Chicagoland home buying strategies can be vital as you enter the market this spring in search of a new home. While a home search is always an exciting and challenging one, in what is currently a sellers’ market, it can be especially daunting. Chances are pretty good that a seller will have his choice of buyers and offers from which to choose. That makes it a little more difficult in the event you find “the” home that’s right for you and your family. If you’ve bought a home before, you know the feeling. You’ve searched high and low and visited numerous open houses and finally found that “just right” home that meets all your needs – and is perfect for your budget, too. But, what happens if the seller isn’t as excited about you or your offer as you’d like for him to be? Then what? Let’s look at five Chicagoland home buying strategies that may help you deal with a seller who doesn't necessarily like you or your offer for his home.

Here are some of our recommended Chicagoland home buying strategies

First, remember a seller can refuse a prospective buyer for any reason. While it’s unusual for people selling their homes to be finicky or fickle, it’s not unheard of. Plus, as mentioned above, in a sellers’ market they may be able to afford to be a little more stubborn when it comes to the sales price, the terms, any contingencies, or the closing and move-out date.

Consider these tips in working with a seller in that position:

Hit Them With Your Best Shot.  No, not literally, even though it may be tempting, we’re not advocating violence! What we’re suggesting is that if you submit an offer and suffer through the back-and-forth of counter offers, it could be time to stop playing games and wasting time. Cat and mouse can be fun and challenging, but we're talking about a home here. If you like the home and want it, make your very best offer. At that point – win or lose – you’ve done all you can do – and now the proverbial ball is in the seller’s court to accept or reject your best deal. While they may reject your offer and hold out for a better one from another potential purchaser, sometimes they may rethink your offer a few weeks later.

Keep on Keeping on.  Another of our recommended Chicagoland home buying strategies is to “cut your losses and move on.” While doing so is difficult and often heart-wrenching, sometimes it’s necessary. If the seller isn't open to working with you or negotiating, it could be time to throw in the towel and move on to the next listing. Wasting time, talent, energy and desire on wanting the seller to see the deal the same way you do may mean you’ll lose out on the next “perfect’ home out there – and trust us, there’s always another one waiting.

Live and Learn.  The best coaches in the country – no matter the sport or the level of competition – will say, "…other than preparation and execution, learning from mistakes in competition is very important for the next game." So, when things don’t go exactly as you planned, take a little time to try to figure out what went wrong – and learn from it for the next negotiation on the next house. The more you understand about what worked and didn’t work, the more likely your next transaction will be more successful. Just like most things in life, it’s critical to live and learn.

Don’t Overthink This.  While you’re performing your analysis on the experience you’ve had in negotiating with or trying to work with a seller in buying their home, be careful not to overthink the seller. As is the case with most people – even close friends and family – nobody really knows what goes on inside a seller’s head. Maybe they’re not really ready to let go of their home. Maybe they’re holding out for every single dollar they can squeeze out of the deal. Perhaps they aren't prepared to move and are dragging their feet in an effort to buy time. Whatever the reason, don’t waste precious time trying to figure out the seller and his motivations or desires. Move on to the next property and concentrate on it.

Self-Analysis Can be Healthy.  Chicagoland home buying strategies can be useful – but only if you use them to your advantage and to accomplish your necessary goals. So, remember this: If you keep trying to work with sellers that refuse to cooperate, maybe you’re the problem, not them. Identify a seller who is both motivated and serious about selling his home. Work with them and make the best deal you can. Don’t waste time pining over the “one that got away,” as there are other fish in the sea. Keeping a positive attitude and a feeling of optimism in the face of rejection or disappointment may mean the difference between finding the right home and becoming frustrated. Stay positive and get what you want.

Read more about home buying advice in the section of articles on Chicagoland Home Buying Tips just below our Chicagoland Real Estate Categories in the column to your right.

Remember, we also post tips daily on Facebook and Twitter. Check us out there, too.

If you’re selling your home or contemplating doing so, there are some Chicagoland home selling issues to consider. While to ultimate goal of any real estate transaction is for complete satisfaction for every party involved – from the buyer to the agent to the seller to the lender – sometimes it just doesn’t work out that way. What happens if – prior to the close of the sale – somebody gets cold feet, buyer’s remorse, or the seller has second thoughts? As the seller, how can you get out of the sales transaction without making too many waves? Can you?

Chicagoland home selling issues that can end up killing a deal

NOTE: Although we never work for sellers or list homes for sale, as exclusive buyer's agents, we can help you by referring you to the most qualified listing agents in the marketplace, due to our experience in working with these agents over the years. Even though we always work only for buyers and never for sellers, we offer these tips on Chicagoland home selling recommendations to potential home sellers who may be in the process of or starting to think about selling their home.

More often than not, deals that progress to the contract stage usually close without a major hitch. However, sometimes there are Chicagoland home selling issues that can kill the deal or put a bad enough taste in the mouth of the seller that he changes his mind. And, you can back out of the transaction as long as you have the proper contract contingencies along with ample communication with your real estate agent – but you need to be vigilant and don’t wait too long.

One key to backing out of the contract is to work with an experienced real estate professional. Make sure you and your agent are both on the same page when it comes to issues like the sales price, closing date, contingencies and negotiable items such as who’s paying closing costs or other seller concessions.

By keeping the lines of communication open with your real estate agent and consulting with him or her during every part of the home selling process, sellers are more informed – and better equipped, perhaps – to anticipate items that may arise regarding their home and what prospective buyers may want to negotiate.

If you’re readying your house for the market, or if it’s early in the home-selling process, an open and honest discussion with your real estate professional may save you time and trouble. Sit down with your agent and explain that you’re not ready, you’re having second thoughts, or you want to put the process on the back burner temporarily. A good, experienced agent will usually be very receptive as to how you feel – honestly, nobody wants to go through the agony of trying to sell a home only to have the seller change his mind down the road. Bring up any Chicagoland home selling issues now and avoid the awkward and painful repercussions that may occur at a later date.

If you’re a little farther into the process or if you’ve already signed the contract to sell your home, backing out of that deal can be a little more involved, but not impossible. Let’s look at your best available options for escaping the contract without creating too much damage:

Issues with the Appraisal or Home Inspection
Normally, sales contracts carry with them a contingency whereby the prospective purchaser (as well as the mortgage lender) be satisfied with the appraisal of the home and the findings of the home inspection report. Depending on the results of either, further negotiations could result between the buyer and the seller.

In the current "seller's market" situation, it’s not unusual for an appraisal to come back lower than the agreed-upon sales price. In that case, additional negotiations and discussions must occur between each party to remedy the situation. Usually, its pretty simple: Either the seller agrees to lower his price or the buyer agrees to pay more money than what the appraisal was. Of course, a third alternative is that both parties walk away from the contract based on the contingency mentioned above.

The same situation can occur with a home inspection – another of the Chicagoland home selling issues that could arise threatening a deal to fall apart. If certain problems were discovered during the routine inspection, the buyer may be more concerned – especially if the seller isn’t willing to pay to make the necessary repairs prior to the closing of the sale. The end result is that both parties – again, due to the contingency – will agree to back out of the contract.

The “Kick-Out” Stipulation
As with the contingencies mentioned above, it’s also normal for a typical contract of sale to include a contingency that says if the potential buyer can’t sell his current home, he’s not obligated to close on the new home. Some contracts may also include a contingency whereby the seller finds a new home by a certain date to ensure he has a place to move. If either scenario doesn’t occur, then either party can exercise the “kick-out” clause in the contract – enabling them to back out of the contract based on the contingency not being met.

Back Out as Early as Possible
As soon as you are made aware of Chicagoland home selling issues that may trigger your desire to back out of the contract – act fast. Real estate experts say the worst thing you can do is wait. Typically, the buyer has more options when it comes to backing out of the contract than does the seller. When the seller wants to back out, the sooner he acts, the better off he will be. Waiting too long could mean you’re setting yourself up for a breach of contract – especially if there’s a third party involved who’s entered into a contract with the buyer or the seller for an additional purchase or sale.

See more articles pertaining to Chicagoland home selling issues 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.

Remember, we also post tips daily on Twitter and Facebook. Check us out there, too.

Chicagoland real estate news trends seem to indicate an increasing number of Americans in search of the proverbial American Dream of home ownership may not be able to experience it. In a nutshell, they either can’t afford the prices of new homes or are unable to save money for a down payment.

Recent statistical models show prospective home buyers at various household income levels are likely to experience sticker shock when shopping for a home this spring. Finding a home in their affordable price range is expected to be a challenging task for many.

Recent Chicagoland real estate news trends indicate an ever-growing number of Americans may not be able to buy a home.

Home prices throughout much of the nation have risen by as much as 40% during the past five years. Conversely, incomes have increased roughly half that pace, therefore, creating a chasm between price and affordability. First-time buyers and those in the lower-tiered household income range will face significant competition for the listings they may be able to afford. In addition, higher interest rates may also dampen their ability to afford many homes on the market. If interest rates continue to rise, potential home buyers and borrowers on the qualification borderline may be unable to qualify for mortgage financing.

An even more disheartening twist in the Chicagoland real estate news trends is the feeling among some housing experts that lack of available credit is a bigger problem than what interest rates do or don’t do. In the words of one housing economist, there appears to be two completely separate housing markets today: One for higher-income purchasers that seems to be brisk and successful, and one for affordable housing units that’s stagnant and struggling.

Lack of growth in the category of starter homes is cited as one reason first-time home buyers, such as millennials, have been slower then previous generations to buy their first home. Incomes just haven’t kept pace with home price increases, making it difficult for middle-class income borrowers from attaining home ownership.

As has been mentioned numerous times in Chicagoland real estate news trends, the inventory of available – and affordable – homes is in short supply. Due to this tight supply, those homes that are on the market are likely priced higher than they ordinarily would be, creating a seller’s market – what typically occurs when the supply doesn't equal demand. In this case, even the lesser priced homes may be out of reach for many prospective purchasers.

The Down Payment Dilemma
To make matters worse for some, saving money for a sufficient down payment is also a challenge that’s a direct result of two factors: 1) Not earning enough money to be able to save and, 2) As home prices continue to rise, so do rents for the first-time homeowners waiting for the right time to buy.

A 20% down payment on the median-priced home of $192,500 in the U.S. currently is roughly $38,500 based on a recent Zillow report. Compounding the problem, in parts of the country where incomes are higher and prospective homeowners are able to save money, the real estate prices in those areas are more expensive, too – making it the typical "catch 22" scenario when it comes to affording a home.

Despite mortgage loan programs requiring considerably less than the widely-accepted 20% down payment – some as little as 3.5% – first-time borrowers are finding those loans are available at higher interest rates and they require the addition of private mortgage insurance (PMI.) PMI insurance is a type of mortgage protection insurance insuring the lending institution against the borrower defaulting on the mortgage payments. The premiums on PMI can be rather steep – especially on top of an already-high loan amount and resulting monthly mortgage payment.

To combat against the higher cost of financing more and putting less of a down payment, many first-time home buyers are tapping into other assets to make the American Dream a reality. Chicagoland real estate news trends are seeing some prospective first-timers withdrawing money from their 401(k) accounts, while others are relying on loans or gifts from parents to provide the necessary 20% to avoid PMI – and the monthly escrow of taxes and insurance payments required for loans with higher loan-to-value (LTV) ratios such as these. Typically, lending institutions who finance more than 80% of the appraised value of a home will require the borrowers to pay the monthly pro-rated portion of the real estate property taxes and the homeowners insurance premium into an escrow account. When the taxes and insurance premiums are due and payable, the lending institution then pays those amounts out of the borrower’s escrow funds and the process starts all over again for the next year.

While the short-term solution may be to increase the number of affordable homes on the market, unfortunately that process takes a while. New home construction, while brisk in some markets, still lags behind demand. In addition, home builders are commanding top dollar for new homes, forcing purchasers to sell their existing ones for as much equity as possible.

It’s a cycle worth continuing to follow as part of the Chicagoland real estate news trends – not only here in Chicagoland , but throughout the nation in coming months.

See more articles pertaining to the most current Chicagoland real estate news trends in the section of articles on Chicagoland Real Estate News 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 as well.

The Chicagoland mortgage forecast – at least for the near future – is that home loans will continue to be easier to obtain than anytime in the last ten years. The Mortgage Bankers Association (MBA) recently published a report showing data that seems to suggest mortgage lenders have relaxed many of their lending regulations and standards for every type of loan – including FHA and USDA home loans – both backed by the U.S. government.

Between 2008 and 2016, it was estimated credit availability to take out mortgages tightened by close to 90%, according to an MBA report. However, today’s Chicagoland mortgage forecast is brighter than before, and more people are qualifying for loans than in the last decade. Officials say even those borrowers who may have been turned down for a mortgage loan a year or more ago are likely to be granted financing in today’s lending environment.

 The Chicagoland mortgage forecast is for mortgages to become easier to obtain than in the last 10 years.

Let’s Look at the Numbers The MBA publishes its Mortgage Availability Index (MCAI) every month in an effort to show the current mortgage lending market as a single number. The MBA obtains data from over 95 lenders nationwide, looking at loan-to-value ratios, FICO credit scores and lending limits as a measure of how much or little flexibility there are in loan guidelines.

The most recent report shows the MCAI at a fairly high 177.1 – a huge increase from what many term its benchmark index of March 2012 of 100. What this means is that mortgages are almost twice as easy to obtain as they were just five short years ago.

The Chicagoland mortgage forecast is for relaxed lending standards to not only continue to be a part of a mortgage lender’s loan guidelines, but they’re making an impact in other areas as well. Mortgage software company Ellie Mae just released a report showing mortgage lenders approve 77% of applicants – an increase of 6% in roughly 18 months. In addition, the MCAI rose 1.1% in only one month. The report also showed that lenders have relaxed lending requirements for loans above the national conforming loan maximum of $424,100.

Availability, as a result, has increased for nearly every type of loan offered:

  • Government mortgage availability rose 0.2% from the prior month
  • Conventional mortgage loan availability was up 2.3% from the previous month
  • Jumbo mortgage availability increased 4.7% from the prior month

Government mortgages referenced above include the three major lending programs – the FHA loan, the VA loan and the USDA mortgage.

USDA Loans Increase Government Mortgage Availability

First-time home buyers really like the little-known USDA home loan program. USDA loans require no down payment, one of only two loan products with that feature – the other being the VA loan – which is available to current or previous members of the Armed Forces. USDA loans are also known as Rural Housing Loans and eligibility requirements are based on the home’s location. Primarily, neighborhoods throughout the U.S. that are in less densely populated areas are the easiest in which to qualify. Before you assume these programs are available only to homes located “in the boonies,” consider this – the eligibility maps are 17 years old. In many areas, was characterized as “rural” in 2000 could be part of suburbia today. The Chicagoland mortgage forecast will continue to be impacted by USDA loans.

The Housing Market Remains Safe

Mention the increased availability of mortgage credit and some people immediately equate that with concern for another housing market crash. In their minds, the logic is easy mortgage availability was responsible for the housing crisis back in 2008 and 2009 – so, if credit becomes easy to obtain we are likely to repeat history. However, here’s something that may calm your fears. Remember the Mortgage Banker’s Association (MBA) MCAI index report discussed earlier? The MBA estimates it reached close to 900 during the bubble in late 2006. Again, the index today is just 177.1. Industry experts say the Chicagoland mortgage forecast is for credit availability to remain strong – and safe – because the housing market is a different animal than it was over a decade ago. Lenders are less likely to be as lax as they were in the years leading up to the housing crisis.

Lastly, mortgage lenders today are more cognizant that making good, sound mortgage loans is the foundation of the housing industry. There are more safeguards in place to prevent history from repeating itself than ever before – primarily as a result of the housing crash. Borrowers today need to have good credit – not excellent, blemish-free credit reports – but a history of paying their monthly obligations on time, over time. In addition, they need sufficient income to qualify for the monthly payments. Of course, they need to have a sufficient down payment to qualify for most mortgage loans, though not all.

Simply put, we remain optimistic with the Chicagoland mortgage forecast for 2017 and beyond. Here’s hoping the housing market will continue to recover to its full capacity.

You can find more articles pertaining to the Chicagoland mortgage forecast in the "Chicagoland Mortgage Info" section of articles just below Chicagoland Real Estate Categories in the column to your right. Remember to also check us out by finding us on Facebook and following us on Twitter.

If you’re shopping a Chicagoland homes for sale listing, you’ve no doubt seen the designation “pending” or “contingent” next to the listing online, attached to a yard sign, or in the newspaper. If you’re like many prospective home buyers, you may not fully understand exactly what those terms mean. Some buyers mistakenly assume that a “pending” message means the home is no longer on the market. However, as we’ll discuss here, that’s not always the situation. Should you come across a home you like and see it listed as “pending,” don't automatically give up. Let’s look at what the terms “pending” and “contingent” mean in today’s real estate market.

What does it really mean when you see a pending sign attached to a Chicagoland homes for sale listing?

What does “subject to” and “contingent upon” really mean? Before discussing what a “sale pending” means, let’s talk about how a normal real estate sales transaction really works. Typically speaking, a prospective home buyer makes an offer to purchase a home “subject to” a real estate appraisal, a property inspection report, or a final mortgage loan approval. In addition, many times a buyer may make the purchase of the home “contingent upon” the sale of their existing home – meaning they intend to buy the new home, but only if their current home sells. Naturally, that’s where most people will obtain the necessary funds for the down payment and closing costs for their new purchase. In the event the home doesn’t appraise for at least the sales price, if there’s an issue revealed in the home inspection report, if the purchaser can’t obtain financing, or if they can’t sell their current home, the buyer can usually get out of the contract. Each of those items allow the buyer the opportunity to exit the contractual agreement as a contingency.

A home under contract may still be available. Depending on the market in which you’re shopping, real estate agents often characterize a home with a contingency as being “active with conditions” or “active continue to show.” What this really means to other prospective buyers and agents is the property is still potentially available and the sellers are open to other offers to purchase. So, if you come across a Chicagoland homes for sale listing, remember that while the seller isn’t able to enter into a contract with another purchaser, the sale is far from completed. In such a circumstance, there may be an opportunity for a “back-up” offer – meaning if the original deal doesn't close, the seller will have an additional offer to fall back on. In the absence of a back-up offer, the property would have to go back on the market and essentially return to where it began in the sales process.

In some real estate markets in certain states, prospective buyers don't execute a contract until they’ve thoroughly inspected the property. Basically, there’s a verbal agreement between the buyer and the seller to purchase the property – and the home isn’t “sold” until the contract is executed (or closed) by all parties involved.

“Sale pending” means there are no more contingencies. A property marketed as a Chicagoland homes for sale listing is truly pending if all contingencies have been satisfied. In that case, the prospective purchaser is “locked into” buying the property. The only step remaining is for the closing of the sale to take place – a process that can range in time from a few days (in the case of a cash sale) or up to several weeks if there is mortgage financing involved.

To avoid confusion, most real estate agents won’t characterize a home as “pending” until the sale is fairly close to being consummated – meaning the sale of the property is pending the final closing. The buyer can still exit the contract, but it’s highly unlikely by that time such an event will occur. However, if the buyer needs to walk away from the deal, in most cases he will forfeit the earnest money deposit paid when the contract was executed.

Determine the status of the property in question. To remove all doubt about where the home you're interested in stands, ask questions of the real estate agent or of the seller. Did the buyer have the proper inspections performed? Did everything check out satisfactorily? Ask your real estate professional to talk to the listing agent to find out the home's current status. You can then fully understand if there’s an opportunity to move forward.

As mentioned, don't be discouraged if the home you’re interested in is labeled “sale pending.” Just keep the home in the back of your mind and actively follow the progress of the sale. Many times in busy markets, buyers may find something they like better or a mortgage lender may change policies creating problems in closing the sale. A good, experienced agent will work closely with the listing agent so if a sale doesn’t come to fruition, a new buyer – their client – can step in and become the new purchaser. If not, just continue your search for another Chicagoland homes for sale listing.

See more articles pertaining to Chicagoland homes for sale in the section of articles 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.