Friday, June 12, 2015
How Home Buying is Going to Change After August 1
9:59 am cdt
From Crain's Chicago:
Big changes in the process of buying a house kick in Aug. 1, the day new federal mortgage rules take effect that
are designed to eliminate closing-day surprises or confusion.
While title companies and real estate agents and lawyers are scrambling to be ready by
the deadline, home buyers should feel more like guests at a well-executed dinner party, oblivious to the mess in the kitchen
and content to be served each course at just the right time.
"It's going to bring better peace of mind that you know what you're getting into
with this loan," said Ben Niernberg, executive vice president at Northbrook-based Proper Title. If all the professionals
in the pipeline handle the new rules well, homebuyers should notice only that "things have gotten easier to understand,"
the homebuyer, the new rules created by the Consumer Financial Protection Bureau bring two key changes: All the financial
details of their purchase will be spelled out more simply, and the forms containing those details will be in their hands three
business days before the closing, giving them time to ask for clarity on anything they don't understand.
"You're getting time to see all the
moving parts of your loan a few days before you sit down at that table to close the transaction," said Maurice Hampton,
managing broker and CEO of Centered International Realty based in Beverly. CFPB says consumers will "Know Before You Owe."
RESPONSE TO SUBPRIME MELTDOWN
Enabled by the Dodd-Frank Act,
the TILA-RISPA Integrated
Disclosure rules, as they are known, come largely as a response to the subprime mortgage meltdown, in which some borrowers were unaware
of the moving terms of their adjustable-rate mortgages and wound up in default when a rising interest rate increased their
While some experienced real estate buyers may see the changes as a belt-and-suspenders approach to the relatively
rare problem of buyers misunderstanding their loans, eventually the changes will become transparent, say most people in real
estate and related industries.
"There will be a few more steps along the way, but the steps are to protect people and give them a chance to
make a better financial decision," said Tom Pilafas, executive vice president of Near North National Title Insurance
are four things to know about the changes:
• The rules apply to loan applications initiated Aug. 1 or later. Any
loan in process prior to that will operate under existing rules. All-cash purchasers also are exempt.
• The rules require two new forms, both
of which replace—and are intended to simplify—existing forms.
First is the loan estimate, delivered
to the borrower within three days of application and projecting the monthly costs, the closing costs and the cash the borrower
will need to bring to the closing. This form will take the place of a Truth in Lending, or TILA, form and the Good Faith Estimate.
Second is a Closing Disclosure form, delivered three business days before the scheduled closing. This one replaces a closing-day
form known as HUD-1 and a second TILA form.
"The difference with the new forms is that the figures on the first one and the
second one have to agree, or be very close," said Jeffrey Baker, a lawyer with Sorling Northrup in Springfield who works
for the Illinois Association of Realtors. "There was no mechanism requiring them to match up in the past."
CFPB's rules include penalties
for lenders if the figures on the two forms aren't within an established range, Baker said. The idea is to prevent buyers
who've fallen in love with a certain house from getting markedly more expensive terms at closing than they were counting on,
"when they might feel they have to just go ahead and do it," Baker said.
• Both forms emphasize clarity.
"When you closed in the past, you
got a spreadsheet that was a bunch of numbered lines," said Christopher Hacker, a co-founder of ShortTrack, a Chicago-based
real estate transaction software company. "It was confusing, and you needed somebody to decipher it for you." Under
the new rules, "you'll see something text-based and more intuitive that tells you what you'll owe" on a monthly
basis, and how that will change in the future, in the case of a loan with an adjustable rate.
• Last-minute changes in a sale will be harder to make.
Under the existing rules, at least in
Illinois, final financial details of a purchase can be recalculated on the day of closing. That can happen for countless reasons,
including the buyers changing their mind on keeping excluded chandeliers or other pricey items on the final walk-through,
or the seller's lender refiguring property tax estimates.
"Closings have a propensity to be delayed, because with so many parties involved,
inevitably somebody changes something," said Steve DiMarco, president of the Key Mortgage Services division of Baird
& Warner. After Aug. 1, "because the forms have to be handed to the buyer three days in advance, there's not going
to be that chance to change things around on closing day."
last-minute changes are inevitable. The CFPB's rules specifically spell out which will call for an automatic three-day delay and which will cause no
Monday, March 30, 2015
Selling Your Home? How Does it Smell?
5:56 pm cdt
Have you ever been in someone's home and smelled something bad? Or walked into your own home and
smelling something terrible? When you're selling your home, one of the first impressions buyers will get is the smell. If
you cook with a lot of grease or strong spices, have pets, or even don't take out the trash on a regular basis, your house
may smell. And like the Febreze commercials say, you may be noseblind to it.
list your house, there are things you can do to minimize this. Odor is caused by bacteria that attaches to the ceilings, walls,
draperies, carpets and furniture. You may need to repaint and do a deep clean on your home before you list it. You can have
a professional do it, or there is a do-it-yourself nontoxic fogger like the Dynofresh that can do it for you. Cleaning may
only temporarily take care of the issue, especially if the offender is cooking or pets. The other things you can do are: take
out the trash regularly, clean out your fridge, avoid cooking strong smelling foods, do your laundry on a regular basis, use
the fan over the stove when cooking and bathe your pets regularly.
You can also use subtle,
simple scents. Light a candle, lay fabric softener sheets between linens stacked on shelves, add plug ins by the bathroom
door, or put lemon peels in the garbage disposal.
These little things may save you thousands
when negotiating a price.
Wednesday, March 11, 2015
At Home Illinois Announces New Program for Refinance, Repeat and First-Time Buyers
7:15 pm cdt
The Illinois Housing Development Authority (IHDA) is offering @HomeIllinois, a new loan product for
first-time Illinois homebuyers, homeowners looking to refinancing and, for the first time in IHDA history, repeat buyers looking
to move up. The @HomeIllinois program features a 30-year fixed rate mortgage and up to $5000 in closing cost or downpayment
Visit www.athomeillinois.gov for details!
Tuesday, March 3, 2015
Chicago Ranks 14th Nationwide Among Real Estate Investors
8:28 pm cst
Taken from Chicago Daily News (Crain's) online:
Real estate investors like Chicago, but it
doesn't set their hearts aflutter like Seattle, Boston and Houston. Real
estate executives ranked Chicago 14th among 75 U.S. markets for investment attractiveness in 2015, according to the “Emerging
Trends in Real Estate” report, an annual publication by the Urban Land Institute and PricewaterhouseCoopers LLP.
The area trailed coastal
favorites, such as San Francisco, Boston and Seattle, as well as Austin, Dallas/Fort Worth and Houston, which was selected
the best market for real estate investment in 2015. Chicago has long trailed such markets in the “Emerging Trends” report.
For four out of five major
property types, meanwhile, investors are less bullish on buying here in 2015 than they were for 2014, the report shows.
In the report, executives
rated U.S. 75 markets on a five-point scale based their investment potential next year. One means “abysmal,” while
3 indicates “fair” and 5 signifies “excellent.”
Chicago scored 3.46, beating out Manhattan, long considered
one of the choice locations for real estate deals.
Houston earned a 4.01 score. The Texas
city brings “energy and technology. They bring international trade, the port and a huge educational system,” and
a business-friendly environment, said Stephen Blank, senior resident fellow at the Washington, D.C.-based Urban Land Institute
who helped put the report together. “Chicago's got some of those things, but not every one. That's why there's the distance.” The Chicago area remains prized for its size and population density and for a local
economy that ranges from tech startups to Fortune 500 behemoths.
It's a truism that's played out this year in a robust fashion, with commercial-property
sales on track to hit their highest annual level since the 2007
peak, according to New York-based Real Capital Analytics Inc.
Chicago has one of the “most diverse economic bases in the country,” the report says,
and the region remains “one of the major core real estate markets in the United States and as such is very appealing
to both domestic and global real estate investors.”
latest "Emerging Trends" study is based on about 1,055 surveys and 391 interviews with executives at real estate
trusts, investment firms, development companies, brokerages and others working in commercial real estate.
Tuesday, February 10, 2015
The Outlook for the 2015 Real Estate Market is Good
3:12 pm cst
Existing home prices are expected to rise about 3% this year, and about 2% the next year. Home
sales in 2015 are expected to reach their highest level in two years. While mortgage rates will probably rise this year, they
will still be considered some of the lowest of all time.
66% of all Americans say they would buy if they are going to move today.
68% of all Americans believe now is a good time to buy.
51% of all Americans plan to buy a home in the next 5 years.
35% of the homes sold recently were on the market for less than
Thursday, February 5, 2015
Japan Establishes "Marriage Hunting" Apartments, Complete with Stripper Pole?
1:41 pm cst
From the Wall Street Journal:
TOKYO - Having trouble getting married?
Maybe you aren't doing enough pole dancing in your living room.
That is the idea behind
one Tokyo real estate company's plan to solve the woes of Japan's lonely singles with konkatsu, or "marriage
The project's mastermind, Rintaro Kikuchi, says living
in the airy pads makes people more relaxed and social, leading to new encounters. He isn't shy about explaining some features,
like a pole smack in the middle of his latest model's living room. "You can't ignore sex and make a house," he says.
Konkatsu is the word du jour both for Japanese singles and government officials trying to improve
the nations' aging demographics. There are konkatsu bars, konkatsu bus tours and konkatsu events
for right-wingers, farmers and other groups. Local governments often pitch in funds to sponsor events, hoping to encourage
marriage and the procreation of future taxpayers.
The percentage of unmarried people ages
30-34 jumped to 47% from 21.5% for me and to 34.5% from 9% for women in the three decades through 2010, according to government
Since birth out of wedlock is uncommon in Japan, those figures translate directly
into a lower birthrate, with the average woman having about 1.4 children in her lifetime.
Yamada, a Chuo University professor who coined the term konkatsu in 2007, says the problem is many young
men nowadays don't have secure jobs because Japan's "lifetime employment" system is fraying. Young women still hold
out for a husband who can support the family on one salary, and men who know they can't live up to that expectation are less
active in searching for a mate.
Other researchers cite busy work schedules for both men
and women, and some young people's reluctance to leave comfortable lives with their parents.
Mr. Kikuchi, the konkatsu apartment developer, the real problem is housing - cramped rooms, dinky kitchens and
little natural light. With settings like that, he says, it's no wonder many Japanese don't wnat to bring anyone home.
His latest model, a one-bedroom apartment, fulfills all of his seven rules for a konkatsu apartment,
including a spacious kitchen and shower room, so couples can cook and bathe together. The home has plenty of windows to let
in natural light and was remodeled with natural construction materials such as earth with fossilized algae.
"You sleep better, you wake up feeling refreshed, and you become more active," he says about the
home's construction. "You smile more, and your skin looks better, and you are making lots of pheromones."
Mr. Kikuchi also consulted a Japanese "total adviser of sexuality" who goes by the name Olivia and
frequently appears in local media. She suggested adding a roomy bathtub in the living room as well as soundproofing and the
pole, which looks as if it could have been transplanted from a local strip club.
who declined to give her real name, said the pole could be used to entertain a male guest or to keep fit to better enjoy sex.
"A lot of Japanese women are shy and bad at using their sex appeal," she said. "By becoming their boyfriend's
'private pole dancer'. I wanted them to be able to playfully enjoy their sex life together."
41-year-old Mr. Kikuchi, who isn't half-bad on the pole himself, thinks amenities are needed not only to get couples hitched
but also to keep them enjoying each other's company. A January survey by the Japan Family Planning Association found about
45% of married couples had not had sex in the last month, up 3.3 percentage points from the last survey in 2012.
When couples stop having sex, their relationship soon turns sour, Mr. Kikuchi said.
has impact on children when they see the relationship between their parents deteriorate," he said. "They don't see
marriage or making a family as something happy," accelerating the vicious of failing marriages and birthrates.
Akino Kanno, 34, moved into one of Mr. Kikuchi's konkatsu apartment north of Tokyo in late 2012
after a divorce. The property, completed in 2010, has six private apartments. Mr. Kikuchi designed the property so that residents
will interact. They get together a few times a year for barbecues, and there is a common bulletin board for notices.
Ms. Kanno happened to see a notice from the building's owner on the bulletin board recommending a local drinking
hole. She went with a friend and was introduced to Masaru Kanno. The two bonded over manga and food. They later married.
Mr. Kanno remembers the first time he saw the apartment. "It was so fashionable. I was very surprised,"
he said. "I knew this was someone who I wanted to be family."
Mikako Tokuda moved into the same building about two years ago and found a boyfriend less than a half a year later on a social-networking
site. The two have since broken up, but she said that moving from her dark, one-window apartment helped her relax and find
the energy to think about dating. In her old apartment, she said, there was only one electric burner, which forced her to
give up cooking, one of her favorite hobbies.
And does Mr. Kikuchi need a konkatsu apartment?
Sorry ladies, he's already married with two children.
Tuesday, January 27, 2015
Housing Forecast for 2015
12:17 pm cst
Things are looking up for the economy and the housing market in 2015; however, there are still a
lot of would-be buyers on the fence who are afraid another slump like the one that started in 2007 may happen. Unemployment
is down, the markets are up, and most importantly, so far for 2015, rates are still very low. Unfortunately for some would-be
buyers, lenders are still making it difficult to qualify for a loan.
have also changed since before the slump. Lenders are much more cautious when they are considering borrowers and a good credit
score is important now more than ever. Also, having sufficient assets to cover closing costs and an "emergency"
fund to cover costs in case of a job loss are things that lenders are looking for when loaning money to buy a home. Being
self-employed also presents challenges in obtaining a loan. Lending became extremely strict
after the market slump, and for the most part, continues to be prohibitive for people with lower credit scores. There are
also not many loan products out there for people who want to put 10% or less down on a property. Fannie and Freddie are considering
introducing a product that would allow buyers to put only 3% down. Right now the only product that allows buyers to do this
is the FHA loan, which is at 3.5% down but with a large up-front PMI. If FHA doesn't reduce their upfront PMI, the new
product by Fannie and Freddie may make them obsolete again.
Make sure that you consult
with a loan officer before you get out there to look for properties and get your financial house in order. Get pre-approved,
know what your credit score is, and choose an agent and an attorney who are knowledgeable about the market.
Wednesday, January 21, 2015
Tip for Purchasing a Foreclosed Property
3:33 pm cst
Happy New Year!
A quick tip for purchasing a foreclosed property:
Try to have an attorney review the paperwork and addendums from the bank BEFORE you sign. This is the only case where you
should have an attorney review real estate contract paperwork before you sign it, because there is typically no formal attorney
review in these types of deals. Make sure you have a mortgage contingency if you are obtaining a mortgage, and that you know
up front if you will be paying any of the Seller's fees for them.
Monday, October 20, 2014
Should you Buy or Sell This Year?
Home prices are up. The median existing home price in June $223,300, up from 4.3% in June 2013. The
average sales price of a new home that sold in June 2014 was $331,400. 3.5 million homes in the U.S. rose out of negative
equity from 2013 to 2014 due to rising home prices. In the past year, existing home and condo sales rose 11% to 5.29 million,
close to the highest level in 4 years. Sales of new single-family homes rose 8.3% in June. Existing home sales increased 2.6%
in June 2014, and have reached the highest sales pace since October 2013.
11:46 am cdt
Tuesday, August 26, 2014
Chicago Home Prices Slowly Rise
11:14 am cdt
From today's Chicago Tribune:
Home prices gains slowed in the Chicago area and in most of the nation in
June, and for the first time since February 2008, 20 cities showed lower annual rate of improvement than the previous month,
according to a widely watched housing market barometer.
the Chicago area, home prices rose 1.4 percent in June, compared with a 1.5 percent uptick in May, according to the S&P/Case-Shiller
home price index. Year-over-year, that made for a 6.6 percent increase.While home prices nationally are back at their pre-housing market bust levels of
autumn 2004, in the Chicago area they are at their spring 2003 levels. Still, June represented the fourth consecutive month
that local home prices have topped their previous month.Nationally, June home prices in the 20 cities included in the index
were up 1 percent in June, from May, equaling a 8.1 percent increase from June 2013.