Chicago's North Shore - North and Northwest Suburbs Real Estate Archive

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Displaying blog entries 11-20 of 199

Home Warranty Highlights

by Allyson Hoffman

More sellers are now including home warranties with the sale of their homes to comfort buyer concerns. Ideally a home warranty provides some assurance to the buyer regarding systems, appliances or other failures within the first year of ownership by arranging for repair or replacement with only a minimal service call fee. Keep in mind that homeowners, themselves, can also purchase a home warranty at any time. Prior to purchasing a home warranty, homeowners should understand what they are and when they are most needed.

What is a Home Warranty?

A home warranty generally covers the major components of a home, such as heating and cooling systems, appliances and water heaters. Typically, minor repairs such as plumbing leaks are not included in coverage. It can be purchased for any age home, though the cost may increase with older properties with additional expense for larger homes or slightly lower costs for condominiums.

With some warranties, owners pay only a set amount regardless of the cost of the repair or replacement. With other programs, payment of a portion or percentage of the cost may be required. So it’s important to read the fine print before selecting a warranty. Know what is included and what can be added for an extra price.

The Benefits

For the buyer, a home warranty provides peace of mind by eliminating the possibility for hundreds of dollars in repairs or exhausting emergency funds for major issues during the first year of ownership. Even one repair can exceed the entire annual cost for the home warranty.

For the seller, a home warranty may attract additional buyers, especially if the home being sold is older with older systems and appliances. Because many first-time buyers may have limited funds to invest into the property, and a warranty can be an attractive asset.

The Downside

Paying for a warranty for years and never needing to use it for repairs may make the proposition appear as a useless cash drain with no rewards. This case is often seen with newer homes when a special home warranty may be unnecessary if the home is still covered under the builder’s warranty. For example, most appliances come with a two- or five-year manufacturer’s warranties, so you wouldn’t need a separate home warranty during that time.

In the end, the decision to buy or not to buy boils down to you and how prepared you are to pay for unexpected expenses. It also clearly depends on the age of the home you’re buying or selling. For additional information regarding home warranty options, feel free to contact me today for a consultation. I will be happy to help you determine the value of your home, or find your next dream home.

 


Allyson Hoffman, ABR, ACRE, CDPE, CRS, e-PRO, GRI, SFR, SRES
RE/MAX Villager
Serving Chicago's North Shore, North and Northwest Suburbs
847-310-5300
[email protected]

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Allyson Hoffman is your ultimate real estate resource for Chicago's North Shore, North and Northwest Suburbs and surrounding areas. Visit my website for detailed information regarding today’s real estate markets. 
  

Image courtesy Valerie Everett/Flickr.com

Downsize Your Life in Five Easy Steps

by Allyson Hoffman

If you’re planning to move to a smaller home, you’ll need to also scale back your belongings – undoubtedly a challenging task, especially for collectors of memories or memorabilia.  To make the process less painful, here are a few tips to streamline the job and increase the likelihood of enjoying your new home.

1. Start with the Less Sentimental Items

Begin with belongings that allow you to remain objective. It could be clothing, linens or kitchen cookware. Once you’ve pared down these practical items, it will be easier to work on your sentimental pieces.

2. Work with the Big Stuff

Rather than sorting through boxes and not truly impacting your living space, instead select large items that matter, such as furniture. Once you know where you’re moving, try creating the floor plan to help determine what truly suits that space. By choosing the most important and appropriate pieces, you’ll be able to decide what can be eliminated.

3. Have a “Just In Case” Box

To deal with items that truly tug at your heart strings, regardless of whether or not you need them, allow yourself to keep a few of these special pieces in a box reserved for “just in case.” Plan a location to store that box as well as a timetable for retrieving it for a second look.  By having that box to store those selected items, it should make it easier to part with rest of the “unnecessary”.

4. Give It Away

It’s often easier to eliminate items when they’re specifically going to someone else. If your family members know you’re downsizing, try inviting them to select things they’d want. That way those sentimental items will continue to have a loving home while you’ll benefit from additional space. For other useful, but less personal articles, consider donating them to charities.

5. Sell It

It can be easier to eliminate belongings when you benefit monetarily.  Yard sales, garage sales or selling online through Etsy or eBay could be a good choice. Depending on what you’re discarding, you might recoup several hundreds of dollars which could make the “parting” much less painful.

Successfully working through these steps will inevitably increase your ability to enjoy that new and smaller home without the distraction of clutter. For additional information on how to make to move from a larger to a smaller home, feel free to contact me today for a consultation. I will be happy to answer any questions you may have about selling your home, and/or help you find your next dream home.

 


Allyson Hoffman, ABR, ACRE, CDPE, CRS, e-PRO, GRI, SFR, SRES
RE/MAX Villager
Serving Chicago's North Shore, North and Northwest Suburbs
847-310-5300
[email protected]

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Allyson Hoffman is your ultimate real estate resource for Chicago's North Shore, North and Northwest Suburbs and surrounding areas. Visit my website for detailed information regarding today’s real estate markets. 
 

Image courtesy of Nicolas Huk/Flickr.com

Understanding the Importance of Real Estate Contract Contingency Clauses

by Allyson Hoffman

Whether you are buying or selling a home, it’s important to understand each contingency clause in the contract. Buying a home is a big commitment, and it is important that you do everything possible to protect yourself when making this investment.

Contingency clauses are one way that buyers can build additional protections into the sales contract. They allow a buyer to cancel a sales contract with no penalty or loss of earnest money if certain conditions are not met prior to closing.

Contingencies clauses can alter the terms of a contract significantly, so don’t forget to read each contingency carefully. Here are the five common contingency clauses you may find in a real estate sales contract.

Attorney View Contingency

In the Chicago metro area, contracts are typically subject to a five-day period where attorneys for both the buyer and the seller can review and suggest modifications to the legal aspects of the contract.  Modifications to critical components of the agreed terms, such as the price to be paid, are not included in the scope of the attorney view.

Appraisal Contingency

If a home does not appraise at or above the sale price, the prospective lender will generally not proceed with the loan unless the buyer raises their down payment to make the numbers comply with lender expectations. An appraisal contingency often permits the buyer to back out of the contract with no penalty if the house does not appraise at or above the sale price. Alternately, the appraisal contingency can state that if the appraisal is below the sale price, the seller has the option to lower the sale price of the home to the appraised price. Terms of the appraisal contingency and what is acceptable to the parties is typically negotiated to arrive at mutually acceptable result.

Mortgage Contingency

The mortgage or financing contingency specifies that the buyer has the right to back out of the contract with no penalty if he or she is unable to obtain financing as specified in the contract.  These terms often include the date the buyer must secure financing, the amount of the loan, and the type and the interest rate of the loan.

Home Sale or Home Close Contingency

This contingency allows a buyer to back out of a contract with no penalty if he or she cannot sell and/or close on their current home before a set date. This prevents buyers from potentially owning two homes at the same time with the obligation to pay two mortgages simultaneously.  Sellers are much less likely to accept these conditions unless there is an abundance of inventory with longer market times when this highly competitive environment is characterized as a buyers’ markets rather than sellers’.

Inspection Contingency

The inspection contingency allows the buyer to perform many inspections as deemed necessary during a set period of time.  In the Chicago metro area, this is typically five business days. If the property does not pass inspection and major issues are revealed, the buyer has several options which include cancelling the contract without penalty.  More frequently, sellers and buyers resolve the concerns revealed in an inspection by sellers performing repairs or crediting buyers for the defects to allow them to address those post-closing.

Contingency clauses in a contract should not be glossed over amidst the legalese and boilerplate language. Doing so could be a costly mistake.  For additional information, please feel free to contact me today for a consultation.  I will be happy to answer any questions you may have about selling your home or finding your next home..

 

 

Allyson Hoffman, ABR, ACRE, CDPE, CRS, e-PRO, GRI, SFR, SRES
RE/MAX Villager
Serving Chicago's North Shore, North and Northwest Suburbs
847-310-5300
[email protected]

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Allyson Hoffman is your ultimate real estate resource for Chicago's North Shore, North and Northwest Suburbs and surrounding areas. Visit my website for detailed information regarding today’s real estate markets. 
 

Photo courtesy Flickr.com/mmoz 

How to Feel Like Home in Your New Community

by Allyson Hoffman

Starting over in a new community can be stressful.  It requires effort to make new friends, find the best places to eat, and to learn your way around. But, if you are to willing venture out and explore, integrating into your new city doesn’t have to be daunting.  Here are a few tips to help you with the process:

  • The Essentials

Depending on your age and interests, what you consider essential will vary, but virtually everyone should know where to shop for groceries, pick up a prescription or get a good meal.  Beyond the essentials, what is important will certainly differ and finding these places is not really all that challenging.  We live in the internet age where a wealth of information on just about everything, including your new city, should be right at your fingertips.  So, initially, let your fingers do the walking.

  • Using the Internet

Start by checking out Google Maps. If you enter your address, a map of your area will pop up.  Type an asterisk (*) into the search field to find everything of interest in the area. For a more specific search, enter the information you are seeking, such as “Thai Restaurant”, “Pharmacy” or “Furniture Store”.  Matching results will display on the map and sidebar. The side bar will also show a star rating and contain a link to written reviews and the business’s website.  In addition, you can easily map a route from your home to any of these locations and to your place of business.

  • Ask for Advice

While the internet is great, it cannot replace the actual recommendations of people you trust. So if you know anyone in your new town or city, consider checking with those folks for information that the Internet cannot provide.  Also consider a social media shout out for local input on Facebook and/or Twitter asking for recommendations and advice about your new city. This will combine the power of the Internet with important native insights from those in the community.

  • Meet New People

While you can certainly discover great restaurants, entertainment venues, local parks and night spots in the city, nothing can replace having friends to share good times, increase your fun, and help to ease your adjustment to a new home and location.  So, make that concerted effort to personally connect with locals in your new city or town. 

  • Use Your Hobbies

Many friendships are rooted in shared interests. So, if you have a hobby, sports you enjoy, or other activity that drives your pleasure and time, use it to meet new friends. Whether it’s your golf game, children’s activities, or your love of music or painting, undoubtedly there are others in your new city with similar tastes and affections.  An easy way to connect with people in your area whose interests mirror your own is through local Facebook groups and the site Meetup.com. So try to find a group of people who share your interests and consider trying a meet up.

  • Help Out in the Community

Community service is an excellent way to meet some great, civic-minded people. When you take initiative and do some good within your community, it becomes more than just the place you live and work. So consider volunteering time to municipal activities for another path to a quickly acclimate.

If you try these ideas, you’ll inevitably meet new people with common interests, learn about your new town and neighborhood, find things to do with people you enjoy, and feel a sense of real comfort in your new surroundings. 

When you are ready to make that move, feel free to contact me today for a consultation.  I will be happy to answer any questions you may have about Chicago’s North Shore, North or Northwest Suburbs real estate. Alternately, if you are leaving the area and need a reference to a skilled real estate professional in that new location, I can provide a reference for you at no cost.  Don’t hesitate to ask – I would be glad to help you identify the right person in your new area.

 

 

Allyson Hoffman, ABR, ACRE, CDPE, CRS, e-PRO, GRI, SFR, SRES
RE/MAX Villager
Serving Chicago's North Shore, North and Northwest Suburbs
847-310-5300
[email protected]

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Allyson Hoffman is your ultimate real estate resource for Chicago's North Shore, North and Northwest Suburbs and surrounding areas. Visit my website for detailed information regarding today’s real estate markets.

Photo courtesy of Palo Dobrik Photography

Suggestions for First Time Home Buyers

by Allyson Hoffman

If you are considering buying your first home in Chicago's North Shore, North or Northwest Suburbs, there are inevitably many things to consider.  To streamline the process from start to finish, following these recommendations will help to ensure a successful adventure to homeownership:

 - Arrange for your mortgage financing up front even before you start to look for a home. The lender will focus on your ideal price range, your maximum loan value, and whether there are any credit issues you should address before buying. The lender should also prepare a pre-approval letter, which you’ll need to provide the seller when you make an offer.

 - Consider reviewing a blank contract form with your agent before you write an offer. This will familiarize you with contract details and may prompt questions.  You may also want your agent to explain the process of negotiating and counteroffers.

- Use buyer representation. It is important to have an agent who owes his or her total loyalty to you. So be sure to discuss your representation options with your agent. If you are purchasing one of your agent’s listings or their company listings, make sure you understand what your agent can and cannot do for you.

- Review the seller’s disclosure(s) before you make an offer. It’s important that your offer reflect the condition of the property. The seller could disclose a repair or condition that would affect what you would be willing to pay. So you should know this before you decide on an offer price.

- If the property has middle-age or older systems, consider asking for a one-year home warranty policy when you write the offer. Some sellers will actually offer these as an incentive to purchase to cover items that could malfunction during the first year of ownership since cash used for down-payment, closing costs, and other home necessities can deplete your cash reserves for potential repairs. A home warranty policy should reduce the risk of a future cash crunch if a warranted item needs repair that first year.

- Be sure to get the property inspected by a professional licensed home inspector who should provide you a written report documenting the condition of your new home. Follow the inspector’s advice if he recommends that you have another system specialist inspect a suspected troublesome feature.  Also ask your inspector to explain how to work or maintain appliances and unfamiliar home systems.

Have your agent prepare a market analysis of the property before you make an offer. It’s important to know what similar properties are selling for so that you don’t overpay. This process will assist you in assessing value should the seller remain firm on his/her price.

Are you a first time buyer who needs help finding your first home? Don’t hesitate to contact me to help you find the perfect home for you and your family!

 

 

Allyson Hoffman, ABR, ACRE, CDPE, CRS, e-PRO, GRI, SFR, SRES
RE/MAX Villager
Serving Chicago's North Shore, North and Northwest Suburbs
847-310-5300
[email protected]

Get your latest Home Value
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Allyson Hoffman is your ultimate real estate resource for Chicago's North Shore, North and Northwest Suburbs and surrounding areas. Visit my website for detailed information regarding today’s real estate markets.

Image courtesy of geralt/Pixabay.com

Get the Best from Your Real Estate Agent

by Allyson Hoffman

You’ve decided it’s time to buy a new home, and you’re ready to hire a real estate agent to guide you through the process. Wise decision!

Presumably, your selected agent wants to provide you the very best service possible.  Here are several things you can do to help your real estate agent produce those results:

1Share your expectations
. Exactly what do hope your real estate agent will do for you and what are your preferred methods of communicating – phone, email and/or text?

2. Get pre-approved for a loan. Knowing your affordable price range in advance of your formal home search assures a better chance of finding and securing that ideal property because sellers typically require prospective buyers to have been pre-approved for a mortgage.

3. Be clear about wants and needs. Create a list of what you’re looking for in a home and share that with your real estate agent. Include as many details as possible – from the price range supported by your loan pre-approval to the number of bedrooms and bathrooms you need as well as the type of neighborhood you prefer to live in and the style of homes you like.

4. Be honest and frank. Speak up regarding homes you have viewed and share exactly what you liked and disliked about each. It will help your agent to better understand your expectations and make suggestions designed to guide you to the right property.

5. Move at your own pace. If you feel overwhelmed or tire when viewing more than a certain number of homes in one day, tell your agent so that your home tours can be designed to match your comfort level.

6. Be prepared to negotiate. While your agent will manage contract negotiations for you, be prepared to compromise. Ultimately some “give and take” will likely be your key to success when you finally select a home that you love, Offers, counter-offers and sometimes many counter-offers are necessary to reach an agreement and secure the home you want. Don’t risk losing it because you’re unwilling to negotiate.

7. Remember that you have the final word. Your agent can, and most likely will, make suggestions, but the final decisions are always yours. With your agent’s guidance when you locate the home that fits your needs, be ready to act quickly.

Just like any other relationship, a client-agent relationship, if managed effectively, should produce a more confident and relaxed setting that results in better decisions designed to help you achieve your real estate goals.

When you are ready to find the right real estate agent for you and your family, please contact me today for a consultation. I will be happy to answer any questions you may have, provide information on the buying process, make recommendations to trusted lender professionals who can assist you in determining how much you can borrow, and/or help you find your dream home.



Allyson Hoffman, ABR, ACRE, CDPE, CRS, e-PRO, GRI, SFR, SRES
RE/MAX Villager
Serving Chicago's North Shore, North and Northwest Suburbs
847-310-5300
[email protected]

Get your latest Home Value
Receive Your Personalized Listing Alerts

Let’s Connect, Socially!

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Allyson Hoffman is your ultimate real estate resource for Chicago's North Shore, North and Northwest Suburbs and surrounding areas. Visit my website for detailed information regarding today’s real estate markets.

Photo licensed from iStockphotos.

Beware of These Five Mistakes Between Your Loan Preapproval and Closing

by Allyson Hoffman

Real estate agents typically advise their clients to complete the loan preapproval process even before beginning to search for a new home. The process should clearly be worth the effort because once preapproved for a loan, prospective borrowers know what a lender is willing to contribute towards their purchase. Additionally, this ensures avoiding the wasting of valuable time looking at unaffordable homes.

It is important to keep in mind that a preapproval letter, even with a contract, is not a final approval. Unfortunately, inexperienced homebuyers sometimes make the costly mistake of assuming that final approval of their loan is guaranteed, a misstep that can potentially delay acceptance or lead to the loan be denied.

Here are five common mistakes to avoid while waiting to close on your home.

Taking on New Debt

While waiting to close on your home, don’t add new debt for household items such as furniture, appliances or decorating accents.  Avoid financing any major purchases like a new car or boat.

Sometimes even minor expenses can also be problematic when there are too many new charges to your credit cards. So, during this period, spend wisely and in a fashion that reflects your prior habits.

Moving Large Amounts of Money

Play it safe and let your down payment funds “age” for at least 90 days in your bank account(s).  Because lenders like stable finances and will review your bank statements during underwriting, it’s important to avoid large deposits or withdrawals. These transactions can raise red flags that ultimately delay the approval process.

Moreover, document thoroughly should you plan to use a gift or the proceeds from the sale of an item such as boat or car. Your lender will require paperwork to track the source of those monies.

Forgetting to Pay Your Bills on Time

There’s a lot going on when planning a move, so make sure to keep track of your bills. Packing can also be distracting. So whether you are moving to your new home or an interim location, make sure to contact all your providers ahead of time, verify all your bills are current and provide your forwarding address to minimize billing problems.

One way to avoid missing an important payment that could negatively impact your credit is to consider setting up online, automatic bill payments through your bank or with each provider individually.

Co-Signing for Anything

Some folks say you should never cosign a loan. That’s debatable, but you should certainly never cosign a loan while in the process of buying a home.  Lenders will consider this new debt, recalculate your debt-to-income ratio, and potentially reconsider approving your home loan.

Switching Jobs

Lenders love stability. So, if you are in the process of buying a home, this is not the time to change jobs or even the way your pay is structured – say from salary to commission based.  However, if you are offered that dream job at twice your current salary and they need an answer by the end of the week, call your loan officer and keep him in the loop. A loan officer who knows your situation can be proactive, possibility restructuring your loan package for underwriting so that no one is surprised a week before closing.

Minimize your risk by avoiding these contract-to-closing mistakes and streamline your smooth transition into your new home.

If you have any questions about mortgage pre-approval or the status of your credit, contact me for reliable references to lenders who deliver expert advice and results.  They can offer suggestions to improve your score or  recommend a wide range of loan options, and I can help you find the home of your dreams.



Allyson Hoffman, ABR, ACRE, CDPE, CRS, e-PRO, GRI, SFR, SRES
RE/MAX Villager
Serving Chicago's North Shore, North and Northwest Suburbs
847-310-5300
[email protected]

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Allyson Hoffman is your ultimate real estate resource for Chicago's North Shore, North and Northwest Suburbs and surrounding areas. Visit my website for detailed information regarding today’s real estate markets.

Photo courtesy of am0903cass at Flickr.com.

 

Your Home Inspection Reveals …

by Allyson Hoffman

Congratulations!  Your offer has been accepted and you’ve gone under contract on a new home. However in most cases, the sale is still subject to satisfactory results of a variety of inspections prior to its closing.  Although inspections are not mandatory, a home inspection is strongly recommended, regardless of whether the home is new construction or over 100 years old.  Moreover, some types of loans, such as FHA financing actually require an FHA appraisal/home inspection. Typically other lenders permit buyers to decide if they want to assume the risk involved in the purchase of a new home without the benefit of a home inspection.  Opting out of this highly-advised inspection process may prompt your realtor to have you sign a letter stating that you have waived the right to step.

A home inspection is exactly as the name states.  It is an inspection of the home, typically conducted by a trained and licensed home inspector.  His, or her job, is to probe, detect and identify any deficiencies in the current condition of the home.  Additionally, inspectors can also recommend areas or systems that would be best evaluated by specialists.  These could include roofers, HVAC contractors, electricians, plumbers and/or structural engineers, amongst others. Ultimately, the inspector should provide the client with a detailed and photo-documented report summarizing the discoveries, judgments and recommendations.  Any home buyer can then use this report to make informed decisions about their pending purchase.  Some buyers presume that the home inspector is guaranteeing future conditions, efficiency or life expectancy of areas investigated.  This is not the case.  The current condition of the home is the main focus of the analysis.

Home inspection reports can be presented in various forms.  However, most reports address similar pertinent areas of evaluation.  The pre-inspection agreement will be the first document signed by both the inspector and home buyer.  This agreement states that the inspector agrees to conduct an inspection for the purpose of discovering major deficiencies in the current condition of the home.  It often bullet points all that will be inspected, pointing out that latent and concealed defects are excluded.  The agreement will also explain that they are not looking for environmental hazards, such as radon gas, lead-based paint, or airborne hazards. (There are other specialized inspection companies that perform these services). 

So what should a home inspection provide?  First, the home inspector should assess the structural condition of the house and basement (if applicable).  The inspector typically checks the soundness of the structure and for the absence or presence of water damage.  If there is no basement, the slab, or crawl space will be surveyed.  Secondly, the heating and cooling unit/units are assessed.  There should be remarks regarding their present condition, age, type and any recommendations for repair or further analysis.  Examples could include the necessity for cleaning/maintenance, the presence of moisture on or in the lines and evidence of rust or cracked heat exchangers.  The inspector will also report on the plumbing and bathrooms.  Water lines, pipes, drains, water heater/heaters, and all areas of the baths (tub, commode, fan, shower, and vanities) will be commented upon.  The electrical system including the circuit breaker or fuse box is also reviewed for electrical hazards, service capacity, proper circuits/wiring and conductors as well as outlets and fixtures.  In particular, the kitchen will also be scrutinized heavily from the countertops and cabinets, to the sink, dishwasher, range/oven, refrigerator and ventilation which should be tested for functionality and compliance with code regulations.  Investigation of the floors, walls, ceilings, stairs, fireplaces, door and windows are also surveyed and reported in the interior section of the report. Lastly, the inspector should enter the attic space checking for moisture, stains, insulation and proper ventilation. 

The exterior of your new home will also be reviewed in the home inspection.  Many times inspectors start on the outside and then do the interior of the property.  From ground up to the roof, the inspector examines the condition of everything from the shingles and flashing to the chimney, gutters, and downspouts.  Exterior walls coverings and trim (siding, brick, etc.), porches, garages, and carports are also included in the analysis.  Finally, the property or grounds on which the house sits, gets an examination.  In this section notation for driveways, walkways, retaining walls, landscaping, fencing, grading, decks, patios, porches and balconies is provided. 

The most important part of your home inspection analysis report is the summary page(s).  These pages will itemize any, and all, findings or remarks regarding deficiencies and defects found by the inspector.  Once received, it is fully up to the purchaser to determine what, if anything, to do with this information.  If the list is extensive, buyers will often ask the sellers to make repairs at their expense prior to closing or to provide credits.

Performing an inspection of this scope is nearly be impossible to accomplish without qualified assistance.  So do not opt out of having a trained and licensed professional thoroughly assess your new home.  Spending the money and time upfront for a quality home inspection may well save thousands of dollars later on repairs.  To easily avoid this potential calamity, simply perform a home inspection.  Indisputably, this decision is of paramount importance.  For additional information regarding the sale or purchase of a home, please contact me today for a consultation. I will be happy to answer any questions you may have, and/or help you determine the value of your home.

 

 

Allyson Hoffman, ABR, ACRE, CDPE, CRS, e-PRO, GRI, SFR, SRES
RE/MAX Villager
Serving Chicago's North Shore, North and Northwest Suburbs
847-310-5300
[email protected]

Get your latest Home Value
Receive Your Personalized Listing Alerts

Let’s Connect, Socially!

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Allyson Hoffman is your ultimate real estate resource for Chicago's North Shore, North and Northwest Suburbs and surrounding areas. Visit my website for detailed information regarding today’s real estate markets.    

Photo provided by flickr.com

The Truth About Home Prices as Interest Rates Rise

by Allyson Hoffman

Interest rates have begun moving upward, a new concern to buyers currently searching for a home. Understanding how increasing interest rates impact the price of the home will help to determine the time to buy and how much house buyers can afford.

How Interest Rates Impact Affordability

Lower interest rates reduce the overall amount paid for a home and the monthly financial obligations. Since payments directly tie to the loan amount and therefore, the amount a buyer can be approved for, any change in interest will inevitably make a substantial difference in what type of home is affordable and potentially affect a buyer’s ability to find the house of their dreams.

For example, consider a $300,000 house mortgaged with a 4% interest rate and a loan term of 30 years. Presuming a 20% down payment ($60,000) and a loan amount of $240,000, monthly principal and interest payments would be $1,146.00. If that interest rate increased by even one percent to 5%, monthly payments would correspondingly rise to $1,288.00. This payment, based upon the higher interest rate, is nearly equal to the payments a buyer would be making if they had paid $330,000 for the same home mortgaged at 4% -- or a whopping ten percent increase in the price.

While a buyer may be comfortable affording the extra $142 per month, their lender will need to approve the loan for the higher amount as well. Depending upon a buyer’s debt-to-income ratio, this may be feasible or not.  So if you are looking at the top of your budget range, even a $100 increase in your payments could mean the difference between approval and rejection. Assess your basic payment information with online mortgage calculators.

How to Deal with Rising Interest Rates

For those actively in the market to buy a home soon, now is the time to act before rates rise further. Lower interest rates and home prices make purchasing a property more affordable.

One way to increase affordability and purchase a home priced near the top of your budget (or just over) is to pay points on your loan. Points are determined based upon the amount of your loan with each point equaling 1% of your mortgage balance. Points are treated as prepaid interest on your loan and thereby can reduce the rate offered, the associated payments required and thus, the affordability to the borrower.

In summary, when shopping for a home and selecting the right financing, pay attention to both the interest rate and the price of the property. This will help to ensure that you choose a property that fits your needs and financial capability. For additional information on the buying process or recommendations to trusted lender professionals who can assist you in determining how much you can borrow, please contact me today for a consultation. I will be happy to answer any questions you may have, and/or help you find your dream home.



Allyson Hoffman, ABR, ACRE, CDPE, CRS, e-PRO, GRI, SFR, SRES
RE/MAX Villager
Serving Chicago's North Shore, North and Northwest Suburbs
847-310-5300
[email protected]

Get your latest Home Value
Receive Your Personalized Listing Alerts

Let’s Connect, Socially!

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Allyson Hoffman is your ultimate real estate resource for Chicago's North Shore, North and Northwest Suburbs and surrounding areas. Visit my website for detailed information regarding today’s real estate markets. 
  

Image courtesy pixabay.com

The Benefits of Having a Buyers’ Real Estate Agent on Your Team

by Allyson Hoffman

In today’s world many people presume that they can use the internet and advice from friends to successfully navigate through the home buying or selling process. Yet,  but with ever- changing real estate market conditions, it advisable to consider hiring an experienced, knowledgeable real estate agent when you are looking to buy a Chicago North Shore, North or Northwest suburban home. 

Here are the top 10 reasons:

  • Experience

Purchasing a new home may well be the largest expenditure that you‘ll ever make.  So it simply makes good business sense to enlist all the help you can get.

A seasoned real estate agent has likely completed more real estate transactions already this year than most folks will do in a lifetime. That adds abundant knowledge and experience that can help to assure safely and securely navigating the buying or selling process.

  • Knows the Market 

If you are buying, a real estate agent will likely know what's happening in a particular area, or neighborhood, and ultimately help you to determine if a home of interest offers a good value.  An agent can provide current "comps" (comparable properties) for similar recently-sold homes, as well as those that are currently on the market.

Established firms and agents will have access to a host of proprietary tools and property information that may be otherwise difficult, or even impossible, to find on your own. Well-informed decisions will undoubtedly be easier with the abundance of data an agent can provide.

  • Saves Time

A good real estate agent will handle organizing tours and access for you to view new properties as they become available by arranging appointments with the listing offices at times that are as convenient as possible even if your time is somewhat limited.

However, keep in mind that accessibility is a two-way street! So, try to maintain as much flexibility as flexible as possible given that appointments may need to work for the seller and their agent too.

  • Good Listener

When you choose a real estate agent, look for someone who asks as many questions as you do.  A skilled agent will note any price range limitations you provide but should also help to expand your options for available properties by adjusting their recommendations based upon other insights gained in your discussions.

A strong agent will not only seek information but also truly listen to your point of view.  Your personal needs and goals should be reflected in their suggestions.  For example, you may be starting a family, need to configure your new home to accommodate an office or note your readiness to downsize.

  • Tells the Truth (even when you don't want to hear it!) 

Expect that a good real estate agent to sporadically challenge you by asking tough questions and even disagreeing on occasion.  When a recommendation seems to miss the mark, wait to make any decision until you have garnered all the facts your agent can provide.  Learn to trust your agent's intuition, insights, and perspectives.  More often than not, they will lead you in the right direction.

  • Respects Your Budget

One of the most important steps that your real estate agent can assist you with is to determine how much you can afford to spend.  To that end, he or she may well ask you to consult with your accountant, financial planner, and/or mortgage broker before you make this important decision.

Because there's a lot more to purchasing than simply having cash for the down payment and securing financing, an experienced real estate broker will help you plan for the other expenses associated with purchasing a home in the market area of your choice.  Finding a terrific housing match should include one that you'll be able to qualify for financially and that will work within your budget.

  • Team Player 

Your real estate agent should be able to recommend a great team of professionals to support your purchase including mortgage brokers and appraisers, contractors and designers or real estate attorneys.

  • Getting to Closing 

Remember that finding the right property is only the beginning. Your real estate agent should be well prepared to negotiate aggressively on your behalf, and assist in coordinating with financing professionals at your bank or mortgage broker’s office, any other agents involved in the deal, and with your real estate attorney throughout the process until the purchase is complete.

  • Gives Timely Updates 

It’s important to stay in regular contact with your agent throughout the buying process so that new property updates arrive on an as-available basis.  Changes in the local real estate market conditions, mortgage rate fluctuations should also be reported.  Likewise if your priorities change, or if your research turns up a property you may be interested in seeing, be sure to promptly let your agent know. Working together closely should help to ensure finding the right home more quickly and efficiently.

  • The Relationship 

While some Northern Illinois home buyers try to find a perfect property on their own given the readily-available internet access to more real estate information than ever before, the most accurate and current information will always be located through a real estate professional and their area Multiple Listing Service.  Moreover, since most buyers trust their real estate agent to assist with one of the most important transactions in a lifetime, it’s prudent to also value the importance of a personality match when choosing your real estate agent.  Find one who you not only trust and respect, but also look forward to working with.

When you are ready to begin your next real estate adventure, whether buying or selling, feel free to contact me to discuss your situation and your options.  I will be happy to answer any questions you may have, help you to find a new home or determine the value of your existing property.

 

Allyson Hoffman, ABR, ACRE, CDPE, CRS, e-PRO, GRI, SFR, SRES
RE/MAX Villager
Serving Chicago's North Shore, North and Northwest Suburbs
847-310-5300

[email protected]

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Allyson Hoffman is your ultimate real estate resource for Chicago's North Shore, North and Northwest Suburbs and surrounding areas. Visit my website for detailed information regarding today’s real estate markets.

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Allyson Hoffman
RE/MAX Villager
1245 Waukegan Road
Glenview IL 60025
847-310-5300
Fax: 847-400-0881

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Allyson Hoffman
RE/MAX Villager
1245 Waukegan Road
Glenview, IL, 60025

(847) 310-5300
[email protected]

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