Home Sales up 7.2%

Sales of single family detached homes went up 7.2 percent in September compared with the same period a year ago, according to statistics released by the Mainstreet Organization of REALTORS® (MORe), indicating the fourth consecutive monthly increase. State wide Illinois home sales increased year-over-year in the month of September for the first time since March 2006 with first-time buyers driving the rebound in sales.

Home sale gains this month show the tax credit is working and should be extended through 2010 as it is helping to stabilize home prices and creating thousands of jobs that rely on housing. Today's lower prices and interest rates are very appealing to consumers, but it's the tax credit that is attracting people to home ownership. Not renewing the tax credit could potentially jeopardize a full recovery needed to set the economy back on track.

There were dramatic increases in the numbers of homes under contract in September 2009 compared with a year earlier - 57 percent improvement for detached homes and a 45 percent increase for attached dwellings.

Standouts in the South suburbs for number of homes sold were Chicago Heights (43 percent increase from a year ago), Country Club Hills (53 percent), Lemont (50 percent), and Orland Park (25 percent). Home sale activity also was up in the Western Cook communities of Bellwood (100 percent), Burbank (50 percent), Franklin Park (50 percent), Leyden Township (500 percent) and Melrose Park (133 percent).

In the Dupage and Kane County areas, the strongest increases were seen in Addison (300 percent), Aurora (77 percent), Batavia (108 percent), Bensenville (225 percent), Elmhurst (96 percent), Geneva (72 percent), Glendale Heights (144 percent), Naperville (37 percent), Schiller Park (1110 percent) and Woodale (267 percent).

THE BASICS:

• Today's market offers great opportunities for buyers and sellers.
• The supply and choice of homes for sale is plentiful in most markets.
• Mortgage interest rates are low.
• Home prices are affordable.
• Home ownership offers immediate benefits and long-term value.

Green Financing Part 2 - Products Available

Part 2 of this post about green loans addresses the types of financing available.  Part 1 outlines the process of gettign green financing which can be found in my earlier post. There are two categories of green loans today.  The first type offers incentives for homeowners to go green.  Usually the benefits are based on how much the homeowner can expect to save on utilities after the .   The second category makes cash available to do green improvements.  Some products are a combination of both options.

Energy Efficient Mortgage (EEM) – New/Remodeled Homes, and Energy Improvement Mortgage (EIM) – For “Fixer-Uppers”/Refinance to Remodel

How they work:  Incentive = Higher loan amount.

How to find them:  EEM/EIM’s are approved by Fannie Mae, Freddie Mac, FHA and HUD so they are available, but not widely used.   Contact your lender.

Pros:  May make buying a state-of-the-art efficient home more realistic, or provide the equity to make one that way.

Cons:  Not appropriate for someone who is most comfortable at the low end of their loan range.

 

Private Green Loans – For New/Remodeled Homes, “Fixer-Uppers”, Refinance to Remodel

How they work:  Incentive = Discounts which vary based on buyer’s credit scores and the extent of the green/energy efficient features.  Certified green homes purchased by buyers with top credit earn the best rates and lowest fees. 

How to find them:  To my knowledge, the players in this space are very limited. Agents who have earned a green designation such as EcoBroker Certified or NAR Green can help.  Or contact me for a list of the three big players in Chicago today.

Pros:  Save money each month on your mortgage payment on top of the discounted utility bills!

Cons:  Limited sources today.

203(k) Home Rehabilitation Loan - For “Fixer-Uppers”

How they work:  Incentive = Equity to complete green improvements.  No energy audit required.  This is a special FHA product for “fixer uppers” and energy efficiency improvements are approved.  The program requires two appraisals, one for the property as-is and another based on planned improvements.  The loan amount cannot exceed $410,000 in Chicagoland and improvements cannot cost more than $35,000.  Additional restrictions apply, so discuss these and the payout plan to your contractors with your lender.

How to find them:  The 203(k) program is approved by FHA and HUD so they are widely available.   Contact your lender.

Pros:  Provides the convenience of one loan to make funding home improvements a reality.

Cons:  The convenience usually comes at a higher interest rate.

To learn more:  HUD website - http://www.hud.gov/offices/hsg/sfh/203k/faqs203k.cfm

Seller Credit for Green Improvements - For “Fixer-Uppers”

How they work:  Current federal underwriting standards allow for a credit up to 3% of the purchase price from the seller to the buyer.  The buyer could request this credit and apply it to green improvements.  The credit still needs to be approved during the standard underwriting and appraisal process.  It is important to involve your lender early on if you are interested in structuring a loan to include a seller credit towards green improvements.

How to find them:  Work with your existing lender if the seller agrees to provide the credit.

Pros:  Use your existing lender and approved interest rate.  Potentially share the cost of energy efficiency improvements with the seller or finance the improvements over the life of your loan.

Cons:  Many approvals to meet.  Need to have good documentation to support the appraisal and show receipts paid.

To learn more:  Contact me.

Five Things You Should "Do" Before You Buy A New Home

Things I learned along the road of life…about buying a new home! Now there are certainly more than five things that everyone should consider before they make (probably) the largest purchase of their lives. Also, my list of five may not be what you consider to be the most important things. That all said, here we go with the list and let the debate and comments roll:

Number One: Plan Your Own Budget.
Plan your own budget for the monthly payment for a new home. You know better than any lender what you can really afford versus what you may “qualify for” on a new loan. Consider the other costs of owning a home, such as: homeowner’s insurance, real estate taxes, mortgage insurance. If you don’t have a budget, this would be a good time to start one.

Number Two: Get Pre Approved for a Mortgage.
Work with a qualified Mortgage Advisor and discuss all of the mortgage options and your personal budget. Once you get Pre Approved, you now know how much you can afford to offer for your new home.

Number Three: Work with a Realtor®.
A local real estate professional knows the market best. They are a true wealth of information and not just about homes. They can tell you about communities, schools, shopping and so much more. Plus, they can help you zero-in on that perfect home just for you.

Number Four: Meet The Neighbors.
If you are new to the area and not sure where to buy, then drop by and visit. Park the car and take a walk around the neighborhood, visit the schools, grocery stores and ask people how they like the area. You will get great tips and probably meet some new friends along the way.

And… drum roll please… Number Five:
Be Patient. Buying a new home is fun and just the idea of moving into a new place can be exciting. Just remember that this is a big investment and commitment. Take a deep breath, get your budget done, get Pre Approved, find a great local real estate agent, meet the neighbors and then when you find the perfect home…make an offer.

Today, more than ever, home buyers need solid advice before they make this important financial decision. My five ideas are just the start. Let’s get some comments on what other people have learned along the road of life.

6 Simple Steps to Clear Your Clutter

After a major windstorm a few weeks ago, I faced the significant task of "de-cluttering" my front yard. As I surveyed my yard covered with large branches, I felt overwhelmed and unsure how to start. Then I took a deep breath, chose a place to start, steadily sawed the branches, and deposited them into bags for the garbage collector.

The following tips will help you discover how to tackle the overwhelming task of de-cluttering your space...whether it's your office, kitchen, or garage. The key is breaking down the project into manageable chunks, so you can dig in and complete your project - just like I did with the tree branches.

1. Set realistic expectations. De-cluttering can take a lot of physical and mental energy. It may be unrealistic to conquer your project all at once. Be gentle on yourself and recognize that your project may involve multiple phases.

2. Have the necessary supplies on hand. Once you start organizing, you won't want to interrupt yourself to hunt for supplies. Having everything on hand will make it easier to stay focused. Supplies you might need include:

• boxes for sorting
• cleaning supplies
• trash bags
• file folders
• pens, paper and markers
• water and a healthy snack

3. Determine where to dig first. Even if your entire home or workspace is an organizational disaster, you need to start your organizing crusade somewhere. Here are some helpful questions to ask;

• Which area or room bothers you the most?
• Which area will have the biggest impact on your life?
• What embarrasses you most when a visitor comes to your home or workspace?
• What small area can you start with, so you can get quick results?

4. Avoid meandering as you organize. Break your organizing project into sections - bookshelves, closet, desk, etc. - and focus on organizing each section completely before you move on. If you zigzag around the room, it will be difficult to work systematically and see your progress. Here's a tip: Cover everything (except your current project area) with a bed sheet so you won't be distracted!

5. Chip away at it. If you get tired or lose focus, it's time to take a break. If you've concentrated on one area, it should be easy to pick up where you left off. And don't be afraid to ask for help if someone else can help you quickly wrap up the project.

6. Stick with it. I've found that, like many self-improvement endeavors, people often start off gung-ho with getting organized, but soon other things in life get in the way of completing the project. There's nothing more frustrating than a half-done organizing project! Therefore, consider scheduling weekly organizing sessions on your calendar. This way, you make a commitment to yourself to stick with it and get it done.

It's surprising how much de-cluttering helps you clear not only your physical space, but also your head. Plus, with a clean, organized space, you can navigate life's windstorms with less stress. So choose a place to start and dig in!

Movement in the Real Estate Market

How to get the Real Estate market moving has been one of the hot topics in the Chicagoland marketplace for many months - and of critical importance to the stabilization of current economic conditions in the U.S.

While there are countless theories about how the credit market meltdown came to be, and countless theories on how to fix it, local Real Estate professionals have been witnessing one of the most successful incentives ever provided for home buyers. The comination of low mortgage interest rates, the most affordable home prices in decades, and the tax incentive have come together to encourage familites to become homeowners.

According to the National Association of Realtors (NAR), in Illinois, the homebuyer tax credit has brought in an additional 9,100 buyers into the market to date, and 73,200 1st time buyers by year's end.

The first-time home buyers' tax credit program began in February of 2009 and is due to expire on November 30, 2009.

The firs-time homebuyer's tax credit program, which was part of the American Recovery and Reinvestment Act (ARRA), offered up to $8,000 in tax credit to home purchasers and encouraged many to buy in an uncertain market. The signs of economic recovery are slowly emerging, and there are concerns that ending the program will cause the housing marke to again stall.

On Friday, October 9, U.S. Representative Judy Biggert introduced measures to promote economic recove3ry by strengthening the housing secotr, boosting homes sales and stabilizing property values. A press release outlingin Rep. Biggert's plan can be viewed at http://judybiggert.house.gov/NewsRoom.aspx?FormMode=Detail&ID=1085

Congressman Bill Foster also held a press conference in Aurora on Friday, announcing his support to extend the tax credit - http://foster.house.gov/

Senator Richard Durbin is also supporting legislation to continue the program. An excerpt from his recent letter in response to my request for his vote in supporting continuation of the program:

Excerpt from the letter of Senator Durbin;

“Two bills have been introduced that extend or expand the homebuyer's tax credit. S. 1678 would extend the first-time homebuyer's tax credit through May 31, 2010, at the current rate of $8,000.S. 1230, the Home Buyer Tax Credit Act of 2009, would replace the current tax credit for first-time homebuyers with a one-time credit for all homebuyers equal to 10% of the purchase price of a principal residence, up to $15,000. This tax credit would be in effect for one year after the enactment of the bill.”

I congratulate all of the buyers who stepped out in an uncertain time by recognizing that home ownership continues to be an important step in building personal wealth. Congratulations on your new residence and all that ownership means to your family.

Show YOUR support of the extension and expansion of this program. You can contact your representatives in the U.S. Senate and the House of Representatives by clicking on http://www.fixhousingfirst.com and letting your voice be heard.

Dryvit® Inspections - What is it and Why Should I Get One?

 What is “Dryvit®/EIFS”?

 Dryvit® is a manufacture of insulated exterior cladding products and their name is used generically to describe all the products that are manufactured on the market. In actuality there are close to forty manufactures of these products that fall under a category of products known as; “Exterior Insulation and Finish Systems”, or simply put EIFS (pronounced Eeef-is). 

Several years ago it was discovered that some EIFS clad homes had developed issues if the EIFS was not properly installed or more importantly maintained. There were several class action lawsuits against the manufacturers, while none were found guilty, several had settlements and large amounts of monies were paid out.

Now here we are and depending on who you talk to we are either in the middle or leading edge of the end of the latest recession. Either way, several of these homes are on the market today as foreclosures. It is almost a guarantee that those in foreclosure have not been maintained to the industry standards and are-in-need of a full comprehensive EIFS inspection to discover if there are any underlying problems that are not visible to the eye by just walking around. Even those listed homes not in foreclosure should be fully inspected prior to purchasing.

Why a specialist?

Because it takes special testing equipment andknowledge of how the EIFS’s work with other critical building components to properly evaluate these exterior cladding to determine if there are any under lying concerns. A good place to start your search for a qualified inspector is: http://www.dryvitinspections.com.

These homes should not be written off, they offer superb “Green” benefits to new buyers as shown by the US Department of Energy. They offer substantial energy savings to the consumer and through various warranties and maintenance programs they can be of little concern to a new buyer. In the past it was not uncommon for a seller to remove this cladding from the home in a belief it helped the home sell. This was done at a great expense to the seller and did not guarantee the maintenance issues were resolved. In some cases it actually presented larger problems. In today’s “Green”movement it is not unusual for the EIFS cladding to once again make an appearance in new home construction for those wishing to have one of the most energy efficient exterior wall cladding on the market today. For this reason and more importantly the true understanding by a homeowner on how to maintain these truly energy efficient homes, they are regaining their popularity in the housing market today.  Be the expert, and follow this simple process: inspect, repair and maintain.

Green Financing Part 1 – The Process

One aspect of green real estate isn’t quite keeping up - the financing end.  Energy Efficient Mortgages known as EEM’s have actually been around since after Jimmy Carter and the oil crisis!  But it is still pretty rare to find one that has closed in the Chicago area.  Part 1 of this post will explain what a green mortgage is and the steps required.  Part 2 will outline the different green loan options available. This topic has the potential to change a lot so be sure to contact a trusted lender for more information.

Green financing is available for the purchase of a new green home, or to make improvements to what I call a not-yet-green home.  A green improvement loan could apply either for your existing home or to purchase a new home you plan to fix up.

Steps Required

The thing that makes green loans different is that an extra step is typically required - an Energy Audit or a HERS Rating.  An appraisal assesses the value of the home.  An energy audit assesses the energy efficiency of the home.  (HERS stands for Home Energy Rating System.)  In Chicago these tests usually cost at least $400-600 with the HERS Rating being both more thorough and more expensive.  Results help the lender determine how much you can expect to save on your utility bills.  In most cases, the cost of the additional inspection can be rolled into the amount of your loan. 

The process typically follows these steps:

Step 1 – Buyer/home owner completes the Energy Audit or a HERS Rating. 

Step 2 – Lender increases your approved mortgage amount based on projected monthly utility savings. 

Step 3 – The rest of the closing process is similar to a traditional loan.

Tips:

· Plan ahead so you can complete the extra steps in time. 

· To get the best results, don’t ask a lender if they offer an EEM.  Ask the lender if their local office has closed an EEM loan.

 To learn more about Energy Efficiency Mortgages check out these recommended links:

· EcoBroker International -  http://www.ecobroker.com/misc/lenders.aspx

· HUD - http://www.hud.gov/offices/hsg/sfh/eem/eemhog96.cfm

· RESNET (professional association for energy auditors) - http://www.natresnet.org/ratings/overview/faq_mortgage.htm