Condominium Law
In most states, condominiums do not have a corporation set up to be responsible for the liabilities, taxes and governance of condos, PUD's or condotels. That is why each state has a special set of condominium laws detailing how condos must be organized and operated. These laws require each condominium project to file a declaration and by-laws, with specific requirements regarding the rights and duties of the association. Condominium statues vary considerable from state to state and many times lack protection for the consumer. While some states provide only the barest framework for creating and governing condominiums others are very complex and can be confusing. Before you buy a condo it would be a good idea to obtain a copy of the state law and consult a trusted real estate attorney.
Condominium law can be quite confusing with all the definitions and time well spent may be the key to making a good decision if you are a first time homebuyer or a seasoned homeowner purchasing for the second or more times. Some important definitions are contained and been paraphrased in the interest of space.
Declaration - the instrument by which the property is submitted to the provisions of the act. Declarations can be amended from time to time depending on local or state laws.
Unit - means a part of the property designed and intended for any type of independent use.
Common elements - means all portions of the property except the units.
Unit owner - means the person or persons whose estates or interests, individually or collectively, aggregate fee simple absolute ownership of a unit.
Condominium instruments - all documents and authorized amendments thereto recorded pursuant to the provisions of the Act, including the declaration, bylaws and plat.
Common expenses - means the proposed or actual expenses affecting the property, including reserves, if any, lawfully assessed by the Board of Managers of the Unit Owner's Association.
Association - the association of all the unit owners, acting pursuant to bylaws through its duly elected board of managers.
Reserves - those sums paid by unit owners which are separately maintained by the board of managers for purposes specified by the board of managers or the condominium instruments.
The condominium law definitions above are from the Illinois Condominium Property Act first established in 1963. Today the popularity of condo living has exploded throughout the country and laws governing these types of properties are being looked at closely. With baby boomers entering the market interested in moving away from the traditional detached homes, condo living has become much more attractive and laws governing them can be very important.
Homebuyer Tax Credit
If you will remember back in 2008 then President Bush signed a Homebuyer Tax Credit that was to stimulate home buying going into 2009. The Housing and Economic Recovery Act of 2008 authorized a $7,500.00 tax credit for qualified first-time home buyers purchasing homes on or after April 2008 and before January 1, 2009. The program has since expired but has been replaced with a much better and larger plan.
The Homebuyer Tax Credit offered today is as follows but changes may be on the way:
- The tax credit is for first-time home buyers only.
- The tax credit does not have to be repaid.
- The tax credit is equal to 10 per cent of the home's purchase price up to a maximum of $8,000.00.
- The credit is available for homes purchased on or after January 1, 2009 and before November 30, 2009.
- Single taxpayers with incomes up to $75,000 and married couples with incomes up to $150,000 qualify for the full tax credit.
The program today is called the American Recovery and Reinvestment Act of 2009 and authorizes up to $8,000 tax credit for first-time home buyers purchasing a principal residence. Many people have questions about the program and below are some of the answers for our buyers. Remember you should consult a qualified tax advisor or legal professional about your unique situation.
First time homebuyers purchasing any kind of home - new or resale - are eligible for the tax credit. The definition of a first time home or condo buyer is as follows; a buyer who has not owned a principal residence during the three year period prior to the purchase. For married buyers the test is of both home buyer and his/her spouse. This year's tax credit is different from last year's because it does not have to be paid back. This year's tax credit is a true credit, not an interest free loan as was last year. However, the home buyer must use the residence as their principal residence for at least three years or possibly face a recapture of the tax credit amount. Claiming the tax credit has also been made easier. All you have to do is complete the tax credit on IRS form 5405 to determine the amount and then claim the amount on line 69 of your 1040 income tax return. No other applications and forms are needed.
Recently Congress passed a bill extending the Home buyer Tax Credit past the November 30 date for military, diplomatic and intelligence personnel serving overseas. The extension of this House bill paves the way for the continued tax credit and word is, offering an expansion of the entire program including offering the credit to a broader group of buyers, such as replacement home buyers whose income does not exceed some limit. Hopefully we will have word of the possible extension in the next few weeks but if you are interested in purchasing and meet the guidelines of the original program don't hesitate to act now. You never know what Congress may do and you would not want to miss out on this opportunity.
Chicago’s Local Market
To say the least the economic news has not been the best in the last several months but sometimes we forget to notice some of the more encouraging trends that may be underway in the Chicago local market. That does not mean that we should minimize some of the sobering national economic news with consumer confidence down and the psychological worries about rising unemployment. There are some genuinely positive developments with all this news.
Housing affordability has been the best in decades. In many real estate markets around the country as well as the Chicago local market more households are now able to afford a median priced home than any time since 1970. Most of this is due to an increase in household income and the continued decline in prices of homes being sold. Right now most economists agree that the inventory of unsold homes is a huge obstacle, but inventories have been steadily declining over the last several months, which mean we are selling off the excess supply of homes. Selling off the excess inventory will stabilize the market which bodes well for the economy in general. When the economy is good and consumer confidence is high prospective home buyers flood the market starting the next housing boom cycle.
Another recent positive development which hopes to draw even more people to purchase a home or condo is Congress's new $8000 non-repayable tax credit. This is available to anyone who has not owned a primary residence during the past three years. The credit is equal to 10 per cent of the home's purchase price up to a maximum of $8000. You need to act now since it is available only for homes purchased on or before January 1, 2009 and before December 1, 2009.
The Chicago local market is poised for a small rebound in 2009 but then start a steady climb toward improvement in the years following. The housing market has long been an indicator of economic boom or bust and today's market is no different. The housing market has always run in cycles, some short and some longer but there is always a rebound and this cycle is no different than those in the past. There will not be as quick a recovery we have seen in past troubled economic times but the kind of steady growth expected will be what is needed to sustain a long term housing recovery.
Chicago Vacation Condos
When you are thinking about your vacation there are several things that need to be considered. Is your vacation site someplace that you may visit many times over the years? What is the cost to vacation in this location with all the amenities you want? Is there enough space if you intend to bring your entire family and have some privacy? If where you go is Chicago, then think about Chicago vacation condos There are some nice aspects of staying in a hotel or apartment but there are reasons to book a condo.
Normally you spend only your evening hours in an apartment or hotel so why pay a higher cost. In some cases a condo could be 10-20% less expensive.
Dining can be one of the most expensive costs for your vacation, especially if you are feeding your whole family. Children are accustomed to foods they enjoy at home and if you are dining in your own condo then it is much easier to prepare the foods they like. Another nice thing is that you have the option to dine in or out which can be a enormous cost reduction and please everyone by offering choices.
Peace and quiet is another advantage to a condo if you are looking for a romantic vacation without the kids. Condos are built to keep noise to a minimum. Hotels with elevator bells, loud late-night guests, and children running up and down halls are not very conducive to that romantic getaway. Being in a Chicago vacation condos means that you can sleep in and you will not get that hotel employee knocking at your door when you are trying to relax.
Comfort and more space are considerations when booking your vacation in a condo rather than a hotel. For the dollar value you get much more space in a Chicago condo than any hotel or apartment. More space means more privacy especially if the kids came along. Condos come with separate kitchens, living rooms, bedrooms, and sometimes even family rooms which translates into a more comfortable, stress free vacation for everyone.
One other major advantage to a vacation condo is that it is yours. You can rent it out if you desire when you are not using it which helps in paying the costs. Additionally, if you decide to sell you could realize a nice profit.
All of these things and more are the reason you should consider a Chicago vacation condos if Chicago is your primary vacation destination.
Bucktown Condos
Chicago has over 77 different communities and over 210 neighborhoods within its boundaries many of which are of ethnic origin. Bucktown is one of these communities which were established mainly by Polish immigrants early in the 1800's seeking refuge from their war-torn country. It is believed the name originated from the large number of goats the early settlers raised in their backyards, (male goats are known as bucks). Today you will not see any goats but the neighborhood is full of Bucktown condos and lofts.
The neighborhood bounded by North and Fullerton Avenues is a slightly less expensive alternative to many other areas in Chicago, although prices are rising for Bucktown condos. In the mid 1980's a growing group of artists emerged creating an artist colony which identifies the neighborhood today. Bucktown's past is seen through its one-hundred year old buildings, cobblestone paths, and historic churches, remnants of the early Polish immigrants. The neighborhood's past is evident but so is its future. Contemporary architecture is found next door to vintage buildings in this neighborhood. Because of its status as a hot spot to live real estate developers moved in and started converting older buildings into loft spaces and constructing new low-rise condominiums and Bucktown condos were off and running. The new construction and refurbishing of buildings in the area lead to widespread gentrification and an increasing number of young working professionals. Most of these buildings offer home and condo buyers updated features like granite kitchen counter tops, new stainless steel appliances, hardwood flooring and remodeled bathrooms, not to mention private balconies and rooftop patios. With this renewed interest in residential property business was soon to follow. Businesses such as upscale stylish stores, trendy restaurants, and bars dot the area and are considered one of the most fashionable places in Chicago to live.
Primarily a residential neighborhood, Bucktown is a mix of single-family homes, converted lofts and Bucktown condos. The average price for a one bedroom condo runs in the mid $200's and a two bedroom can run up to $300,000. A three bedroom single family detached home runs about mid $650's. Bigger places that have been completely rehabbed with upgraded amenities can run as high as $800-$900,000. Private residences with more than three bedrooms in Bucktown can push upwards of a million dollars. Today young adult professionals are flocking to Bucktown in droves. Its status as a hot spot to live has made this Chicago neighborhood one of the most sought after residential areas in which to live.
REO Properties
The challenges facing the real estate market in the last few years have brought to the forefront a term that many have never heard of, REO properties. REO stands for Real Estate Owned and most times is property taken back by a bank or mortgage company when they could not sell it at the foreclosure auction. Most foreclosure auctions do not result in any sort of bid because if there was enough equity in the property the owner would have probably sold the property and paid off the bank or mortgage company. Most foreclosure sales begin with a minimum bid that will include the loan balance, accrued interest, attorney's fees and any other costs associated with the foreclosure process. Since what is owed the bank or mortgage company almost always exceeds what the property is worth, foreclosure auctions normally do not result in a successful sale which means the property reverts back to the bank or mortgage company which then becomes an REO, real estate owned property.
A bank REO property may or may not be a good deal. Many people think that by buying these properties they are getting a great deal and making a killing in the market. That sometimes is true but most often not. These are things to think about before an offer is made. You should always ask, are there any inspection reports, what work has the bank agreed to, how long will it take for the bank to accept the offer and are there any special forms that will be needed to complete the sale. Bank owned properties are almost always sold "as is" meaning there may be repairs needed or other liens on the property which will need to be satisfied before clean title will be conveyed. It may sound like the bank is just dumping these properties but they may be of assistance with handling an eviction, do some repairs, pay off homeowner's association fees and negotiate with the IRS to remove any tax liens.
It is a lot of work but there are advantages to purchasing REO properties over foreclosed properties. Once a property becomes an REO property all the liens are removed and taxes are paid in full. REOs are normally listed with real estate agents and inspections are allowed prior to contract which means the property is typically restored to a salable condition. An additional benefit with REO properties is that the bank or mortgage company will many times offer better financing than they might offer for traditional properties. Lenders and mortgage companies do not want to hold on to these properties very long because of the cost to maintain so if you do your homework and are willing to take a risk it just might be your entry into the homeowner market.
Chicago Condo Properties
Home ownership on any level is wonderful. Nothing gives you a sense of pride like owning your own place and if you live in the Midwest there is nothing quite like Chicago condo properties in which to live. Condo ownership has some very distinct advantages versus a single family home. Let's say you really hate to mow the lawn, trim and pull weeds, then condo living is where you want to be. Maybe you travel a lot for your job or have hobbies that you want to pursue then, condo real estate is what you need. You love to sit around the pool but can't afford one. You have few friends and you want to meet new people. You would really like a large home in a gated community with rules and regulations but can't afford it. Last but not least, there are some great deals in today's market interest rates are lower than they have been in years. All of these things and more are an excellent reason to buy a condo.
Chicago condo properties have become more and more like their own communities. Today tight knit groups of friends have evolved due to the condo living lifestyle. A close group of friends creates a sense of security knowing you will always have good friends around to help no matter the situation. This sense of community offers frequent social events to take place at the pool or clubhouse which offers many different types of social activities with the total cost spread around rather than paid by a single homeowner.
Condos are king in Chicago when it comes to residential real estate. When it comes time to Chicago condo properties, there are many areas in which to choose. Chicago is certainly known for its downtown skyscrapers but there are numerous other areas that have their own flavor which offers some of the best values in residential real estate. One definite advantage in the Chicago real estate market when buying a condo is that prices are holding steady and there are numerous developments currently underway or proposed for this year. Construction crews are putting up new buildings and older places are being refurbishing to create condos and lofts. It is estimated that over 4000 units will be built in Chicago in 2009 which puts buyers in a great position to get what they want for a good deal.
There are many Chicago condos for sale in a variety of communities and neighborhoods. Chicago is known for its ethnic groups and communities where condos are being built or re-furbished in almost all of these areas. If you are looking for a different lifestyle in a vibrant community atmosphere there is no better place to look than Chicago!
