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Hiring
a REALTOR®
The biggest mistake buyers make is to start shopping for a home
before they select a REALTOR®. Rather than interviewing candidates
and making an informed choice, they drive off with an agent who
happens to be holding an open house in their preferred neighborhood.
Or they pick a REALTOR® whose name is on a for-sale sign or
who answers the brokerage's telephone when they call about a home
advertised in the newspaper.
A
top agent will rarely hold open houses personally, nor will a
top agent sit around the office answering cold telephone calls.
Productive agents are busy with repeat and referral business from
former clients and personal marketing efforts.
There
are exceptions, of course. Some solid agents enjoy holding open
houses. And some enthusiastic newly licensed agents use floor
time to build a client base. It's okay to hire a REALTOR®
who does these activities, but you shouldn't hire someone based
primarily on the chance encounter of one telephone call, one open
house or one for-sale sign.
Sellers
make similar mistakes. Some select a REALTOR® because he or
she sold a few other homes in the neighborhood or sent out seed
packages last spring. While these "neighborhood names"
may be worth considering, sales and seed packages shouldn't be
the sole factors in hiring a REALTOR®.
Another
common mistake among sellers is to hire a REALTOR® because
he or she states a high opinion of their home's value. An agent
may suggest an inflated price to flatter the seller and capture
the listing, only to have the agent argue for a price reduction
after a few weeks, or an agent may suggest a low price so they
can sell the home quickly or attract multiple offers. Rather than
being a factor in selecting a REALTOR®, pricing decisions
should be made in consultation with the agent, based on market
trends, recent sales of comparable homes and how soon you want
to move.
The
right way to hire a REALTOR® is to know your own needs and
find someone who will meet those needs. Talk to several agents
and take notes. Start by getting some background information about
the agent. Ask: How long have you been in the real estate business?
What special training or qualifications do you have? Do you have
an assistant? What are your strengthens in negotiating? How many
buyers/sellers did you work with in the last year? How many of
those people bought/sold a home through you? What is your view
of market conditions? Then find out whether the agent is experienced
with low-downpayment financing, condominium associations, lease-options,
multiple offers, high-end homes, disclosure concerns or other
special needs you may have. Finally, get a list of references
from the REALTOR®.
Hiring
a Real Estate Professional
One
of the biggest mistakes buyers make is to start shopping for a
home before they select a real estate professional. Rather than
interviewing candidates and making an informed choice, they drive
off with a real estate professional who happens to be holding
an open house in their preferred neighborhood. Or they pick a
real estate professional whose name is on a for-sale sign or who
answers the brokerage's telephone when they call about a home
advertised in the newspaper.
There are some very important things you should consider when
choosing a real estate professional. One of the first considerations
is who the agent represents during the process.
It’s
important to know the differences between a real estate professional
who represents a seller (the "traditional" role of a
sales associate), a real estate professional who represents a
buyer, and one who represents both. In most areas, real estate
professionals are now legally obliged to disclose, in writing,
information on the various types of real estate agency relationships
that exist.
·
Seller's Agent – A real estate professional becomes a seller's
agent by entering into a listing agreement to represent the seller's
interests. Seller representation may also be created when a real
estate professional shows a property on the Multiple Listing Service
and "buyer agency" has not been created. The seller's
agent can provide information to assist the buyer, but they must
place the interests of the seller first. A buyer should not disclose
anything to the seller's agent they do not want the seller to
know.
· Buyer's Agent – A real estate professional becomes
the buyer's agent by entering into an agreement to represent the
buyer. A buyer's agent can assist the seller, but does not represent
the seller. The buyer's agent must place the interests of the
buyer first. A seller should not tell the buyer's agent anything
they would not want the buyer to know, because the buyer's agent
must disclose any pertinent information to the buyer.
· Dual Agent - Dual agency occurs when a real estate professional
represents both the seller and the buyer. It can also occur when
the listing or seller's agent works for the same real estate company
as the buyer's agent. In most states, the buyer, the seller, and
the agent must agree in writing for the creation of dual agency.
The dual agent is required to treat the buyer and seller honestly
and impartially. In dual agency, the agent's duties are more limited
and there is potential for conflict of interest.
Finding
the right home builder in Chicago is a difficult task. How can
you locate a reputable contractor that will give your family a
building that gives generations of enjoyment? Let IllinoisRealEstate.com
help you; we have an exclusive network for finding the perfect
home builder in Chicago. We can help you and offer tips on finding
the right piece of property for your house, financing, moving,
and everything else involved with building your own future. IllinoisRealEstate.com
can help when it comes to finding the perfect home builder in
Chicago.
Whether
you’re looking to purchase a condo in a high-rise, a greystone
in the Gold Coast, a loft in Bucktown, or a multi-unit building
in Lincoln Park, Chicago’s real estate market has something
for everyone. Chicago’s real estate market also offers lots
of opportunities in commercial real estate. Whether you’re
looking for office space, an entire building, or a warehouse to
store a large inventory, you can be sure you’ll be able
to find it in Chicago’s real estate market. There’s
a lot to like about Chicago, from its beautiful skyline, efficient
public transportation system, financial district, and various
ethnic neighborhoods, it’s truly a great place to call home.
Chicago’s
real estate market provides opportunities for almost anyone associated
with real estate. Although competitive, home appraisers, real
estate agents, lenders, insurance agents, home inspectors, and
leasing agents should not have a difficult time finding business
in Chicago being that there are around three million people in
the city alone. Couple that with the financial district and the
fact numerous national companies are based in the Chicago area
and you can see why Chicago is a great place to call home. With
the use of the city’s public transportation system getting
around the city is extremely easy, efficient, and will help save
you money with today’s higher fuel costs.
1031
Tax Exchange
Taxpayers planning to sell, purchase, or construct real property
should review the possibility of conducting an Internal Revenue
Code Section 1031 like-kind exchange to defer federal and general
state income taxes on the capital gain. To qualify, property owners
must exchange real or personal property (relinquished property)
for other property of a like-kind (replacement property).
"Like-Kind" has reference to the nature or character
of the property and not to its grade or quality.
The fact that any real estate involved is improved or unimproved
is not material. Unproductive real estate held by one other than
a dealer for future use or future realization of the increment
in value is held for investment and not primarily for sale.
The fact is real estate that can be exchanged
under IRC Section 1031 is "like-kind", is extremely
broad and is supported by numerous Revenue Rulings and Private
Letter Rulings that have addressed this subject.
By
utilizing the 1031 tax exchange you will be able
to increase your, leverage, cash flow diversification, consolidation,
and increase depreciation.
HOW
TO GET YOUR HOME SOLD (IN A BUYER’S MARKET)
I
think just about everyone would agree that the Chicago real estate
market is officially a buyer’s market. What exactly does
that mean? The definition of a “buyer’s market”
is when there are more sellers than buyers, thus creating larger
supply than demand, and if you ever took an economics course,
you would conclude that prices would then have to fall until there
was balance. Fortunately, that doesn’t have to be the case.
The
days of selling your home the moment it goes
on the market or a few days later for the listing price or even
more are over, so how do you get your home sold
in this type of market? First, you will need to find the value
of your home’s value in today’s market. This can be
accomplished by either hiring an appraiser (for a fee), or a local
licensed real estate agent (this service is usually free). Since
real estate agents offer this service for free, it’s generally
a good idea to get 2-3 opinions. They will analyze your home and
compare it to similar properties in the area that have sold, as
well as, ones currently on the market.
Assuming
you are satisfied with the current value of your home, the second
step is to determine the best approach to selling it. You may
want to try selling it FSBO (for sale by owner), listing it with
a full service real estate company, or a discount real estate
company that will list your home in the MLS for a flat fee. There
are pros and cons to each approach.
FSBO-
Pros:
-Doesn’t need to pay a commission, therefore can be more
flexible on price
Cons:
-Limited exposure-home will not be listed on MLS or Realtor.com
-Pay all advertising out of own pocket
-Having to schedule and attend all showings
-Must be there for open houses
Discount
Real Estate Company-
Pros:
-Inexpensive to list your home on the MLS
-Will explain real estate terms and contracts
-Assist with negotiating
Cons:
-Having to pay money out of your pocket before your home sells
-Responsible for all advertising costs
-Must offer commission to buyer’s agent if home is sold
through the MLS
-May have to schedule and attend showings, and open houses
Full
Service Real Estate Company-
Pros:
-Costs you nothing until your home sells
-Home
will be listed on the MLS & Realtor.com in addition to other
real estate publications and websites
-Will provide a free home evaluation
-Does not need to schedule or attend any showings
-Will handle all negotiations
-Will explain real estate terms and contracts
Cons:
-Commission is due upon sale of the home
If you decide to list your home with a full service real estate
company, I recommend interviewing multiple agents prior to making
your final decision. Prepare a list of questions, such as, what
will you do to get my home sold? Are you a full-time real estate
agent? How long have you been in the business? You should also
ask for a couple references of both previous and current clients,
and contact them to see if they were satisfied with their service.
In
a buyer’s market it’s very important to get the most
exposure possible for your home, so if you decide to list with
a real estate agent, make sure they have a solid marketing plan
that will maximize your home’s exposure.
Here
are some additional tips to help get your home sold:
· Price your home competitively
· Make sure your home is clean both inside AND outside.
Curb appeal is important because the exterior is the first thing
a potential buyer sees, and a good first impression can go a long
way in selling your home.
· Consider paying for a professional home inspection. This
way you will be aware of any problems before a potential buyer
will. Nothing kills a deal faster than a major issue with the
home inspection.
· Offer incentives. If your home’s flooring is worn
and/or outdated, or you plan on taking some of your appliances,
offer some form of compensation up front.
· Assist with buyer’s closing costs. This will usually
appeal to first-time home buyers, as well as, cash-strapped buyers.
NEW
CONSTRUCTION TIPS
Choosing
the right builder for your new construction home
·
Start creating a list of new construction home builders:
1. Talk to family and friends who have bought a new construction
home and ask about their experiences.
2. Contact a real estate agent in the area(s) you are interested
in buying a home.
3. Search the Web
4. Look in the real estate section of your local newspaper. Some
will even have a New Homes section.
· Do your homework on new construction:
1. Get a recent list of homes the builder has built. They may
even be able to provide you with names and phone numbers.
2. When speaking with current owners, make sure you have a notebook
to take notes. Try and speak with as many owners as possible and
have questions prepared ahead of time like, Are you happy with
your home? Was your home built on-time? Have you had any problems?
If so, were they fixed in a timely manner? Would you buy new construction
from this builder again?
3. Look at the quality of work. Does the home builder use quality
materials? Check out the quality of the cabinetry, trim, drywall,
windows, etc. in the builder’s new construction homes
Other
items to be aware of when dealing with new construction:
1. Warranties- What type of warranty does the home builder offer?
Most home builders offer a 1 year warranty to repair or replace
items that may be defective. You should get the exact terms and
coverage in your purchase agreement though.
2. How much money does the builder require up-front, and is there
any additional money due prior to closing?
3. Inspections- Does the home builder offer “inspection
periods” throughout the building process?
4. Punch List- This is a list comprised by the buyer. It may contain
small items the builder has yet to complete, items that have been
installed improperly, etc. An agreement between the buyer and
home builder will determine the time period the buyer has to submit
these issues.
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