Julie's Blog

The first time my husband and I sold a house in Plainfield, we didn't have the first clue about real estate. We thought after we accepted an offer, it was a done deal, and we'd be seeing everyone again real soon at the closing table. Oh, how naive!

Unfortunately we found out about two weeks, and a houseful of boxes later... that our buyers did not receive the "commitment letter" from their lender.

I guess I should back up a bit first and tell you a little bit more about the commitment letter. It's basically a letter from the lender or mortgage broker that you have chosen, declaring that you have have been approved for a mortgage for the requested amount of your loan in order to close. Without it, the deal is dead in the water. Most likely there will be a mortgage contingency attached to the contract if you are obtaining financing, which protects your earnest money in the event that you cannot get approved.

When you sign your contract to either purchase or accept an offer on your next Plainfield real estate transaction, it's important to understand that the date for the commitment is going to be under close scrutiny by all of the attorney's and agent's involved in the transaction. If a buyer cannot get financing by the date noted on the contract, it is often a red flag to the interested parties that there is a problem with the buyers ability to obtain financing.

Lending institutions are changing their guidelines daily. There are no guarantees when it comes to financing these days.

Our buyers could not commit to close within the time-frame needed to make the purchase of our new home in Plainfield happen. We didn't get to move into the beautiful new home that was waiting for us. About 2 months later someone else bought it; and in a huge way, I'm glad.  We didn't know it at the time, but my husband was about to be laid off from his job after 9-11.

A similar situation happened to me just this month with the buyers for one of my listings. The commitment date on the sales contract was for February 15th, and we were scheduled to close on February 20th. When the commitment date arrived instead of receiving an approval, we received a request for an extension, which pushed the closing back by as many days. My sellers, Shelly and Mike Naples, had already written a contract to purchase another property in Wheaton, that was contingent upon the closed sale of the home.

On February 18th we received another request for an extension, and at this point everyone was more than a little nervous that we wouldn't be able to get this transaction to the closing table.

In order to protect the purchase of the other house from unforeseen delays in the closing of their house, I scheduled the purchase of their new house two weeks later on March 5th... and are we ever lucky that we did! We needed every second of those two weeks to make sure that the scheduled sale of their home still happened. Thankfully Shelly and Mike had a place to stay for those two weeks or this transaction might not ever have happened. Those two weeks kept this sale alive.

We closed on the sale of their home on February 29th, which after all of that, still wasn't the end of the story. Since this year is leap year, leap day, wasn't recognized by the computers at the title company. The closing had to actually take place on two days, and as of yesterday afternoon, the Naples' have officially SOLD their home! 

This is a perfect example of how many things actually happen between signing the contract and making it to the closing table, and as you can see from these two examples, you never know how things will play out.

It's important to keep close tabs on the process of obtaining commitment letters no matter what side of the transaction you are on. If for any reason a commitment letter isn't issued there isn't much you can do about it, but at least it relieves both parties of their obligation to the contract and allows everyone to move on.

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I was having a discussion the other day with my business associate and friend, Dan Garcia. He's a real estate investor in Plainfield, and we've invested in Plainfield real estate together for the past 3 years. The other day I said something that started an interesting conversation, and made me think of the real estate market in Plainfield in an entirely different way.

I said to Dan, "It's horrible how much money people are losing on their homes in this market. I can't believe how much money we've already lost this past year..." to which he replied, "Really? How much money have you lost on your house this year?"

I thought about it, and was surprised by my own answer. The truth is... I haven't lost a single red cent.  I didn't sell my house, and it's impossible to lose money that you never really had.  Plainfield home values are based on real-time data. 

Dan then clarified to me, that the only people losing money in this market are the one's who bought high (given the rate of appreciation) and sold low. He said, "It's just like the stock market. If you have stocks that were worth a lot of money and the market crashes at the time you chose to sell... you're going to lose money. If the market crashes and you hold out for the market to improve, you haven't lost anything at all."

Hmmmmm. Food for thought, from the guy who taught me a lot of what I know.  Despite all of the gloom and doom in the media right now about real estate, it really is a great time to buy and sell real estate.

Do you want to know what your Plainfield home is worth right now?  Call me at 630-673-6233 to find out!

I just got done reading an article in the Chicago Tribune's New Home Guide, which I found very interesting. While I wasn't surprised at the results of the article, I was impressed that there is now research and evidence to prove that testing the market with a higher asking price, rather than at market value, will not only take longer to sell, but that it will actually sell below the median asking price for similar homes in the neighborhood.

Jeffrey Otteau is the president of Otteau Valuation Group which offers various real estate appraisal, litigation, and consulting services in New Jersey. After taking a few minutes to explore the company website, it's quite clear that they know what is happening in real estate all over the country.

In a quote from the New Home Guide Jeffrey says, "Houses that are priced right are selling. Overpricing extends days on the market and guarantees that you will sell your home for less in a declining market."

The key to his statement is "in a declining market"...

Many analyst's are predicting that home values and sales prices will continue to drop throughout 2008. In a market like this, holding out for a better price may take you well in to 2009 before the decline in values can even plateau, let alone... begin to rebound.

There is also the stigma of high market times associated with listings that have been on the market for a long time. Consumers assume the sellers are desperate to sell... which leads to "low-ball" offers.

The market we are experiencing now is a result of the gold-rush days of real estate. The extremely low interest rates, which not only increased consumers consumers confidence; it increased the amount consumers could afford to pay for a mortgage, and has left many homeowners with the misconception that this is only a temporary problem.

On a similar note, while consumers were then able to afford to finance a higher mortgage, the price of the homes appreciated at a rate drastically skewed from the traditional rate of appreciation of 3-5% per year , well into the double digits in some areas especially Plainfield.

The "shake-out" we are experiencing now will give way to a more realistic real estate climate over the next several years.

The truth is, over-pricing real estate in Plainfield and Naperville to "test the market" will end up biting you in the end.

To quote Jeffrey Otteau again, "Everything's a function of price."

The upside? If you sell low, you'll also be buying low when you purchase your next home. So depending on how long you've owned your home, it could really be a wash depending on what your intentions are for your next purchase, with all things being relative

If you want to know what your Plainfield or Naperville home is worth, call me at 630-673-6233, or fill out the form at the top of this page! 

Buying a house under market value in Plainfield and Naperville is easy if you know what to do, and what to look for. 

There are a lot of opportunities to purchase a Plainfield or Naperville under market value if you work with an agent who understands these situations.  The biggest thing to keep in mind when entering the market of under valued homes is knowing when to make a move, and being ready to do it. 

Here are just a few of the reasons why you might be able to find an home under market value in Plainfield, Naperville or anywhere in Chicagoland.

• Pre-Foreclosures as short sales!  They are everywhere, in every neighborhood, all over the Chicagoland area.  Most of these homes are still in great condition because the owners still care about their home, and are looking for a way out of their situation by working with their lender to be able to sell the house for less than what they owe.  If the loan is federally insured as an FHA loan it's almost a slam dunk that they will take a net offer of 82% of the homes currently appraised value.  If it's a conventional loan, a successful short sale can save you anywhere between 60-70%.  Offers "subject to bank approval" are a the mercy of the lender, but they can be an amazing way to save some cash on your next Plainfield or Naperville home.

• Divorces make for liquidation sales.  Imagine the motivation of two sellers who's main goal is to cut all ties from one another as quickly as possible...  There aren't many sure fire ways to seek out these situations, but it's a good thing to keep in mind when making an offer on your next house.  Make sure you're working with Naperville or Plainfield Realtor who is willing to dig deep into the reason of why the sellers are selling.  Their answers will tell volumes about the motivation behind accepting an offer and how they will negotiate.

• Vacant houses on the MLS.  A vacant house is either a "holding cost" for an investor, or a non-performing asset to a bank.  Either way, they scream motivated seller!  As I mentioned before, working with an Illinois Realtor who is willing to ask questions and dig deep about the reason the house is on the market, will ALWAYS give you the upper hand in the negotiation process.

• Job transfers.  If the job transfer did not include the services of a RELO company, you are most likely dealing with sellers that are eager to reunite with a spouse that had to "go ahead" without them. Occasionally they are making two house payments, but at the very least, they are almost always paying for alternative living expenses.  (and if a mom who has suddenly finds herself as a single parent has anything to do with the negotiation process, you'll be moving in faster than you can say "escrow")

• Bank owned or REO properties.  These are houses that the bank wasn't able to sell at the auction.  In situations like this the bank has borrowed money to the former owner, and when the owner lost the home to foreclosure, the bank took back the house as a collateral per the terms of the mortgage note.  Most of the time these houses need varying degrees of repairs. Make sure you are ready to factor the cost of the repairs into the final fair market value of the home to make it worth your while.  If the house is selling for $25K under market value and it needs $35K in repairs, it wouldn't make much sense to rush to the closing table on this one...

For more advice on how to get the best deals on real estate in Plainfied, Naperville, Romeoville and Joliet, subscribe to my site, just enter your e-mail address to the subscribe box to get all the latest news and information delivered directly to your inbox! 

Owning a home will always have financial benefits that far outweigh the cost of renting a home or apartment in the Chicagland area. If you are in a favorable financial position to purchase a home, and have good credit and a down payment, here are some examples of the financial benefits to owning real estate in Chicago and the suburbs:

1. Federal Tax deductions baby! It's a big one, especially in the early years of your mortgage before the payment becomes amortized. The interest on your mortgage is tax deductible, and it can add up to some hefty savings when it comes to filing your W-2's. Isn't money always more fun when it's in your pocket!
2. Real Estate has traditionally been known as owning an appreciating asset. A well kept home in a stable market can double or even triple in value at the end of a 30 fixed rate mortgage. I know, I know... homes aren't really appreciating right now. (that's a whole other story) The fact is, right now is a great time to buy because as the prices begin to plateau at the bottom of the decline, they should begin to appreciate at the average rate of 3-5% per year rather quickly. Purchasing a home in the Chicagoland area in the next 18 months, before the aniticipated end of the decline in home values, will place a homeowner in a position to begin building equity. Buying low and selling high are the key to maximizing real estate appreciation in the Chicago suburbs.
3. Being able to turn your equity into a liquid asset. Home equity lines of credit (HELOC's) or home equity loans (second mortgages) have their benefits if you know how to make them work for you. Instead of applying for a traditional bank loan or maxing out a high interest credit card for big purchases or emergency situations when you have the ability to pay them back is a great example of a good use of a home equity loan. Using them to go shopping or to buy a new car... not so much.

And now for the fun side of owning your own home in Chicago and the suburbs:

1. You can paint, wallpaper, carpet and tile any room your house without permission.
   
2. You can grow a garden, or plant a tree anywhere in your yard.
3. You can wash your car in the driveway.
4. You get to have backyard barbeque's in your own backyard.
5. You can surprise your son or daughter with new puppy for Christmas without getting permission from the Grinch.
6. You don't have to call the landlord when the above mentioned puppy chews off a corner of the drywall in the living room!
7. You can hang pictures on any wall in the house without fear of losing your security deposit.

I know I got a little silly with the last part, but owning a home IS fun, and it comes with a sense of pride and accomplishment. For anyone that's carefully taken the steps necessary to become a homeowner, it's a decision most people make without looking back!

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What should I expect to pay in closing costs for my new home loan?

Many times customers end up paying more than they need to in closing costs when closing on their new home loan. It is important to be educated about what closing costs should be, and what types of charges are excessive. Closing Costs are broken down into different areas on a "Good Faith Estimate" and it's important to understand what each section means.

Every section has number next to it, so to clarify the Good Faith Estimate, I'll break down the line items by number. 

Section 800 to 823 Lenders/Bank Charges

This is the section where your mortgage specialist has the most flexibility in trying to charge excess fees which can increase their bottom line. Points are listed out in this section as well. Points should only be paid if you are trying to buy down the interest rate, if not... the mortgage specialist is trying to increase their overall profit in the loan. DON'T PAY POINTS unless you are given a breakdown of your interest rate with points and without points and see how many months it would take to recoup those costs by doing a comparison of the two. After comparing the two sets of numbers, take the amount of the charge and divide it by the amount you would be saving when compared to the loan without paying points.

Other charges in this area include appraisal, underwriting, processing, credit report, and commitment fees. These fees vary depending on the loan program but you should not pay more then $900 total in this section. If they are higher most likely your loan specialist has increased those charges to make additional profit.

Section 1100 Title Fees

On any purchase the seller and buyer have to pick up certain costs of the title policy. The title policy makes sure when you buy a home that there are no liens against the property. This also covers the costs of closing the loans through a title company which is required on any transaction. These fees can be as low as $500 and be as high as $1500 depending on where you close and the purchase price of your property. This does not include transfer stamps which may need to be bought depending on the city you purchase in. Check with your Realtor about these transfer stamps. Mortgage specialists don't have any control of these costs and they can't increase these costs on their own. As a consumer you are protected against charges being added into this area.

On average, closing costs really shouldn't be higher than $1700 on any transaction. If they are you may want to consider questioning your lender about what each of the fees are actually for to determine if it's justified.  If you feel like the answer is dishonest or vague, you may be paying too much in closing costs.

Pre Paid Items- why you will need additional money to close.

Pre Paid items need to be paid at closing too and are not part of the cost of writing or shopping for the best loan. These items include interest per day from the day you close on a loan until the end of the month, and the escrow account if applicable (taxes and Insurance).  The county dictates how many months taxes need to be required to be put in that account at time of closing. As the buyer you do receive a tax credit from the seller which should offset this amount for the months that the seller owned the home in the current year.

If you have any questions or comments please leave a comment here or call me directly at 630-742-3198.

Chris Puleo, MAOM
Sr. Loan Consultant
630.587.7300 office
630.742.3198 Cell
630.622.0464 EFax
630.924.1100 Processing or Closing Questions
cpuleo@1stmortgage.com

When it comes to making an offer on Plainfield real estate it's important to arm yourself with the closed sale price comparisons from the last 6 months, but in a volatile market like we are currently experiencing I would recommend more closely comparing the closed sale comps from the last 3 months. When sales are slow it is more difficult to pull those numbers from recent sales, but I would recommend it whenever possible.

If the house is priced in good competition with other properties for sale in the Plainfield neighborhood, it's most likely that a seller can expect to get an offer at or near 97-98% in a good market. In a slower market that has a high inventory of homes for sale, buyers and sellers can expect to reach an agreement for an acceptable offer at about 95-96% of the asking price, which would reflect the trend of the most recent sales.

There will always be motivation from both sides that will cause fluctuations on these percentages such as how anxious a seller is to move, or how badly a buyer wants a particular house, and it's because of this that so much negotiation takes place in real estate.

Things to Consider When Making an Offer on Plainfield Real Estate:

• How much are you willing to spend?
• Do you think the house is over-priced?
• What have similar property's sold for recently?
• What condition is the house in?
• Will you need to make repairs or improvements to move in?
• Are you interested in another property as well?
  

Plainfield does have a high inventory or real estate for sale, but that is due largely in part to the 7 1/2 sq. miles that is contained within it. Plainfield is a very large community and one of the factors that makes negotiations for Plainfield real estate so intense at times is the homogenous traits of the homes within each neighborhood. 

Buyers often have a wide selection of homes that could potentially meet their needs, in fact there may be an even be an identical model available for sale for them to chose from. 

The benefit to the buyer could be that they have a wide variety of homes to chose from. 

The benefit to a seller is that if they own a home that stands out above the rest of the homes in their community, and is priced right for their neighborhood, they are likely to increase their chances of getting a better price for their Plainfield home.

Ive been driving past the Ashford Place models that popped up on Caton Farm Rd. in Plainfield last year for a while now.  Ive been meaning to stop in something always seemed to keep me getting in there.

A few weeks ago, my oldest son and I stopped in at the Ashford Place sales center and took a look around their two beautifully decorated models; the Halden and the Stanhope. 

I immediately fell in love with Ashford Place's,  Stanhope model.  It was beautifully decorated in a pale aqua and cream color pallet.  We have big family so its only natural for me to gravitate toward the biggest home they had to offer, but it was a beautiful and highly functional layout.  I especially loved the extra large laundry room that was located right off the garage. 

The front closet was big enough to store even the largest families collection of outerwear!  Mittens, hats, scarves, and gloves... Oh, the possibilities!  I seriously have never seen a "walk-in" front closet before.  Yes, it was a walk-in closet big enough to make even the most well equipped master bedroom jealous!!!

There are 7 floor plans to choose from, and 2 models available to view.  Base prices range from $262,600 to $321,100 and optional features and upgrades will add to the actual cost.

Ashford Place is also part of the Plainfield Consolidated 202 School District .

I stopped back at the sales office for a while and talked to Susan Lanucha who is the general sales manager at the office.  We discussed the fact that, at the moment, there really arent very many new home builders still left in Plainfield.  A lot of the land has already been built on and there isn't much open land left for development the way it was in the late 90's.  She said that Smykal Associates have been building homes in Chicago and the suburbs for the past 136 years. 

Thats a long time!

Now in its 5th generation, the Smykal family business has built over 17,000 homes in the Chicago land area.  So many builders and developers are facing hard times right now along with the rest of the country.  On the heels of the sub-prime lending fall-out, its nice to see a family owned business with such longevity.

If you are looking for a new construction home in Plainfield its not too late, and its still a great time to buy!  Id love to have another excuse to get over to see them again.  Call me at 630-673-6233 to set up a time to preview the models!

I have been invovled in the foreclosure and pre-foreclosure aspect of real estate in Plainfield and Naperville for the last 5 years. I have seen countless families in both of our Plainfield neighborhoods, lose their homes to foreclosure or the real estate auction over the last 9 years. My interest in real estate began as a means to understand the foreclosure process.

In the last 5 years, I have learned more about the foreclosure process than I ever thought possible, and have helped and met some really great families along the way. I helped a seller in Montgomery avoid a foreclosure this past January, and I am currently working with another family in Oak Park. My husband and I also purchased two homes in Plainfield from sellers in foreclosure as investment properties, and as a result the homeowners were able to avoid foreclosure.

Here are a few things you can do if you find yourself in a position of not being able to pay your mortgage:

• Don't ignore calls from your lender. They may be able to offer options not traditionally available which may include re-payment solutions to get you back on track, and keep you in your home. Loan modifications amend the original mortgage and allow you to keep your home. This is a good option for someone with an adjustable rate mortgage or ARM.
  
• Don't wait; be proactive in seeking a solution.
• Prepare yourself for the highly likely chance that you will have to sell your home, especially if you are not over the hardship that brought you to this point You need to work with a Realtor who knows how to negotiate not only with a buyer, but with the bank as well.

These are some options available for Plainfield homeowners to avoid a foreclosure:

• Forebearance agreement: A lender may let you make a partial payment or skip payments if you know that you will be able to catch up within a certain amount of time. You'll need to tell your lender if you are expecting a tax refund or a bonus that can get you caught up on the money that you owe in arrears.
  
• Reinstatement: A lump sum payment that totals the amount of payments missed to bring the mortgage current.
  
• Repayment plan: If reinstatement isn't an option your lender may allow you to include an additional amount to your regular payment to catch up.
  
• Deed in Lieu of Foreclosure: Handing over the keys to avoid a foreclosure can spare a foreclosure. This speeds up the process of liquidating the sale of the house to get the bank the money they need to recover their losses. It can still affect your credit in an negative way, but it is still better than a foreclosure on your credit report.
• Loan Modification: At the discretion of the lender the bank can agree to modify the original terms of the mortgage. Some examples of a loan modification would be; adding more years to the mortgage to pay off the loan, adjusting the interest rate from an adjustable rate to a fixed rate, or adding all of the missed payments to the end of the loan to be paid at the end of the length of the loan.
  
• Short sale: In a short sale a lender is willing to accept less than what is owed and forgive the original debt. A "settled for less" appears on your credit report and the foreclosure is avoided. For immediate advice, I recommend calling 1-888-995-HOPE or visit: www.995hope.org as advised by the Illinois Association of Realtors.

If you are a Plainfield or Naperville homeowner facing foreclosure, I want you to call me at 630-673-6233. I can help you explore your options and help inform you about the process of foreclosure. I have experience in both working with lenders and sellers in foreclosure, as well as having a team in place that supports lender negotiations for the purpose of short sales. I have successfully negotiated short sales in the last 12 months.

Watch for more articles and information about foreclosure. Subscribe to my site and never miss an article.

*currently I am only accepting pre-foreclosure listings in the Plainfield and Naperville area, but I'd be more than happy to talk to you and refer you a colleague that specializes in foreclosure in your area.

With such a high inventory of homes for sale on the MLS these days, it's important to work with a Plainfield or Naperville Realtor that knows the kind of challenges homeowners face in trying to sell a home in this market.

Here are 5 things you should ask your Plainfield Realtor before you sign the listing agreement:

1. Do you do provide both a print and Internet Presence? Agents who rely on only one source of advertising to market a home are limiting the exposure of their listings. A multi-faceted marketing campaign of both printed materials and Internet exposure will multiply your chance of being seen by buyers.
   
2. What is your commission fee and how much do you offer a cooperating agent? Make sure that no matter what commission fee you and your agent agree to that you know how much of that commission will be paid to the selling agent. While it's not supposed to, it could dramatically affect how your property is shown and how often it is shown.
   
3. Do you own a digital camera? Pictures, pictures, pictures... I have no idea why so many agents fail to include interior photos on their listings! It takes so little time to include such an important feature to the MLS. Agents often preview homes for the clients on the MLS to see if they will meet their clients needs and if there are no interior photos included in the listing, they are quite often excluded from the list of properties that an agent will decide to show their buyers.
   
4. Does your agent have a good website? Buyers can easily access more information about your house if you agent has a website that features their listings. As always, the more exposure your property has, the better your chances that an interested buyer will want to see it.
5. Will my listing include a virtual tour? A virtual tour is an excellent way for listing agents to show off the best features of their clients homes. It allows buyers to take a look around from the comfort of their own home. It's an especially helpful tool for buyers who are looking for a new home that are from out of state. It's the most convenient way for buyers to preview properties from a distance.
   

Not all agents are created equal, and not all agents provide the same level of service. Make sure the Plainfield or Naperville Realtor you chose to hire will deliver the highest quality of service and include all of the services and tools you need to have in today's real estate market.