Chicago’s Blizzard 2011 Has Passed, But a Spring Storm is Already on Its Way
By Noel Christopher
If you thought Chicago's blizzard of 2011 was bad, wait until you see the storm that is coming this spring. The OREO storm that is. OREO, or Other Real Estate Owned, is the term that banks use for the distressed properties they have on their books. RealEstateAuctions.com is poised to service banks and institutions nationwide through our innovative auction platform offering boots on the ground in all our auction markets.
We keep hearing about the “shadow inventory” in the real estate market, right? Well, a recently released Standard & Poor’s study shows that in Chicago there is a 54-month and growing inventory of distressed properties. Many of these properties are in the shadow inventory of bank properties that are waiting for one reason or another to be put out into the market. Lately there has been a hold on foreclosures due to the Robo Signing controversy, which has added to this shadow inventory. Also adding to this inventory are all of the previously foreclosed properties that were held back from the banks to make sure they filed the right paperwork. You can see why we are drawing comparisons with Chicago's blizzard of 2011.
Although the last four months in the distressed real estate market has been a little slow here in Chicago, that is all about to change. Industry sources tell me that banks are opening up the flood gates in the second quarter of 2011. So while we just had the great Chicago Blizzard of 2011, we are about to see a deluge of REO properties hit the market, much like the snow that recently buried us all. This is more than the market can absorb through the traditional Multiple Listing Service model.
RealEstateAuctions.com is the perfect solution to fill the need of banks by supplying an accelerated marketing option through auctions. A well-marketed auction puts the most eyes on a property with qualified buyers in the room, thus getting a great price for the bank and a good opportunity for a savvy buyer pick up a great deal.
Buying Foreclosures
There are a lot of great deals in the real estate market today but not all are as easy as it seems. Buying foreclosures can be a tricky business unless you know exactly what you are doing and know who can help. Right now foreclosures are dominating the market like no other time in history with well over a million homes in foreclosure and more are expected in the near term. These properties can offer great opportunities but are also rife with problems for so-called bargain hunters. Many people wrongly think that low prices means you should jump out there and start buying foreclosed properties but nothing is further from the truth.
Buying foreclosures can be a great way to purchase property but that doesn’t mean you should lose your head. Banks put foreclosed homes on the market at cut rate prices for a reason. They want quick sales to avoid the expense of upkeep and the related expenses with any home such as property taxes, utilities and insurance but due to the cut rate pricing everybody and their brother is trying to buy those homes. You ask why this would be a problem. The answer is the people trying to buy these homes keep bidding until the price is no longer a bargain. Good for the bank but not so good for the buyer because they get caught up in the bidding war and did not carefully calculate what the final costs may be with repairs that may be needed.
Don’t let some of these things keep you out of the foreclosure market. Buying foreclosures can still be a good deal if you take the proper steps and don’t get caught up in the excitement. Smart buyers establish a relationship with their local bank’s asset manager which can sometimes get them inside information and maybe the first offer of properties coming available. While you are talking with your lender about the properties that are available you want to get pre-approved by that same lender. Nothing warms a banker’s heart more than someone qualified for a loan and within their own bank. Next and perhaps most important is to hire a trusted real estate attorney, not your neighbor down the street who is a corporate lawyer for the mega corporation but the local attorney who handles a significant portion of the properties being transferred in your area. He can offer the expertise to handle any problems and the legal aspect of purchasing a home. Buying foreclosures can be challenging but the rewards can be quite significant.
Chicago Condo Foreclosures
Chicago condo foreclosures. You've heard all about them in the news. How do you get involved in one of the hottest condo products out on the market today? There are so many things you'll need to know before going forward with buying your foreclosed condo in Chicago.
So now you're ready to move forward on a Chicago condo that's been foreclosed on. You've spent some time with your due diligence analyzing the areas prices and inspecting the amenities in the area. Now what? The price seems right and your friends and family think it's a good buy. The first thing you want to do is get an attorney that knows the condo market involved. Your attorney will be able to answer questions in reference to the overall state of the condominium association. Condo associations can make or break a deal. If the association is not organized, the state of the entire condo complex can be in disarray.
One of the most important things to check is special assessments. The month condo assessment is one thing, but what is going to happen in the future to the complex? Are there any funds set aside for major capital expenditures? If not, the special assessments bill has a chance of kicking in at a time that you weren't expecting it.  And it can be a big bill. Depending on the capital expense, it could possibly run in the thousands.
Chicago foreclosures should be purchased with caution, but once your attorney has gone through everything, then move full steam ahead. The condo prices are to die for. I've seen penthouses going for $1.4M a few years back now selling for $400,000. Now that's a deal. In the market for condos under one hundred thousand, you can pick up foreclosed condos for $40,000 and $50,000. When you finance these condos not only do they break even after renting them, but they actually cash flow substantially.Â
Chicago foreclosures will be around as they've been since the mortgage industry started. Now, more than ever, the deals are rampant. The banks have too much inventory and they don't want to manage condos. It's one of the best times ever to capture the condo of your dreams. Look up foreclosed condo brokers in the area you live in and start the hunting process. Before you know it, you'll own your own condo in the city of Chicago. See you soon.
Foreclosed Condos in Chicago
Foreclosed condos in Chicago are at an all-time high. There are so many foreclosures going on nationally that banks are having a tough time keeping up with everything. To get involved with buying these investment condos it's best to start out with a real estate agent that knows how to handle the foreclosure process.
The statistics on foreclosures in Chicago, whether for condos or homes is just staggering. There were over one million, five hundred thousand reported foreclosures nationally so far for 2009. We're only a little past half way. The numbers are overwhelming for banks.  Illinois had the eighth most foreclosures so far in 2009 nationally.  Nevada was first followed by Arizona as number two.
So how do you buy a foreclosed condo? There are numerous ways to get involved in the process. You can buy online courses, go to seminars and auction houses, but as I stated earlier, one of the best avenues, is to go to a real estate agent that specializes in foreclosures. There are a number of them out there and they can narrow down the properties that are ready to be liquidated now with very little hassle. They normally will be paid by the bank so their services are free to the buyer.
What's the difference between a short sale condo and a foreclosed condo? The short sale is a condo that is in a delinquency state. The seller usually is behind a few payments and the bank has decided to sell the condo short of the amount of the loan. It's really a crazy time when you see a bank allow a sale of a unit's mortgage and lose money, but the bank is losing so much more if they let it go into a foreclosure state where they end up taking over. The banks are not in the business of managing property When they take a foreclosure property over, they now have to manage it. They have to renovate it and either put a tenant in it or try to sell it. The longer it sits on the market, the more money they're losing.
The foreclosed condo game in Chicago is big right now. The numbers keep rising. If you're looking to get into it, now is certainly the time to start the process. Have we hit the peak yet for foreclosures in Chicago? They're talking about next year at this time, but what do they know?
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.
Condo Foreclosures
Condo foreclosures are huge right now but how do you get involved in them? The real estate market has devastated so many people’s lives in ways unimaginable. What’s left behind is a foreclosure market of condos that’s overwhelming for banks to deal with. That means incredible condo deals for the buyers!Â
Condo foreclosures are in every neighborhood imaginable. The banks have foreclosed on everything and everyone over the last three years, from the poor to the mega superstar celebrities. There are so many people in positions that were making top money, the job got eliminated and now they are in trouble. The condo foreclosure market is so huge; I don’t know where to begin. I guess I’d say that it starts at the Realtors desk. Chicago Realtors have such a great advantage knowing the product that’s available because they’re in the market place everyday. Imagine being a Chicago Real estate agent. Everyday you are out there on the streets of Chicago getting calls from sellers and banks. They are the people that know the condo product. I would start there if you’re looking to get into foreclosed condos.
Condo foreclosures can be in great condition or they can be in deplorable condition. Once you’ve gotten a list from your condo Realtor, the next step is physical showings. If you’re inexperienced at rehab and maintenance, it might be recommended to hook up with a handy man and have them come to your showings. Each condominium is different and you’ll find that a handy man will have eyes different than you, noticing things you just can’t see. Plus they’ll be able to give you a total of what it will cost to rehab the Chicago condominium. This will save a number of steps in the due diligence process. If you include them in your showings, you’ll kill two birds with one stone.
Now you’ve found the Chicago condo foreclosure you want to buy. Have you checked into financing yet? This step should be first. If you can’t finance a condo, what good is it getting all these people involved. To finance a condo, you’ll need about 20% of the purchase price a s a down payment. Most lenders are tough in this market place, but not impossible. Have all your records together and do your homework on all the lender programs and you’ll be ready to pull the trigger once you’ve found the forclosed condo you want to buy.
Cheap Condos in Chicago
In today's market, you're guaranteed to find cheap condos in Chicago. It's all over the media and in various publications that we're in a buyer's market. A "buyer's market" is just another way to express that there are cheap condos in Chicago and throughout the suburbs. After performing a basic internet search, Illinois appeared with 10,014 condo foreclosures. Of that number, there are 4,056 foreclosed condos in Chicago. What does that mean? A buyer has 4,056 cheap condos in Chicago to choose from. The balance of that figure is foreclosed condos in various suburbs.Â
But wait, that is not your only opportunity to purchase a cheap condo in Chicago. Over the past couple of years, the number of Short Sales has grown significantly. A Short Sale is defined as a homeowner that can no longer afford their monthly mortgage payments, and are confronted with the possibility of foreclosure, resulting in the homeowner requesting to sell their property for less than they owe the bank. Consequently, allowing buyers another opportunity to purchase property at a discounted price. Short sales are the more favorable approach for all parties involved. For a property owner, a short sale is an option to escape damaging their credit as severely as they would if the property defaulted in foreclosure. On the other hand, a foreclosure is when a homeowner loses title to their home as a result of not making timely payments, or any payments. The bank becomes the owner of the property through repossession. In either scenario, we are flooded with cheap condos in Chicago.
If you're interested in learning more about cheap condos in Chicago or any of the suburbs, I would suggest reaching out to an OwnACondo.com specialist. Since OwnACondo.com specializes in condos throughout the Illinois area, you are guaranteed to find the best deal out there. In addition to working with an OwnACondo.com specialist regarding your real estate needs or desires, they can assist you with various mortgaging options through our partnering companies. I just received a memo today informing us that 95% conventional financing on condos is back. If you are worried about coming up with a down payment, that is an option for you. And, don't forget the $8000 tax credit for 1st time home buyers. Buying cheap condos in Chicago is the reality of today!
Chicago Foreclosures
Chicago foreclosures are everywhere. How has this all happened? The foreclosures have doubled every year for the last three years and it doesn’t seem to be getting better. How can you take advantages of all the foreclosures in Chicago right now?
It starts with the owner of the real estate not paying his or her mortgage. As time goes on eventually the owner has to abandon to premises and the bank takes the property back. The bank tries to sell the property through an auction. This is where you or your real estate agent can take advantage of spectacular deals. The Realtor will have all the information you’ll need on the foreclosures going on in today’s market place. They’ll show you through the various methods for obtaining a condo through the foreclosure process.
Once you’ve identified the piece of real estate, the Chicago foreclosures you’d like to bid on, you’ll need to make sure you can finance the real estate. There are several financing firms that specialize in real estate. If you are focused on townhouses or condos, you can go to FinanceACondo.com and get a number of financing institutions that can help this process. Once you get the OK from a bank, the next step is to make your auction bid. The bid is an interesting experience. If you bid too high, you pay too much. If you bid too low, you don’t get the property you want. It all comes down to your due diligence and your needs. If you go through and analyze all the properties that are available and look through the sold properties that compare to your subject property, this will help you immensely. The second part of the equation is how bad do you want or need this property. If you don’t need to live in it right away and can wait, make offers that are extremely low. You never know when or if they’ll be accepted, but if they do, you may have one of the best investments you’ve ever made.
Once you own the Chicago foreclosure, who do you choose to manage the property. There are a number of real estate management specialists out there. RE Management is Chicago based and can help with all types of real estate management. If you plan on managing the Chicago foreclosure on your own, make sure you get yourself a good attorney to go over all aspects of property management. There are so many parts to consider when managing real estate, that in the end, it’s great to have the right advice from an attorney.
