Many people are wondering how they can still get a bargain in today's competitive market. Some people have given up completely and are waiting. However, since we are getting into more of a "normal" market with modest gains, waiting may end up costing you more. 1.) First of all, hire a buyer's agent - they are free.
(Remember the listing agent has the best interest of the seller in mind and they most likely will get a bigger commission if there is no buyer's agent. And in dual agency, they can't recommend a strategy or price to either party.) The catch is... don't just hire anyone. Look up their reputation competent (Linkedin, Facebook, Yelp, Trulia, Zillow, etc.), ask about their production, and do a face to face in their office or in public before going on showings.
An agent that doesn't have an online presence could mean they aren't tech savvy, which is a problem in today's market. Also, I believe an active agent in the industry should be doing at LEAST 8-12+ transactions a year and preferably in the local market you are looking. This is because an inactive agent will not be familiar with the changes in the market. Finally, the meeting is key because then you don't feel obligated to them if you aren't comfortable working with them. Don't fall victim to I NEED TO SEE IT NOW! Calm down, breath, and remember this is probably the biggest financial transaction of your life... you deserve a quality person representing you.2.) Next, be flexible with your criteria.
You won't get everything you want, so decide right away what you need and what things are wants. I had one client recently that sacrificed a 2nd full bath and high end upgrades and we actually ended up bidding on this amazing duplex in the heart of Wicker Park! Another buyer I have chose to buy a highly upgraded unit near Division and Halsted, which is in a still developing area and his appraisal just came in way higher than what we are under contract for!3.) Check out the homes with LONG market time!
Many people think there is usually something wrong with these properties and you are probably right... it is the PRICE! I love negotiating on these properties because usually I have no competition, which gives my buyer the leverage.
So the key is to be creative and flexible while having a competent consultant on your side to guide you. Let me be your Realtor on your next purchase in Wicker Park, Ukrainian Village, Bucktown, Lincoln Park, River North, Oak Park or anywhere on the North Side of Chicago and nearby suburbs!
Andy Ogorzaly - Direct - 312-566-SELL (7355) or email me at email@example.com
If you have read my previous blog posts, you may have remembered how I mentioned that the market has been changing every few months. And guess what? That is still the case. It was a crazy summer here in Chicago with tight inventory and multiple offers on properties. However, I have noticed that my buyers listing alerts have been getting more listings and price changes to them. Don't get me wrong... great properties move quickly still, but I have definitely noticed a little less competition and more inventory. As a result, frustrated buyers should not give up because I think this winter will be the next perfect time to score a deal.
Interest rates spiked mid to late summer, which knocked some on the fence buyers off into the mud. However, a lot of these buyers were probably not that serious and were just curious to see if they could get the same deals their friends did in 2010-12. Unfortunately, multiple offer situations pushed prices up in 2013. I still helped buyers score some great deals this year, but you need to be creative. (Contact me directly if you need tips and/or representation) However, the Fed has decided not to pull back on its stimulus program, which caused mortgage rates to dip to 4.32% from 4.5%. This is great news for buyers.
The big question is... will buyers go into hibernation this winter or will they be motivated by the dip in rates and rise in inventory? My advice for buyers is to take advantage of this small window! Historically, these rates are still low and I doubt we will see them again for a very long time if ever. But what could save you more money is that the seasonal competition is gone. (P.S. Winter is also a GREAT time to secure a luxury rental in the city - prices can be sometimes $200 less per month)
For more helpful tips contact me Andy Ogorzaly at firstname.lastname@example.org or 312-566-SELL (7355). Â I am an active real estate broker in the Chicagoland area, but I also can refer you to other professionals nationwide.
Looking for a great deal? Foreclosures are probably the best bet. Short sales are still a long process and some traditional sellers are still being unrealistic on price. You probably won't have much luck finding high-end foreclosures unfortunately, but there is definitely stuff under $400,000 all over absolutely. I like them because they are usually priced somewhat realistic and you can usually still negotiate if there aren't any other offers.
But remember the more desirable the neighborhood, the quicker it will go. As a result, you probably need to make a decision on whether to bid that same day. You can always back out if you find out a huge defect immediately after an inspection. However, when you go to the property, look at it as if you were a contractor. Try to deduct things on the spot vs. on the inspection. You can still ask for credits during the attorney/inspection review, but the banks are getting less generous because of the increased demand. As a result, it is important that your agent is tough during the initial negotiation. Since every negotiation is different, I go over the strategy to take with my clients.
If you get into a multiple bid situation, the bank will most likely call for best and final. This is when you have to decide how badly you want the property. Many units recently have been going over asking price. When bidding over asking you will want to take many factors into consideration. First of all, is this a prime location where prices will appreciate quickly? How much repair work am I going to have to do this property? And finally, how does this compare to the current inventory? I've walked into some very nice foreclosures before and they may be better than anything else on the market. As a result, the bank may not be as negotiable on the price if it isn't that physically distressed.
Finally, a lot of people are wondering if foreclosures and short sales should be considered as comps when purchasing a traditional property. I absolutely think that they should be counted. Besides being sold "as-is" they are still a transaction of what someone is willing to pay. This is especially true if that neighborhood is flooded with distressed units. Why would someone want to pay $150K for a property if 10 similar properties closed at $110K? Thanks for reading and feel free to contact me about any real estate related questions at 312.566.SELL (7355) or email@example.com!
Dual agency is when a listing agent also represents a buyer. Â In Illinois this type of representation must be disclosed with written approval from both parties. Â In some states it is not even allowed. Â I personally don't think it should be allowed in Illinois either because how is one agent supposed to get the best deal for both parties? Â It just doesn't seem possible. Â In dual agency, the agent is not allowed to suggest a price to either party (or release confidential info) because the agent may end up favoring one party. Â However, wouldn't it be easy for the agent to accidently release some confidential info? Â Also, what's the point of having an agent if they can't suggest a price?
A buyer's agent is free, but not all are created equal. Â Do your research to see which agent will fight the hardest to get you the lowest price. Â And while a seller's agent does charge a commission, they may end up getting you a better price through staging advice and tough negotiation. Â
Just like the stock market, you need to buy low and sell high. Â But in real estate, you don't ever have to sell because a smart investment property gives you income every month! Â However, you can't start buying when everyone else is because you don't want to overpay for a property like many did. Â Chicago is currently in a down market that is starting to level out. Â This means we will be approaching a bottom market, which could last a couple years. Â For sellers that need to EXIT their property right away, you probably should list now since prices won't be going up for a while and it's busy now. Â If you don't plan to move and aren't in financial trouble, then hold onto it by all means. Â
For buyers, you need to first figure out what you can afford for ALL of your monthly costs will be like mortgage, taxes, insurance, HOA's, maintenance etc. Â If you will be living there, but still are looking for income from the property, then consider a 2 bedroom, duplex, or multi-family building where you can rent out the extra bedroom, floor, unit etc. to cover your expenses. Â However, not all properties are a good fit for this situation because the monthly costs are different for every property depending on the factors I listed above. Â The best investment properties are usually in middle class areas where you can get quality renters and the purchase price isn't too expensive.Â
A lot of people are wondering whether to invest in transtitioning neighborhoods right now, and I say YES! Â These are great areas to find great deals right now and the property values should only rise, but I only recommend buying in these areas in bottom markets because these areas usually struggle in down economies. Â Rogers Park and Humboldt Park are prime examples of this. Â Also, only buy in areas that you feel comfortable being in. Â You may need to visit the property to collect rent, do maintenance or even live there. Â As a result, it should be an area that you would feel comfortable being in at all hours of the day. Â Two major neighborhood features that turn me off personally are vacant lots and boarded up homes. Â Those are signs to me that this is an unstable area, which makes it a risky investment. Â Finally, I would also check out the local businesses or lack there of. Â If "Main Street" is also empty and boarded up, then that may also be a bad sign. Â
Well I hope this blog post was helpful. Â Contact me directly with any questions!
As a buyer you have access to a wealth of information about real estate that has never been seen before. Â This can be helpful, but overwhelming at the same time. Â While you may find your dream place online by yourself, it is still a good idea to hire a buyer's agent. Â Do you really want to work with the listing agent who is looking out the seller's best interest? Â All brokers in Illinois are required to disclose dual agency (an agent handling both ends of the transaction), but it doesn't mean that they won't accidently be biased. Â They are legally not allowed to recommend a price to either the buyer or seller since it could risk violating confidentiality. Â As a result, interview a few buyers agents out there that either knows the area or is at least willing to do research for you in order to get you the best price. Â I won't go into all the details about a good buyer's agent because that's not what this post is about, but make sure that they are ready to negotiate hard to get you the best price.
I know it can be tempting to just go out on a showing before sitting down with an agent, but DON'T. Â You should interview your agent ahead of time to make sure they fit your personality. Â If you get to involved and don't like them, then you may end up feeling uncomfortable firing them later on. Â Also, the property you want to see may not be a good fit for you anyways because of restrictions with financing, pets, etc. Â So if the first agent you called is willing to run out for a showing before meeting you, then they too aren't doing their due diligence to help you. Â As a result, they probably won't understand your goals of your home search later on. Â
Unfortunately, bad agents can give this whole industry a bad reputation. Â But there are definitely plenty of good ones out there as well. Â Because there is so much info available online nowadays, it may seem like you could represent yourself in a transaction. Â But a good buyer's agent is FREE to you and they have market data that isn't available online that can help get you a lower price. Â So while you are shopping online for homes, you should first be shopping for your agent. Â You are the boss in this situation, so you need to do your due diligence in finding someone who will protect and serve your needs.
Showing homes is easy, but negotiating and advising takes skills. Â