Under Contract!!!

For those of you following my own home search story, I have found a home! I just went under contract and we are in the middle of attorney review. We had the home inspection already so things are moving along smoothly.
The contract negotiations went very smoothly. I even found out later that the other agent on the deal is a drummer too! Small world. Seriously, it's nice to do deals with pleasant, intelligent agents. We are of course both trying to get the best deal for our clients but it doesn't have to be an unpleasant experience.
The house itself is a registered bungalow (for more information about Chicago Bungalows, historical designation, how to register and the benefits of registering, visit www.chicagobungalow.org.)
The house is in fairly good shape but the home inspection turned up a few items that we are still negotiating on. I cannot stress enough the importance of getting a home inspection. It's the best way to safeguard your investment from a safety aspect. It also gives you an idea of any hidden costs associated with future repairs. Finally, if nothing else, a good inspector will walk you through "the care and feeding of your new home." It's like an instruction manual on the home, mechanicals, appliances, basic repairs, etc.
Assuming the rest of attorney review goes well, I should close on Aug 1. So...who wants to help me move?

Are you covered?

A few years ago, I came home from a routine grocery run to find that my garage door was left open (perhaps by myself, although I think my tenant with whom I share the garage was the culprit. Either way, it doesn't matter now.) I was horrified to discover that some very valuable drums that I had left in the garage while I ran my errand had been stolen. Horrified? I was downright heartbroken! However, I found out--to my surprise--that my homeowner's insurance actually covered personal property in the detached garage. My insurance company did me right and wrote me a very decent check to cover my loss. I even briefly considered naming my next child State Farm Barclay..."

However, many people aren't so lucky. Unfortunately many people find out after a loss or catastrophe that they were not covered for the damages incurred. I would encourage everybody to review their homeowner's policy and find out if it needs updating and adding or reducing coverage.

Here is a list of points to consider from the National Association of Insurance commissioners.

NAIC's InsureUOnline website offers the following tips:

• Add insurance coverage as you enhance the value of your home, and acquire expensive possessions, such as furniture, computers, stereos and televisions and other electronics. Keep in mind computers and other high-end electronics may require special coverage.
• Alert your insurance company when making any major home improvements that cost $5,000 or more. Update your homeowners insurance policy to reflect the new enhancements and prevent being underinsured.
• Maintain your property by clearing clutter and other dangerous conditions to reduce the potential for liability suits. In many states, you could be held legally responsible for the actions of anyone who drinks in your home and then has an accident in your house or after leaving it. Your policy should protect you against lawsuits due to these types of liability issues.
• Backyard items, such as a trampoline, pool, hot tub or spa may require you to increase your liability coverage through an umbrella policy.
• As you acquire more valuables -- jewelry, family heirlooms, antiques, art -- consider purchasing an additional "floater" or "rider" to your policy to cover these special items. They're typically not covered by a basic homeowners or renters policy.
• It's a good idea to make an inventory of all of your personal property, along with a photograph or video of each room. Also, save your receipts for major items and keep them in a safe place away from your house or apartment so you'll have them if you need to file a claim and substantiate value.

I still haven't found what I'm looking for.

Buyer's market?!? Looks like somebody forget to tell the people selling houses that I want to buy! Seriously, there are some pretty stingy sellers out there who aren't budging much off their asking price. I have made offers on two separate properties now and haven't been able to reach terms with either one.

I am finding out what I already knew about the nature of a slow market. Chiefly, it all depends on the seller's motivation/need to sell. Sellers who have a lot of equity in their home (and thus, more financial flexibility to give on their asking price,) are more able to strike a deal with buyers. Sellers who, for one reason or another, do not have much equity are forced to be stubborn and get the price the need to get whether the market bears that out or not.

In any case, the two properties in question were decently priced but a little more than what I wanted to spend. Still, it doesn't cost me anything to write an offer so I put in a fair but admittedly low offer. Alas, neither seller was in a position to give and, at the end of the day, no deal was to be had.

However, the third time is a charm, right? I've got my eye on a place that is priced very attractively and has what I'm looking for. I am in the process of reviewing comperable sales to determine what I want to offer for the home. Check back soon for an update...

It's so important for buyers to take advantage of the information that is out there. If you are serious about buying a particular property, make sure your Realtor does his/her homework: find out what the home is worth; when did the current owners buy and what did they pay for it? What improvements have been made since they bought? Try to find out why they are moving. Have they had any offer on the property thus far? A good, tech-savvy agent can access many of these answers online. The more info you can get, the better you can negotiate your price!

Buying a foreclosure property

A lot of people ask me about foreclosure properties. With all the news of mortgage defaults and homes going into foreclosure, the general sentiment is that this is an easy, cheap way to get a house. My response to that is generally, "no" and "probably not." Here's a great article that details what to look for and what to watch out for if your are considering buying foreclosure property.
Click here to read.

And you may say to yourself: "this is not my beautiful house!"

So my house hunting has begun in earnest. Man are there a lot of crappy homes out there! There are also some nice ones, too. I count myself lucky because, being in the biz, I'm used to reading and analyzing listing sheets very quickly. Thus, I've been able to process a lot of data and weed out homes, areas, etc online. That being said, at some point you just have to walk into a place and decide if it is a good fit. Some random thoughts on my search so far:

I'm basically looking in two different price ranges: "the fixer upper" price range and the "nothing more needs to be done with this house for a while and it's a damn good thing because after I buy it I won't have any money left in the bank" price range. I have been house poor before and I'd rather not revisit that state.

I cannot stress enough the importance of driving by prospective properties before a buyer considers purchasing. I've saved myself a lot of time by eliminating properties based on a "drive by." Now you have to know what to look for: a home could be beautiful on the inside and just need some new siding or tuckpointing. I'm also looking at the neighborhood and asking myself "is this the block I want to raise my daughter on?" If that answer is "no" then I don't care how nice it is inside.

As for safety, I find myself referring to the CPD's citizen I-cam site. It has proven invaluable for seeing what (if any,) crimes are being committed on certain blocks. Note: I'm trying to post the link to this site but the server is busy. Check back later...

And one more thing...Ever since I started blogging about my own homebuying experience, I seem to be inundated with friend requests from mortgage/real estate myspace cites. Coincidence? I think not. I guess if you use a few keywords like "I'm gonna buy a house," you can expect to get that kind of solicitation. If any of these people seemed reputable that wouldn't be bad but they all look pretty shady.

Go on. Take the money & run

So a few weeks ago, I was approached by a business owner in my neighborhood who wanted to know if I was interested in selling my home. I was not but I told him that I would listen to his offer. He asked me how much I would for it.

Whoa, stop right there. Don't try this at home. I am a professional! Seriously, because this is my business, I have a lot of experience in pricing homes--I do it day in day out. This is where most homeowners could easily get "taken" by selling their home for much less than its true worth because they don't know it's true worth.

Not only did I know what my home was worth, I knew that any potential offer would have to be well above that amount for me to take seriously. So I was in a great position to "name my price" knowing that after all, I didn't have to move. After much consternation on my buyer's part, he agreed to my price. He admitted that he planned to raze the property to use the land for parking. It will be sad to see my house go but I have to be pragmatic: If my home were to appreciate at a realistic rate (keep in mind the market is in a slump,) it would be another 5 years before I could see this much for my home.

Another upside to selling to a developer is that I could also set my closing date, other terms and have scavenger rights to my home. Simply put, I could take or sell off everything in my 2 flat: appliances, cabinetry, light fixtures, wood trim, doors, etc.

So now that the contract is signed, I have to find a new place to live! more on that next time...

A new client

An interesting client

If you have read my blog with any regularity, you have noticed that I don't tell too many war stories of my everyday life as a realtor. This is largely due to the fact that I don't want to talk about my clients too much online out of respect for their privacy.

Well it just so happens that I am working with a client who doesn't mind having his story shared throughout the blogosphere...and that client is me!

Through a strange turn of events, I am in the process of selling my residence and buying a new place to call home. Among other things, this affords me the opportunity to tell a very real account of what it is like to sell one home, buy and move into another--the good, the bad and the hideously ugly wall paper...

So check back over the next few weeks to view this online "diary" as is were. I'm excited to see how this all turns out!