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Price Reduction. Short sale listing with Bank Approved pricing.

For Sale: 3BR/1+1BA Single Family House in Deerfield, IL, $115,000.

Eric P. Egeland, SFR, CDPE, e-PRO
Broker Associate
RE/MAX SUBURBAN
NorthShoreREO.com

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Eric P. Egeland, SFR, CDPE, e-PRO
Broker Associate
RE/MAX SUBURBAN
ChicagolandHomeSeller.com

For Sale: 3BR/1+1BA Single Townhouse in Deerfield, IL, $140,000.

Eric P. Egeland, SFR, CDPE, e-PRO
Broker Associate
RE/MAX SUBURBAN
NorthShoreREO.com

For Sale: 5BR/5+1BA Single Family House in Lincolnshire, IL, $1,495,000.

Eric P. Egeland, SFR, CDPE, e-PRO
Broker Associate
RE/MAX SUBURBAN
ChicagolandHomeSeller.com

For Sale: 2BR/2BA Townhouse in Lincolnshire, IL, $289,900.

September Newsletter

August 31, 2010

Real Estate Advisor: August

Tips for Buying New Construction

Buying a brand new a shiny, un-lived in home has a certain amount of appeal. There is no previous homeowner who has affected the home or who has emotional ties to the home that will factor into the negotiation process. New homes are usually built with floor plans that reflect the latest, most popular design trends.

In many ways, buying new construction is an entirely different animal than buying an existing home. While you still need to determine your budget, decide which home features are must-have and secure financing; the process of buying new construction involves a number of different steps.

Representation

Always have independent agent representation when considering new construction. The builder will have sales agents of their own, but they are paid to represent the builder’s interests, not yours. Many will use pressure tactics to encourage you to sign the contract.

A buyer’s agent will act as your fiduciary and provide unbiased information on the pros and cons of any potential transaction. If you find developments that you are interested in learning more about, channel everything through your own independent representation. Protecting your own welfare is paramount.

Learn About the Development(s)

Buying a home in a planned development necessitates careful research of the development and neighborhood itself – more effort than you might otherwise put into learning about an existing neighborhood surrounding a resale.

  • Drive around the neighborhood to get the lay of the land. Are street grids easy to learn, or confusing. What community amenities are in the development, and how conveniently are they located in relation to available homes?
  • Are homes built right on top of each other, or does each lot have breathing space between houses? Are houses laid out such that similar models are not side-by-side, or does each street have an overly “cookie-cutter” feel to it?
  • Visit open houses for any home models that fit your budget, size requirements and general home needs. You may need to allot several days to this task to avoid rushing through each open house. Bring a camera to document details of each model – this way you don’t have to rely on either your memory or marketing materials provided by the development.
  • Inquire with the city or county planner’s office to learn about what is in store for the area around the development(s) you are interested in. Is that bucolic country neighborhood destined to besiegement from an array of shopping complexes and office parks? Is a seemingly too-distant neighborhood due to be linked by future mass-transit into core areas?
  • Research the bylaws and rules of the homeowners association, if one exits. Some subdivisions have HOA’s with strict rules and regulations restricting things such as exterior paint colors, outdoor sheds, landscaping and vegetable gardens. Violating these guidelines can result in expensive penalties, while living by them may be too stifling for some.

Research the Builder(s)

Accurately and fairly reviewing a builder’s history is a crucial step if you’re considering the purchase of a newly built home. Don’t rely on information provided by representatives of the builder or subdivision, as it will be their goal to represent the builder in the best possible light.

Go to the courthouse to see if any liens or lawsuits have been filed against the builder, and verify how they were resolved. Check with the Better Business Bureau for any serious complaints against the builder registered by past homeowners or subcontractors. If at all possible, contact homeowners currently living in homes previously constructed by the same builder to see how they feel about the quality of craftsmanship after having actually lived in the home. Experienced real estate agents should also have a good understanding of which builders have a good reputation locally, and which do not.

Be Cautious with Upgrades and Extras

5 Home Features That Excite Buyers

1. Stainless Steel Appliances:
Many buyers like the sleek, powerful appearance of stainless steel kitchen appliances. Part of the attraction may be that a home kitchen with stainless steel appliances suggests the professionalism of a commercial kitchen. The modern look of the appliances themselves can be incorporated into almost any kitchen design (from modern interiors to more traditional styles). A stainless steel finish is not for everyone, however, so keep in mind that the appeal of these contemporary gadgets will not be universal.

2. Hardwood Floors:
Hardwood floors are sought after by home buyers across all property types and architectural styles. Hardwood flooring has a timeless style and is more durable than other types of flooring. Synthetic wood floors are an option for owners who can’t afford hardwood – just know that most potential buyers will know the difference right away.

3. Quality Fixtures:
Upgrading the smallest details can often go a long ways to improving your home’s appeal to buyers. Replacing outdated or lower-quality doorknobs, faucets, light switch/outlet covers, and drawer pulls can be a relatively inexpensive way to make over a bathroom or kitchen. You can also greatly enhance your home’s appeal by updating lighting fixtures throughout your house, but keep in mind that higher-end lighting fixtures can get expensive fast. Whenever replacing fixtures, make sure the replacements coordinate with both any remaining fixtures and the interior aesthetic of your home.

4. Surround Sound:
The popularity of larger flat panel and projection screen televisions in recent years has in turn generated greater interest in advanced home audio that compliments near cinema-quality picture. Building a surround sound system into your living/media room can entice potential buyers who may be excited by the idea of a new dimension of home entertainment but disinclined to go through the process of installation and setup.

5. Slab Kitchen Countertops:
Granite countertops get a lot of attention as a must-have finish for any contemporarily designed kitchen, but in reality a number of other slab materials can be used to achieve a similar look at a lower cost. One of the major selling points of granite countertops is how easy they are to care for: the hard, nonporous surface is much easier to clean than a tile counter top with grout lines. Solid Synthetic surfaces (such as Corian), composite stone (such as Silestone), limestone, soapstone, marble, quartz and butcher-block slab counters all come with easy care and a more attractive appearance than laminate or tile countertops.

Upgrades to the home itself are features (such as hardwood flooring or high end appliances) that you pay extra for to improve the home based on your tastes. Builders can make a lot of money on upgrades, because they get the parts and labor at favorable rates and generally tack on a large markup.

Make sure you know the base feature list of the model you are purchasing by heart. When the builder offers upgrades, make sure you understand exactly what is being offered by asking questions and taking notes.

Do your own research to compare the cost of the feature plus installation as offered by the builder with what it would cost to have the work done independently after move in. If the builder’s version is far and away more expensive, bidding the work out to independent contractors after you move in is probably the smart move. If the costs are similar, however, it may be less stress to have the work completed by the builder in advance.

Hire an Independent Home Inspector

Many people who purchase new construction fall into the trap of thinking that because the home is newly built, the important step of getting a detailed home inspection is unnecessary. Simply put, new construction does not guarantee sound construction, and skipping a professional inspection can leave you open to future problems that might crop op as a result of building flaws or cut corners. Even homes built by the most scrupulous contractors can have defects that are not obvious to the untrained eye.

Many builders will proved an all-inclusive home warranty as a part of the purchase agreement. This should not dissuade you from getting an impartial inspection: most warranties have a limited lifespan, and many original issues with home construction may not become apparent until many years later.

Shop for Lenders

Builders almost always have a preferred lender (sometimes even an in-house mortgage company), and will typically try to steer you to using this lender to secure the mortgage for your new home. Some builders will even offer deals on the purchase price of the home or free upgraded – contingent upon you using their lender.

Using the builder’s lender, especially without first shopping around for mortgages and other sources, is highly problematic. A mortgage provider who has a working relationship with a builder or development is out to make sure they can get you into a loan for the property. What they aren’t necessarily doing is making sure you get the best deal. Always shop around for the best possible rate, lowest closing cost and fewest hassles.

August 2010 Foreclosure Data for Buffalo Grove, IL 60089 Newsletter.

Real Estate Advisor: June

The Dangers of an Unreasonable Asking Price

One of the most common and costly mistakes made by sellers is setting an unrealistically high asking price. Every seller wants to receive the highest closing price possible for their house, but losing sight of fair market value can have serious repercussions.

In some cases a lack of objectivity results in overpricing the home, other sellers may subscribe to the theory that pricing high initially leaves room to negotiate lower later. Overpricing from the outset could actually force you to end up settling for a lower price than you would have received by setting a realistic asking price based on market research.

Common Results of Overpricing

Fewer “Eyes” on Your Listing – Mispricing your home can prevent it from ever being seen by a certain percentage of potential buyers who might otherwise be interested in your home. Savvy buyers today research the local market even before acquiring an agent. Buyers will search available listings both online and offline in real estate publications, and in most cases they will set a price range to limit the listings they review. If your home is outside of their range even by a few thousand dollars, it may not be on the buyer’s radar.

Most buyers will then hire a specialized buyer’s agent, and together they will develop a strategy to evaluate homes that match the buyer’s needs within their acceptable price range. Occasionally an agent will provide information on a home above the buyer’s maximum price point, but rarely will they stray too far above that boundary.

Lack of Showings – Agents who work with homebuyers will know local market conditions and the listing prices of comparable homes. If they feel your home is overpriced, they will be reluctant to show your home to their clients for fear of wasting their time.

Helping Competing Listings – It may not be your first thought, but overpricing for your home for the market can actually help the competition. Your home’s higher asking price will make other nearby homes of equivalent size and quality look like steals in comparison. Astute selling agents for other properties will use the price gap between your home and their own as a further selling point of their listings.

Stagnation and Stigmatization – If your home is priced higher than what buyers in your market are willing to pay, it runs the risk of sitting on the market for a longer period. The longer your home sits on the market, the more likely it will become stigmatized as “overpriced” in the real estate community. Once that happens, removing the stigma and restoring interest in your home can be a difficult task. Even dropping the price later will not have the same level of impact as the initial, negative, impression of your listing.

Tough Negotiations – A high listing price can be a warning flag that buyers use for leverage during the negotiation process. If the asking price seems high without home improvements or features to warrant the difference, buyers may assume that you are either A) not well informed about the market, B) not a highly motivated seller, C) have a need for money (perhaps forced by a move to a higher-priced area), or D) are simply creating some bargaining room. If the buyer believes any of these, they are likely to fish to determine how low of a price you will accept.

On the other hand, if your home has languished on the market as a result of a high price, buyers may believe you are becoming desperate. Interested buyers will make lower offers as a result.

Appraisal Problems – Should you be fortunate enough to find a motivated buyer willing to pay your overestimated asking price, you still run the risk of having the deal fall apart prior to closing. Most buyers will use some kind of financing to pay for their home purchase, and every lender requires an appraisal of your home’s value.

The appraiser will review your home in person to assess its value based on similar homes that have sold (usually within the last six months). If the appraised value is below the agreed selling price, the lender will only approve a loan for the lower amount. You may be forced to reduce the selling price or risk having the deal collapse, and your home return to the open market.

Overpricing and Today’s Market

Today the tendency to overprice relative to the current market can be even more tempting. Home prices have dropped since the high peaks in the summer of 2006, and as a result many are in denial about the current market value of their home. Homeowners who bought within the past five or six years in particularly may be overly influenced by the purchase price they paid during the real estate boom.

This comes at time when overpricing couldn’t be a worse strategy. There is a smaller pool of highly motivated buyers, and today’s buyers tend to be well educated about the market. Without the assumption of price appreciation, few buyers are willing to gamble and overpay for a home. In addition, credit tightening has reduced both the number of buyers who can qualify for a mortgage as well as the size of the mortgages available.

Creating a Pricing Plan

When pricing your home, the best strategy is to remain objective and compare your home closely to similar properties on the market. Take the opportunity to visit open houses and pay attention to recent sales in your area. Are you more focused on selling quickly, or on receiving the highest possible selling price? Is the price you have in mind reasonable when compared with what other homes are asking for and selling for?

Priced Too High: Corrections

If your home has been sitting on the market with few offers or showings to its name, consider whether or not it is priced correctly. Review recent sales of comparable listings, especially those that have sold since your home went on the market. Another method is to ask agents who have shown your property for feedback they received from their clients. Have buyers who looked at your home in person purchased other homes in the area instead?

Acting quickly to adjust the asking price is the best way to keep as much of your marketing momentum as possible. Depending on how long your listing has been on the market, additional marketing may be needed to help repair some of the “damage” done to the reputation of your home’s listing at the higher price. In some cases, you may be forced to slightly under price your listing to create additional interest.

Real  Estate Advisor: May

Moving Companies: What You Need to Know

Arranging the move to a new home requires dozens of arrangements – particularly in the case of a long distance move. Hiring a professional moving company can save you both effort and time. Moving companies can provide a variety of services for a range of fees, and in many cases leaving the actual move to the professional can free you and your family up to focus on other details.

Picking the Right Mover

Choosing a moving company who will transport your possessions both carefully and swiftly can be something of a daunting task. The tips below can help you find a quality moving company while weeding out some of the less than trustworthy candidates.

Only Accept Visual Estimates – It’s nearly impossible for a mover to offer an accurate cost estimate on the transportation of your things without completing a detailed inventory of your house in person. Only get quotes from companies willing to review what needs to be moved before providing an estimate. You should also accompany each moving company’s representative on their walk-through to make sure the inventory is thorough.

Price Shop – While it may be tempting to go with the first company that you like, obtaining multiple quotes is the best way to assess the market rates for the service.

Avoid Dramatically Lower Offers – Shopping three or more price estimates is also a good way of identifying a company who is providing a “low-ball” quote. Companies whose quote a price far below the median are more likely to either provide a final bill far above the initial (inaccurate) or tack on arbitrary fees that will result in an unexpectedly high final total.

Avoid Movers who Promise a Precise Delivery Date – Most moving companies will provide you a delivery window during which your items will reach their destination. Any company that promises to deliver everything at a prĂ©cised date and or time should raise your suspicion. Moving companies provide delivery windows specifically because precise delivery dates are often beyond the control of the movers themselves, especially in the case of long-distance moves.

Check for Proper Licensing – You always want to make sure that the moving company you’ve chosen is properly licensed and has a strong safety record. Intrastate moving companies are required to be licensed through the Department of Transportation. If you’re moving in-state, you will want to check with local or state authorities to verify the mover’s licensing.

Check for Numerous Complaints – Asking for testimonials from past clients can provide some insight, but the best way to avoid hiring a moving company you will regret is to check the Better Business Bureau for any sign of numerous (unresolved) complaints about the mover.

Questions to Ask a Moving Company

  • -How long have they been in business?
  • How are move estimates priced?
  • What extra charges may come into play?
  • Does the company have any repeat clients or references of business moves?
  • How do they handle expensive or challenging items such as a pool table or grandfather clock?

Common Moving Costs

A professional moving company can save you time and keep your back muscles in working condition, albeit at a financial cost. Here are some of the most common charges levied by movers.

Packing Materials – Regardless of whether you are boxing everything up yourself or having the movers pack for you, boxes of various sizes, bubble wrap, packing tape and loose packing fill will all need to be purchased. If you rely on the moving company to pack boxes, they will charge top dollar for packing materials (sometimes double retail value). Movers may also impose an additional packing fee.

Self-packing all items is one way to save money. Remember that movers usually won’t load anything that is not already boxed and well-taped, so buy extra boxes and rolls of packing tape for a precaution on moving day.

“Line-Haul” Charge – This is the base charge for the transportation portion of your move. Line haul charges are based on the distance of the move and the quantity of moved items (determined either by weight or cubic space occupied).

“Long-Carry” Charge – The “Long Carry” is an additional charge allotted if there is an excessive walking distance between your home and the mover’s vehicle. .

“Stair” Charge – Similar to the “Long Carry” charge, most movers will add an extra fee if they are required to haul your furniture and boxes up or down an excessive amount of stairs. Some movers will charge any stairs in place (by the flight).

Third Party Charges – Many services involved in a move are not handled by the moving company directly, in which case the movers will pass the charges from third-party companies on to you (typically without markup). Examples of third-party charges include appliance servicing (disconnecting &hookup), disassembly/assembly of exercise equipment or playground furniture/equipment and the crating of fine/fragile items.

Insurance Surcharge – The moving industry faces high costs for trucking insurance. Insurance surcharges help the moving company off-set some of the trucking insurance costs they pay on the truck(s) that actually transport your goods and furniture. Note that an insurance surcharge does not offer protection against the loss or damage of your goods.

Valuation Charge & Supplemental Insurance – The valuation charge compensates the mover for assuming liability of your goods during transportation. Moving companies are required by law to have a minimum protection, and federal law requires interstate movers to offer you the option between two different levels of liability (learn more here). Some movers may also offer to sell or obtain for you separate liability insurance on top of basic valuation coverage.