Chicago condos
Chicago condos are active and alive in today’s market place with an entire sector of wholesale condos selling in record numbers. The Chicago condos that are selling are not only the normal inventory, but now short sale and foreclosed condos are popping up everywhere. This trend looks like it will continue for many months to come of not years.
As we get closer to the $ 8,000 first time buyer tax credit deadline, which is scheduled to end November 30th, there will be more and more closings. Three things are really adding to the heavy volume of closings happening now and soon to be.
First you have the $8,000 tax incentive. This allows first time buyers of Chicago condos to get a credit of $8,000 from the government if they close on a Chicago condo by November 30, 2009. Second, the interest rates are at an all-time low. Lastly is the deals that are in the Chicago condo market place right now. We’ve never seen the deals that are out there with short sale condos, foreclosed condos and the market in general, it’s causing a tremendous buying opportunity for just about anyone buying a Chicago condo.
Chicago condos can be found by going to the OwnACondo.com website and clicking on “Condo Searchâ€. There are over 35,000 Chicago condos for sale right now and it looks like we’re soon to see another run of active condos soon. Reports are out that you’ll see thousands of foreclosed condos in the Chicago condo market place over the third quarter of 2009. That’s a lot of Chicago condos. How do you search through it all? One of the best ideas would be to hook up with a condo dedicated agent that does nothing but sell condos. They have the Chicago market in the back of their hand looking at deals every single day. These are the people that know product.
Once you’ve found your condo, you’ll need to focus your efforts on closing the condo. Financing a condo can be tricky in this market place but not impossible. The website FinanceACondo.com has five lenders that focus primarily on financing condos in Chicago. This would probably be your first place you want to start. A condo lender will tell you how much condominium you can buy and then you can start your search with your condo Realtor.
Buying a Chicago condo right now may be the best investment you’ll ever make.
Rent to Own
Rent to own a condo or home has received a lot of press lately due to the downturn in the real estate market the last couple of years but is still a very viable option for many home or condo buyers. There are two main reasons why the rent to own program is attractive to many buyers in today's economy.
What is rent to own and what kind of agreements are needed? Rent to own is in its simplest form is renting a home or condo with the opportunity to purchase at a later date. The lease to own or lease-option agreement is both a lease that allows you to occupy the home and an option that allows you to purchase the home in the future at an agreed upon price. The typical agreement may offer a part of the rent to go toward down-payment or closing costs. For example, $200 a month may be applied toward the down-payment where at the end of the year $2400 has been accumulated towards the purchase.
Lack of a down payment is common today with the credit markets shrinking and the ability to obtain credit getting harder by the day. Home lenders no longer have the financial products available to write loans they way they did just a few short years ago. Cash strapped first time home buyers with good credit are finding it much too difficult to find loan products with little or no down payment. The rent to own a condo or home programs offered by many different real estate companies and other organizations fills the gap between the inability to buy now and waiting for possibly years before a down payment can be saved. Rent to own programs can be structured several different ways offering condo or home buyers a variety of options to purchase sooner than later. One of the most popular today is for a portion of the rent to go toward closing costs or down payment. This makes it easier for the potential buyer to save the much needed down payment because it is already a part of their monthly payment. The excess in rent goes toward an escrow account that is not tapped until the buyer is ready to purchase. In other words, a forced savings account where the buyer or seller do not have access to the money until an agreement to purchase is executed.
Condos
Condos are getting very close to surpassing the amount of homes that close annually. Just think of that statement. Condos are now getting close to being the number one type of real estate that close on an annual basis. In fact, there are some cities where more condos close than homes. What’s all the excitement about these condos?
Condos out number homes in several cities now. When you think of all the space needed for a single family home, many times you can put a skyscraper up in an area of ten homes, but get 700 condos out of the same area. Seven hundred families can live in that same space instead of ten, a much more efficient way to use the land.
Condos that have the most units on the market are Chicago and Miami. Both of these metropolitan areas have well over 35,000 active condos to date. And it doesn’t look like it’s letting up soon. With the amount of foreclosed condos and short sale condos, the wholesale market is dominating right now. When will it end? We have the get the wholesale market out of the picture and I don’t see that happening soon. Literally, thousands of condos are being foreclosed on right now and it just doesn’t appear to be going away. If you have another ten thousand foreclosed condos coming on to the market this month, they will all need to be sold. The prices are so cheap for these condos, that it’s driving buyers from the retail sector to the wholesale sector, doing nothing but creating great deals for buyers, but dragging process for the seller of condos down.
Condos can be found by going to your local realtor. They will run off a list of all the condominiums for sale in your area. They will also be able to help you with short sale condos and foreclosed condos. If you’re a seller of a condo right now, just be patient. Always remember, if you have to take a price cut to sell the condo now, you can make up the difference when you buy the condo on the next round. The wholesale market may be around for three more years. That means lots and lots of deals for people with money right now.
Vacation condos, investment condos or even the buyer of their first condo is going to get a deal right now. What a nice time to have the money to buy a condo!
Short Sale Condos
Short sale condos are all over the market place but I’m constantly hearing the question, “what is a short sale condo?â€Â A short sale is where a bank agrees to take less than the mortgage amount of the loan. For an example, lets say you purchased a condominium in Los Angeles for $350,000. The bank financed $325,000 for you back in 2007. Now you are late on your financing payments and you want to sell. If after many months of selling the condo you finally get an offer but the offer is less than the mortgage amount of $325,000. In fact, it’s quite a bit below. It’s at $ 225,000. The bank, depending on the situation may actually accept this contract. Why would they do that?
The short sale condo is popular right now because of the amount of foreclosed condos. There are so many foreclosed condos that the banks are now taking less than the mortgage so they do not have to go into foreclosure with the condominium. Let’s go back to our example. The bank now accepts the $100,000 discount. They are clean of the loan and they can move on. If they foreclose on the condo, they are in a position that it may take another six months before they actually can take possession of the condominium. That’s another six months of not being paid. Then they have to market the condo. This may take a few months to get started because the process before marketing the condo is getting it ready to market. They’ll have to come in with a team of construction guys and clean everything up to make it ready to market. How much will this cost? The bank factors this in as well. Now that the bank has spent $20,000 in fixing up the condo to get it ready to market, the process begins for selling the condominium.
Now the bank has to hire a Realtor to sell this foreclosed condo. How much will that be? Five to six percent of the purchase price is typical to pay to a real estate brokerage. When you start adding it all up, the time, the money and the energy, many times selling the condo through a short sale is just easier.
Short sale condominiums are rampant all over the United States. Choose a Realtor and start looking. You’l find that a high percentage of the market is selling short right now.
Foreclosed Condos
Foreclosed condos seem to be the trend in today’s market place. Can you own a condo after being foreclosed on? How do you buy a condo foreclosure? If you’re being foreclosed on, who do you turn to?
Let’s start with the people that are being foreclosed on today. Foreclosed condos are popping up everywhere. The banks have certain guidelines and when the line in the sand is drawn and you pass that point, they begin the foreclosure process. If you’re behind on your mortgage payments, the first thing you’ll need to do is talk to your finance person. A banker or mortgage broker will help you with all your initial questions. The process to be foreclosed on is relatively extensive. Depending on the bank or institution, it can take as little as six months all the way to two years to be foreclosed on.
The normal situation if you fall behind on your payments, is to start with counseling at the lending institution. The lender will suggest a few things, but they normally give you some time if they see that there is a chance for you to get out of your situation. If the length of time continues and you still cannot pay your monthly mortgage payment, the next step is called the workout department. The workout department will normally be another advisor and they will be the last resort before going into a foreclosure mode.
The foreclosed condo from a bank’s perspective is not good. They do not want this product in they’re portfolio. They are in the business to finance real estate, not manage real estate. The foreclosed condo to a bank is an eye sore. It’s not good on their books and they do not want to handle it once they’ve taken it over, so they are going to try to do everything in their power to work with you.
In the end, you’re still going to have to find a way to pay for the mortgage. There are real estate investors out there that may consider loaning you part of the money in return for part of the equity in the property. If they see a nice return, you can stay in the condo and they can have you as a manager of the condo because you live in it. It’s a win-win scenario for both properties and you find a way of not being another foreclosure statistic.
Condominium
What stops you from owning a condominium when you really want one? So many renters focus too much on why they can’t own when most of the times, it’s very possible to own a condominium. Condominium ownership is actually less expensive than renting many times. Let’s break down the cost of condos to own in an area of Chicago.
A condominium in Chicago on the southwest side costs roughly $ 129,000. You can get a loan to purchase the condominium for 3.5% of the value is roughly $ 3,900. So you need $3,900 to use as a down payment. Next, you’ll need to know how much it will cost monthly. After you put the $3,900 down, you’ll need a bank mortgage of approx. $125,000. At an interest rate of 6% over thirty years, the monthly amount comes to approx $750.00. Next comes the real estate taxes. On a two bedroom condominium on the southwest side of Chicago you’re looking at roughly $150 per month for taxes. That puts you at $900 total per month. We’re not done.
The condominium you buy will be run by an association that will pay for the upkeep of the real estate. Each condominium owner needs to pay into this association. This is known as condominium association dues. The condo association varies but on average lets estimate this fee at $150.00 per month. Added with the $900 total, we’re now at $1,050 per month to own your condominium.
What’s next? Mortgage insurance on your condominium. Because you did not pay 20% down, the mortgage company will ask that you get mortgage insurance. This will cost you another $50 per month. Now you’re at $1,100 per month. What are you paying rent right now? You’re probably paying very close to that today. Maybe even more. What if you do not have enough for the down payment? How about a rent to own programs that allow a portion of your rent for a down payment? What about borrowing the down payment? What about going in half with a friend? Now the down payment is half of what you need. There’s always a way if you really want to own a condominium.
Condominium ownership means you own instead of paying rent. Renting a condo may be nice, but do you know what owning a condo feels like? It’s the American dream. It’s not being under anyone’s control but your own.
Finance your Condo
The condominium market has long been an alternative housing option that is increasing in popularity each passing year. From the first time buyer to the step down condo buyer all are an attractive means for home ownership. To finance your condo in the current market can be challenging but not impossible. Fannie Mae, one of our government backed mortgage-finance companies has added some restrictions that can make it more difficult for developers to sell their properties. A new policy effective March 1st raised the amount of units sold from 51% to 70%. In addition, Fannie Mae will not back loans for sales in buildings where 15% or more of the current owners are delinquent on their association fees or where more than 10% of the units are owned by a single entity. Fannie Mae says these restrictions protect the developers and taxpayers from throwing good money into troubled developments but many condo developers disagree and have petitioned Fannie Mae for exemptions. To date more than 50 petitions have been filed and granted allowing condo buyers to purchase.
It is for first time home buyers but there are several things to consider before you can qualify. To finance your condo you cannot have owned a home in the last three years but your spouse has owned a principal residence, neither you nor your spouse would qualify for the first time home buyer tax credit. However, unmarried joint purchasers may allocate the credit amount to any buyer who qualifies as a first time home buyer. A good example would be if a parent jointly purchases a home with a son or daughter. Also, ownership of a vacation home or investment property not used as a principal residence within the last three years would still qualify you for the tax credit. There is movement in the Congress now to enable the buyer to use the tax credit at time of closing their loan and not waiting till next year when taxes are filed. The final decisions have not been made yet but it looks like it could happen at any time, so stay tuned!
To finance your condo there are income limits for the program but they have been made generous to encourage more buyers into the real estate market. To receive the full $8,000 home buyer tax credit a single buyer cannot have more than $75,000 in modified adjusted gross income and married tax payers filing a joint return cannot make more than $150,000 in modified adjusted gross income. Now that does not mean that buyers making more than those amounts will not receive any benefit from this program, it only means they will receive a reduced amount based on their income level. In other words, almost anyone can benefit in some form with this program.   Interest rates are down, prices are very reasonable, and now $8,000 in tax credits, what are you waiting for!
Rent A Condo
Why rent a condo? Condo rentals are everywhere nowadays because people are having a hard time selling condos. The question you have to ask yourself is why rent a condo when you can buy a condo? Condos are cheaper than ever and can greatly appreciate if you pick them up at the right price. The prices have dipped so significantly that I’ve seen deals literally at thirty and forty cents on the dollar.
Renting a condo starts with the inspection. Make sure the condo meets all your needs. It’s not only the space between the four walls that’s important, but the environment itself. I always like going to the condo complex at several different times of the day and different times of the week. Visit it at night on a Wednesday and then during the day on a Saturday. There’s always a different crowd and you’ll begin to see the people and soon you’ll know if the complex is right for you.
Renting a condo in Chicago? Renting a condo in New York? You’ll need a condo specialist. Make sure you choose a Realtor that knows the area. They always have the best deals. Tap off of their experience. They get paid by the landlord, so their services a re free to you. There are specific rental real estate agents that do nothing but condo rentals. Once you’ve found the condo you want to rent, make sure you really read every line of the lease. My recommendation is to get an attorney for the condo lease, but if you’re unable to afford one, please take the time to read every line of it. Condo leases are usually pretty standard, but many condo landlords throw in amendments. Watch for these.
Once you’ve rented a condo, you’ll find that your new home needs upgrading. There are usually several maintenance guys and rehabbers that service several of the complexes throughout the condominium complex. Ask the manager of the condo association for names and numbers. Ask for references as well. See if your neighbors used them and what they think about things.
Renting a condo can be awesome if you use the right people and take the time to carefully make your selections. It’s all about focus. Don’t take this lightly because you’ll be in your condo a long time. Take the time now so you won’t suffer later by not choosing the right condominium to rent or choosing the right condo complex to live in.
