If you are buying residential property, you are probably aware that you should get a home inspection. This means you should hire a licensed home inspector to check out the house for you. Typically this is done within the first 5 days after the contract is signed by the seller. If you are not happy with the way the inspection turns out, your attorney can cancel the transaction or try to negotiate the repairs or a credit for you.
Keep in mind, however, that a typical home inspection is not meant to cover cosmetic items. If you are walking through the house and notice chipped tiles or peeling paint, take all of that into account when you make your initial offer. The purpose of the inspection is to make sure that the home's structure and systems are in good condition, not to find peeling wallpaper or dirty carpets.
Make sure your home inspector focuses on the following:
1) Roof condition and water-tightness
2) Foundation condition and water seepage
3) Mechanicals and HVAC
4) Plumbing and internal water damage
5) Electrical panel and system
6) Exterior walls
7) Exterior slope
If you are concerned that there might be mold that is not visible, or radon, you may have to ask your inspector to run specialized tests. Not all inspectors are able to do mold and radon testing, however, and you might need to contact someone else for assistance.
If your inspection reveals conditions that are unacceptable to you, or will cost too much to fix, you can back out as long as you do it in a timely manner. If the flaws are manageable, you can move forward.
Friday, February 22, 2013
Friday, February 15, 2013
Chicago Named Strongest Buyer's Market in the Country
According to data recently released by Zillow, Chicago was the best buyer's market in the United States in the third and fourth quarters of 2012. Zillow studied 142 metro areas across the country, and found that buyers in Chicago have far stronger bargaining positions than sellers do. Cleveland came in second place, and the top five were rounded out by by Philadelphia, Cincinnati, and New York City.
The top three seller's markets, meaning metro areas in which the sellers had greater bargaining power than the buyers, were all in California: San Jose, San Francisco, and Sacramento. The top five were rounded out by Las Vegas and Phoenix.
The formula Zillow used to determine the best markets had three components: 1) A comparison of how much a house sells for as compared to its last listed price; 2) the amount of time a house stays on the market; and 3) the percentage of homes in any metropolitan area that have had at least one price reduction. Chicago is the strongest buyer's market because in order to sell their homes, sellers are not only having to reduce prices more often than sellers in other metro areas, their homes are on the market longer, and the final price they accept is a smaller percentage of the asking price than the prices accepted in other metropolitan areas.
What does this mean for you? Well, if you're looking to buy, according to Zillow, it's a great time to do it. On the other hand, if you're looking to sell, you have a lot of competition out there!
The top three seller's markets, meaning metro areas in which the sellers had greater bargaining power than the buyers, were all in California: San Jose, San Francisco, and Sacramento. The top five were rounded out by Las Vegas and Phoenix.
The formula Zillow used to determine the best markets had three components: 1) A comparison of how much a house sells for as compared to its last listed price; 2) the amount of time a house stays on the market; and 3) the percentage of homes in any metropolitan area that have had at least one price reduction. Chicago is the strongest buyer's market because in order to sell their homes, sellers are not only having to reduce prices more often than sellers in other metro areas, their homes are on the market longer, and the final price they accept is a smaller percentage of the asking price than the prices accepted in other metropolitan areas.
What does this mean for you? Well, if you're looking to buy, according to Zillow, it's a great time to do it. On the other hand, if you're looking to sell, you have a lot of competition out there!
Friday, February 8, 2013
Changes to the Security Deposit Return Act
Landlords and tenants often end up fighting, and sometimes the arguments continue well past the end of the tenancy. You may have had a bad landlord, or a bad tenant, but the fact is, not all landlords are bad, and neither are all tenants. Periodically the state legislature makes little tweaks to various laws to acknowledge either or both of these assertions.
Recently, for example, the legislature tweaked the Security Deposit Return Act. Pursuant to this Act, the landlord must give the tenant an itemized list of the damage the tenant caused to the landlord's property within 30 days after the tenant leaves, along with the cost (either actual or estimated) of repairing the same. This notice must be given to the tenant personally, or at his last known address. Effective January 1, 2013, however, landlords have the option of sending this notice via electronic mail to an e-mail address that has been previously verified by the landlord (perhaps an e-mail address on which the landlord and tenant communicated with each other earlier -- the statute uses the word "verified" but does not state exactly what that means).
Regardless, this revision helps get around an argument often used by tenants, namely that the tenant did not receive the notice. In many cases, the tenant truly has not received the notice because he had left the landlord's property before the notice was prepared, and he is not living at the address he lived at prior to moving to the landlord's property. If the notice is sent via electronic mail, the landlord can have a greater degree of confidence that it will actually be received by the tenant.
For more information on the Security Deposit Return Act, click here.
Recently, for example, the legislature tweaked the Security Deposit Return Act. Pursuant to this Act, the landlord must give the tenant an itemized list of the damage the tenant caused to the landlord's property within 30 days after the tenant leaves, along with the cost (either actual or estimated) of repairing the same. This notice must be given to the tenant personally, or at his last known address. Effective January 1, 2013, however, landlords have the option of sending this notice via electronic mail to an e-mail address that has been previously verified by the landlord (perhaps an e-mail address on which the landlord and tenant communicated with each other earlier -- the statute uses the word "verified" but does not state exactly what that means).
Regardless, this revision helps get around an argument often used by tenants, namely that the tenant did not receive the notice. In many cases, the tenant truly has not received the notice because he had left the landlord's property before the notice was prepared, and he is not living at the address he lived at prior to moving to the landlord's property. If the notice is sent via electronic mail, the landlord can have a greater degree of confidence that it will actually be received by the tenant.
For more information on the Security Deposit Return Act, click here.
Friday, February 1, 2013
Mortgage Relief Extended for 2013
A few laws benefiting home owners and borrowers have been extended through December 31, 2013.
First of all, the Mortgage Debt Relief Act of 2007 expired on Decembr 31, 2012. On New Year's Day, however, lawmakers extended the act through 2013. This is good news if you are going through a short sale. Typically, any debt that is forgiven during the course of a short sale is taxable income to the homeowner who's debt is forgiven. But pursuant to the Mortgage Debt Relief Act, such debt is not taxable.
Second, mortgage insurance premiums will remain deductible, as they were in the past, as a result of the recent "fiscal cliff" laws. These deductions allow a sizeable savings for homeowners who pay mortgage insurance, so long as their income is less than $110,000 annually
Third, in 2012, homeowners who made energy-efficient improvements were allowed to take a $500 tax credit if they met certain criteria. This has also been extended through 2013.
First of all, the Mortgage Debt Relief Act of 2007 expired on Decembr 31, 2012. On New Year's Day, however, lawmakers extended the act through 2013. This is good news if you are going through a short sale. Typically, any debt that is forgiven during the course of a short sale is taxable income to the homeowner who's debt is forgiven. But pursuant to the Mortgage Debt Relief Act, such debt is not taxable.
Second, mortgage insurance premiums will remain deductible, as they were in the past, as a result of the recent "fiscal cliff" laws. These deductions allow a sizeable savings for homeowners who pay mortgage insurance, so long as their income is less than $110,000 annually
Third, in 2012, homeowners who made energy-efficient improvements were allowed to take a $500 tax credit if they met certain criteria. This has also been extended through 2013.
Friday, January 25, 2013
Will Cook County get a Land Bank?
According to research conducted by an advisory committee appointed by the Cook County Board President, 80 government bodies in 23 different states have a land bank. Last month the Cook County Board President is recommending that Cook County form one too.
What is a land bank? In this context, a typical land bank is a quasi-governmental group that buys (or receives via donation), maintains, manages and then eventually sells off properties that were otherwise serving no real purpose. Usually the properties owned by the land bank were either foreclosed or sold at scavenger sales; often they are vacant and seldom have they been maintained.
If Cook County's land bank is formed, the advisory committee hopes it will deal with 850 properties in its first year. This estimate assumes that the land bank would purchase 30% of the properties with an initial $1 million start-up investment, and that 70% of the properties would be donated by banks.
The Cook County Board is considering the land bank proposal this year.
What is a land bank? In this context, a typical land bank is a quasi-governmental group that buys (or receives via donation), maintains, manages and then eventually sells off properties that were otherwise serving no real purpose. Usually the properties owned by the land bank were either foreclosed or sold at scavenger sales; often they are vacant and seldom have they been maintained.
If Cook County's land bank is formed, the advisory committee hopes it will deal with 850 properties in its first year. This estimate assumes that the land bank would purchase 30% of the properties with an initial $1 million start-up investment, and that 70% of the properties would be donated by banks.
The Cook County Board is considering the land bank proposal this year.
Friday, January 18, 2013
Radon Revisions Effective January 1, 2013
In 2012, the Illinois state legislature made some changes to radon-related items that took effect on January 1, 2013. Here are the basics:
1) Licensed day care centers, licensed home day care facilities, and licensed group day care homes must be tested for radon at least once every three years. The radon test report must be posted in the facility, and copies must be available to parents and guardians upon request.
2) The Radon Disclosure form (given to buyers) has been changed. Specifically, sellers are now required to give buyers the most current records of radon on the property, as opposed to "all available" records. Attorneys, real estate agents, and sellers should take care to use the new form.
1) Licensed day care centers, licensed home day care facilities, and licensed group day care homes must be tested for radon at least once every three years. The radon test report must be posted in the facility, and copies must be available to parents and guardians upon request.
2) The Radon Disclosure form (given to buyers) has been changed. Specifically, sellers are now required to give buyers the most current records of radon on the property, as opposed to "all available" records. Attorneys, real estate agents, and sellers should take care to use the new form.
Friday, January 11, 2013
Illinois Provides Funding for Military Homebuyers
Recently, Illinois invested more money into Welcome Home Heroes. The $5 million cash injection will help military families and veterans buy homes in the state. In addition to active military members and veterans, the program is also available to Illinois National Guard members and reservists. To qualify under this program, you must be a first-time home buyer unless you are a veteran.
There are income limits as well. If you are buying a home in Cook, Lake, DuPage, Will, McHenry, or Kane counties, then your household income must be less than $90,960, assuming your household consists of 1-2 people. If your household consists of 3 or more people, your household income must be less than $106,120. All other Illinois counties are eligible too, although they each have their own income limits.
Of course, there are limits on the purchase price as well. If you are buying a single-family property in Cook, Lake, DuPage, Will, McHenry, Kane, Kendall, Grundy, or DeKalb counties, the home must cost less than $378,461. All of the other counties have their own purchase price limits, but they are all less than $378,461.
If you meet the various requirements and qualify for a Welcome Home Heroes loan, here's what you get:
1) A 30-year fixed loan. As of today, the interest rate is 3.725% for conventional financing and 3.25% for FHA or VA programs (subject to change).
2) A forgiveable loan of $10,000 for closing costs and down payment assistance
3) A special mortgage credit certificate to help save more money than the traditional itemized deduction for interest on your income taxes
If you feel you might qualify, it's worth looking into!
There are income limits as well. If you are buying a home in Cook, Lake, DuPage, Will, McHenry, or Kane counties, then your household income must be less than $90,960, assuming your household consists of 1-2 people. If your household consists of 3 or more people, your household income must be less than $106,120. All other Illinois counties are eligible too, although they each have their own income limits.
Of course, there are limits on the purchase price as well. If you are buying a single-family property in Cook, Lake, DuPage, Will, McHenry, Kane, Kendall, Grundy, or DeKalb counties, the home must cost less than $378,461. All of the other counties have their own purchase price limits, but they are all less than $378,461.
If you meet the various requirements and qualify for a Welcome Home Heroes loan, here's what you get:
1) A 30-year fixed loan. As of today, the interest rate is 3.725% for conventional financing and 3.25% for FHA or VA programs (subject to change).
2) A forgiveable loan of $10,000 for closing costs and down payment assistance
3) A special mortgage credit certificate to help save more money than the traditional itemized deduction for interest on your income taxes
If you feel you might qualify, it's worth looking into!
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