Chicagoland home improvement projects can cover virtually the entire spectrum of housing. Home improvements can range from custom finishing newly-constructed spec homes to older home remodeling updates to fixer uppers that need considerably more than just a little TLC. Let’s take a look at the various options available in the housing market in which Chicagoland home improvement projects can make an important impact.
New Construction or Builder Remodel It’s no secret the new home market has been one of the most attractive in recent years. In part, new construction has added an element of increased supply to a national real estate market that has suffered from a lack of available inventory. The biggest attraction to new construction is just that – it’s new! Yet, with all its newness and “move-in” readiness, new homes do present some potential purchasers with a major drawback – there are few components to which buyers can claim for “their own.” Unlike a custom home construction project built to the owners’ specifications, most new construction allows little for the purchaser to customize or have input on. In addition, some home buyers feel that a newly built home lacks individual personality since the home has been designed to attract a larger pool of typical buyers. That brings us to the first of the Chicagoland home improvement projects – some developers and builders allow certain customizations to their homes. The improvements can range from what color or type of paint or wall covering the home can have to the type of floors – carpet, tile, or hardwood flooring. In addition, some developers or builders will give their purchasers the opportunity to make other customizations from appliances, kitchen cabinetry, kitchen and bathroom hardware and more.
Arguably the most popular of the Chicagoland home improvement projects is the owner remodel option whereby the homeowner elects to renovate all or part of an older home. Often the remodeling project can be undertaken expressly for the satisfaction and enjoyment of the homeowner. Many times – especially in the past several years as home values have risen steadily in some markets – homeowners elect to perform remodeling that will enable them to put their home on the market and command top dollar because of the popular updates it will offer.
Homeowners who have done their Chicagoland home improvement projects homework and who can select knowledgeable remodeling contractors can indeed make improvements to homes that can improve its value dramatically – especially in a rising home value market. A word of caution, however, not all home improvements will add value to a home. The best thing to do is to discuss the improvements you want to make and get a cost estimate. Then have a frank discussion with a real estate professional as to the price range you could expect to sell your newly-modeled home. Then, the decision is easier. If you’re able to recoup more of the cost incurred by having the improvements performed than by not having them done, you should consider moving forward with your remodeling plans.
Fixer-Upper As the name implies, the fixer-upper is on the complete other end of the Chicagoland home improvement projects spectrum as far as the scope of the work to be performed. A property described as a fixer-upper could require anything from some cosmetic attention to a complete gutting of the home to the walls and subfloor. Homeowners thinking of purchasing a fixer-upper property should be aware of two major considerations:
- How much work needs to be performed to raise the property to the level you desire, and how much of that work are you able and willing to perform?
- Are you in favor of making severe wall or flooring demolition if necessary, or are you in favor of merely updating surfaces like walls and floors with new materials?
Once you’ve answered those two questions you can move forward by identifying the properties that fit into the categories based on your answers. If you’re considering buying a fixer-upper, remember it requires a level of imagination and forward-looking vision to create and achieve the potential the property may have. Some buyers find it helpful to enlist the services of a knowledgeable real estate agent who may be aware of properties that are available. Plus, you may also want to hire an architect, contractor and designer to assist you in developing the vision for the property’s potential. Their experience, opinions and cost estimates can be extremely valuable in determining whether to go forward with remodeling a fixer-upper and, if so, to what degree.
While there are advantages for each of the three major Chicagoland home improvement projects options, our best advice is to decide which is right for you. The most important factor to consider is the result of a comfortable balance of money and time combined with what you want and what you need in your home.
The key to achieving the most success in determining the level of home improvement work you’re comfortable with is purely a personal decision. It’s a decision based on your financial abilities, but also on your appetite for making changes and taking chances.
One last word of caution. Be prepared for the unexpected if you choose a fixer-upper. Many homeowners can sadly attest to the simple truth that once the renovation starts, there’s little or no backing up. In addition, in the case of an older home that may have undergone years of neglect, there could be hidden damage such as rotten wood, termite issues, or water damage that may only be discovered after the demolition and renovation work has begun. Beware also of electrical and plumbing system failures that may require additional budgeting to replace or upgrade the systems to bring them within the proper municipal building codes.
Chicagoland home improvement projects can be rewarding and fun – but only if you have the mindset, temperament and financial wherewithal to undertake them.
You can find more articles pertaining to Chicagoland home improvement projects in the Chicagoland Home Improvements section of our site below Chicagoland Real Estate Categories in the column to your right.We also post tips daily on Twitter and Facebook and would love for you to follow us there as well.
A large number of homes for sale offer open houses as a popular way to attract buyers. A Chicagoland open house can be an excellent tool to put your home on display for prospective buyers to get a closer look. Before you hold your own open house, we think it’s a good idea to visit a few others and learn from them – both the good and the bad. Once you decide to list your home and have an open house it will help you make yours as successful as possible.
Attending a Chicagoland open house (or two, or three) are great idea generators. Let’s take a look at a few areas in which you can gain valuable insight that will prepare you for a successful Chicagoland open house.
Go to school on other listing agents
Use the time you’re investing by visiting other open houses to compare the prices of comparable homes and learn more about the market. Meet the listing agent and ask questions to get their opinion about current trends in your market area. Because they’re in the business, real estate professionals are usually in the know about changes in the local markets well ahead of the news media or other informational sources.
Pay attention to current home design trends
Since most sellers make every effort to show their home in the best possible light for an open house, pay close attention to what has been done to the home. Many sellers may make cosmetic improvements in preparation for listing and showing their properties. Often their real estate agent can suggest the most popular designs and newest trends in the market. If your home needs a few updates to improve its appeal to prospective buyers, seeing what other sellers have done may assist you in selecting paint colors, kitchen or bath fixtures and countertops. This is especially true if you attend several open houses and begin to see improvements that are consistent with each other.
Obtain referrals for home improvement contractors
If you’re considering having updates done to your home before putting it on the market, what better way to get a good referral than to ask the listing agent or seller of one of the homes you liked for the contractor’s name. Being able to see the results of what a few remodeling upgrades can do for home will give you some interesting ideas for your own home.
Now that you’ve seen what others are doing with open houses, let’s shift gears and begin planning for your very own. Here are a few tips on what you should do to make your Chicagoland open house as painless and seamless as it can be.
Keep a stiff upper lip
Conducting a Chicagoland open house can be an emotionally conflicting process. Inviting people you don’t know into your house to mill around and look in every nook and cranny can be a little overwhelming. Don’t allow it to be. Remember, it may mean the difference between selling your home quickly or not at all. Think of each person that comes through your doors as a potential buyer – chances are pretty good that one of them will be. And while an open house can be somewhat intrusive and emotionally draining, treat your home as an asset that you want to sell both quickly and at an attractive price. That motivation may give you a different perspective on the value of a Chicagoland open house.
Depersonalize your home
As you probably know by now, most home-staging and open house experts recommend “depersonalizing” your home by removing personal items like collectibles, family photos or other memorabilia. A prospective purchaser wants to feel as if he’s walking into a neutral zone, giving him the ability to see the various rooms of the home decorated with his furnishings and possessions – not somebody else. Psychologists say this is very important to what motivates buyers to buy certain homes. You may also consider this idea: Sellers who have the greatest success with open houses have reported they’ve actually moved out of the home. If you’re able to do so, this may be an excellent way to ensure you’ve broken the emotional bond you have with your home and have given all prospects the opportunity to envision their family in what could be their new home.
Be smart, be safe
If you elect to stay in the home while you’re conducting your Chicagoland open house and don’t have the luxury of moving out until you sell it, be smart with your possessions. While we’d like to think homebuyers viewing homes for sale are trustworthy, the truth is, some aren’t. As a precaution, therefore, be sure to remove any smaller valuables from public view and access. Hide expensive jewelry, watches, smartphones and tablets deep in closets or in a home safe if you have one. Remember, people attending open houses may feel free to open drawers or closets, so make sure there aren't any valuables readily available for them to take. Lastly, secure any handguns or other firearms in gun safes or, preferably, out of sight altogether. Many homeowners have reported guns were among the primary possessions stolen in burglaries or home invasions – and many times, experts say, it’s because the thieves knew the guns were in the house. Keeping them locked away during a Chicagoland open house can be one way you could deter potential burglars from “casing the joint” as they plan for a future theft.
See more articles pertaining to selling Chicagoland homes in the two sections of articles on Chicagoland Home Selling Tips and Chicagoland Homes for Sale just below Chicagoland Real Estate Categories in the column to your right.
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Chicagoland home inspection tips like the ones found in this article could save you a ton of money. A home inspection is but one of the many expenses a homebuyer will face during the home shopping process. None is more critical – and potentially satisfying – than a home inspection. Experts say on a dollar for dollar comparison, a home inspection represents the wisest investment you can make regarding the home you’re considering purchasing. A thorough home inspection will examine and summarize your home’s good points and bad, giving you necessary insight to know how to proceed with the sales transaction.
Let’s take a look at Five Chicagoland Home Inspection Tips worth considering.
Choose the right type of inspection
Once you meet with your real estate agent to submit an offer to buy the home you like, your agent should cover the various types of inspections from which to choose. In addition to a standard home inspection there are others such as pest, radon and mold inspections.
Standard home inspections can be categorized into two different types: The home inspection and the general inspection. While it may sound like nothing more than semantics, there are differences in the two – primarily in the manner in which the information reported by the inspection is utilized. A typical home inspection is the more popular option. In that report, the home seller will receive a notice from the prospective purchaser outlining certain specific items that need to be repaired prior to the closing of the sale. In addition, the notice will ask the seller to consider paying for the repairs by way of a credit toward the closing costs of the transaction.
Second on our list of five Chicagoland home inspection tips includes getting a general inspection, which is solely for informational purposes. It stops short of requesting that inspected issues be corrected or repaired – but it does provide the prospective homebuyer the option to refuse to close the sale based on the inspection’s findings.
Choose a qualified inspector In scheduling, conducting and following up with a home inspection it’s important that each participant in the process is experienced and highly qualified. The potential purchase of the home you’re interested in represents one of the largest financial investments you’ll ever make – and it’s important that you and the people you surround yourself with treat it as such. Select a home inspection expert that is currently licensed by, and is a member of, a well-known trade association such as the American Society of Home Inspectors (ASHI) or the National Association of Certified Home Inspectors (NACHI.) In addition, have the home inspector share a copy of the sample inspection report. Of course, you will ultimately obtain the entire report and its findings, but seeing a blank report ahead of time will give you a clearer picture of what to expect and how you can use the information in a potential negotiation with the home seller. In the end, the home inspector will give you a detailed list of the home’s components and their overall condition. Home inspectors recommend taking notes during the inspection recap – especially if you have questions regarding the use and maintenance of items such as home systems and appliances you’re not fully familiar with.
Where’s the owner’s manual? Funny thing about homes – they rarely come equipped with an owner’s manual. Among our Chicagoland home inspection tips is the advice of many experts which recommends you accompany the home inspector while he’s conducting the inspection. He will be able to provide a good deal of information on how certain systems in the home operate. This will be invaluable at a later date should you decide to purchase the home.
Use the report for the purpose intended Among our Chicagoland home inspection tips, when your home inspection professional has examined the home and has issued his findings in the report, review it closely. Ask questions as needed. Don’t be bashful and don’t be afraid of asking the proverbial “stupid” questions – there are none when you’re making a purchase of this size. Keep in mind that the home inspector’s role is that of a “generalist” to some degree, and less of a specialist regarding certain areas or findings. As an example, if the inspector finds possible evidence of a mold issue, he will likely recommend that you contact a company specializing in mold remediation to solve the problem.
While negotiations with the seller vary widely according to the results of a home inspection, there are normal guidelines and protocol that are usually followed. Major issues such as plumbing, electrical or HVAC systems should be addressed first and most importantly. Experts say to devote the bulk of your attention and negotiation efforts to these issues and don’t worry about the smaller items. If there are no major items that need attention, then you can tackle the smaller items with the seller as part of your final negotiation.
Lastly among our Chicagoland home inspection tips, if you opt to perform any repair work yourself or oversee its completion and decide to seek a credit from the home seller at the closing of the transaction, consult your mortgage lender. You’ll want to ensure you are able to request the maximum amount of credits as per the guidelines – usually 3%-6%. Remember, if the amount is in excess of what is needed you won't receive it, the seller gets to keep it.
Remember this It’s important to know that home inspectors – as experienced and trained as they are – don’t have x-ray vision that allows them to see through walls or under floors. So remember, as thorough as their inspection of the home may be, they can’t be expected to report on items they can't visually inspect. In addition, remember that a home inspection will give you the condition in which the home is in as of the day of the inspection. While the old adage “Things change” usually applies to the everyday hustle and bustle of life, it also applies to the conditions of various home components, too.
You can find more articles pertaining to Chicagoland home inspections in the Chicagoland Home Inspections section of our site below Chicagoland Real Estate Categories in the column to your right.
We also post tips daily on Twitter and Facebook and would love for you to follow us there as well.
In most parts of the United States, real estate is – over time – a good investment. And while we all know that to be true, often this nagging question remains unanswered: “How do I get started buying Chicagoland investment real estate?” For some millennials and others the answer is, “Just do it.” Let’s look at how you can make a start in building your Chicagoland Investment real estate portfolio.
Though it seems somewhat ironic to use millennials as a segment of the population perhaps best suited to start a modest Chicagoland investment real estate portfolio, let’s look at a few salient points. Millennials comprise roughly 50% of all current homebuyers in the marketplace, according to the Zillow Group Consumer Housing Trends Report. And given that most millennials buy their first homes or starter homes with the intention of living there fewer than seven years, potential real estate investing could be in their future. Why? Millennials or other first-time homebuyers are in a unique position to buy their second home and maintain their first as a rental property. This can most often be accomplished by leaving the owner-occupied original mortgage intact without selling the property. Hopefully, the mortgage was acquired with a modest down payment and is accompanied by a low interest rate.
Obviously, if a borrower is able, it’s much better to keep the first property and rent it rather than trying to purchase a non-owner-occupied rental property. Financing for rental property usually requires a higher down payment – 20%-25% – and will likely have a higher interest rate, as much as .50%-.75% or more. In summary, it will almost surely cost less to arrange for your current house to become a rental property and purchase a second home to use as a primary residence than to buy a second property for use as a rental home.
Quite naturally, in order for this growing Chicagoland investment real estate portfolio to be successful two factors need to be considered:
1 ) You must be able to find a tenant for your first home. This is important not only for the additional rental income to pay for the mortgage, but many millennials or first time homebuyers may find it difficult to qualify for a mortgage on the second home unless they have a tenant under lease.
2) You must be able to come up with the necessary down payment for the second home. With low down payment financing available for as little down as 3% in some cases, this is possible. Most first time homebuyers rely on the equity from the sale of their first home to be able to afford the down payment on their new one.
There are certain tax advantages to be enjoyed by renting one of your properties. We recommend discussing them with an accountant in order to make sure you’re up on the latest tax rules regarding Chicagoland investment real estate. As a normal rule, the best tax advantages come in the form of depreciation of the rental property along with being able to deduct both the mortgage interest and the maintenance expenses of the rental property.
Choosing the Best Rental Property
If you’re contemplating turning your first home into a rental property, it’s probably best to consult with a Chicagoland investment real estate professional first to better understand the market and establish a strategy of what you want to accomplish. In addition, there are considerations to discuss regarding whether there is a viable rental market for your home. Experts say homes with one to three bedrooms are likely to rent more easily and more often than larger homes. Lastly, and the real estate rental professionals can better help with this, it’s important to understand who the typical tenants are in your market as well as the type properties they usually rent. That will give you insight as to where to advertise, what rents to charge, what terms to ask for and other decision-making factors.
Assessing Rental Rates
As is the case with rental properties across the country, Chicagoland investment real estate rental rates have been on the rise in the last year or so. In addition, rental rates vary widely in the single-family home and condominium rental market. Most real estate professionals agree that one of the most challenging aspects of renting a home is being able to establish a rental rate low enough to be competitive in the market yet high enough to pay the mortgage and related expenses while making a small profit each month. Again, consult your local Chicagoland investment real estate rental professional for the most current information on what the market will bear and what you can expect to rent your home for.
Aside from the financial considerations, one of the most important things to remember about renting out your first home is becoming a landlord. You’ll need to budget both your time and money in order to be able to take care of your tenant’s needs as they arise. Of course, you can hire a property management company to handle the typical chores of a landlord, but there are expenses involved with such an arrangement. Still, it may be worth looking into to see if the rental market will enable you to cover a portion of the rental management fee by raising the rent.
Most experts say when it comes to starting a Chicagoland investment real estate portfolio comprised of rental property, “buy and hold” is usually a good philosophy. However, there are precautions you should take if you’re thinking about making the leap. If you find yourself in a sellers market, just realize that it may be more difficult to buy the second home without getting the needed equity out of the first. However, there are other options such as refinancing.
See more articles pertaining to real estate in the section of articles on Chicagoland Real Estate just below Chicagoland Real Estate Categories in the column to your right. And remember, we also post tips daily on Facebook and Twitter. Check us out there, too.
If you’ve paid attention to the Chicagoland mortgage industry, no doubt you’ve seen and heard all sorts of ads for a Chicagoland reverse mortgage. Just exactly what is a reverse mortgage, you ask? A Chicagoland reverse mortgage enables a homeowner to extract the equity in his home to use as monthly income. These mortgage instruments can sometimes be attractive options for senior citizens and retirees. The reason? There are no monthly mortgage payments. As long as the homeowner continues to pay real estate taxes and home insurance – and maintains the property in good condition – the repayment of the mortgage doesn't commence until the owner dies, transfers ownership, or no longer lives in the home.
A Chicagoland reverse mortgage, however, may not be for everybody. There are other alternatives to consider – especially if you’re thinking about tapping into your home's equity to help pay living expenses during your retirement years. Let’s take a look at a few options.
Refinancing your existing mortgage.
Refinancing can be a viable alternative to a reverse mortgage. With interest rates at or near all-time lows, from a pure rate standpoint you’ll likely have a much lower rate than you currently have. In addition, being able to extract cash from the equity you’ve built up in your home – especially as home values have risen in the last few years – is an excellent way to borrow cheaply. Another big advantage to refinancing versus taking out a Chicagoland reverse mortgage is you're maintaining the control of your biggest asset – and that’s important if you want to leave the property to family members or other heirs.
Just a few additional points to consider if you’re leaning toward refinancing your mortgage: You can search online for mortgage payment calculators that will show you what your new payment will be. Plus, you can adjust the payment based on a variety of rates and terms to give you a better idea of what to expect. If you’re like most older homeowners and have owned your house for a long time, your monthly mortgage payments are comprised of a larger portion of principle and less interest. By refinancing – even at a lower interest rate – of course, you’re adding greater debt by increasing the existing loan amount by whatever equity you want to borrow. The bottom line is this, compare your payments and make sure you understand your total repayment amount. Refinancing may or may not be the best alternative and depends on a number of factors. Consult your mortgage lender, your financial advisor, or your accountant before you make the final decision.
Lastly, don’t forget the closing costs. As is the case with most refinances, you’ll have to pay closing costs that will be deducted from the equity proceeds of the new mortgage. Be sure you allow for them so you can receive the full amount you want to borrow. Your mortgage lender will give you an estimate of the closing costs you can expect to incur as part of the mortgage lending application process.
Home equity line of credit (HELOC) or a home equity loan.
Other viable alternatives to a reverse mortgage are either a HELOC or a home equity loan. In either case, compared to a reverse mortgage the fees are usually lower. Again, as with a straight refinance, choosing one of these alternatives also keeps your home under your complete control.
Let’s look at the difference between a home equity loan and a HELOC. As for the interest, the borrower pays regularly scheduled interest payments during the loan’s term. The biggest difference between the HELOC and a home equity loan comes at the end of the HELOC term. The borrower must then pay the remaining principal and interest owed – in full – either by refinancing, extending the terms of the loan or paying the loan off entirely.
A home equity loan provides you a lump sum secured by the remaining equity (or value) in your home. It requires normal regular interest payments each month. Chicagoland reverse mortgage lending experts say if you’re considering a reverse mortgage but want to leave your home to your children or other heirs, a home equity loan would be a better option.
A HELOC has been described as an “equity credit card.” It allows the homeowner to borrow up to an established credit limit during the term of the loan. The borrower repays certain portions of the principal at various times throughout the loan’s term. As the principal is reduced, your borrowing power increases (to the pre-determined limit) just like a credit card.
Flexibility is one of a HELOC’s biggest advantages, as it can provide a source of money to be used in emergencies – only if and when you need it.
Of course, selling your home and moving into something smaller is always an alternative to a Chicagoland reverse mortgage – especially for retirees or those approaching retirement. The biggest advantage to downsizing is you can get all the equity in your home in one lump sum as the proceeds from the closing of the sale.
Should you elect to keep your home in the family, selling it to a child or other family member is a possibility. In addition, if you can afford it and if it makes sense financially, you can even consider owner financing by having your child pay you the monthly mortgage principal and interest payments. This is especially a good option if your child or family member doesn't have any credit established or needs down payment assistance. But remember this, family or not, if you choose to take the place of a Chicagoland mortgage lender, do everything by the book. Have the required legal documentation in place with you as the mortgage holder and your family member or child as the borrower signing the note for the amount they owe. A real estate attorney can assist you in handling the preparation of the necessary documents and the closing of the sales transaction.
You can find more articles pertaining to a Chicagoland reverse mortgage in the Chicagoland Mortgage Info section of our site below Chicagoland Real Estate Categories in the column to your right.
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