An esteemed colleague of mine wrote today:

I have a deal on a listing where the buyers are going FHA. The only thing holding is up is that our condo docs have a 30 day first right of refusal! and the FHA sees this as discriminatory. So, we are trying to convince the 8 owners to amend the docs to remove the clause, and we have a lawyer lined up ready to do this if we get a 100% vote.

Here is the help I need....Can anyone share your opinion on this 30 day first right of refusal, why they originally were put into 99% of all condo docs, what benefit it really IS to owners or an association, and or if you have EVER known any association to utilize this right? and how it even benefits? and then on the flip side, how it would, if at all, HURT a condo association to LOOSE this 30 day FROR?

As my research shows so far, this clause is holding up not only FHA and VA loans, but also now even conventional loans when it comes to lenders viewing a property as warrantable or non-warrantable. And we all know how tough it is for buyers to get financing right now, so we are feeling that to REMOVE this 30 day FROR, is actually a future benefit to owners who hope to have every chance to sell in this market and for a while yet to come!

Condominiums evolved after co-op's. It seemed in the 1970's, that condo associations wanted to emulate the kinds of policies of co-op buildings. And one of those policies was the right of first refusal. Historically, in co-op buildings the right of refusal really was discriminatory. In New York, there are still some co-op buildings that do not allow black people or Jewish people to move into the building. The way they enforce those policies is the requirement of very high down payments, or no financing permitted at all. Sometimes, co-op boards simply don't give a reason why they don't approve a prospective tenant.

But in the condominium act, the most powerful way an association could exercise their right to make sure no "undesirable" people moved into the building, was with the right of refusal.

These days, the requirement seems rather Victorian. Right out of a different time, or era. And it is. Since the right of refusal is historically used to ensure that a condo board can control who can and cannot move into the building, the FHA rightly categorizes the policy as de-facto discrimination and won't allow FHA financing in the building.

There is no downside to removing the right of refusal. As a practical matter, as the laws have evolved, it is now a requirement that an association that exercises its right of refusal must BUY THE UNIT under the same terms as the contract with the rejected buyer. There are very few condominium associations that have the resources (i.e. cash) to buy a condo to prevent an undesirable resident from moving in. And the fact that a prospective resident has either qualified for a mortgage, or paid cash for their unit, means that the meet the financial requirements for being able to meet their monthly obligations to the association.

Very few new condominium associations are written with a 30 day right of first refusal for the association as the policy is mostly unused in this day and age. And given the economic situation and its impact on the real estate market, a home owners' association would be wise to aggressively pursue amending their declarations to remove the policy from their declarations.

We received an offer on one of our listings on Sunday. The condominium was listed for $400,000 plus $35,000 for each of two parking places - a total of $470,000.

The offer came in from a couple that had not seen the unit for themselves, but their agent had pre-viewed for them a week earlier. The offer came in at $100,000 under list price. Mind you, we had just reduced the price aggressively and were right in line with other comparable unit prices in the building.

During negotiations, we did learn that the buyer was only interested in one of the parking spots, but this still left the offer some $65,000 off the asking price. We do have the ability to sell the leftover parking space to someone else in the building later.

After delivering counteroffers back and forth once, the buyer's agent slipped and said "Which unit is this for?" WHOA?

We immediately ask: "Are you bidding on multiple units at the same time?" and the answer from the broker was "Yes."

This extremely aggressive form of negotiating is not considered illegal here in Chicago; there is not much of a danger that a buyer will wind up owning two or more pieces of property. We usually write our first offer and deliver it, but negotiate verbally. Therefore it's possible that you could agree to price and terms on a property, but not follow up with a written version. We also have very generous attorney review clauses in our contracts, so a buyer's attorney could cancel a contract during the first few days of attorney review.

Though both of these tactics are completely legal, they will not garner any favor with a seller's agent that discovers that these underhanded tricks are being used on him. We now know that these buyers are pitting us against several other sellers in the same building, and hammering us against each other to beat out the lowest possible price. Then, after the bottom line is discovered for each, signing the contract with the most desired terms leaving everyone else holding nothing in return.

Our advice to our clients is to negotiate in earnest with someone negotiating in good faith with us, but in this case, since every negotiation we make will be used against us, our best defense against this strategy is not to reveal our lowest price.

Normally, it's considered to be acting in bad faith to be negotiating multiple offers at the same time without all parties in the negitiations being aware of the tactic. Buyers should beware that extreme negotiating tactics can backfire if the other party learns that they're being played against other competitors. In our case, since we know that our bargaining position will be used against us, we won't reveal anything close to our true lowest price.

The Memorial Day holiday weekend was relaxing and enjoyable - just like an early Summer weekend in Chicago should be. We did some work for clients as well; I showed some listings on Friday and took a buyer-client out for a Saturday morning tour. Steve showed our listings on Saturday morning and then we both had the rest of the weekend to ourselves.

One recurring phenomenon we experience on Holiday weekends is the last-second call to our cell phones with requests to show property at odd times during the Holiday - sometimes right on the Holiday.

I know we need to SHOW houses in order to SELL houses, but we also can tell the difference between BUYERS and TOURISTS. I prefer to show houses to BUYERS.

For example, on Saturday I toured a selection of condo's with my buyer, Eric. Eric is a solid client of mine. We have a relationship. One defined by the State of Illinois - I represent Eric as his Buyer's Agent. Eric met me several weeks ago in my office where we went over his criteria for a new home, we spent time looking at properties in the MLS and selected some that he wanted to see. Eric got pre-approved from a lender. Eric will actually BUY a condo from me this summer.

My partner showed our listings to some other Realtors' BUYERS on Saturday, too. We know this because (a) Realtors we know (b) from Chicago real estate firms (c) called with a day or two notice with a request for (d) a specific time (e) during normal real estate business hours.

A couple of requests we did not accommodate included:

One phone call from an agent whose agency is so far out of Chicago that his area code is most commonly associated with farmland. Downtown Chicago is area code (312) and the neighborhoods of Chicago have area code (773). Suburban area codes include (847) and (630). The caller's area code was (815) which includes a region that stretches from the Iowa State Line to 1/3 of the way downstate. His request was for a short notice showing - and this can be an indication to us that he's not really working with a BUYER. A third indicator that this might be a curiosity viewing was that it was for after dinner-time on Saturday night.

This sounds suspiciously like an agent from outside of Chicago coming into the city with friends or family - that might someday be thinking of buying an in town apartment - for the Memorial Day parade, dinner and drinks. Oh, and, maybe a viewing of a condo or two.

Another request came from a young couple who called our office and reached the agent on "floor" - someone there to answer questions during office hours. The couple got the urge to view some properties on Saturday, but already had an agent of their own. Since they didn't plan ahead with their agent, he or she was unavailable. The young couple was calling agencies on their own asking for same day showings of properties they thought might be interesting. These folks might be BUYERS but without any credibility, I don't ususally jump through hoops on Holiday Weekends.

Here's how you can build your 'Cred' and get exactly what you want:

• Plan ahead! People who need to buy houses normally think about planning a house hunting trip a few days in advance. People who don't need to buy a house often get bored at Linens & Things and want to see homes.
• Establish a relationship with an agent. If your agent knows you'll buy eventually, he or she will cater to your every wish - including odd times and other hard requests.
• Choose an agent with his or her own 'Cred'. There are over 30,000 licensed agents in Illinois. I do 90% of our business with the top 500 or so. If an agent I know and respect calls with a request, their 'Cred' counts for a lot, and I will go out of my way to accommodate it.
• Don't blow your 'Cred'. Setting up a tour of 10 or so properties on a Saturday takes a dozen or more phone calls and an hour of time. If you blow off that appointment, I have to make another dozen or more calls to cancel all those requests. And I've lost a valuable Saturday that I could have devoted to another client. If you cancel a tour without a good reason or blow off a tour without a call, you'll never see the inside of my car again.

Follow these tips and you'll have a faithful and loyal ally in your home search who will move heaven and earth to make sure you get exactly what you're looking for.

I had a quick conversation with a new seller this morning. She has a home that's almost 7 years old and in pristine condition. She has been able to keep her home in this condition by forbidding visitors from wearing shoes inside her home. Her place truly is a testament to how effective removing shoes can be in keeping carpeting and floors in brand-new condition.

One more item to add to your seller's kit of items needed to sell your home: another entryway rug. I have to ask prospective buyers as many as three times to remove their shoes sometimes, and in order to get the message across, I use this approach:

1. Have the seller post a very friendly note inside the front door asking people to remove their shoes.

2. The note reminds me to ask visitors to remove their shoes.

3. Have an entry rug blocking the way into the home with at least one pair of shoes right-smack in the middle of the way into the home.

Yes, sometimes buyers need to be beaten over the head THREE times before they get the message that I do indeed mean them, too, and that they don't have some sort of Shoe VIP status alleviating them from taking their shoes off.

Oh, and if you're a buyer reading this? Don't wear religious socks when you go home shopping. You know - Holy.

Your guides play host to a wide variety of international visitors as we are members of an international travel club called The Hospitality Club as well as hosting relocating job transferees in our capacity as Realtors.

One fantastic aspect of Chicago is its ever-growing collection of world-renowned outdoor art. I think this guide is a bit limited but if you were to try to view all the art described in this article it would surely take longer than a full day. Readers that notice any omissions are welcome to post a comment.

You can't go wrong by simply starting out with a walk through Millennium Park. You'll first be drawn to the large bean shaped "Cloud Gate" sitting on top of the concessions along Michigan Avenue. By combining distorted images of spectators and their surroundings, the piece encourages us "to consider how we as individuals face a culture, with all the superficiality, speed and visual reflection and really make it ours." says Jonathan Fineberg, a professor of art history at the University of Illinois. Most people I saw were simply making funny faces and silly poses.

Continue south through the park and visit the other insanely popular pop-art piece: The Crown Fountain - aka "Sptting Faces." This is interactive art at its best combining a variety of traits that make patrons completely comfortable interacting with the setting. It's a fountain that pays tribute to city residents who are encouraged to step into the shallow water and falling sprays while looking at themselves larger-than-life.

Leaving Millennium Park and continuing south, you seemlessly cross into Grant Park. More formal than Millennium Park, pathways follow the straight and narrow and gardens are more like you'd find in European Palace grounds. All paths lead to Buckingham Fountain in the center of the park, a memorial surrounded by fencing to keep people out. How proper.

On the south end of Grant Park is the newest installation - Polish Artist Magdelena Abakanowics' "Angora." Walking through the installation of 106 headless figures provokes a flood of associations. Among them: war, nature, democracy and isolation. Their juxtaposition helps viewers reflect on the connection among them.

Walk out along the path and roadway towards the Adler Planetarium and you'll find Denise Milan and Ary Perez' "Americas." The multi-colored granite blocks, which can be rearranged in a variety of designs, encourages a sense of community by drawing those who sit in the installation into a circle.

You'll backtrack a bit, but it's worth the trip to head into the downtown area to get a look at some of Chicago's older sculpture located inside the urban canyonscape. At the State of Illinois Building - Clark Street at Randolph - a series of white concrete morphing shapes is titled "Monument with Standing Beast." Kids love it. A former city deputy budget director said "They should have a voter referrendum on whether to take this thing and throw it in the bottom of Lake Michigan. It's the ugliest thing I've ever seen in my life."

In Daley Plaza - at Washington and Dearborn - you'll find the untitled sculpture by Pablo Picasso. It's a landmark and a masterpiece that residents have come to associate with the City. Is it a giraffe? A lion? A monkey?

Two blocks south on Dearborn in Federal Center Plaza, you'll find Alexander Calder's "Flamingo." Paul Gapp, Chicago Trib's architecture critic said "The kindest thing that can be said about 'Flamingo' is that it is vandal-proof and appears to frighten away pigeons." Nice.

On West Madison at Clinton, in front of the Harold Washington Social Security Center, is Claes Oldenburg's "Batcolumn." This 10 story baseball bat is oddly out of place both in relation to its location in the financial district and it's placement outside the Social Security Administration. Gotta use those Federal Matching grants somehow. I wonder who the artist is related to in City Hall?

This last suggestion is hard to walk to, but with a morbid twist. Between the Ohio and Ontario feeder ramps onto the Kennedy Expressway at Orleans Street is "The Flame of the Millennium" sculpture. You really only get a quick glimpse of this sculpture as you whiz by at 50 mph on your way in or out of River North. As a side-note, horrified Friday-morning commuters watched a man apparently douse himself with gasoline and lit himself on fire along the Kennedy near the 25-foot-tall sculpture in late 2006.

It's Tuesday and I'm finally getting around to catching up from the weekend. The past two weeks have been SLOW (Bears in the playoffs and few people doing real estate.) Next weekend the Bears are in the Super Bowl - so nothing will be happeing in Chicago. Given all that - EVERYONE was out shopping this past weekend.

What kills me is that both selling agents and sellers just don't seem to get it. There are many truths to real estate; two of which surely are 1) in order to sell your home you have to show your home, and 2) the person bringing the money (ie- the buyer) gets to say when.

(See our previous post on the unique nature of Chicago real estate showings.)

Here's my experience last weekend:

Wednesday 8am - Start making phone calls to set up Saturday appointments. 10 requests for a morning buyer client and 2 requests for a quick tour with an afternoon client. Result - one confirmation.

Thursday 8am - Starting making repeat phone calls to get appointments. Result - one more confirmation; one outright "no, I'm having an open house on Sunday, come then only", 9 - still no answer.

Friday 8am - Start making calls again to try and get showings. Results - 4 confirmations, 2 no can do's, 1 who said she purposefully ingnored my calls to see if an offer they got earlier would go anywhere (they did come to agreement so she didn't want to bother with any more showings), 1 no because the owner decided the weekend was the perfect time to have the unit unavailable while they had a contractor refinish the wood floors - but please come on Sunday. and 1 still never called back.

So in the end - I was able to get 6 of 12 showing requests, five "no" answers and one who just never called me back.

At the same time, we serviced all our listings and didn't turn down a single appointment request. See a pattern here?

So here is some sage advice for all of you out there who are interviewing agents: Along with all the other questions the pundits tell you to ask, here's one - "Just how available are you to show and sell my house?"

I had an unproductive real estate showing today, and my first draft of this post came off more like a rant than anything useful to our readers. Here's the second try with some helpful hints to keep you focused on the business at hand - namely: finding a new home for yourself (if you're the buyer) or your client (if you're an agent.)

Earlier today, Saturday, I met a broker who brought her client with to view our loft in St. Ben's. In tow, she brought her real estate partner/husband, and their 3 year old toddler.

I just can't imagine what these agents were thinking - I don't think anything was accomplished with this client today. When showing real estate to clients, an agent's objective should be to:

• Present the features and amenities of the property you are viewing.
• Afterwards, determine whether the property meets the needs of the buyer.
• If at first pass, the property does meet the client's needs, try to establish a ranking of preference of the acceptable properties.
• At the end of the discussion and ranking, see if the client would like to move forward by writing a contract offer on the highest ranked property.

For each of the points listed above, the client and the brokers were distracted:

• I was interrupted frequently by the toddler during my presentation of the property as he wanted to press the buttons in the elevator, play with all the light switches in the home and run around in the home.
• As the brokers were in their family minivan, the client followed in her own car. Time spent in the car right after a showing is invaluable to gauge a client's level of interest and focus him or her on prioritizing what they just saw.
• Struggling with the car seat and keeping track of lost hat & gloves pushed the brokers further and further behind schedule. It was clear everyone was distracted and anxious.
• Without coming across too much like a "salesman," the time in the car at the end of a tour is the perfect opportunity to question the buyer as to whether they might be ready to put an offer together on a property. Since the agents and the buyer were in separate cars, the buyer simply shook hands with the agents, promised to call later, and went off on her own. This was a huge missed opportunity.

If the buyer's objective was to tour some nice properties, but isn't in the market, then they accomplished their goal today. The problem here is that no consideration was given to the listing agents who also had to accompany these appointments.

My goal is quite clear: I am showing property today in order to sell it to someone.

Buyers, it's perfectly reasonable to let your agent know if he or she is not productively using your time if you're actively in the market for a new home. Agents, don't let opportunities to move your clients along the decision-making process go by, and show consideration for your fellow agents out in the field.

 

During 2006, and reinforced repeatedly in the first few weeks of 2007, buyers decidedly made their preference known for new, newer and more new.

Last year, my buyers purchased new product 50% of the time. Add in buyers that purchased fixer-uppers and renovated to new condition before move-in, and the percentage was more like 75%.

Listings that were new flew off the market, and there was demand for condo conversions in vintage buildings as long as there were all new finishes inside. The dark clouds in inventory last year were condos with perfectly servicable kitchens and baths from 10 years ago or longer.

We clearly saw buyers willing to travel out to up-and-coming neighborhoods for new or rehabbed, rather than purchase the listings in Premium neighborhoods but with tired (or worse) fits and finishes.

Sellers may have to make improvements to kitchens and baths just to get their property sold rather than choosing to undertake the work as a way to make additional profit.

Here's a list of the most frequently found items during home inspections. Homeowners - you'd be wise to take a look at this list and make a few repairs around your home if you're thinking of selling - or you've just gone under contract.

If you take the time to fix these 5 items in your home before the home inspector makes a note of them, your home will instantly gain the credibility of a well cared for home with a pro-active homeowner. Always a desirable thing during the sensitive time at the beginning of any contract contingency period.

• Furnace maintenance: Inspectors ALWAYS note that the furnace should be professionally maintained including a professional cleaning. This will also include changing the furnace filter and humidifier water panel. If you can demonstrate that you already did this, or if your furnace & filters are super clean, you'll save the aggravation of doing it during your move.
• Caulk around your bathtubs and showers: You know you need this, but it's such a hassle. Plus, you know you can't make a clean bead of caulk the way a pro can. Hire it out and get it done. More hassle saved.
• Stuck windows: If you know you have a sticky window, or a window that's painted shut, get it unstuck before your inspector finds it. If a window is stuck, the inspector will usually list a laundry list of SCARY reasons that the window doesn't work. Anything from improper installation to structural failure written in a report will cause alarms to go off in your buyers' minds. It's never fun to get a letter from your buyers' lawyer demanding a structural inspection when a squirt of WD-40 would take care if this upfront.
• Loose toilets: Inspectors love to point out a little bit of wiggle in a toilet. If yours does, it's a pretty easy fix. Your buyer will demand that a licensed plumber perform this easy handyman task. Save the cash - do it now.
• GFCI Outlets: Most communities require Ground Fault Interruptor Circuits (GFCI) near water and for outside outlets. These life-savers trip off when water gets on the outlet or an appliance shorts out from water. All inspectors will point out that modern building codes require GFCI's to be installed near the sinks in kitchens and baths. Your home might be grandfathered if it was built before the rules were changed in your town. Your buyer is going to ask for these anyway; and will probably demand - again - that they be installed by a licensed electrician. GFCI outlets only cost $25 at Home Deopt. Buy enough and install them yourself.

Take care of these items and your house will most likely sail through inspection with glowing remarks from the inspector and your buyer will have the warm-fuzzies for selecting such a well cared-for home.

 

I've been caught a couple times this weekend by prospective buyers and Realtors from outside Chicago looking to see properties very quickly.

Here are a few pointers to help you get into the properties you want to see, or to help your Realtor plan his or her weekend:

• Realtors in Chicago don't use lock-boxes very often. This odd habit started years ago, and the practice survives today.
• The listing Realtor will come to show the property for sale most of the time.
• If you are using the services of a Realtor to show you homes, your Realtor will be juggling his or her schedule for the weekend between showing his or her own listings as well as trying to take buyers out on tours.
• The Realtor who has the listing will be doing the same thing.
• Homebuyers in Chicago don't always have their homes or their families ready for showings the same day the requests come in.

Therefore, if you want to have the greatest chance of seeing properties, you'd be wise to:

• If you're using a buyer's Realtor to take you on a tour, reserve time with your Realtor by Wednesday afternoon or first thing (before 9am) Thursday morning.
• Your Realtor will need to call all the listing Realtors for appointments as soon as possible to guarantee you'll get into the listings you want.
• If you're doing it on your own, call the listing Realtors by Noon on Friday. I get a rush of phone calls on Friday afternoon - most after 4:00, some after 6:00. By this time, my weekend is usally full.
• Check the websites for Open Houses. You may get lucky and be able to fill your Sunday with properties that already have open houses scheduled. The Chicago Tribune has a very comprehensive database of open houses.
• Open houses aren't as popular on Saturday except for developments. If you're looking for a new construction or newly rehabbed property, your favorite neighborhood should have some development open houses on Saturday for you.

Hopefully this explains why you may have not gotten the appointments you've requested here in Chicago, and would ordinarlily be considered quite reasonable anywhere else in the suburbs, or the rest of the country.