With real estate, properties that are deemed to be comparable are likely to impact you, whether they are currently on the market or are recent sales. They will show up on the MLS and numerous websites, and likely will influence potential offers. Also, prospective Buyers are likely to visit nearby properties still for sale with similar characteristics within the price range.

Comparable properties also will factor into an appraisal of the value, which usually is ordered by a lender as a part of a mortgage loan application. Cash purchasers sometimes arrange appraisals as well, to make sure that the purchase price appropriately reflects the market value.

For those reasons, it pays to analyze them. If there are some recent sales at premium prices, your listing should take them into account. If there are low sales figures nearby, you may be able to find out more information to distinguish them so they are not compared to your unit. For example, foreclosures, short sales, and run down units sold for the land or for a complete interior remodeling may have an artificially low price – and one that has nothing to do with a unit that is in move-in condition.

To an extent, taxes and assessments are other elements to consider. They usually are presented on the listing sheets, and often are considered by potential buyers in reviewing the economics of potential properties. Keep in mind that the taxes and assessments can vary for apparently similar properties.

Finally, the relative strength of the property can come into consideration. Are the building components in good shape, or are they worn and in need of replacement? Also, if there is a Homeowner Association, is it well-run and well-funded?  Buildings that are in good condition can command better prices relative to those that require some work.

As a seller, taking these factors into consideration can help you price the property correctly, and thereby avoid a long time on the market. If you are not sure about their impact, call us today.

At the outset, selling a home may appear to be a large undertaking.  Here is an overview of what to expect.

The process begins for the seller with the decision to sell.  If you are using a real estate broker to list the property, you will need to decide who that will be and the terms under which they will list and sell the property.

A seller will need to decide at what price to list the home for sale, as well as how the property will be advertised.  Your real estate broker should be able to assist you with these considerations, including by gathering market information about similar, comparable properties nearby.  How quickly one needs to sell, and the unpaid amount of any sums borrowed, also can be taken into account.  Sellers are required to supply certain disclosures about the home, which will be tendered to the purchaser.  These will need to be assembled early in the process.

If there is a homeowner association, such as with condominiums and townhouses, then the seller will need to provide or arrange for the relevant documents and disclosures required by the contract.   Typically, these include the Declaration and Bylaws of the Association, any Rules and Regulations, prior and current year budgets, and certain other disclosures from or about the association.  Some of these may be able to be obtained in advance of a sales contract.  Other documents change more frequently, and may become outdated in the event of a lengthy listing.    Also, the seller may need to notify the association to transfer the unit, to certify the payment of assessments, and to waive any right of first refusal as to the sale.  Some associations charge the seller for these documents.

As a part of the transaction, you are required to provide evidence that you have, and can transfer, good title to the property.   This involves looking at the property history for any liens, unpaid taxes, assessments, easements, and restrictions that affect the land.  We assist our clients to arrange this.

Various documents will be needed for the closing, including to actually transfer possession, and to satisfy the applicable Illinois, Cook County, and municipal taxes, requirements and certifications.   We will coordinate with you to make these steps as seamless as possible.

Also, the buyer likely will expect to take possession of the property at closing, unless you made a different agreement.  Therefore, if you are living in the home being sold, you also need to consider where you are going to move.   If purchasing a new home, then you will need to plan early for the time constraints and financial requirements to do so.

As a final thought, only the seller can decide the right time and price at which to sell.  But when that decision is made, our goal is to assist sellers by taking care of a lot of the mechanical aspects of the transaction, providing the freedom to move forward.

Purchasing a home should be an exciting experience.  Here is a brief overview of some of the common components.

For the buyer, the journey begins with the decision to buy, and a determination of what is affordable.  A quick consultation with your bank or lender can get you focused on the right price range, so that your search is efficient as possible.

The next step entails some reflection on what is important to you.  One factor is the type of structure — single family, townhouse, small condominium, and high-rise buildings all have different benefits and limitations.  Other considerations may include the age of the building, location, schools, transportation, view, parking, property size and features, and anything else you want to prioritize.  Your real estate broker should be able to help identify properties that are suitable candidates.

When you are ready to make an offer on a property, determine your strategy and the upper limit you are willing to pay, and prepare your first offer accordingly.

Once the seller accepts your offer, several important clocks start to run.  The shortest of them is for the inspection and attorney review periods.  The inspection period allows you to schedule a walk-through with a licensed home inspector to identify any defects with the property.  Your broker should be able to refer you to a home inspector.  Also, the seller is required to provide various disclosures about the condition of the property to you.  If you have any questions, or any significant defects are disclosed, you may want to review them with your inspector.  Attorney review allows for certain changes to the contract where appropriate.  Both of these periods usually last only a couple days, so it is very important that you are ready to act quickly and keep your attorney informed.

Unless you are paying cash, you also will need to apply for a mortgage by selecting a bank or lender, filling out an application, and providing various records in support.   Decide how you will hold title to the real estate so that you can apply for the loan accordingly.  If you have questions about different ways to hold title, ask your attorney.

If there is a homeowner association, such as with a condominium or townhouse, the seller will be required to provide certain documents, such as the Declaration and Bylaws, Rules and Regulations, budgets, and certain disclosures from the association.  You will have a certain period of time – again, usually just a few days — to review these documents and decide whether the property is appropriate for you.

Once you get through these items, contact your insurance agent to obtain an appropriate policy.  Many lenders require proof of insurance as a lending condition.

Finally, you should stay in touch with your lender throughout the process to make sure that they have everything they need from you.  Once the lender approves the loan, the closing can be scheduled, and you will be well on your way to a new home.

We are available for our clients throughout the process to review the contract, resolve any defects disclosed during the inspection, help you with any questions in your evaluation of any homeowner’s association, review the documents produced by the seller, and help you through closing.  In short, we are here to make it as enjoyable a journey as possible.

It is helpful to identify your primary goal for the sale.  Is it to obtain a certain price?  Or to sell quickly?  By discussing these with your team of advisors, you will give them a sense of the parameters that are acceptable to you.  This will make for more productive discussions and negotiations with a potential Buyer and their agents.  Also, identify what your bottom line is, and consider giving your agents some authority to negotiate on your behalf.  This way, the negotiation can proceed more smoothly and rapidly.

If your target is a certain price, keep in mind that there also is a cost to holding the property.  Property taxes, insurance, mortgage payments, Homeowner Association dues, utilities, and any other recurring costs will continue to accrue while the property is listed.  Therefore, it is possible to hold out for a certain purchase price, but ultimately end up worse off.

Keep in mind that the question of whether to accept a particular offer is both an economic question and a function of your other circumstances.

If you need to sell your current residence before you purchase another home, you limit your own mobility until closing.  On the other hand, if you do move before you sell, you will need to be able to support both the cost and the time to maintain a second property.  Life circumstances, such as jobs, children, schools, and the like also can increase the urgency of a transaction.  These factors also carry their own costs, whether in money, time, or something else.  Therefore, you should consider the value of all relevant circumstances when you evaluate the offer.

As a Seller, receiving word of an offer from a potential Buyer is a great feeling. Multiple offers can be even better news, but will require the Seller to evaluate each offer, and after any bidding, to choose one. Whether you receive one or many, there are various factors that signal the strength of an offer.

All other things equal, the strongest kind of offer is a cash purchase. This eliminates the need for mortgage financing, and the underwriting that goes with it. It also can make for a more rapid transaction, because there are fewer steps for the parties to get to closing.

Purchase price is clearly an important factor as well. There can be a tension between competing offers – one for a higher purchase price with a mortgage, and the other for a lesser amount of cash.

For offers involving mortgage financing, Sellers may want to require a potential Buyer to submit a pre-qualification for financing. Such a pre-qualification indicates that the Buyer has talked with a lender and apparently is fit for a certain level of financing. Although such a pre-approval is not binding, it can lessen the risk of accepting an offer from a Buyer who can not afford the property and who ultimately can not close.

Other indications of the relative strength of an offer include the amount of the down payment, the amount of Earnest Money tendered, and any other contingencies required by the Buyer. The down payment is evident from the amount of the mortgage required by the Buyer. A higher down payment means a lower loan-to-value ratio, or LTV, which corresponds to less risk for the lender. The total Earnest Money, after the attorney and inspection periods are completed, also communicates the level of seriousness of the Buyer. Although there is not a single correct formula, the Seller should be cautious if the amount offered by the Buyer is too low to make sense in light of the other parameters of the transaction.

Other contingencies that a Buyer requires can diminish the strength of an offer, in that they pose an additional layer of uncertainty for the Seller. This does not mean that they should always be refused. They very well may work out and the transaction may close – but they may fall apart later, leaving the Seller to re-list after time has passed.

Timing and market conditions also should be considered. Reasonable offers received quickly after listing the property, or in a down market, may have some extra intrinsic value for some Sellers.

The sales process can require a lot of choices, sometimes with limited information.  Call us if you are going to sell a property in Chicago and want to develop a strategy to get to a smooth closing.

As a Seller, you will need to choose a place to go unless you have already vacated the property.  If you plan to purchase a different property, contact a lender early on to learn the appropriate price range for your next place, and whether your purchase is contingent upon the sale of your current home.  These elements are important for planning purposes, because you might want to make the purchase contract contingent on the sale if necessary, and because you will want to make suitable arrangements for the moving and storage of your possessions during the two closings.  If you plan to rent instead, you will need to identify a suitable property and execute a lease.

Planning the move should not be overlooked.  It takes time and resources.  If you are moving from a condominium or other high-rise community, there may be moving hours, other rules, forms and fees to reserve an elevator.  Moving companies, and storage if necessary, also need to be arranged in advance.

Most real estate contracts provide for a transfer of possession at closing.  That means that you and your possessions have to be out of the premises, and that the keys have to be turned over at closing.  If you plan to retain possession after the closing for any reason, you should communicate that with both your real estate broker and your attorney, so that appropriate terms can be negotiated and put into writing.  Absent a written agreement, do not assume you can stay after the closing.

Your home is for sale, and you have it under contract, but the Buyer can not get financing.

The risk of this situation can be mitigated at the outset by obtaining from the Buyer a pre-approval from his or her lender. Sometimes, however, other factors cause a loan application to fail.

The residential real estate contracts most frequently used in Chicago contain a mortgage contingency provision. Generally, these provisions provide a certain period of time for the Buyer to obtain a loan commitment (i.e., approved financing). If the Buyer fails to do so, the contingency often provides a Seller with an option to try to arrange an alternate source of financing with certain, usually similar, terms. (Sometimes this option is changed or deleted in an earlier phase of the transaction, however, in which event Seller’s choices may be limited.)

News that financing has fallen through is not a welcome development for a Seller. At best, there will be a delay to closing. It also is possible that the transaction will not close. Unfortunately, the Seller will still be responsible for any mortgage payments, taxes, and assessments accruing while he or she owns the property – and potentially may have other plans delayed as well.

A Buyer must provide written notice to invoke the mortgage contingency. The question then is, what caused the loan application to fail? Two additional considerations are whether the Buyer has sufficient financial strength to proceed with the transaction if the loan were to issue, and whether another lender may offer more flexible lending guidelines.

If these factors come together favorably, it may be possible for the transaction to proceed with a different lender. Most contracts are drafted to provide an option rather than a requirement for a Seller to seek an alternate source of financing. Therefore, a Seller usually also can choose to simply move on, and either hold the property or re-list it for sale.

After signing a contract to buy a condominium, you should receive a stack of documents about the condominium association. The contract usually provides a short period of time to review them, and it is important to make sure that the condominium unit matches your own budget and lifestyle.

Among these documents, there should be at least a condominium declaration and bylaws, a budget, a condominium disclosure, and a set of rules and regulations, if adopted. (Some small buildings do not adopt rules. Larger associations almost certainly will have them.)

The condominium declaration, bylaws, and rules and regulations describe the facilities and governance of the condominium. It is important to make sure that you understand the any restrictions, such as with facilities, construction, decorating, noise, pets, and rental of the units. If you intend to rent the unit out within a year or two, a building may not be suitable if rentals are capped and subject to a wait list. If you are a pet owner, make sure you will not be in conflict with the building rules! Pet restrictions can vary widely – including number, weight limits, tank size for fish, and sometimes an outright ban.

The budget should tell you about the income, expenses, and reserves of the building. With a condominium, you are buying the unit itself, along with a share of the building or development as a whole. Therefore, you are buying a share of the assets – both the existing facilities and the financial reserves. You are also taking on a shared responsibility to maintain and operate the building.

The condominium disclosure, sometimes referred to as a “Section 22.1 disclosure,” should provide information about the operation of the condominium itself, such as monthly and any pending special assessments, upcoming capital projects, insurance, and any litigation. This will help to identify ongoing or potentially upcoming circumstances that may factor into your decision.

It is often said that real estate is unique. That is certainly true as far as the location and all the factors that go with it – view, air and light, building amenities, neighborhood facilities and services, and the like. It also applies to the economics and governance of a condominium unit. For example, in a high-rise building, a unit at the top of the building can have a higher ownership stake and assessments compared to a seemingly identical unit lower in the building. In some buildings in Chicago, this may almost double from the bottom to the top floors!

Ultimately, these kinds of issues involve economic decisions. Therefore, a buyer should review the condominium documents carefully to make sure that the disclosures and restrictions match his or her expectations for use and cost.