What's the Real Cost of Your New Home?

This week, the Center for Neighborhood Technology released a new tool that could help home buyers figure out a more true picture of what a new home might cost.  The Housing + Transportation Affordability Index offers a visual picture of average home and transportation costs for over 161,000 US neighborhoods! 

The comparison options are great for home buyers who are assessing the pros and cons of different locations for their next purchase.  For example, the map that compares Vehicle Miles Traveled per Household and Housing + Transportation Costs could be a helpful indicator of quality of life issues such as the commute time you could expect in one town vs. another.  And, how much your transportation budget might change based on which town you choose.

The tool has another advantage - it can also help you select a location that is healthier for the planet.  You can also compare how Greenhouse Gas emissions might change for different locations. 

What is this $3,500 transfer fee?

Nearly five hundred Realtors attended our annual Capitol Conference in Springfield this past Tuesday. This is the biggest Capitol Conference since 1976 and demonstrates the importance of housing issues for homeowners and legislators.  Our local area sent 124 REALTORS for a day long trip which culminated in REALTORS talking to Senators and Representatives about how some proposed bills would affect real homeowners back here in the DuPage and West Cook area.

Issue number one for us was a bill that prohibits something called a private transfer fee covenant.  A private transfer fee covenant would allow a person or entity to collect a fee to the creator of the covenant each time the property title is transferred. On a $200,000 home, this could add up to $3,500 per transaction.

Even in a good real estate market, homeowners don't need yet another cost added to the transfer of property.  REALTORS believe that the price of a home needs to be based on the prevailing market, and not artificially inflated by transfer fees, private covenants, needless government taxation or restrictions.  As experts in the local housing market our members spoke with Senators Cronin, Dillard, Pankau, Millner, Hultgren, Wilhelmi, Radogno, and Holmes about this important issue.

The REALTOR analysis fears that in addition to the burdensome cost, if such covenants were allowed in Illinois, a new "estate in real property" might be litigated for years in Illinois courts.  Illinois should protect homeowners by upholding existing law and the prevailing practice of Illinois law and not allow private transfer fee covenants.

This bill, known as Senate Bill 3747 has now passed the Senate and awaits action in the House.

New Lead Law Goes Into Effect April 22, 2010

A new Renovation, Repair and Painting lead law goes into effect April 22, 2010.

What does this mean for you, the consumer? The new law requires contractors, property managers and others paid to replace windows or renovate residential houses, apartments and child-occupied facilities built before 1978 to be certified by the U.S. Environmental Protection Agency. This new law is designed to protect children from leaded dust that may result from disturbing lead-based paint.

The Illinois Department of Public Health will be conducting meetings around the chicagoland area. For more information, please call the Illinois Lead Program at 217-782-3517

Looking for the right contractor

As a contractor in business for over 10 years, I have seen a lot in regards to the economy, the housing market and the construction industry. As times get tough in the construction industry, contractors look for ways to trim costs. Often this is done by cutting insurance coverage. Verify your contractor has coverage. Requesting a “Certificate of Insurance” does this. The certificate of insurance (aka COI) shows the policy dates and the coverage amounts.

All contractors should have a general liability and workman compensation policy. If they do not have these two basic coverage’s and something happens to either an employee or your home while they are working, you could be held liable. In addition to this basic information, make sure your contractor is insured for the work he is performing. For example: Dryvit or Stucco repair contractors require special coverage to work on your home. In another example a roofing contractor should be covered to work on roofs. If he does not have this coverage and lets say a storm blows in while he has half your roof off and your home suffers severe water damage, your insurance could be liable. His insurance will deny coverage since his coverage did not include the roof. In the unfortunate event this happened at the renewal of your policy, your insurance company will more then likely not renew your home since it had a major claim that could have been avoided. In an extreme case, your insurance could also deny coverage, leaving you to cover all damage on your own.

In addition to insurance, the Illinois Attorney Generals Office requires you to receive a copy of the “Know Your Consumer Rights” on all projects over $ 1000.00. A contractor that does not provide you with this basic informational pamphlet is in violation of state law and can be fined under the law. To view this pamphlet and your rights visit: http://www.illinoisattorneygeneral.gov/consumers/homerep0505c.pdf

Most contractors are reputable and will often give you this information without you even asking.

Lastly, all contractors have the same expenses: labor, materials and insurance. Their bids should be within 5 – 10% of one another. If there is large discrepancy investigate – don’t just take the low bid. If you don’t understand the bids involve someone that does. Several home inspectors will review the bids and give you their opinion. They do charge for this service, but in could be well worth it.

Remember, if it looks to good to be true, it probably is and you always get what you pay for!