COVID-19 & The Real Estate Market

With COVID-19 coming into the picture, there are a lot of questions in regards to how it is affecting the Real Estate market. Although there is obvious stress with current conditions and restrictions, the industry is still managing to continue, safely. 

Changes in Procedure

With social distancing in place, real estate professionals have to find ways in which to adjust. Open houses are no longer allowed, sellers are more likely to require all showings to provide a pre-approval before confirming access, and agents are minimizing visits from themselves, photographers, stagers, etc. Attendance at closings is limited to only the buyer and a representative from the title company, with some title companies only doing drive-up closings where the buyer remains in their vehicle. The takeaways: Less face to face/ in-person contact, more streamlined and efficient processes, higher utilization of technology, no open houses.

Changes in Lending & Mortgages 

This is an aspect that is rapidly evolving on a daily basis as lenders tighten their belts. Most lenders are requiring higher credit scores, larger down payments, and some are even temporarily suspending certain loan products such as jumbo loans. On the flip side, existing mortgage holders are seeking relief from their lenders’ new forbearance plans and some are taking advantage of low rates and refinancing. It’s extremely important to be fully educated on your lender’s forbearance policies before making the decision to skip a payment. The takeaways: raised borrowing standards across the board, some loan products are temporarily unavailable, forbearance plans offered to current mortgage holders, and refinancing could be a money saving option.

Changes in Stats & Price

This is what we all really want to know: what does all this boil down to when we look at the numbers? Surprisingly, for Cook, Will, and DuPage counties, Real Estate has found a way to remain strong. In comparison to the last three years in the aforementioned counties: 

• Home sale prices are up by an average of 2.86% 

• Listings on average close for 97.5% of asking price 

• There is a 1% increase in the number of homes currently under contract 

• There is a less than 1% in the number of homes closed 

• Market time/days on market is increased by 8% 

As COVID-19 continues to change our world, the Real Estate market and professionals who work within it have adjusted as well. If you have any questions in regards to buying or selling during the pandemic please do not hesitate to reach out. Be well and stay healthy!  

What Sellers Should Know Before Selling Their Home

As an experienced real estate agent and property optimization specialist here are several items I encounter time and time again and share with my client’s when they are preparing to sell their home.

Pictures Matter

Photos of your property should be your number one priority

This topic has been beaten to death, but I still see horrible pictures of homes daily. This is the first impression of the home that buyers will see when scouring online, where over 90% of people are looking. Make sure your realtor has professional pictures taken, no matter the property type. A professional photographer knows how to achieve a level of quality that will make your property look its best and attract the most exposure. 

Overpricing Hurts

While there is a common perception that "you need room to negotiate", pricing a house properly will actually get you a better price for it. Overpriced houses sit for longer and rack up market time, which eventually invites low ball offers. It's better to stick more firmly to your asking price than to overprice a home and anticipate low offers. If you must start high, have a plan to adjust your price accordingly if your home isn't selling.

Price Isn't Everything 

Making sure you walk away with the right number is important, but making sure your buyer can close is the other half of the puzzle. When reviewing a contract it is important to look at the buyer's loan or proof of income. Better qualified buyers are less likely to have their loans fall through. Contingencies are also important. A deal is less stable if the buyer is depending on their home to close in order to buy yours, although this is a normal occurrence. When considering an offer keep in mind that if a buyer can't close, it doesn't matter what they are willing to pay. 

Don't Get Offended 

There are many different tastes and values when it comes to home buying. Everyone is looking for what will suit them best, and it's nearly impossible to find something that checks ALL of the boxes. Don't be surprised if feedback from showings includes comments on your physical home, and don't let it affect your perception of them as a potential buyer. It is always better to leave emotions out when negotiating and focus on what makes the most logical and financial sense. 

What Buyers Should Know Before Purchasing Real Estate

After many transactions and working with many buyers, below are several items I wish buyers knew before purchasing real estate.

Prep Time is Valuable 

Having time on your side is very valuable in Real Estate. Time is usually money, and planning ahead puts time on your side. Be ready when the time comes to buy by saving for a down payment, getting pre-approved for a loan, and doing a little homework ahead of time so you know what you are looking for when you go to view properties.  

Price Isn't Everything 

A lot of buyers only focus on the price of the home when deciding what they want to spend. Price is important, but only a part of your mortgage and monthly expenses. Also to keep in mind are taxes, HOA assessments, maintenance, and repairs. All of these factors can affect your budget, and they differ from home to home. 

Know Your Position  

What you are looking for, what type of loan you can be approved for, and what other offers are on the table can all affect your position as a buyer. These and other factors will play into your negotiating power. Know your position as a buyer and be realistic about your expectations in your buying power. 

Choose Professionals Wisely 

This is a very large and important purchase that impacts your life. Your choice in the professionals that handle your purchase will have a hand in how the process goes for you. Pick experienced and responsive people who are fully vested in their careers. You want to make sure the property you are buying is right for you and your Realtor, attorney, lender, and inspector will all be able to help assure your success.  

Preparing Your Property for Colder Weather

Here are four things you can do to prepare your property for the colder months:

1. Check Your Heating System: Nothing is worse than a heating system that has decided to break on the coldest day of the year, and usually, that is when they do because that is when they are working the hardest. Loss of heat can result in every homeowner's and investor's nightmare: frozen pipes.

2. Check the Sealing and Drainage in and Around Your Property: We had covered watershed previously, and this is very important in winter months when we have freeze and thaw cycles. Any masonry and hard surfaces should be sealed to prevent water from getting into nooks and crannies and freezing, causing cracks and damage. This also goes for the drainage around your home. In prepping for winter make sure no water is pooling around your home. As it contracts and expands with the weather it can cause damage to your foundation.

3. Ensure Your Attic and Roofing Are in Good Condition: A roof takes a beating from winter weather, so making sure there are no weak spots is key. Loose shingles or unattended roof damage can let in water, ice, or possibly even a small animal looking for a spot to hide away from winter weather. In addition, making sure gutter systems are clear is very important. Clogged gutters and drainage can lead to ice damming and other ice build-ups. The damage from these instances can also reach your interior walls, ceilings, and insulation.

4. Look Out for Fire Hazards: On the flip side of prepping for winter, fire prevention is often overlooked. Winter is high season for more wires, more cooking, cozying up to fireplaces and a huge increase in the risk of house fires. Cleaning dryer vents of highly flammable material in the drier months is a small step with a big impact. In addition, having the fireplace cleaned and flammable residues removed is a smart idea. To finish it off, it's a great idea to make sure that all smoke and carbon monoxide detectors are properly working, just in case.

Why Buy Real Estate in Colder Months

Competition is Lower

Colder months thin out the number of people looking to buy, and this means less competition. Most summer buyers know the agony of prices being driven up or beating out in multiple offer situations. The chances of being bumped by a stronger offer are slimmer, and buyers have more negotiating power when they are not contending with one another for the seller's favor.

Sellers are More Motivated

The law of supply and demand works in buyers' favor during the colder months, and most people who sell in the winter are putting their homes on the market because they have to. This means that buyers might have more room to negotiate and possibly get a better deal. Also, sellers could be more willing to entertain offers that have contingencies.

Better Service

During the height of the selling season, all service providers related to Real Estate are kicked into high gear and may be stretched. Buying in winter months means more attention from eager realtors, attorneys, inspectors, movers, and most importantly: lenders. A less busy lender means more hands on deck for their buyer's deals and a quicker turn around time. When everyone has more time to focus on the deal it means a smoother transaction for the buyer.

More Time to Make Sure It's Right

Buying in the winter means missing the big rush. When buyers don't have to deal with competition and busy real estate professionals they have more time and attention to make sure the home is right for them. In addition, they can see how the home handles harsh weather. During milder temperatures, it's hard to see possible defects like ice damming, drafts, or buckling.

What to do when you Inherit Property

Who Gets the Property 

When someone dies in Illinois, there is a process called intestate succession, and who gets what depends on whether or not there are living children, parents, siblings, and other relatives. Unless there is a will or other legal instrument in place that instructs otherwise, a spouse and children are the first to inherit the property in equal shares. If spouses or siblings do not exist, under Illinois intestate succession, parents and other decedents will be next in line to inherit the property. If someone does without a will and has no family, the property can escheat, meaning it is forfeited to the state. This, however, is rare because Illinois laws are designed to pass property on to anyone even remotely related to the deceased. 

Sell, Buy, Rent, or …Don’t Claim

When inheriting a property in Illinois, there are a couple of options on what to do with it, and this also will depend on who has inherited it. The more persons who have an inherited share in the property, the more complicated the process can become. The home can be sold and the profits split, a relative can buy out the others out to keep the property for themselves, the inherited property can be rented out and those profits split, the list goes on. An important fact to know as well is that the property also does not have to be claimed in the first place. This is especially important if the property is underwater and would be a costly burden for those who would inherit it. The last option would be to file a lawsuit for partition, which essentially gets the courts involved and asks a judge to order the sale of the home and division of the profits. This is a time consuming and expensive process and should be avoided if possible.   

Taxes 

Everyone’s favorite topic in Illinois: taxes. Most will be happy to find out that when inheriting a property in Illinois there is actually no inheritance tax, and a graduated scale of estate taxes for estates with a worth of 4 million or more. Capital gains taxes can also, for the most part, be avoided because of what is called the “step-up tax”. When a property is inherited, it is inherited at its current market value on the date of inheritance, and therefore the only taxable income would be the difference between that value and the final sales price. So if a home was inherited and valued at $250,000, and then sold later for $300,000, the taxable gains will only be on the $50,000 increase, and not the entire profit of $300,000. 

Consult Professionals 

Wills and estate planning can clear some of the confusion when inheriting property, but it’s always a good idea to seek legal advice. Finding out the legal disposition of the property is important such as any outstanding mortgages or liens, and the status of the title. Inheriting property can also be tricky when more than one person is involved in the inheritance, and there are often several when it comes to spouses, siblings, and other relatives with interest. An attorney in conjunction with a  real estate professional can be good mediators and also educate and lay out someone’s options after inheriting property. 

How to Increase Income on Investment Properties

Every landlord and investor wants to see their property produce income. Maximizing a rental property's income can greatly improve its net operating income as well as its market value. There are several aspects that should be considered when trying to increase income.

TENANT SCREENING & TURNOVER
An empty property costs money, and so do problem tenants. Picking a well-vetted clientele will help reduce the chance of property damage or evictions, both of which can have steep prices. Also, proper tenant screening can reduce your amount of tenant turn over, with the aim to keep long term tenants and reduce the cost of downtime. If a unit does become vacant, it is important to fill that vacancy promptly, making sure that the new rental rate is on par with current market values.

CHOOSING MATERIALS THAT PAY YOU BACK

Choosing the right materials when repairing or remodeling units can increase the income a building generates. While a fair price is important, the elements that go into a building should also be of good quality so they can withstand tenant use. Solid plywood cabinetry and vinyl plank flooring can hold up to water, pets, and wear better than cheaper materials (and it is also preferred by most tenants).

PASSING OVER COSTS OF UTILITIES

Tenants can rack up large bills with older furnaces, boilers, plumbing fixtures, and electrical fixtures. Newer fixtures have much greater efficiency and will lessen your tenant-related utility costs. Going a step beyond improvements such as a new boiler or LED light fixture, a way to not only reduce utility costs but possibly eliminate them as well is to pass the bill onto the tenant. Having individually metered units can allow a landlord to either subdivide their bill or completely remove themselves from the equation and have tenants responsible for their own utility costs.

LAUNDRY FACILITIES

Collecting quarters isn't glamorous, but they add up quickly! A passive and easy way to collect income from tenants, laundry machines are the silent moneymakers and can increase income on an investment property with little effort. Well-working washers and dryers in clean and easily accessible on-site areas encourage tenants to use them instead of taking a trip to the laundromat. There are companies than loan their washers and dryers for a part of the profit, or landlords may purchase their own. Either way, it's an easy way to increase income for an investment property.

These are just a few of the ways that a property can be adjusted to increase the income it produces. For more ideas and tips, please reach out!

Four Elements to Look Out for When Managing Water Shed

It is crucial not to ignore any alarming water issues in a home or any sort of property. In this post we’re reviewing four important elements when it comes to managing water.

Grading and Slope

Weather and the water it brings starts outside, so when looking for ways to improve water shed, start there. The way in which your home is situated on your property and the land around it effects how your home wards off flooding or seepage. Most importantly, the ground should slope away from your home, even if just slightly. Your foundation should never be showing, with soil up to the top and then graded downward and out. Otherwise, you are inviting water to roll back towards you instead of away, including water dispensed from gutters and your roof. Water always follows the path of least resistance. 

Drains and Gutters

Drainage and gutter systems are crucial in directing water away from your home and often work hand in hand for optimal water shed. Making sure your gutters are clear of debris, drop outlets aren’t blocked, and downspouts are properly aimed away or into drainage ways will assure that water makes it off of your roof. Misdirected or disconnected downspouts often account for pooling water after or during storms. Along with gutter systems, drainage systems are extremely important. They take water from the ground around your home and either direct it away from your home, or to your sump pump to pump out and away. A broken drain tile or clogged window well drain are common culprits to basement seepage, flooding, and foundation issues. 

Sump Pumps

One of the number one reasons basements flood are faulty sump pumps. Often overlooked but central to water shed and a dry basement, this small piece of equipment should be checked often and have a backup battery installed. Power failure during storms or loss of electricity is frequently the culprit for sump pump failure and flooding. Many homeowners do not realize their sump pump has lost power until it’s too late. All the water the ground, roof, and drain tiles pools in your sump pit, where the sump pump then pumps it out and away. Without the pump working, the water just keeps coming, floods the pit, and then your basement. 

90% of basements in the U.S. experience water damage at one point in their life spans

Warning Signs When Buying 

Imperfections are normal when buying a home, with over 90% of basements in the U.S. experiencing water damage at one point in their life spans, but there are some red flags that should not be ignored when looking to purchase a home. With water and flooding being common, a one-time sump pump failure or a clogged drain that has been fixed should not scare you away from your dream home. However, active or reoccurring water shed issues should. Water marks or rust on basement walls and supports should be inspected carefully, and any moldy or mildewy smells should be taken note of. Water marks on ceilings, walls, and corners can be signs of a damaged roof or gutter system. Pooling water in the yard or near the home should also be investigated for problems with drainage or grading. Foundation sinkage can also be a tell tale sign that water isn’t being properly shed and is pooling under and shifting your home. It’s always wise to protect yourself and get a home inspection before buying! 

Adding Value (and enjoyment) with Curb Appeal

The curb appeal of your home can make or break its first impression on visitors. The facade is what people see when they drive by, walk up, or is the first picture they see online when home shopping. It is the only part of your home that is seen every day by the outside world. Make sure it packs a punch! Here are a couple of tips to amp of your curb appeal and get that “welcome home” feeling. 

PRESSURE WASH AND PAINT

This tip is affordable, simple, and can be done by most DIYers and weekend warriors. Dirt and grime can buildup on brick, siding, windows, and walkways. A simple power wash can remove years of build up and brighten up your home. If you do not own a pressure washer, you can easily rent one from most hardware stores. Friendly warning though: if you’ve never used a pressure washer before, consider hiring a professional. The powerful blast of water can cause damage to surfaces if not done correctly. After giving your home a bath, consider painting focal points such as your front door, windows and shutters, or porch. The right color choice can give your home a new look. 

ADD LIFE WITH LANDSCAPING

Having the right landscape design is like having the right haircut. It frames the facade of your home, draws your eye to or from certain elements, and can be a major complimenting factor in creating your curb appeal. More than a quick trip to the local nursery, just digging holes, and plopping in some plants, it is important to take factors such as the amount of sunlight, water, and maintenance into consideration. Planters are also a wonderful way to invite the eye to wander up to your front door, or welcome visitors as they walk up to your home and onto your front porch. When done right, landscaping has a large impact that adds color, life, and character to your home. 

PORCHES, WALKWAYS AND EXTERIOR STRUCTURES

A little more in-depth than the other tips given today, investing some time and money into your entryway can completely transform the look and feel of your home. When rehabbing investment properties or coaching clients this is one of the top elements I emphasize. This is where most of your foot traffic is, where you spend time during warmer weather, and where you greet visitors. Your walkway, porch, or other entryway structures such as pergolas and trellises really shape your home visually and effect your curb appeal. Projects like these often require the expertise of a contractor, and it is well worth the investment to get things done right the first time. 

COMPLETING THE CURB APPEAL

The easiest and most personable way to kick up curb appeal is to add the details that really tie your home together. These include mailboxes, door hardware, lighting, and outdoor accessories. Small elements like these can showcase your style and work together to create your home’s personality. As a Real Estate professional the number one detail that is commonly overlooked (but in my opinion is most important) are your house numbers. Pick something bold, unique, creative, and easy to read. Your house numbers are part of your home's identity and what visitors are looking for when trying to find your home. These small changes have big effects! 

These curb appeal boosting tips range from simple tricks you can do yourself to more involved projects that could require the expertise of contractors and other professionals. They can help you ready your home for sale, or simply enjoy your living space more. If you need guidance on your curb appeal projects or referrals for professionals to get the job done, I would be happy to help! 

What a Listing Agent Should Do for Their Clients

An ultimate pet peeve of mine in Real Estate is lazy listing agents. Beyond the legally required minimum standards, there is a slew of things your Realtor should be doing for you to set you up for success when listing your property for sale. The best Realtors take pride in their work, are invested in their clients, and know what it takes to get a deal done. Below are just a couple key points that will help you make sure you have found the best Real Estate agent to list your property: 

Importance of Pictures 

prioritizing listing photos

The best realtors know your first showing is online.

This is where it all begins! People are visual! The best realtors know that your first showing begins online, where buyers see your property on websites and apps they most frequent while searching. A good agent will make sure your property looks its BEST when advertised. Professional photography is a MUST. Smartphones or novice photographers cannot get the quality that a professional can. Your agent should make the small investment of a couple of hundred bucks, including staging and virtual staging for empty properties or investors. Great agents know that the better your home looks, the more showings you have, the more buyers you get through your door, the better the chance for offers and a done deal! 

Advertising is Key

Advertising is key!

In advertising, it’s important to let the images do the visual talking while agents supplement it with information that cannot be shown by pictures.

The best Realtors know how to properly position a property in the market and advertise it to potential buyers. In advertising, it's important to let the images do the visual talking while agents supplement it with information that cannot be shown by pictures. Buyers can already see that there are granite counter tops, so a great agent will let the pictures do their job while they add in selling points such as top-rated school districts, proximities to highways, or other features that cannot be seen through a camera lens. In addition to this, the best Realtors will know who your intended buyer is, and market to them! Are millenials taking over your neighborhood? Then your agent should be focusing most of their advertising on social media. Is everyone moving in and having kids on your block? A great agent will make sure to focus on how great the local parks are in your property's advertisement. 

Extra Steps to Get It Done 

There are extra steps in a Realtor's practice that can help clients better achieve their Real Estate goals when selling. The best Realtors know these tricks of the trade and work hard to go the extra mile. Prompt and regular communication is key as updates about market activity, feedback, and potential interest need to be timely. Attending the appraisal is also a habit that great real estate agents have to help appraisers do their homework and assure the home valuation will meet your lender's requirements. In addition, the best listing agents will filter and evaluate all of the offers and buyers for your property, making sure all are qualified and have solid contracts. Great agents know that these and other extra steps make or break deals. 

It's Their Career

Great realtors have full careers in real estate. They are not part-time, it's not a side job, and they aren't just showing up to earn a paycheck. Just like any other career or professional, the best agents take their experiences, training, and skills to achieve long term goals. When listing a property, client satisfaction and successful transactions are an absolutely integral part of their career. The best Real Estate agents are fully vested in their Real Estate practice.