

These are things that I review every time I take a Single Family Home, a 2-4 Unit Property and even a condominium listing. You don't want to get to the contract stage to find out permits were not used and so value will not be given for square footage if it was added, a garage that was built without a permit, upgraded electrical, etc.

One needs a Realtor who has the background, knows what to look for so that the property will get closed and won't run into these emotional snags because of lack of experience, training or knowledge.

Being Third Generation in a Family of Real Estate Professionals has its responsibilities and expectations. There is a reason why I can't bake brownies.

Until next time,

Chicago, Illinois 60641 Market Update for Single Family Homes

If one looked at the two year figure for the housing market in Chicago's 60641 Zip Code area, the figures would be devasting. For instance, the two year repot shows an adjusted price of 52.8% from 2007 to now for Single Family Homes. That is extremely significant and the reason why it is such a huge drop in value and misleading is because it includes neighborhoods of Old Irving Park, Portage Park and includes part of Albany Park. Financing ranged from FHA to conventional. The type and sizes of the homes are larger lots and homes in Old Irving Park, where Portage Park and Albany Park have similar lots sizes but FHA financing was stronger in Albany then it was in Portage Park.

With that all being said, let's look at where we are from one year ago compared to today.

Single Family Homes in Chicago, Illinois 60641 marketplace have seen a 6.9% reduction in price for Under Contract Homes with a median of $199,700. However, there is a 19.6 downward trend in final selling price with a median of $170,000. Now, remember this includes three neighborhoods and this system cannot pull out the medians for the three individual neighborhoods. I will explain why this is important shortly.

New listings of Single Family Homes in Chicago, Illinois 606041 marketplace are coming on at $249,500 versus $250,000 a year ago. It is telling me that there is a reduction in properties in Albany Park but Portage Park and Old Irving Park are still showing new listings everyday.

WHERE's THE COMPETITION?

Under Contract has increased 80%

Sold has increased 11%

For Sale has dropped 30%

This is for Single Family Homes in Chicago, Illinois 60641 Marketplace.

WHAT's TAKING SO LONG?

While more homes are going under contract, the days on the market has gone from 176 Days in 2008 up to 244 Days on the market. That is a 38.2% increase in marketing.

So, what's in store for Chicago, Illinois 60641 Marketplace?

Well, right now there are 555 Pre-Foreclosure properties that haven't even hit the market. There are 178 Bank Owned Homes of which, most of them are in the marketplace.

You are not the only ones in this position right now with the increase of pre-foreclosures. The banks have begun to release properties that thye have been holding on to for the last year. This is just the beginning of exposure. Our goal is to help those who are in the pre-foreclosure stage to get them sold so that the median price doesn't continue to drop in a significant way.

If you know of someone who is having financial mortgage struggles, have them reach out to us before they go into foreclosure. Foreclosure and/or bankruptcy isn't good with mortgages right now. The homeowner may end of owing should the home go into foreclosure.

If you are a standard sale, your best options are to either hold on to your property or get your property looking it's best to obtain the highest price in this market.

This past Saturday, I went shopping for homes with my sellers who are also buyers. We had a broad range of properties and about four hours of looking. Here are some issues that will arise and that you need to take into account:

1. Listing says "Rehabbed". Now this property was a former two flat converted into a Single Family Residence. WRONG: I pulled up the permit information and the subject property was still a two flat!

WHAT GAVE IT AWAY? There was a front and rear entrance in the lower level. What the sellers did was take the two unit position and did the extended living for two levels and then repositioned the rental unit in the basement.

2. FRONT STEPS: The walkway didn't line up with the front porch steps. So, I went under the steps and there is was, no footing for the base of the landing but the steps were "floating" on two separate bricks!

3. Listing says: "New Floors". Did they remove the old wood floors or put laminant or new hardwood floors on top of the existing floors, the sub-florring that creates a huge burden for those floor joists should they not be replaced or sistered.

4. Warped Hardwood Floors: No heat in the house - can be remedied by serious sanding but they never are the same once they warp.

5. Gutters: Look at the pitch of the roof, but most homes in Chicago should have the larger gutters and downspouts. The regular sized downspouts are good for ranch style homes only. Larger ones even for the bungalows because of the width, pitch of roof.

6. Waterline: If the property has 30 water fixtures (commode counts as one, shower counts as one, combo shower and tub count as two, double vanity counts as two, etc.) the later line needs to be a minimum of 1-3/4" but for safe side get a 2" water line. Now, just because you can see that new copper coming out of the ground and it looks great, doesn't mean that the waterline has been changed in the street. That's right. That copper waterline can be modified from your front yard "B" Box and that has nothing to do with your street connection.

7. If the house is rehabbed, you need to ask if there are new drain tiles. One way to know if there are new drain tiles is that the City would require them in serious renovation work as well as require a sump pump and you should also have a front yard ejector pump as well. No sump pump, I doubt if there are new drain tiles.

8. Rehabbed: If a home is rehabbed, most older homes have floor joists that are 2 x 6's. Those 2 x 6's are stronger then most 2 x 10's in today's lumberyard. Now, those 2 x 6's have been cut up to bits because of the age of the house. Here's an example:

This is what your floor in your rehabbed home may just look like. Not too great.

9. Rehabbed: What do you roof rafters look like? Are they 2 x 4's or are they 2 x 10's? Big difference.

These are just some of the issues that surfaced while we were shopping for homes this weekend. Let me know if you have a question or concern. And remember, just because a home has a permit doesn't mean that everything was done correctly.