Lyn Sims ~ Schaumburg Homes ~ Chicago Northwest Suburbs ~ Illinois Real Estate

Should tenants get an early payment discount?

Lyn Sims ~ Chicago Northwest Suburbs (Schaumburg Illinois ~ RE/MAX Suburban) — Wed, 16 Dec 2009 14:25:54 -0600

Early Payment Discount?

Many landlords don't like to give the tenant a discount for paying the rent on time or early. The sentiment is: "Why should I reward the tenant for doing something they agreed to do anyway?" I agree with the sentiment, BUT I have to disagree with the reality of it. Why not reward your tenant with good money managment?

Wouldn't you rather have the bulk of your rents come in a week to 5 days before the first of the month? How about this solution: build a $5 or $10 early payment discount into every lease. Good responsible tenants want that discount and have a reason to pay early. It sure beats sending late notices and chasing the rent each month. More importantly it saves valuable time and would give you peace of mind too.

If you don't have this clause already in your lease, you can also present your tenants with a created form called an 'Early Payment Discount Voucher.'

Looking for investment property in the Northwest Suburban Area?

Please contact me Lyn, I need more information!

Lyn Sims    (847)230-7324
         RE/MAX Suburban
   Email: LynSims@msn.com

Resources: LPA landlord protection agency, November 2009

All data and information provided on this blog is for informational purposes only. Lyn Sims makes no representations as to accuracy, completeness, correctness, suitability or validity of any information on this site and will not be liable for any errors, omissions, or delays in information or any losses, injuries, or damages arising from it’s display or use/

What's an SSA or Special Service Area?

Lyn Sims ~ Chicago Northwest Suburbs (Schaumburg Illinois ~ RE/MAX Suburban) — Tue, 15 Dec 2009 09:41:24 -0600

What is a Special Service Area (SSA)?

New homes in an SSA may be priced and marketed at lower prices because the infrastructure costs are not built into the cost of the home. Instead, the infrastructure costs are paid
annually by the homeowner through Special Service Area assessments. A Special Service Area (SSA) is a special taxing district created by an ordinance of a municipality or county, often at the request of developers of new housing subdivisions, to pass on the costs of new infrastructure (i.e. streets, landscaping, water lines and sewer systems) to homeowners who reside
in the SSA. They also are created to pay for repairs and maintenance of existing infrastructure. The funds collected through these assessments pay off bonds that are issued to pay infrastructure costs. Special Service Area boundaries are established by the municipality or county and can be a neighborhood, an entire subdivision or even an entire municipality.

What are the purposes of creating an SSA in a residential area?

There are three purposes for creating an SSA in residential areas:

To pay for new infrastructure in a new subdivision
To pay for the repairs and maintenance of existing infrastructure.
To serve as a “fall-back” to pay for existing infrastructure in the event that a homeowners association dissolves and no longer maintain the infrastructure of the subdivision.

How is the assessment collected?

A Special Service Area assessment is a tax lien on the property. The assessment will appear on homeowner’s property tax bill as a line item that says, “Special Service Area Number X: $X,XXX.00.” Most assessments range from $1,000 to $3,000 per year with annual increases ranging from 2 to 5 percent. These assessments are typically done for a period of 20 to 30 years.

Is the assessment tax deductible?

Even though these assessments appear on your property tax bills, they are only tax deductible on federal income tax forms if they are for repairs or maintenance of existing infrastructure. The
assessments are NOT deductible if they are for NEW infrastructure. It’s important to keep this in mind when buying a new home and considering all of your housing costs.

How do I know if a home is located in an SSA?

When searching for a new home, it is smart to check to see if the home you are interested in purchasing is in an SSA. Here are ways to check: If the house is a re-sale (not new construction), ask the seller for a copy of the latest property tax bill. The tax bill will have a separate line and dollar amount for the SSA. If there is a separate SSA line on the property tax bill with $0 listed, either the assessment has been prepaid or the SSA is a “fall-back” SSA. In a “fall-back” SSA, the special assessments will start if the homeowners association fails and the municipality has to maintain the infrastructure. If the home is newly-constructed, there’s a greater chance that the property will be in an SSA. ASK THE DEVELOPER IF THE HOME IS IN AN SSA. Remember: the SSA assessments on new homes won’t appear on the property tax bills until the following year. Be sure to ask the developer or the sales agent if there is an estimate on the amount of the special assessment. It’s important to take this amount into consideration when reviewing your monthly housing costs should you purchase that new home.

Important Follow-up questions:

What is the life of the bond?
How much is the current assessment?
What is the percentage of the maximum increase each year?
Will the municipality take over the maintenance of the infrastructure after the bond is paid?

THIS IS PUBLIC INFORMATION and should be readily available to you. You can contact the county clerk’s office and give the clerk the home’s PIN (permanent index number or tax number) or call the municipality and ask these important questions.

The Absolute Best Christmas Lights

Lyn Sims ~ Chicago Northwest Suburbs (Schaumburg Illinois ~ RE/MAX Suburban) — Sun, 13 Dec 2009 19:17:11 -0600

Amazing Grace Techno - Computer Controlled Christmas Lights from Richard Holdman on Vimeo.

Frosty the Snowman 2008 - Holdman Christmas Display from Richard Holdman on Vimeo.

Mortgage Guideline Changes - A Summary Of Changes Over The Last Few Years That Consumers Need To Know

Lyn Sims ~ Chicago Northwest Suburbs (Schaumburg Illinois ~ RE/MAX Suburban) — Fri, 11 Dec 2009 13:58:09 -0600

So here's a wonderful post for my readers about Mortgage Guideline Changes that have happened recently. The days of 'easy money' are done folks, even for those with great credit. I like this post because it tells you 'What's different now'.

You will find it interesting if you are a new buyer or have been around the closing table a few times! It is from an agent in Dallas, Texas, John Jones. I couldn't have said it better myself!

Via John Jones (Keller Williams Elite, Dallas/Park Cities):

Since the beginning of the financial crisis, several significant changes have occured with mortgage guidelines. A summary of these mortgage guideline changes is imperative to helping consumers understand what changes that have taken place over the last few years may affect their ability to obtain a new mortgage loan.

Contrary to popular belief, the guideline changes have involved a lot more than just higher credit score requirements. In fact, one could argue that credit scores have perhaps been the least significant factor that has changed.   This assumption is perhaps my biggest reason for writing this article. Many buyers I encounter today, especially those who monitor their credit score and know they have good credit, are under the false impression that mortgage guidelines are essentially the same as they were a few years ago with the exception of higher credit score requirements. This leads them to assume that they will automatically be approved for a loan.

Perhaps they were able to obtain a mortgage quite easily a few years ago, or perhaps they simply do not understand that credit score is only one of a long list of factors that mortgage lenders consider. The main reason for their misunderstanding is because the media has oversimplified the complexity of the mortgage crisis and constantly portrays it as being caused by "banks giving loans to people with bad credit".   So it's logical to most people to conclude that credit score requirements have been the only factors that have changed.

Unfortunately this is far from the case. That doesn't mean that it's impossible to get a loan nowadays, but buyers need to be aware of the other changes that have taken place with mortgage guidelines. Simply having a good credit score no longer guarantees a loan approval like it did a few years ago.

The subprime mortgage market at one point made up more than half of the mortgage market in the US. Today, it accounts for just a small percentage. Fannie Mae, Freddie Mac and Ginnie Mae now account for over 90% of the mortgage market, with the remaining share consisting largely of jumbo loans held in bank portfolio and hard money loans, which are private mortgage loans made by a variety of different entities.

In other words, FHA, VA, USDA and Fannie/Freddie Conventional loans are about the only game in town, aside from jumbo loans and the small share of hard money lenders that make loans on their own terms. Of course, hard money lenders usually demand much higher fees and interest rates than the government agencies since they are able to provide a loan when nobody else will.

The government agencies guarantee loans made by banks, they do not loan the money themselves directly to consumers. But they purchase the loans from the banks once the loan has been made to the consumer. So banks will typically not lend outside of these guidelines since they do not wish to hold these loans on their books. They would rather transfer the risk and make loans to new customers by sellling them to Fannie Mae or Freddie Mac.

Here's a summary of changes that have taken place in mortgage guidelines over the last few years:

MOST SIGNIFICANT CHANGES:

ELIMINATION OF VIRTUALLY ALL STATED INCOME AND NO DOC LOANS

Stated income loans were originally designed as a way to simplify the mortgage approval process for self-employed borrowers who had to provide a significant amount of paperwork (tax returns, etc). Over the last several years, many lenders dropped the down payment requirement for stated income loans from 20% all the way down to 0% while at the same time eliminating the requirement to actually verify the borrower had a business in the first place.

Then came "no doc" loans, where the borrower simply had to provide their name and a social security number. At one point, a buyer with a 680 credit score could purchase a $750,000 home with no money down with no verification of employment, income or assets. Needless to say, these loans mostly resulted in foreclosure and massive losses to the investors.

WHAT'S DIFFERENT NOW?

Most states have passed laws that completely outlaw stated income loans. Furthermore, banks realize that loans made to individuals that can't document their income through traditional means (W-2's, tax returns, etc) have a much higher instance of foreclosure. Fannie Mae no longer purchases stated income loans. The only option most homebuyers have who can't document their income is to seek financing from a hard money lender who is willing to take the higher risk. The rates and fees are typically much higher than government insured loans.

MANY 100% FINANCING PROGRAMS HAVE BEEN ELIMINATED

A few years ago, subprime loans allowed buyers with credit scores as low as 560 (in some cases 500) to obtain a 100% loan. Also, there was a loophole in the FHA guidelines that allowed buyers to obtain a "gift" from the seller to circumvent the 3% down requirement. Fannie Mae also had a variety of 100% loan programs.

WHAT'S DIFFERENT NOW?

Fannie Mae now requires a minimum of 3% down. FHA down payment requirements have been increased to 3.5% and the loophole allowing sellers to pay their down payment has been eliminated. 100% subprime loans have been gone for several years now, and 100% stated income loans have been retired to the graveyard of history.

PROGRAMS THAT STILL ALLOW 100% FINANCING include the USDA loan program and the VA loan program. Some government grants also may be used for down payment, but these usually have very strict income requirements. The USDA loan has some specific loan guidelines and, more importantly, geographic restrictions. 100% VA loans are still available to qualified veterans. And surprisingly, the guidelines for VA loans have changed very little. This is likely due to the fact that VA analyzes income more closely than other types of loans, which has led to fewer losses compared to subprime and conventional loans.

GUIDELINES FOR BUYERS WHO WANT TO KEEP THEIR CURRENT HOME AS AN INVESTMENT PROPERTY, SECOND HOME OR SELL THE HOME AFTER CLOSING ON THE NEW ONE

A few years ago, most buyers who wanted to purchase a different home (move-up) or even downsize to a smaller home would simply lease their current home and provide a copy of this lease to their lender to offset their mortgage payment. Then once the foreclosure crisis picked up steam, lenders began to notice that a significant amount of foreclosures were occuring on homes where buyers had purchased another home and simply let the first home go into foreclosure. This was even happening on many buyers who had perfect credit. This tactic, known as "buy and bail", began causing a massive amount of losses to mortgage companies. Even many buyers who intended on keeping their home as an investment property or who were planning to sell the home shortly after closing on the new one began falling behind because of a slowdown in the market.

WHAT'S DIFFERENT NOW?

Homebuyers who want to keep their current home may not be able to simply show a lease to offset the payment. Fannie Mae, in most cases, requires the buyer to prove they have at least 30% equity in their current home in order to offset the current payment with a lease. They also may be required to show at least six months payment reserves for both the current and new home. FHA also requires 25% equity, unless certain conditions exist (such as moving to an area that's not within reasonable commuting distance). Proof that the first month's rent and/or security deposit has been obtained is often required as well. Homebuyers that are upside down on their current home or who do not meet these equity requirements may still be able to obtain a new loan provided they qualify with both mortgage payments.

RESERVE REQUIREMENTS

During the subprime boom, many lenders relaxed or completely eliminated requirements that borrowers have reserves in the bank after closing. Statistically, buyers are much more likely to have problems paying their mortgage without at least some cushion to fall back on in case of a financial hardship, such as job loss, etc.

WHAT'S DIFFERENT NOW?

While most loans do not have specific requirements for reserves, some lenders now require reserves for buyers with lower credit scores, as well as in certain situations where the overall risk of default may be higher. A good example is buyers that are keeping their current residence, as described above. In general, buyers who have little or no reserves will find it harder to obtain a mortgage.

DEBT TO INCOME RATIO LIMITS

The debt-to-income ratio is defined as the ratio of total monthly obligations compared to total gross monthly income. So a homebuyer who makes $5000 per month but has $2500 per month in debts, including the proposed new house payment, would have a debt ratio of 50%. Debt ratio requirements during the subprime boom were often allowed to exceed 60 or 70% and were completely ignored in many cases.

WHAT'S DIFFERENT NOW?

Fannie Mae recently changed their maximum debt-to-income ratio to 45% from 50%. Many lenders may also have an arbitrary requirement regardless of whether or not the loan program guidelines do or not. The automated underwriting systems have tightened the maximum debt-to-income requirements in many situations. While credit score may help to increase a buyer's allowable debt ratios, having a high credit score alone does not guarantee an approval.

OVERLAY (ARBITRARY) GUIDELINES

This is perhaps becoming the most significant change that is affecting many loan applicants. An overlay guideline is essentially a guideline imposed by a lender that is over and above the loan guidelines themselves. For example, FHA does not have a minimum credit score requirement per se. However, I'm not aware of any lenders that do not have some kind of minimum credit score for FHA buyers. Why do lenders do this? Because even though an agency such as FHA or Fannie Mae may guarantee a loan, that doesn't mean the lender will not incur a loss if the buyer fails to make their payments. Therefore, lenders will often analyze the loans they've originated in the past and impose certain requirements that may be over and above the requirements set by the federal agency that insures or guarantees the loans.

WHAT'S DIFFERENT NOW?

Most lenders have a minimum credit score requirement of 600-620 for FHA loans. Also, some lenders may either require a second-level signature from upper management on loans that are deemed to carry a higher risk of default, such as for buyers with high debt ratios, low reserves, a spotty employment or income history or buyers that are purchasing a home that's in an area where real estate values have declined significantly.

OTHER CHANGES:

HIGHER INTEREST RATES FOR BUYERS WITH LOWER CREDIT SCORES AND LESS MONEY DOWN

Fannie Mae began this trend a couple of years ago by instituting "loan level price adjustments" for buyers with less than 740 credit scores and who were putting down less than 40% down (yes, 40%). Although the adjustments to the rate are very minor at this level, buyers with less than a 680 credit score and less than 20% down may see a significant adjustment to either their rate or to their closing costs. And since many buyers assume the rate they see advertised is the rate everyone gets, they may budget the cost for their new home based on a rate that is not obtainable based on their situation. Furthermore, many companies are now imposing rate adjustments to buyers seeking government loans (FHA, VA and USDA).

MORTGAGE COMPANIES THAT ADVERTISE RATES ON THE INTERNET, TV AND RADIO DO NOT TAKE THESE PRICING ADJUSTMENTS INTO ACCOUNT. Most advertisements disclose somewhere in their fine print that the rates they advertise assume a credit score of 740 and a 20% down payment. So don't assume the rate you see is the rate you're going to get until a loan officer has a chance to fully qualify you by obtaining a full credit report and also an analysis of your current situation and income.

TOUGHER APPRAISAL REQUIREMENTS

Lenders require an appraisal to be conducted on virtually all home purchase transactions to ensure that the price a homebuyer is paying for a home can be justified with recent sales data. This protects lenders collateral position in case of foreclosure.  In past years, loan officers would simply call their favorite appraiser and request an appraisal.

Because of perceived conflicts of interest with this process, a new process was created called the Home Valuation Code of Contact, which restricts loan officers and production staff from communicating directly with an appraiser. The result has led to longer waiting periods to obtain appraisals and sometimes inaccurate appraisals since the management companies often select appraisers that are unfamiliar with an area. Since the appraisals are now ordered through appraisal management companies, this extra step means extra time (and money in many cases) for home buyers.

LONGER WAITING PERIODS

The Federal Reserve recently amended the Truth In Lending laws. Buyers now must wait at least seven days to close after the full terms of their proposed loan have been delivered and disclosed to them. Furthermore, if the terms of the loan change (which is sometimes not the fault of the lender and may be the result of a change outside of everyone's control), the buyer must wait another three days to close.

While this may seem like nothing to worry about, keep in mind that the sales contract in Texas calls for a certain specific closing date. If the buyer fails to close by this date, even as the result of a federally mandated waiting period, the seller has the option of terminating the contract at their sole discretion in the State of Texas. These waiting periods can often become an issue and put buyers at risk of potentially losing the contract on their home if they wait too long to select a lender. The days of five day closings are a thing of the past, and the process of the new appraisal requirements can also cause additional delays as well.   The bottom line is that homebuyers need to shop for their loan well in advance of shopping for a home to avoid any potential delays.

So in conclusion, the changes that have taken place in mortgage guidelines over the last few years have been a lot more than just higher credit score requirements. In fact, the minimum credit score of 620 that most lenders require to obtain an FHA loan is not much higher than it was a few years ago.  The most significant changes have occured in the more detailed guidelines that most buyers may not even realize exist. And while it's certainly safe to say that many changes have taken place, it's certainly not impossible to obtain a loan if these situations can be overcome.

But waiting until the last minute to consult with a lender is a mistake that will cost many homebuyers the opportunity to qualify for a home loan. If you are considering purchasing a home, please contact me today so I can evaluate your situation and put you in touch with a lender that can consult with you at no charge to evaluate your options.

John Jones, Realtor

The Kaul Group - Keller Williams Elite, Dallas / Park Cities

www.dfwhomefinder.info

www.thekaulgroup.com

8201 Preston Road Suite 265

Dallas, TX 75265

Dallas, TX Real Estate and surrounding areas of Richardson, Plano, Addison, Frisco, Carrollton, Farmers Branch, Garland, Allen and Irving.

Dallas, TX neighborhoods and subdivisions of Lake Highlands, White Rock Lake, Lochwood, Eastwood, L Streets, M Streets, Hollywood Heights, Lakewood, Coronado and Gastonwood, Forest Hills, Preston Hollow.

Copyright 2009 by John Jones, All Rights Reserved. You may reblog or republish with links back to this post.

* THIS ARTICLE WAS ORIGINALLY PUBLISHED AT http://dfwhomefinder.info *

Illinois Home Sales - Slowly we turn ..... step by step ..... inch by inch .....

Lyn Sims ~ Chicago Northwest Suburbs (Schaumburg Illinois ~ RE/MAX Suburban) — Thu, 10 Dec 2009 16:22:22 -0600

Illinois Home Sales - Slowly we turn ...... step by step ..... inch by inch ......

Yes, I'm quoting the well remembered Three Stooges sketch. Are we making a comeback? A little at a time is all we can expect but the numbers are good and getting better all the time!

Here is the report from the 'egg heads' in the know:

Pent-Up Demand and Tax Credit Drive October Home Sales Rally - Sales Up 24.2% Statewide and 33.3% in Chicago Region

"Illinois home sales took a double-digit jump in October as buyers took advantage of unprecedented buyer-market conditions with record low mortgage interest rates, affordable home prices and the federal first-time home buyer tax credit. According to the Illinois Association of Realtors® latest report, statewide total home sales (which include single-family and condominiums) in October 2009 reached 10,986 homes sold, up 24.2 percent from October 2008 sales of 8,846. The Illinois median price in October 2009 was $157,000 down 7.6 percent from $170,000 in October 2008. The median is a typical market price where half the homes sold for more, half sold for less."

"October’s extraordinary sales totals reflect home purchases by many buyers who were sitting on the sidelines of the housing market waiting out the economic downturn as well as more home sellers coming to terms with accurate pricing given the market conditions (forced too in my humble estimation). The first-time home buyer tax credit clearly was a motivating factor and an effective market stimulus to reduce inventories and help stabilize prices. The good news is that the credit has been extended through April 2010 and expanded to now include potential move-up buyers who have owned a home for any consecutive five-year span during the last eight years.”

"The monthly average mortgage commitment rate for a 30-year, fixed-rate mortgage for the North Central region was 5.0 percent in October 2009, down from the 5.06 average rate during the previous month, according to the Federal Home Loan Mortgage Corporation. Last year in October it averaged 6.25 percent."

"In the city of Chicago, October total home sales (single-family and condominiums) were up 28.5 percent to 2,012 sales compared to 1,566 homes sold in October 2008. The city of Chicago median price in October 2009 was $215,000 down 18.0 percent compared to $262,250 a year ago in October 2008."

"According to the Illinois Association of Realtors® report, total home sales (single-family and condominiums) comparing October 2009 to the same month in 2008 were up in 45 of 99 Illinois counties reporting including Champaign, up 19.7 percent; Cook, up 31.1 percent; DuPage, up 34.9 percent; Kane, up 34.8 percent; Kendall, up 51.0 percent; LaSalle, up 43.8 percent; Madison, up 42.2 percent; Peoria, up 3.4 percent; Rock Island, up 31.1 percent; Saint Clair, up 18.1 percent; Sangamon, up 36.8 percent; Will, up 57.4 percent, and Winnebago, up 6.1 percent."

September Illinois Report

Resources: Illinois Association of Realtors IAR report 11/23/09; Sales and price information is generated from a survey of Multiple Listing Service sales reported by 37 participating Illinois REALTOR® local boards and associations. The Chicago PMSA, as defined by the U.S. Census Bureau, includes the counties of Cook, DeKalb, DuPage, Grundy, Kane, Kendall, Lake, McHenry and Will.

Is Cancellation of Debt always taxable?

Lyn Sims ~ Chicago Northwest Suburbs (Schaumburg Illinois ~ RE/MAX Suburban) — Wed, 09 Dec 2009 16:17:46 -0600

Is Cancellation of Debt always taxable?

The good news is NO. Here's why - it's called the Mortgage Forgiveness & Debt Relief Act enacted on 12/20/2007. Why haven't we known about this? I've just heard of it and I'm thrilled for some of my seller clients that are currently selling or thinking of selling on a short sale. As if their situations weren't bad enough, the short sale differences we were told would be a tax liability. Now I find out that in most instances that is not the case!

The most common situations when cancellation of debt income is not taxable involve:

Qualified principal residence indebtedness: This is the exception created by the Mortgage Debt Relief Act of 2007 and applies to most homeowners.
Bankruptcy: Debts discharged through bankruptcy are not considered taxable income.
Insolvency: If you are insolvent when the debt is cancelled, some or all of the cancelled debt may not be taxable to you. You are insolvent when your total debts are more than the fair market value of your total assets.
Certain farm debts: If you incurred the debt directly in operation of a farm, more than half your income from the prior three years was from farming, and the loan was owed to a person or agency regularly engaged in lending, your cancelled debt is generally not considered taxable income.
Non-recourse loans: A non-recourse loan is a loan for which the lender’s only remedy in case of default is to repossess the property being financed or used as collateral. That is, the lender cannot pursue you personally in case of default. Forgiveness of a non-recourse loan resulting from a foreclosure does not result in cancellation of debt income. However, it may result in other tax consequences.

So ..... Short sale sellers take the full loan balance and subtract the sales price. This is a positive number and is treated as 'ordinary income'.

Here are the conditions and requirements that the seller not be taxed on this income for federal income tax purposes (note, not necessarily state taxes) if the following conditions are met:

You lived in the home - primary/principal residence
The loan was used to buy, construct or improve that home referenced in #1
The income not taxed is capped at $1 million for a married person filing separate and $2 million otherwise
The short sale has to take place after Jan 1, 2007 and before January 1, 2013 (any guess as to how long the government thought this might be an issue?)

Questons I've snatched for further clarification: If I sold my home at a loss and the remaining loan is forgiven, does this constitute a cancellation of debt?

Yes. To the extent that a loan from a lender is not fully satisfied and a lender cancels the unsatisfied debt, you have cancellation of indebtedness income. If the amount forgiven or cancelled is $600 or more, the lender must generally issue Form 1099-C, Cancellation of Debt, showing the amount of debt cancelled. However, you may be able to exclude part or all of this income if the debt was qualified principal residence indebtedness, you were insolvent immediately before the discharge, or if the debt was canceled in a title 11 bankruptcy case. An exclusion is also available for the cancellation of certain nonbusiness debts of a qualified individual as a result of a disaster in a Midwestern disaster area. See IRS Form 982 for details.

More frequently asked questions here.
Publication 4681
Release IR-2008-17

Note and Disclaimer: This is a very complex situation and should be verified by your accountant or the IRS. I am in no way giving tax advice only passing along information that I have been made aware of recently. I am in no way an attorney or tax advisor so please verify all these statements in their entirety. It seems in California, this income is still taxable so please verify with your state of residence.

Resources: IRS, Dr. Danielle Babb, Landlord Protection Agency

What happened to the price difference between a Foreclosure and a 'Regular Sale'?

Lyn Sims ~ Chicago Northwest Suburbs (Schaumburg Illinois ~ RE/MAX Suburban) — Mon, 07 Dec 2009 17:09:16 -0600

Recently I have been noticing a disturbing trend in low appraisals all across my area and I'm sure you have too. We are all having a hard time having a 'regular sale', if there is such a thing, get appraised out to the purchase price. There are many of you out there, mostly buyers agents, that don't seem to see a problem with this trend.

I DO and here's why - no where in the appraisal guidelines do appraisers have to use REO's and foreclosures in an appraisal.

Yep, that's right. By their own guidelines and policies the REO's and foreclosures have not been 'market tested and have reasonable market exposure' just because of their reduced price. The price on that REO is not the same as Mr. Seller just down the street that anticipates a market time of 120 days. Nope, that's not the game plan for that REO, they want it sold and gone so they adjust to price to compensate for market time. Problem is again, that 'reasonable market exposure' doesn't have an adjustment.

It used to be that REO's were adjusted for condition and price because of the 'market tested' criteria. Why not any more? Why are apprarisers suddenly turning a blind eye to things that they did for YEARS in a market previous to this?

How can a Seller ever expect to receive a decent price unless these 'market tested criteria' are used once again? Ever wonder how the market will hopefully improve after the 'crisis' has ended?

How can a Seller possibly expect to compete with REO's and foreclosures for the next several years?

Come on, let's be honest, there is a price difference in REO's, foreclosures and just a 'regular sale'. We all know there is but why is nothing being done about it?

Reference Material Pointers from the Appraisal Institute:

Appraisal notes (Market Conditions Addendum 1004MC) ~

As a reminder, although it is preferable for the appraiser to provide comparables from the subject’s neighborhood, Fannie Mae does allow for the use of comparable sales that are located in competing neighborhoods, as these may simply be the best comparables available and the most appropriate for the appraiser’s analysis. If this situation arises, the appraiser must not expand the neighborhood boundaries just to encompass the comparables selected. The appraiser must indicate the comparables are from a competing neighborhood and address any differences that exist. (Page 15)

The presence and extent of foreclosure/REO sales is worthy of comment when analyzing market data and must be reported on the form. The form also allows for the appraiser to summarize the data and provide other data analysis or additional information, such as analysis of pending sales, which over time can show a market trend. (Page 12)

The appraiser must analyze additional trends, including the changes in median prices and days on the market (DOM) for both sales and listings as well as a change in list-to-sales price ratios. (Page 11)

Insure that active listings and pending sales are market tested and have reasonable market exposure to avoid the use of overpriced properties as comparables. Reasonable market exposure is reflected by typical marketing times for the neighborhood. The comparable listings should be truly comparable and the appraiser should bracket the listings using both dwelling size and sales price whenever possible. (Page 7)

Appraisals of properties located in declining markets must include at least two comparable sales that closed within 90 days prior to the effective date of the appraisal. In some markets compliance with this requirement may be difficult or not possible due to the lack of market data and, in these cases, a detailed explanation is required. The appraiser is expected to include at least two sales that are as similar as possible to the subject and which settled within 90 days of the effective date of the appraisal in order to show recent market activity. (Page 6)

Foreclosure Sales and Summary/Analysis of Data ~ The presence and extent of foreclosure/REO sales is worthy of comment when analyzing market data and must be reported on the form. The form also allows for the appraiser to summarize the data and provide other data analysis or additional information, such as analysis of pending sales, which over time can show a market trend. (Page 25)

Reasonable Exposure Time in Real Property ~ The estimated length of time the property interest being appraised would have been offered on the market prior to the hypothetical consummation of a sale at market value on the effective date of the appraisal.

FAQ USPAP 102. Exposure Time
Market Time
Reasonable Exposure Time Statement

Are Home Inspections for Renegotiation or Buyer Protection?

Lyn Sims ~ Chicago Northwest Suburbs (Schaumburg Illinois ~ RE/MAX Suburban) — Thu, 03 Dec 2009 16:45:08 -0600

This is an interesting post with a good point of view that I wanted to share with my readers. The topic is Home Inspections. A home inspection in Illinois is for the buyers protection to find 'latent' or hidden defects in the property. Things that the buyer might not see upon his shopping excursion into the home. Examples of these items: code violations, electrical problems, structural items, mold issues, etc.

What a Home Inspection is not: It is not carte-blanche to have every little thing fixed in the home you have selected! It is not for every crooked switch plate or for general maintenance items. If you want the furnace filter changed - do it when you move in. Right now the seller is in charge of the home! If there is a crack in one ceramic tile in the bathroom, that's a good ratio because there are 99 others that are not cracked! 1 out of 100 = good.

This post is from a successful gentlemen Rick Schwartz in Danbury, CT. Hope you enjoy this post as I couldn't have said it any better than he.

Via Rick Schwartz (William Raveis Real Estate):

It's fairly ubiquitous today to hire a licensed home inspector when purchasing a home. This is a good thing. For most folks a home purchase represents the largest amount of money to be spent in their lifetime. The home inspection contingency is typically one of the "big three" contingencies in an offer to purchase.

While specific language and format will vary, the basis of a home purchase agreement has, in essence, three components from the buyer's point of view.

We will purchase your home if...

You agree to our price

We can acquire appropriate financing

Upon inspection(s) the home has no defects which we deem unacceptable

If any of those contingencies are not met, the buyer has an out and will likely be able to recoup any money paid into an escrow or trust as a deposit.

I guess this is where I should put my disclaimers.

I am neither an attorney nor a home inspector - this post is to be construed neither as legal advice nor specific recommendations on any construction, structural, etc issues regarding a home you wish to purchase. Any similarities to actual persons living or dead is purely coincidental. One offer per household and finally - employees of Rick Schwartz Homes, any affiliates, wholly or partially owned subsidiaries or related companies are not eligible.

The question I'm posing, as a Realtor is this: Should it be assumed, by the buyer, that the seller should bear the cost of repairing any and all defects uncovered during a home inspection?

My purpose in this discussion is to raise the issue for thought as to why we do home inspections and should the buyer plan to use this moment to renegotiate the purchase price of the home.

We do home inspections in order to uncover defects in the home that might not be noticed during the shopping process. Things that might not be visible during a routine walk-through. Most defects are fixable. There is obviously, a cost involved in any remedy. The key point, in my opinion is one of expectations. The purpose of the inspection is to uncover things that were not likely to be apparent when you are in "shopping" mode. Examples:

If you see water dripping into a large puddle in the center of the basement directly under the kitchen, you should not be surprised when a home inspector reports a plumbing issue.

If you see scores of rodent traps on the floor in several rooms, you should not be surprise if the inspector hints that there might mice present.

If there is black tape across the front of several electrical outlets, you should not be surprised if the inspector recommends that an electrician check the place out.

If the front view of the house looks more like the one on the left in the image below, rather then the one on the right, you shouldn't be surprised at anything the inspector finds.

Serious point here is that your own walkthrough which happens long before you negotiate price should give you a general idea of the condition of the house. If you have a feeling that there are issues yet to be discovered, say so early on. Have your Realtor let the listing Realtor know that you are making a lower offer because you saw, this or that or the other. Take the condition of the house into account before you decide what you want to pay.

Your home inspection is, without a doubt, going to reveal some items that need to be corrected. If they are minor, put them on your list of things to work on when you move in. If they are major safety, health or structural issues, then either ask the seller to pay for repairs, split it with them or use your contingency to pull out.

Find Home Listings

Hanover Park IL - 4BR 2.5BA's $244,900 Great Family Home!

Lyn Sims ~ Chicago Northwest Suburbs (Schaumburg Illinois ~ RE/MAX Suburban) — Thu, 03 Dec 2009 13:20:14 -0600

Lyn Sims | RE/MAX Suburban | 847-230-7324

7944 SHERWOOD CIRCLE N, Hanover Park, IL

VAULTED GREATROOM ADDITION ~ 2.5 BATHS ~ 2 MASTER BR'S

4BR/2.5BA Single Family House

offered at $244,900

Year Built	1968
Sq Footage	1,705
Bedrooms	4
Bathrooms	2 full, 1 partial
Floors	2
Parking	1 Car garage
Lot Size	8,056 sqft
HOA/Maint	$0 per month

DESCRIPTION

4BR's 2.5 BA's ~ This house rivals largest in area! Greatroom addition w/fireplace, remodeled kitchen with all appls, neutral carpeting & decorating thruout, Zoned heating, 6 panel doors, 2 Master BR's, Possible In-Law Suite. Schaumburg Schools & low Cook County Taxes!

see additional photos below

PROPERTY FEATURES

- Central A/C	- Central heat	- Fireplace
- Walk-in closet	- Family room	- Living room
- Dining room	- Dishwasher	- Refrigerator
- Stove/Oven	- Microwave	- Attic
- Washer	- Dryer	- Yard

COMMUNITY FEATURES

- Garage parking

- Storage space(s)

OTHER SPECIAL FEATURES

- Cement Crawl for Storage - Pull down attic Storage

- Double Drive accomodate 4 cars easily

- Newer siding, roof, fascia, gutters, garage door

- Paver brick patio & fenced yard

- Large UTLRM - Mud Room with outside entrance

- Neutral carpeting, ceramic tile thruout - no work to do!

- 1.5 Blocks to Grade School ~ Distr 54 Schaumburg Schools

- 2 FIREPLACES

- 2 MASTER BR's - You pick one

ADDITIONAL PHOTOS

Open Greatroom	Remodeled Kitchen
Master BR has walk-in	Master has dual closets
Livingroom	Hall Bath

Contact info:

Lyn Sims

RE/MAX Suburban

847-230-7324

For sale by agent/broker

Equal Opportunity Housing

Posted: Dec 3, 2009, 10:09am PST

REO'S and Foreclosures - Think they could possibly be for you?

Lyn Sims ~ Chicago Northwest Suburbs (Schaumburg Illinois ~ RE/MAX Suburban) — Wed, 02 Dec 2009 15:48:45 -0600

REO's and Foreclosures - Think they could possibly be for you?

I just sold and closed two foreclosures recently and the two sales couldn't have been more completely opposite! One needed work (203k) from head to toe - you know the kind you hear about where the seller decided to cut parts of the furnace out of the unit! The other was fabulous with a remodeled kitchen and 42" maple cabinets. That one needed painting and new carpet but needed minor TLC. It had the best location backing up to a pond!

What did these buyers both have in common?

They weren't afraid to get their hands dirty and do some work for future equity!
They had to be flexible with all the paperwork delays!
They were pre-approved and knew exactly what they could purchase and didn't go over their budget!
They asked lots of questions thruout the entire process which made them comfortable with the scenarios and with their purchase!
They kept a positive attitude thru the entire transaction!

Interested in purchasing a home in the Northwest Suburbs? Please don't hesitate in giving me a call so we can get started right away!

203K FHA Rehab Loan
Hoffman Estates Village Bio
Schaumburg Village Bio
Elk Grove Village Bio
Schaumburg - Best Places to raise your kids, runner up.
Is it FHA Approved?
Downpayment Assistance for First Time Buyers - ADDI
Tips for buying a Foreclosure
Buying a Bank Owned Home - REO
Hoffman Estates - Top Selling Subdivisions
Common Buyer Closing Costs
6 Common Problems that Spook Buyers
How to pick a Buyers Agent
What is a Buyers Agent?

Links at Poplar Creek - Hoffman Estates IL

Lyn Sims ~ Chicago Northwest Suburbs (Schaumburg Illinois ~ RE/MAX Suburban) — Sun, 29 Nov 2009 09:41:34 -0600

Links at Poplar Creek Subdivision

I just sold and closed a St. Andrew Model in the neighborhood! 2BR 2.5BA, Loft, Full finished basement and 2 car garage. Great upgrades from the hardwood floors thruout, full wall brick fireplace, deck, whirlpool in Master Bath. Very nice updates and condition thruout with approx. 1654 sq. feet. Really a solid area close to the Poplar Creek Golf Course with some great views of the course itself. Short drive to Northwest Tollway access makes it popular.

Interested in selling or purchasing a home in the Links at Poplar Creek? Please don't hesitate in giving me a call.

203K FHA Rehab Loan
Hoffman Estates Village Bio
Schaumburg - Best Places to raise your kids, runner up.
Is it FHA Approved?
Downpayment Assistance for First Time Buyers - ADDI
Tips for buying a Foreclosure
Buying a Bank Owned Home - REO
Hoffman Estates - Top Selling Subdivisions
Common Buyer Closing Costs
6 Common Problems that Spook Buyers
How to pick a Buyers Agent

Briar Pointe - Schaumburg IL

Lyn Sims ~ Chicago Northwest Suburbs (Schaumburg Illinois ~ RE/MAX Suburban) — Sat, 28 Nov 2009 16:23:12 -0600

Briar Pointe Subdivision

I just sold and closed a Barrington Model 2BR 2.5BA 2-story townhome in the neighborhood! It had the best location on the nature sanctuary! Fireplace, newer appliances, newer carpet, BA's remodeled with granite, 1 car garage, skylite.

Interested in selling or purchasing a home in Briar Pointe? Please don't hesitate in giving me a call.

Briar Pointe Townhomes
203K FHA Rehab Loan
Schaumburg - Best Places to raise your kids, runner up.
Is it FHA Approved?
Downpayment Assistance for First Time Buyers - ADDI
Tips for buying a Foreclosure
Buying a Bank Owned Home - REO
Schaumburg - Top Selling Subdivisions
Common Buyer Closing Costs
Schaumburg #1 with Residents

Castle Rock - Schaumburg IL

Lyn Sims ~ Chicago Northwest Suburbs (Schaumburg Illinois ~ RE/MAX Suburban) — Sat, 28 Nov 2009 15:57:11 -0600

Castle Rock Subdivision

I just sold and closed a foreclosure in the neighborhood! 2BR 1.5BA, no basement and no garage. Definitely needed work with new kitchen and all appliances and mechanicals. Buyer did the 203K FHA rehab program thru me.

Interested in selling or purchasing a home in Castle Rock? Please don't hesitate in giving me a call.

203K FHA Rehab Loan
Schaumburg - Best Places to raise your kids, runner up.
Is it FHA Approved?
Downpayment Assistance for First Time Buyers - ADDI
Tips for buying a Foreclosure
Buying a Bank Owned Home - REO
Schaumburg - Top Selling Subdivisions
Common Buyer Closing Costs
Schaumburg #1 with Residents

Schaumburg say it ain't so - imposing property taxes?

Lyn Sims ~ Chicago Northwest Suburbs (Schaumburg Illinois ~ RE/MAX Suburban) — Wed, 25 Nov 2009 12:17:42 -0600

Schaumburg say it ain't so - imposing property taxes?

One of the last village hold outs for communities with no property taxes in the area include Schaumburg. But recently in this down turned economy, the revenue to keep the village moving forward might have to come from possible property taxes.

Daily Herald on November 15th, 2009 states:

"The health of today's retail economy affects more than just the entrepreneurs and workers who earn their livings by the sale of merchandise. Also closely watching the rise and fall of consumer behavior are municipalities like Schaumburg, which have tied their own fortunes to those of the marketplace. With the luxury of being Illinois' second largest economy after Chicago, the village has foregone such typical revenue generators as a property tax to rely almost exclusively on sales taxes and other consumer-generated income.

But what seemed like the most resident-friendly policy in better times is now causing a budget crunch for Schaumburg that's putting some difficult decisions on the horizon. Schaumburg Finance Director Doug Ellsworth said the village has seen a significant drop in sales taxes, averaging about 3 percent per year or 15 percent overall since 2006. This comes despite store occupancy and shopper traffic being relatively good for an economy like this. "Foot traffic at the malls is only part of the story," Ellsworth said. "Retailers are discounting things so much." Community Development Director Christopher Huff agreed that's the heart of the problem. Other than car dealerships, which truly are selling less product than they did - the Cash for Clunkers program notwithstanding - most other retailers are simply charging less for what they manage to sell, he said.

So far, the village has been able to avoid laying off workers, but has had to cut some services (see my notes below) considered noncritical like brush pickup and community education programs. And if the economy continues to sputter, the village will have to look at further service cuts, new revenue sources or both, Village Manager Ken Fritz said. Fritz believes it's not a question of Schaumburg having painted itself into a corner. He said the village has more untapped options, ones that other cash-strapped suburbs have already exhausted."

Village of Schaumburg Press Release November 17th, 2009 states:

"The Village of Schaumburg has a history of providing quality comprehensive municipal services while relying primarily on revenue from visitor's to pay for these services. This strategy has worked extremely well and provided the foundation for the development of the second largest retail area in the State of Illinois and at the same time given residents a superior standard of living at a relatively small cost. As the village has matured the ability to rely solely on income from visitors has diminished. Retail development to the west and internet competition has eroded new growth causing revenues to stagnate. In addition to this trend the worse recession since the great depression has tapped reserves and threatened to reverse progress made over the last 30 years. Major revenue sources of the General fund have declined at a rate of 1.92% a year for the last five years."

Daily Herald on November 17th, 2009 states:

"One of the largest holdouts against a municipal property tax in the Chicago area is finally caving to new financial pressures. Schaumburg trustees began discussions Tuesday of imposing a property tax for the first time in village history. Officials say they need a new funding source to make up for a $17.6 million deficit created by dwindling sales tax revenues.

The village is among only a few Chicago-area communities that do not levy a real estates tax on local property owners. Most - including Schaumburg, Gurnee, Deer Park and Oak Brook - have large shopping malls and retail bases that have generated enough sales taxes to fund most municipal services like police and fire protection, roadwork and snow plowing. Others non-property-tax towns include Carol Stream, Prospect Heights, Campton Hills and several smaller communities in Kane County including Kaneville, Big Rock and Lily Lake.

Schaumburg's financial woes suggest they won't be the last to weigh the potential of considerable political fallout against the prospect of massive service and job cuts. Carol Stream has also recently considered imposing a new property tax, and Prospect Heights has made deep cuts at city hall and closed its police station to the public in the face of dwindling revenues. Schaumburg officials say their options are similarly dire: raise a property tax or make severe cuts in services, including widespread municipal layoffs. That would include the elimination of many capital improvements, almost all public transportation funding and 123 employees, or 24 percent of the work force, Village Manager Ken Fritz said.

The village's proposed tax would generate $23.7 million next year, or about a quarter of this year's general fund revenues. According to village calculations, that would mean the owner of a home worth $250,000 would pay about $250 to the village, or roughly 8 percent of the property taxes paid to all taxing bodies including the county, library, park and school districts. In exchange, the village would absorb the cost of garbage pickup and eliminate its $20 vehicle stickers.

Fritz said the elimination of these fees should make the new property tax a wash for the owner of a $250,000 home who owns two cars. Garbage pickup currently costs such a homeowner $170 per year. He also noted that the estimated tax rate in Schaumburg would remain lower than in most surrounding communities, with the exception of Elk Grove Village. Officials said sales tax receipts alone - which along with the food and beverage and telecommunications taxes make up nearly three-quarters of village revenues - have fallen by $7 million in the past five years. The village's general fund cash reserves have dropped to about $9 million today from $25 million in 2006. Officials say at that rate, the village will run out of cash sometime in 2010 or 2011."

Village Profile
2010 Best Place to Raise your Kids 'almost winner'
Sculpture Park
Top Selling Subdivisions for Schaumburg Homes
Top Selling Subdivisions for Schaumburg Multi-Family Homes

Lyn Sims (847)230-7324

RE/MAX Suburban

Search for homes in Schaumburg now!

I proudly serve and sell real estate in the Northwest Suburbs of Chicago. If you are thinking about purchasing or selling your home in the communities of Schaumburg, Hoffman Estates, Elk Grove Village, Roselle, Palatine, Medinah, Itasca, Bloomingdale, Carol Stream, Bartlett, Hanover Park, Streamwood, Elgin, South Elgin, St. Charles and more importantly, want to work with a local area expert, contact me immediately.

Resources: Daily Herald, Village of Schaumburg.

Schaumburg, say it ain't so! ©2009 Lyn Sims - RealEstateConsumerInfo.com - RealEstateBuyMe.com

Schaumburg IL is still a winner! Business Week's Best Places to Raise your Kids

Lyn Sims ~ Chicago Northwest Suburbs (Schaumburg Illinois ~ RE/MAX Suburban) — Tue, 24 Nov 2009 13:03:22 -0600

Business Week's Best Places to Raise your Kids 2010

Schaumburg just missed out and was a noted 'runner up' for 2010. Last year for 2009, Mt. Prospect cinched the title. We'll get 'em next year!

So here is the full article for BusinessWeek's annual ranking of the best places to raise your kids. Each picture represents a state and a little bio about each town that won!

Best Place to Raise Your Kids 2010: Tinley Park, IL

Nearest city: Chicago
Population: 54,491
Median family income: $90,377

Runners-up: Arlington Heights, Schaumburg

"Tinley Park, a fast-developing southwestern suburb of Chicago, is this year's Best Place to Raise Your Kids—not just for Illinois, but for the nation as a whole. It has great schools, a vibrant downtown, and housing options that range from modest to luxurious. Oak Park Avenue, which serves as a Main Street shopping area, includes a beautiful town square where residents gather and children ride bicycles. Tinley Park also has a 28,000-seat outdoor concert amphitheater, one of the largest in the Chicago area."

Looking for a home in Schaumburg to raise your kids? Give Lyn a call today to get started!

Santa is coming to Schaumburg!

Lyn Sims ~ Chicago Northwest Suburbs (Schaumburg Illinois ~ RE/MAX Suburban) — Tue, 24 Nov 2009 09:57:34 -0600

Santa Is Coming To Town on November 27th

The Schaumburg Fire Department will officially escort Santa Claus to town on Friday, November 27, 2009 to join village officials in the annual tree lighting ceremony and welcome the holiday season from 6 to 8:30 pm at the Prairie Center for the Arts.

Village President Al Larson and members of the Board of Trustees will begin the evening singing holiday carols at 6pm at the Prairie Center for the Arts. Santa is anticipated to arrive at 6:30pm on the plaza between the Robert O. Atcher Municipal Center and the Prairie Center for the Arts.

Santa will be greeted by village officials who will assist him in his lighting duties. In keeping with holiday tradition, the tree will be decorated with ornaments crafted by area youth groups and organizations. After the lighting ceremony, Santa will meet with youngsters in the Maggie Atcher Theatre located in the Prairie Center for the Arts. Parents are welcome to bring their cameras and get a special snapshot of their children with Mr. Claus.

Seasonal entertainment will be featured and refreshments served and this event is co-sponsored with the Schaumburg Jaycees.

6 - 6:30pm - Village President & Village Board sing carols.
6:30pm - Santa arrives via fire truck to light the tree with the Village President.
6:45pm to approximately 8:30pm - Children can meet Santa in the Maggie Atcher Theatre.

Attendees are encouraged to bring nonperishable food items to this event for the Schaumburg Food Pantry. These items may be placed in the designated boxes located in the Prairie Center for the Arts lobby.

FHA Appraisals and "the Rules"

Lyn Sims ~ Chicago Northwest Suburbs (Schaumburg Illinois ~ RE/MAX Suburban) — Fri, 20 Nov 2009 14:51:32 -0600

FHA Appraisals and the Rules

Lately in my area there has been a tremendous amount of miscommunication and misinformation with FHA appraisals. It is so rampant in our area that I've decided to post the drama.

Schaumburg IL - Townhouse listing of mine does not appraise out and is $5000 under contract price. Seller does not want to sell at the appraisal price and the buyer doesn't want to pay the contract price. Deal dead which is easy enough. Buyer #2 comes along with their overzealous buyers agent, let's call her 'Gloria Go-Getter'. She's overcaffinated, overconfident, never listens to what is being said and is constantly on her 'crack berry' answering those important emails. Buzz, buzz, buzz, there she goes.

After negotiating this new offer at the appraisal price (I surprised her with that BTW) she said, sure I guess we'll use it. You guess? Sorry Gloria, the appraisal is good for 6 months on the property so yeah, we're gonna use it. Then the contract goes to the also overcaffinated loan officer, 'Busy Bruce', who begins the conversation with - "You don't know what you're talking about, I want a new appraisal done". So now we have Gloria Go-Getter and the loan officer telling me I am blocking the contract by not letting a new appraiser into my listing.

Now I'm thinking to myself, this can't be happening right? This FHA appraisal guideline is as old as dirt, how can they not know about it? Well it turns out that the loan officer wanted me to manipulate the FHA system that assigns the appraisals and case numbers. The loan officer is telling me that the appraisal no longer has a case number and they don't want to use it. Well I get the original appraisal from the original loan officer and indeed there's that case number and all the appropriate information necessary to make it valid. Hmmmm.

Did the buyers agent and the loan officer plan this? I think that having the appraisal already done was not in their collective game plan. I think what they expected was that the townhome would not appraise out and the price would be adjusted downward. Their only option was to fight the current appraisal. Problem is, we can't just get another new FHA appraisal on a property and I wasn't going to do anything funny with the FHA assignment system.

Besides, I've heard that the federal penitentiary accommodations would not be adequate enough for little 'ole me.

I've uncovered some interesting things from the FHA Help Line (FHA Connection) and they were very courteous and answered all my procedural questions. I wasn't loosing my mind and indeed the appraisal was still valid and in the system. Why all the drama? Was I just supposed to forget about the 1st appraisal? Why would I just ignore it?

What would the penalty be if I did turn a blind eye? So the deal finally closed and I can honestly say I'm not sure what this agent was trying to accomplish. All the way to the end, she was adamant that we didn't have to honor the appraisal.

I'm not gonna miss Gloria Go-Getter.

FHA Appraisals

Winter and Summer Furnace Settings

Lyn Sims ~ Chicago Northwest Suburbs (Schaumburg Illinois ~ RE/MAX Suburban) — Wed, 18 Nov 2009 14:11:56 -0600

Heating and cooling adjustments on a forced air furnace - Winter and Summer Settings

Warm air rises; cooler air sinks. Keep this principle in mind, and you’ll realize why opening the correct air returns in winter and summer will provide better air distribution-which, in turn, allows more even temperatures in your home.

When you use a forced air furnace for summer cooling, you should open the high returns. This allows the furnace to take warmer air from the top of the room back to the air conditioning cooling coil in the furnace. In the winter, open the low returns to collect cold air at the floor.

For a two-story home, you may also need to adjust the supply air for winter and summer. In the winter, warm air rises to the second floor, so less heating is required there.

In the summer, warm air still rises, and a hot attic adds even more heat, so you need greater cooling (air flow) to the second floor than to the first floor.

The best way to control air flow is to adjust the small dampers in the heating/cooling duct system in the basement. Often, these dampers are found where round supply duct runs connect t o the main (rectangular) ducts. Look for small (¼-inch) threaded rods and wing nuts. You can adjust the damper by turning the screwdriver slot on the small rod. When the slot is parallel (going the same way) to the duct, the damper is fully open. You don’t need to adjust the wing nut, which simply locks the rod into place.

Heating ducts vary. Some systems have levers indicating the direction of the damper. Some rectangular ducts have dampers and levers.

To adjust air flow for summer cooling, start by fully opening all second floor dampers. Next, partially close dampers to first floor rooms that are getting lots of cold air. You will find that closing the damper to 50% or turning the shaft to 45 degrees will only partially slow the air flow. Often, even if you fully close the damper, there will still be air flow because the dampers fit very loosely in the ducts.

Closing first floor dampers will direct air to the second floor. Mark your damper settings for summer and winter once you have found the correct balance.

Remember to clean the furnace filter, too, because a plugged filter can also restrict air flow.

Older homes were not built for cooling - the supply and return ducts to the second floor may not be adequate so adjustments may not solve the problem. A quick fix may be to run the fan furnace continuously.

I just moved into a new home recently and I had a 'mini melt down' on the 2nd floor. It was just too hot all the time! Went on the internet to find these settings which used to be marked right on my old furnace! Guess what - no marks, no nothing on the new furnace, so my guess work began. It actually took me quite a bit of work and research to find these directions so hope you can make use of them in your home.

Happy heating AND cooling!

Another kick in the head ......

Lyn Sims ~ Chicago Northwest Suburbs (Schaumburg Illinois ~ RE/MAX Suburban) — Tue, 17 Nov 2009 14:13:28 -0600

Well here's a kick in the head ......

I recently cancelled a listing that I had for some time because the seller just would not lower the price. All the signs were that since she didn't have a fireplace, she was being overlooked at her price. Townhomes with fireplaces were getting regular showings and this one didn't have a showing in 30 days! We had to adjust our price for wanted features that we didn't have.

Seller said no way, they can just make an offer as we've all heard that before. "Lowering my price won't make a difference and everyone knows they can just make an offer in this market."

Well, as always I check the new listings everyday in the MLS and who should appear? Ms. I won't ever reduce my price! Here's that kick in head - she's $13,000 lower than I had it. I'm quite sure at that price, it's going to sell right away. Now at the new price it's below the current market value and with the newer carpet she put in, I'm confident an offer will be in her hands soon.

But, what was all the fuss, fighting and digging in her heals all about? I was only looking for $2000 to bring her more in line. I'd have to say the other agent was a better sales strategist than myself because she got the job done and got the seller down below what she needed to be at. She did a great job.

I'll certainly be putting it on my list for future showings. Just don't understand what Ms. Seller was thinking here? It cost her alot of valuable market time.

Tax Credit Q & A

Lyn Sims ~ Chicago Northwest Suburbs (Schaumburg Illinois ~ RE/MAX Suburban) — Mon, 16 Nov 2009 19:33:14 -0600

Congress has passed new legislation that extends the First-Time Home Buyer Tax Credit of up to $8,000 to first-time home buyers until April 30, 2010. Also expands the credit to grant up to $6,500 credit to current home owners purchasing a new or existing home between November 7, 2009 and April 30, 2010.

Here is the basic information and guidelines about how the Extended Home Buyer Tax Credit can help you purchase a home. If you have specific questions or need additional information, always seek out a tax professional or the Internal Revenue Service at 800-829-1040. But here are the basics:

Who Qualifies for the Extended Credit?

First-time home buyers who purchase homes between November 7, 2009 and April 30, 2010. To qualify as a “first-time home buyer” the purchaser or his/her spouse may not have owned a residence during the three years prior to the purchase.

Current home owners purchasing a home between November 7, 2009 and April 30, 2010, who have used the home being sold or vacated as a principal residence for five consecutive years within the last eight.

Which Properties Are Eligible?

The Extended Home Buyer Tax Credit may be applied to primary residences, including: single-family homes, condos, townhomes, and co-ops.

How Much Credit is Available?

The maximum allowable credit for first-time home buyers is $8,000. The maximum allowable credit for current homeowners is $6,500.

How is a Buyer's Credit Amount Determined?

Each home buyer’s tax credit is determined by two additional factors - The price of the home and the buyer's income.

What is the maximum price I can purchase?

Under the Extended Home Buyer Tax Credit, credit may only be awarded on homes purchased for $800,000 or less.

What is the maximum Buyer Income?

Under the Extended Home Buyer Tax Credit effective on November 7th 2009, single buyers with incomes up to $125,000 and married couples with incomes up to $225,000 may receive the maximum tax credit.

If your income exceeds these limits, can you still get a credit?

Yes, some buyers may still be eligible for the credit.

The credit decreases for buyers who earn between $125,000 and $145,000 for single buyers and between $225,000 and $245,000 for home buyers filing jointly. The amount of the tax credit decreases as his/her income approaches the maximum limit. Home buyers earning more than the maximum qualifying income—over $145,000 for singles and over $245,000 for couples are not eligible for the credit.

Can a Buyer Still Qualify If He/She Closes After April 30, 2010?

As long as a written binding contract to purchase is in effect on April 30th 2010, the purchaser will have until July 1st, 2010 to close.

Will the Tax Credit Need to Be Repaid?

No and Maybe. The buyer does not need to repay the tax credit, if he/she occupies the home for three years or more. However, if the property is sold during this three-year period, the full amount of the credit will be recouped on the sale.

Elk Grove Township - Tax Appeals now due

Lyn Sims ~ Chicago Northwest Suburbs (Schaumburg Illinois ~ RE/MAX Suburban) — Mon, 16 Nov 2009 14:08:01 -0600

Appeal data for Elk Grove Township is due Nov. 18th, 2009. Please make sure all your data is submitted in a timely manner.

October 2, 2009 – Cook County Assessor Jim Houlihan announced today that residential property owners in Elk Grove Township were mailed notices reflecting a reduction in the assessed values of their properties. The impact of these reductions will be seen in second-installment tax bills payable in the fall of 2010.

"The situation we are facing in the real estate market is extraordinary, and the downturn has had an impact on home values," Houlihan explained. "After analysis of market sales and foreclosure data, we determined that Elk Grove Township homeowners should not have to wait until their properties are reassessed next in 2011 for the downturn to be reflected in their assessments."

Normally, properties are reassessed and receive notices every three years. The north suburbs are not scheduled to be reassessed again until 2010; the south and west suburbs will be reassessed next in 2011. This year, the City of Chicago will be reassessed.

Due to this first-ever downward market adjustment, residential properties in each suburban township will receive adjustments of their assessed values. A 7% decrease will be applied to the assessed values of all residential properties located in Elk Grove Township.

The deadline to file appeals for properties located in Elk Grove Township is November 3, 2009 (now extended to November 18th).

These market reductions come as the Assessor’s Office is implementing the 10/25 Ordinance, a measure passed by the County Board last year which was designed to simplify assessment levels. Homes will now be assessed at 10% of market value. Commercial and industrial properties will be assessed at 25% of market value. All Cook County property owners will receive notices telling them of the changes in assessment levels this year.

"If Elk Grove Township taxpayers want to appeal their proposed assessments, we encourage them to do so online," Houlihan said. "Our newly redesigned Web site is easy to navigate, contains a wealth of information, and makes it easier than ever to appeal a proposed assessment."

Cook County Appeal Forms

Medinah Illinois - $147,800 2BR 2BA near Meacham Grove Forest Preserve!

Lyn Sims ~ Chicago Northwest Suburbs (Schaumburg Illinois ~ RE/MAX Suburban) — Sun, 15 Nov 2009 14:10:36 -0600

Lyn Sims | RE/MAX Suburban | 847-230-7324

191 Hillcrest Terrace, Bloomingdale, IL

WESTERN MEDINAH AREA! 2BR 2BA NEAR FOREST PRESERVE!

2BR/2BA Condo

offered at $147,800

Year Built	1969
Sq Footage	1,087
Bedrooms	2
Bathrooms	2 full, 0 partial
Floors	1
Parking	Unspecified
Lot Size	Unspecified
HOA/Maint	$219 per month

DESCRIPTION

No updates needed - newer neutral carpet, remodeled Kitchen, remodeled Baths. Sunny unit with detached garage space, storage area in basement. Very private end unit overlooking oak tress and steps to Meacham Grove Forest Preserve that has walking paths, pond, etc. Small subdivision where you can virtually walk to shopping, banks, etc.

see additional photos below

PROPERTY FEATURES

- Central A/C	- Central heat	- Living room
- Dining room	- Dishwasher	- Refrigerator
- Stove/Oven	- Microwave	- Basement
- Laundry area - inside	- Balcony, Deck, or Patio

COMMUNITY FEATURES

- Garage parking	- Guest parking	- Laundry on-site
- Storage space(s)

OTHER SPECIAL FEATURES

- Remodeled Kitchen

- Newer carpeting

- Ceramic floors

- Remodeled Baths

- Newer furnace, AC, water heater

ADDITIONAL PHOTOS

Notice mature trees	Livrm
Master BA	Master BR
Kitchen	Kitchen

Contact info:

Lyn Sims

RE/MAX Suburban

847-230-7324

For sale by agent/broker

Equal Opportunity Housing

Posted: Nov 15, 2009, 10:44am PST

Selling Advice - the 3 things you should know about Condition

Lyn Sims ~ Chicago Northwest Suburbs (Schaumburg Illinois ~ RE/MAX Suburban) — Thu, 12 Nov 2009 15:30:39 -0600

The 3 Things you should know about Condition ~

This is a series regarding the most popular question that I receive from people about real estate? What’s the #1 tip that I could pass along?

Well there’s actually 3 things that are enmeshed together – Condition, location and price. All 3 actually make your home either sell or be rejected by prospective buyers. Here's how to have your home be in the buyers favorites!

Condition -

Avoiding Home Preparation Mistakes

Getting your house ready for market goes beyond making the beds and washing dirty dishes. Although I've seen plenty of homes with toys scattered throughout and dishes piled in the sink; buyers can't get out of those homes fast enough. Read up on the essential steps to be taken on preparing the home for sale. Some homes need updating and quick fixes. Doing repairs before resale can boost chances of quickly selling. If items are broken or buyers see deferred maintenance, they wonder what else is wrong. It's more expensive, actually, not to fix the house.

Phrase to remember: Buyers only know what they see - not the way it's gonna be!

Another phrase to remember: "Facts do not cease to exist because they are ignored" ~ Aldous Huxley

Dressing your home for showings is called 'staging a home'. Think of the process like arranging flowers in an attractive vase. If you or your agent lack the vision or ability to stage, consider hiring a professional home stager. It is absolutely worth the effort and the price because your home will sell faster in any marketplace!

Common Marketing Mistakes

Whenever I see badly shot photographs in the MLS, or it's the only photo, I want to scream at the agent, 'What are you thinking?' But agents and sellers make plenty of marketing mistakes beside bad photos. Do you realize that there are sites and blogs that actually post these photos under 'worst photos of the week' and 'how not to take a photo like this'. And my personal favorite 'cave of the week'.

If photography isn't your strong point or your agents - hire a professional. Marketing now begins on the internet, before the buyer even gets near your home. My advice is to get samples of what and how the agent is going to present your home with virtual tours, widgets, and online ads. If the agent can't show you or provide that info - run the other way and get another agent!

Some sellers loudly lament: 'Why isn't my home selling?' These are likely sellers who are not employing marketing strategies designed to expose a home to the largest pool of buyers or are avoiding the preparation tips before the home went on the market. Buyers have a lot of choices - think why should they choose yours?

Once a buyer has entered a home, the marketing continues. A strong listing agent plays up the good features of a home and downplays the negative - that's selling. Make sure your agent provides as much information to the buyer as possible so they can make a good, informed decision. I can't tell you how many times I've shown a home and it takes up to 3 days to find out the age of the roof or other vitals that should be readily available to the buyers. It's basic questions that most buyers want to know - age of roof, age of furnace, age of AC, age of appliances.

Hiring the Wrong Agent

You can hire a good listing agent or a mediocre agent. They all cost the same. You don't have to hire your brother-in-law that 'dibbles and dabbles' in real estate or your daughters friend that 'just started in the business'. This is the largest personal investment that you have - interview agents and hire a full-time professional with a minimum of experience that you feel comfortable with. Think of it this way - do you want a new agent practicing on you?

If you want full-service, then hire a full service agent. Also, learn the difference between Realtors® and real estate agents, they are not the same. Ask an agent why they are not a Realtor®? Think of it as a 'professional labor union with a code of conduct and ethics'. What would be a benefit for them not to join?

Carefully read the listing agreement to make sure the agent who brings a buyer is fairly compensated because one surefire way to make sure an agent won't show your home is to offer a silly commission percentage. In a competitive market like now, often buyer agents are paid a 'bonus' commission percentage. It is an additional 'incentive' to show your home first before the others in the same price range.

Be sure your home is in top marketing condition. Be sure that your home is getting all the expose it deserves.

Remember that ‘3’.

Lyn Sims (847)230-7324

RE/MAX Suburban

Selling Advice on Price
Selling Advice on Location

I proudly serve and sell real estate in the Northwest Suburbs of Chicago. If you are thinking about purchasing or selling your home in the communities of Schaumburg, Hoffman Estates, Elk Grove Village, Roselle, Palatine, Medinah, Itasca, Bloomingdale, Carol Stream, Bartlett, Hanover Park, Streamwood, Elgin, South Elgin, St. Charles and more importantly, want to work with a local area expert, contact me immediately.

All data and information provided on this blog is for informational purposes only. Lyn Sims makes no representations as to accuracy, completeness, correctness, suitability or validity of any information on this site and will not be liable for any errors,
omissions, or delays in information or any losses, injuries, or damages arising from it’s display or use.

Selling Advice - the 3 things you should know about Location

Lyn Sims ~ Chicago Northwest Suburbs (Schaumburg Illinois ~ RE/MAX Suburban) — Thu, 12 Nov 2009 15:26:27 -0600

The 3 Things about Location ~

What’s the most asked question that I receive from people about real estate? What’s the #1 tip that I could pass along?

Well there’s actually 3 things that are enmeshed together – location, price and condition. All 3 actually make your home either sell or be rejected by prospective buyers.

So a real estate mantra in case you don't know it is:

Location, location, location!

There's that 3 again but there is a reason that it is used over and over. Nobody listens!

The location of your home makes a 'price' difference to buyers from the town that it's in, the street that it's on and the school district the kids will be attending.

Obviously different towns have different socio-economic benefits for living there. Maybe you need the train to go to work? Maybe you've grown up in the city and want your kids to run around and play soccer in the best park district - all these reasons encompass location.

So this portion of the series really will ask you to take a step back and look at your home with a critical buyers eye. Do you have a good location?

Is it safe? Is it quiet? Is it in the middle of the subdivision across from a park? Walking distance to schools? Close to expressway access or public transportation? Golf Course view? Wooded view?

After answering these questions if you find yourself saying:

'Well the busy road never bothered me because actually my wife tells me I'm hard of hearing!'

'No the jet noise doesn't bother me at all - what did you say again?'

'No the berm is not a problem for me because now you can't see the garbage dump (aka the recreation ski hill and mini-mountain range) from here!'

That's a location issue that effects your price. If you take 2 similar homes and put them side by side as a buyer will do, which home would you choose? Come on, be honest?

Each location issue will pose a difference in the price. Buyers will either except or reject your location based on your price just like they would consider other features like a basement or number of bedrooms.

Be sure your home is set at a competitive price based on your location. Remember that ‘3’ and say it one more time - location, location, location!

Lyn Sims (847)230-7324

RE/MAX Suburban

Selling Advice on Price
Selling Advice on Condition

Selling Advice - the 3 things you should know about Price

Lyn Sims ~ Chicago Northwest Suburbs (Schaumburg Illinois ~ RE/MAX Suburban) — Thu, 12 Nov 2009 15:22:23 -0600

The 3 Things you should know about Price ~

What’s the most asked question that I receive from people about real estate? What’s the #1 tip that I could pass along?

Well there’s actually 3 things that are enmeshed together – Price, condition, location. All 3 actually make your home either sell or be rejected by prospective buyers.

Price - Obviously in this market with the elevated inventory you have to be ‘spot on’ with your homes price. Too high and no one will take your home seriously and it will be passed over. Too low? Well that really doesn’t happen too often except in distress sales, foreclosures and the like. A fair price – what a seller is willing to accept and a buyer is willing to pay. That’s what we normally strive for.

When an agent puts your home on the market, it has to be sold three times.

The first sale is to my peers, the other REALTORS® and agents who are in the market everyday. They need to be excited about the price or they simply ignore the listing because it's often a waste of their time to show it to buyers who won't pay that price.

The second sale is to the buyer, and they compare your home to the others they're looking at in the marketplace comparing features and benefits that are important to them.

The third sale is to the appraiser for the lender. Even if we're lucky enough to get a higher than market price from a buyer, the appraiser compares the sale with past sales in your neighborhood and their appraisal usually hits right at the market price.

Now let’s think about this question for a moment - if you bought a home and the appraisal came in lower than what you paid, what would you do? How would you feel as a buyer?

I'll tell you what normally happens from past experience, the deal falls through and we begin the whole process all over again. Start again at square one, we’re back on the market baby! How would you feel about that?

Be sure your home is set at a competitive price. Remember the ‘3’.

Lyn Sims (847)230-7324 RE/MAX Suburban

The 3 Things you should know about Condition
The 3 Things you should know about Location

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Selling Advice - the 3 things you should know about Condition

The 3 Things you should know about Condition ~

Condition -

Home Selling Advice on Condition ©2009 Lyn Sims - RealEstateConsumerInfo.com - RealEstateBuyMe.com

Selling Advice - the 3 things you should know about Location

The 3 Things about Location ~

Home Selling Advice on Location ©2009 Lyn Sims - RealEstateConsumerInfo.com - RealEstateBuyMe.com

Selling Advice - the 3 things you should know about Price

The 3 Things you should know about Price ~

Home Selling Advice on Price ©2009 Lyn Sims - RealEstateConsumerInfo.com