About Chicago's Lincoln Square

When we were kids, my Mom and Dad always took us on vacation during the Christmas Season (as it was a low time in real estate appraising due to holiday) to Florida.

We looked forward to that annual trip to Florida for two reasons:

1. The first person to spot a palm tree got a nickel from my Dad; and

2. We got to choose which home we wanted when we grew up and got married.

There are four of us in my family and I rank #2 in age. I took my time choosing my home (a/k/a honey moon cabin) because I wanted something spacious, grand, land, etc. By the time we got to my next sibling, well, he has a hard time making decisions and hence, my baby sister didn't get to choose her home until we hit Georgia or Florida but her home had to be chosen within (x) miles before we hit our destination.

The photo you see is generally the pickens my sister got because she felt she had to make a decision before (x) amount of miles. Not much of a "honey moon" cabin, now is it?

Here's my point: You are buying your first home, you don't panic like my sister and just choose something because your time may be limited, there might not be the right home you desire and you settle for second best.

Financial Wisdom: When you are buying a home, look at how much you really want to spend each month and not how much you qualify for.

The next step to Financial Wisdom: Does the home you are looking for have room for improvement or are you banking on the market appreication/depreciation to carry you?

The Third Step to Financial Wisdom: What do you really need in a home vs What do you really want makes a huge difference. If the home you select, has potential for growth, you have a winner as you will be able to live in that home for years to come and not transition every 3-4 years.

The Fourth Step to Financial Wisdom: If you are thinking about buying a condominium, look at the history on resale over the course of the last ten years of that particular building. Check to see if there are any special assessments and how often have special assessments been implemented for that building?

Buying your home is an emotional time but should not be an emotional decision.

Oh, by the way, my sister finally realized that she needed to wait and she finally got that honey moon cabin that she wanted in Florida.

Personal Financial Troubles don't happen overnight. Most of the time, we are in denial and want to forget that we are heading towards the loss of our home or bankruptcy. The denial? If the credit card still works that means I still have credit and the ability to buy.

Who are we fooling?

We need to get a back bone and recognize that there is a problem. Once we do, the ship will turn around for us but it takes dedication and commitment to make it happen.

Heres the Red Flags:

Credit Card Payments: If you are making minimal payments on your credit cards or returning items to keep the credit card balance higher, you've got a borrowing problem. If you can't pay your credit card balance in full at the end of the month, then pay at least two minimum payments to keep yourself from spiraling down into financial trouble.

Emergency Money: This is not a savings account but a bone fide Emergency Money Account that should be equal to six months of your monthly income. This is a bottom basis for Emergency Money and it would be ideal if you had more in this Emergency Fund but we have to start some place if our Emergency Money fund is ZERO!

Bills: Are you throwing the bills into a box and picking out which ones you want to pay for the month? Or, are you just overstretched for the month only. There is a difference and one says you are heading into finaical trouble and the other says, you are okay but be careful.

Credit Scores: If your credit score is below 620, that is another red flag that says you are in financial trouble or heading that way.

Bouncing: I have a friend who was paying over $350 a month in bounced check or late payment fees to her bank or credit cards. If this is happening every month you are in financial trouble.

Words of Encouragement:

We were not born to understand our finances. It is something that is learned. Do not beat yourself up because you have two or more of the red flags. What you need to do, is to read and learn from your mistakes and take baby steps. I am a believer in baby steps. The sad fact is few people take the courage to reach out for change. I hope you reach out and take that first baby step.

Why do I think Chicago's Lincoln Square is heading into a Seller's Market?

Basically, supply and demand are not in balance. We have roughly 45 homes for sale in Lincoln Square right now with a median list price in the low to mid $400K. The 45 homes that are currently on the market are not even the prime Lincoln Square Neighborhood but surrounding extended parts of Lincoln Square.

We have a lot of condominiums but most are roughly below $240K and so there are few 3 bedrooms to choose from and those are pretty desireable.

The buyers are out there but the type of properties that those who are transplanting from another neighborhood in Chicago are move-up buyers.

In 2011, Real Estate Sales were there worst yet, I saw signs going up in the front yards of a lot of Lincoln Square Neighbors that did sell.

It will be interesting to see what happens in sales in Lincoln Square this year but if you are serious about selling, consider getting consultation on ways to appeal to the buyer. When the home appeals, the buyer buys. The inventory is old, stale or not appealing and this is your chance to come out like a shining star on the selling of your home!

I cannot emphasize enough the importance of curb appeal, decluttering, neutralizing, and enhancing as that adds up in the final net selling price for you. the Chicago Lincoln Square Home Seller.

Chicago's Winter Chill is officially here and one does not see to many people window shopping and parking spaces or unlimited right now in Chicago's Lincoln Square Neighborhood.

Ways to Survive Chicago's Cold Chill:

1. Dress in Layers and make sure you wear gloves and a good warm hat on your head besides the other basic winter clothing essentials.
2. Drink Gatorade, Water and Juices to keep hydrated
3. Don't crank up your thermostat but add an extra layer of warmth. A lot cheaper on the heating bill.
4. Keep at least a half a tank of gas in your automobile!
5. If you are going to use a free standing heater, make sure that it is digital and should it fall over, that it has an automatic turnoff. DO NOT go to sleep with this heater on!
6. When in doubt and the rooms are cold, have a camp out in one room to stay warm.
7. Make sure that the pipes are secured and insulated. When in doubt, open the doors and allow the heat to come into cabinet area to minimize ruptured pipes.
8. Slow drip from the faucet when in doubt with your water lines.
9. Eat the proper food and make sure you have plenty, just in case there is an emergency and you can't get to the store or the store can't come to you (should be all the time, but focus especially during the Chicago artic like chill)
10. Stay inside and spend more family time together

The biggest item on my list is:

Check up on your senior parents or your senior neighbors. They will be huddled in one room and will not complain but don't realize that they need to eat and drink the proper fluids. They are on a fixed budget and heat is the first thing they will cut back with food being the next item.

Be safe and don't take risks as my Dad has always said: "Physical things can be replaced but not human life."

SIX WAYS TO RETIRE WITHOUT A MORTGAGE:

Kiplinger wrote an article today about ways to retire without a mortgage and I pretty much agree and so I am going to share with you what my Grandfather, Opa layed out for us when I was a youngster:

Never have a mortgage longer then 7 years.

Opa believe in reinvesting in real estate and one couldn't save when one was paying so much interest on a mortgage.

Pay Your Taxes, Pay Yourself and Pay God:

Opa was a strong believer that if at the end of the pay check there wasn't any money, then you didn't charge but you saved. Actually, when one did charge, it wasn't a revolving charge back then but at the end of the month. So, Opa's philosophy was if you can't pay for it in cash, then you don't need it.

Buy what you need:

Have you ever gone into the grocery store without a list and come out with ten more items the the one item you needed? My Dad has a list every week that he gives my sister, Debbie, when they hit Meijers in Grand Rapids, Michigan. He now understands that it is wise to buy when on sale and have a personal inventory as that will save you money on your required monthly expenses.

The above is the foundation. Now, let's look at a stronger way to retire without a mortgage ....

• Make Extra Mortgage Payments: - when you make extra payments during the course of the calendar year on your mortgage, you are reducing the principal faster. For instance, Opa and my Dad had/have always said to us that when we made two extra payments on a 30 year mortgage, it reduces the mortgage down to roughly a 19 year mortgage.
• Refinance: Totally agree with this one as I have a lot of friends who have asked if they should/could refinance their home for a lower interest payment. This is so ideal as most of my friends have been in the 6.5 to 7.25 interest rate on a 30 year mortgage but had 25 years left on their mortgage. So, the idea isn't to refinance and reduce your monthly payment vs reduce the amount of interest you are paying to the Bank!! You pay less interest and you put the money back into your pocket.
• Downsize your Home: The above home was a 1.5 story home but it had 8' outside walls on it so there was plenty of room when I redesigned this home. However, as we get older, let's get serious and rethink space: When you are an empty nester, do you require as much space as you did when you were raising your children?
• 

Here is a photo of the garage to the redesigned home but my point is, if you can't refinance your home but have equity, then another route to go is to downsizing. That way, you have a smaller mortgage payment, less real estate taxes (those are monstrous in Chicago) and less stress on the monthly commitment.

• Move to A Cheaper City: I have several retirees that are seriously considering moving away from Chicago because of the monthly real estate taxes. One of my friends/clients is paying $750 a month in real estate taxes! On a fixed income, that is a "bite in the britches" and not smart thinking. Moving to a cheaper City, while not ideal, is an option.
• Get a Roommate! With the cost of maintaining a home, plus the costs to fuel the home let alone the real estate taxes, another great option is to rent a room or get a roommate. Set the boundaries, the rules and do your research but another great way, especially, if this is a parent who is living alone but needs some monitoring if the children of the parent are not in the immediate area.
• Rent vs Own: Easy, easy but what happens if you run out of money? When one owns a home, they have options, including a reverse mortgage.

Bottom is we need to consider what it is going to take to maintain our lives when we retire. The less baggage, such as a mortgage and credit cards, the better our retirement life. I believe Opa was right with his rules:: Live within your means and not your credit card.

Opa also said: "Save, like there is no tomorrow."