real estate

Buyers are Getting Crazy!

In my career as a realtor I have seen a lot of things. Seen things in properties that I really shouldn't mention here or care to relive again for that matter. The one thing though that truly bothers me, is watching buyers get desperate and way overpay for a property just to get it. I get it. You lost out on multiple properties becuase of multiple offers but if you sit down and think about it. Is it really worth it to way over pay for something that you are just going to loose money on when you go to sell?

Craziest I've Seen

A few years ago I had an awesome couple for clients who were looking for a penthouse condo on Chicago's west side. We had been looking for a few weeks and finally found the one place they were looking for all along i.e. it had "character." We made an offer and of course so did another buyer. Both of us we asked to give out highest and best. We pulled out all of the strings and went $15K over list price (about as high as you could justify for this place). We were completely blown out of the water. The other buyer came in $25K over list price and waived their appraisal contingency. Meaning, fi the property did not appraise at the purchase price, the buyers would make up the difference out of pocket. Insane! In order to even break even when they go to sell the buyers would have to be in the home for at least 7-10 years JUST TO BREAK EVEN!

Second Craziest I've Seen

Just recently I had a wonderful couple make a fantastic offer on a home. We had lost out on a few places and had to walk away from three others because of inspection issues but this was the place. The location, size, everything was what they were looking for. We came in strong, $10K over list price. I had the buyer and even their eleven year old daughter write a personal letter to the sellers. It didn't matter. Another buyer came in with an escalation clause of $5K over the highest offer and destroyed us. It didn't matter if we went higher they were always going to be $5K higher than us. This is ridiculous in my opinion. They could have done a smaller escalation clause and still won't but they ended up overpaying for this place because they did this.

Moral of the story, it's easy to overpay when you are in a desperate situation. But its never a good idea. Make sure you pay what is the fair value or plan on being in the property for a very long time.

Welcome to Multiple Offer Season

In my last blog post I talked about the how the spring market has arrived and how it is typically the busiest selling season in Chicago, especially the last few years. The main thing that frustrates buyers during this time is al of the multiple offer situations they find themselves in. It seems that any property that is turn key (i.e. move in ready), has 10 offers on it and every seller is asking for everyone to submit their highest and  best offers. This is a time when a lot of buyers get very desperate and frustrated from missing out on a number of properties and make offers that are so crazy the seller has to accept theirs. Case in point, last year I had a client in a multiple offer situation. It was us vs one other party mano-a-mano, 1 on 1. We had amazing financing terms and cam in $15K over list price. We thought this was a slam dunk no brainer we would win but the other party blew us out of the water. They came in $25K over list price AND waived their appraisal contingency. Meaning, if the property did not appraise at the price they agreed to purchase it at, the buyers would make up the difference from purchase price and appraisal price out of pocket. This was absolutely ludicrous (no not the rapper)! What I came to find out is that, the buyers had lost out on a number of other properties and decided this time since they were frustrated they were going to make a crazy offer that would be sure to be accepted. Personally, I would advise heavily against a client of mine doing this. They would have to hold the property for a long time to ever get enough appreciation to make up the difference of what they over paid. But, desperate times call for desperate measures.

Im not writing this to scare you. I am writing this to prepare you. Make sure you speak to your agent if you run into situations like this. A veteran agent is going to have a bunch of strategies they can advise you on to help you win the property. Don't be cared of these situations as well. If you love the place still make an offer. You never know what the other offers are so it doesn't hurt to try. Just make sure you are coming in strong with your best foot forward!

Spring Market 2018

Well, I totally dropped the ball and haven't written in a while. A lot has happened since then. We are now fully into the spring market. What does that mean? Well as the weather has been warming up so has buyer's and seller's interest in getting into the market. This spring is going to be similar to previous ones with a lack of inventory and high demand. We are now in year 8 of a seller's market with no signs of this changing anytime soon. The one big difference we are seeing this year is that interest rates have finally started to tick up. This has been something talked about for a while but we did not see much of an increase until recently. Currently, rates are in the mid 4's. Which, historically is still very low but it is not what we have been accustom to seeing over the last few years. For buyers, this means that you may not be able to qualify for the price point you really want to be in. As prices have risen and now rates, buyers are being priced out of areas and types of properties they want. Meaning the cost of buying is becoming more expensive. Now that being said Chicago is still a market where it is cheaper to buy than to rent so don't think you have missed the opportunity on buying. It is still very much an appreciating market and we have not hit our top yet.

The best advice I can give to anyone considering buying soon is to speak to a lender right away and get a feel for what your current financing situation is. At the very least you can know where you stand and if you have to rent for another year then you rent. But with lenders coming out with more and more programs, getting a loan has become easier. You might be surprised that you can in fact purchase now and may be able to get in before rates and prices climb higher. If you really need more incentive, its free to have a lender to offer you a pre-approval and we ALL love free stuff!

Buying New Construction is NOT a Typical Purchase

OK, besides the obvious that new construction is buying something new as opposed to buying something used like in a traditional sale, there are many other things to keep in mind when buying a new construction property.

Delivery Date

When you are looking at information sheets you will see the "estimated" delivery date that the builder expects the property to be ready. I always suggest to my buyers to tack on at least another month from this date. There are a lot of things that can go wrong that can push the delivery date back. If the weather doesn't cooperate, permits take longer than expected to get, city inspections are delayed, or even the work is not keeping up with their proposed timeline. Regardless, don't expect to close on the date mentioned and plan accordingly.


Unlike in a traditional sale, there is typically no negotiating on the price. What you see listed is what you pay. Developers LOVE to keep their prices high. They look better when they do. BUT, you can negotiation other items. For one, you can ask for closing cost credit to help pay for your closing costs. Ask to add items or upgrade things like the appliances. You are usually given a budget from the developer to work within but they may be willing to budge a bit on this if you pay their price.

Customize to Your Liking

The cool thing about new construction is that you are allowed to customize the property to your liking. Developers will budget for everything. For example, appliances, lighting, and kitchen cabinets. You usually will be given options within these budgets to pick out colors, designs, materials to name a few. You can choose to stay in the budget or if you want to upgrade you may have to pay for the difference in the upgrades vs what they budget for. Regardless, you are able to make the home your own and have someone else build it for you. Not the same as with buying a used property where someone else's finishes are there you may have to live with.


With new construction, you are going to want to do a few inspections. One of which is likely just you coming back to the property at certain progress points to make sure the work being done is what you agreed to with the developer. If you see anything off, make sure you mention it to the developer so items can be corrected easily before the work gets too far along. Also, when the property is pretty much done you are going to have a real home inspection with a professional home inspector. This person is going to pick out every defect and thing wrong with the property. The other cool thing is that a developer needs to deliver you a perfect product so anything that the inspector finds wrong needs to be fixed by the developer. This includes paint scuffs, floor scratches and minor items that are not typically negotiable with a traditional sale. 

Finally, make sure you hire a real estate attorney who understands new construction and has represented many buyers in this regard. Developer contracts are written heavily in favor of the developer and you want a good real estate attorney to know how to read these contract and make the necessary changes to properly protect you!

The 2018 Chicago Housing Market Overview

Hard to believe the holidays have passed us by and we are already a few weeks into 2018. But such is life. It doesn't stop for anyone. That being said, I expect 2018 to be a different market than the previous year. 

The last couple of years Chicago experienced an unseasonably warm winter. This really threw our market off in terms of timing. Chicago typically has 2 busy selling seasons, spring and fall with things slowing down during the winter months. Due to the warm temperatures, our market was still relatively busy during the winter months with a huge push in spring then a level off for the rest of the year. This year with a normal winter, I expect Chicago to see the normal two busy selling seasons of spring and fall with the summer months being busy as well.


Inventory has been a hot topic for a number of years. Or basically a lack of inventory. This year I expect to see more properties available to buyers and a more leveling off of buyers to sellers. I expect the buyers to gain a little more power this year but it to still be a seller's market.


This year I expect prices to level off a bit but to continue to rise. I expect to see a 3-5% increase in price year over year. The last few years we have seen a huge jump in prices due to a lack of inventory. With inventory leveling out this year, the rising prices should slow down a bit.

Rental Prices

Rental prices have been skyrocketing over the last few years. But, developers have been throwing up rental buildings like its going out of style. There has been a huge flood of units onto the market over the last few years and will continue to do more of the same this year with more buildings being built. I expect rental prices to level off if not decrease a bit.

New Construction

The last few years Chicago has witnessed a boom in new construction all over the city. This year will be no different. Projects are being proposed every day and permits are being requested almost hourly. Unfortunately, these new projects are mostly rental unit and commercial buildings. Any new condo developments are high end luxury except on the west side of the city where developers are willing to build on a smaller scale to appeal to the mid-price points. I expect to see many more cranes rising this year around the city.



One thing I realize as I get older is life goes by really fast! It's hard to think that it's almost 2018 already. Feels like just yesterday I was thinking about my goals for 2017. Like Ferris Bueller said, "Life moves pretty fast. If you don't stop and look around once in a while, you could miss it." My next blog post will be in the new year so I wanted to take this time to thank everyone who trusted me to help them out this year, the agents who have come join my company, everyone who has supported me this year, and my family/friends. From the bottom of my heart THANK YOU!

2017 was a crazy year. With my partner, we opened up our own brokerage, it was the first year in a long time I had no support of a group behind me, and I found out my wife is pregnant WITH TWINS! 2018 is looking to be an even crazier year and I can't wait to see what it has in store for me. One thing is for sure, life doesn't slow down for anyone. We need to make the most of the time we have on this planet. We only get one life so please do not waste it. Make sure you take the time to reflect back on 2017 and prepare for 2018. This is a great time to set up your goals for the coming year and get mentally prepared for it.

I wish you all a happy new year! Have fun and be safe! I'll see you in 2018!

Merry Christmas!

Its hard to believe its already Christmas! It really feels like it was just Thanksgiving yesterday. The end of the year is winding down. The housing market typically slows down over the next few weeks as people focus on family and buying gifts for each other. If you are still in the market to buy, do not stop your search. Most people will put things on hold right now but there will still be properties listed over the holidays. This could be a great time to find a property without a lot of competition and to get it at a discount from a seller looking to sell fast.

That being said, make sure you taking some time to relax and enjoy the time with family and friends. Our lives are busy. We do not get a lot of time off so taking advantage of the slow down during the holidays is a great way to recharge the batteries and get ready for 2018. Life doesn't stop. 2018 will be here before you know it and things will start all over again for the new year. If you think about it, from new years until Easter is the longest we go without a holiday break! Four months before we get together with family again is a long time. 

I hope everyone has a wonderful holiday season! Enjoy the time off. Relax. Drink. Be Merry. Spend time with family and friends. Do something holiday related. Watch some holiday movies (there's plenty, especially if you are into the Hallmark channel). But overall, just take it all in. The holidays come only once a year so don't let them slip by.

Merry Christmas!


What's Special About a Special Assessment?

If you are considering buying a condo unit one thing you will hear often is "assessments." An assessment is what you will pay monthly to the Home Owners Association. This fee is there to help pay the building's bills along with paying for any work that needs to be done on the building. Unfortuantely, sometimes the amount of work that needs to be done is far greater than the amount the building has saved up. This is where a "special assessment" comes in.

A building that is well run will be putting a portion of every units monthly assessment into something called a reserve account. This account is there in order to pay for work that needs to be done or for emergencies. Good buildings will be putting 10% of every units assessment into this account. The idea is not to have to touch this account unless it's absolutely necessary. But sometimes major projects need to happen and the amount in this account is not enough to cover it. In this case, the building will vote on levying a special assessment in order to pay for the work. 

A special assessment can vary from millions of dollars in very large buildings to even a few hundred dollars in smaller buildings. After the total amount is agreed too. It is then split up among the units based on the ownership percentage each unit has. There are typically two ways to pay for a special 1: out of pocket upfront or 2: increasing your current assessment amount by a certain amount to pay of the special over time. 

Finding out if there are upcoming specials in a building or if there are current ones is part of the buying process. You will find this info out within the first few weeks of getting an offer accepted. If you find out there are specials you can back out during this time. But its possible there might not be a special for a number of years down the road. Sice no one can predict the future it is possible you will have to deal with one at some point during your ownership there. The best advice is to make sure you are buying into a building that plans for all necessary work and is putting plenty of money into the reserve account for future work. Make sure to ask your agent about any specials in the building you are interested in. They should be able to find this info out before you ever make an offer.

What's The Price Per Square Foot?

I touched on price per square foot in earlier blog posts. Just as a reminder, WE DO NOT CARE ABOUT PRICE PER SQUARE FOOT IN CHICAGO! I can not tell you how many times I have had this conversation with people. Look, I get it, we are in an over-informed environment. We have so much information in our pockets I understand how it can all become overwhelming and confusing. Let me take the confusion out of it. Chicago is the ONLY major housing market in the whole world that does not base its prices on price per square foot.

If you have watched enough Bravo Million Dollar Listing shows you have heard price per square foot used quite often. In cities like New York and Los Angeles price per square foot is used to determine to price and used in comparing comparable properties. The difference with Chicago is that there are 77 different neighborhood. Read that again..77!!! It impossible to do price per square foot for each of these. Not to mention, people tend to measure square footage differently as well. Some people include balconies (which you are not supposed to), some include an area that if 50% or more below ground (again not supposed to), and some people just guestimate the heck out of the space. This is why it is common to see a "0" on the area on the MLS where it says "square foot." 

How do we price properties then?

We base our price just on what similar properties sell for and not the price per square foot they sold at.

When is price per squre foot used?

The few times we do use price per square foot is in new construction and in high-end luxury buildings like the Ritz-Carlton, Waldorf Astoria, or the Aqua tower. 

Otherwise, dont worry about the price per square foot. It'll save you the headaches of trying to do the calculations anyways.

Yes, You Need a Home Inspection!

I often asked if I recommend getting a home inspection. Do you get your car looked at when the check engine light comes on? YES, YOU SHOULD GET A PROPERTY INSPECTION. I really cannot stress this enough. Pay the money, its worth every penny! When you are viewing properties you are not going to be looking at the electrical panel, testing the water heater, or looking for leaks You are going to be seeing if your furniture fits, if the layout works, and if it gets enough natural light.

A professional home inspector is vital to the transaction. These people are the ones who can help save you thousands of dollars or better yet, prevent you from buying a money pit. A professional inspector is going to be looking at and for everything in the property. Electrical, plumbing, appliances, along with roofs and foundations if its a single family home. Their job is to mark down every single red flag they find and provide all of this in a report for you to review. Now don't freak out if the report comes back with a lot in it. They will be marking down every ding and scratch they find. So, a lot of the report may be cosmetic or very minor things that comes with buying something used. This is normal! What you will want to focus on are the big items. The ones that can be very expensive to fix or can cause harm. For example, the electrical box is wired wrong and is a safety/fire hazard or the stove doesn't work. 

Once you review the report you and your agent will talk over any issues that concern you. KEEP IN MIND, YOU CAN ONLY NEGOTIATE ON MATERIAL DEFECTS AND SAFETY HAZARDS. Read that last sentence like a hundred times and remember it. Unless you are buying new construction you can not negotiate on cosmetic issues like scratches on the floor or paint issues. This comes with the territory of buying something used. You're agent will advise you on what is the best way to negotiate these major items with the sellers.

NOTE: If new construction you will ask the developer to fix everything on the report. Since its new it needs to be perfect!

Make sure you are hiring a great inspector with a great reputation. Ask your agent for recommendations and do your own research. There are inspectors out there whose business model is to try and kill your deal so they can get a second inspection out of you in the next place you get an offer accepted on.

I Want to Give Thanks!

One of the reasons I love the holidays is that it makes people remember that even though we are all busy we still need to take a few minutes to give thanks for all that we have. So that is what I wanted to do in my blog this week. In the last 10 years, I have met some amazing people in a career and industry that I love and am so passionate about. This is something I do not take for granted.

So first, I want to thank all of my clients that have allowed me into their lives and trusted me to help them with the biggest financial decision of their lives. I understand how difficult a decision this can be and not having the right person there to help could end up in disaster. I have met and helped some amazing people over the years. Some that I am still close with and that means everything to me. When a client uses me again or refers me to someone they know, it shows that I had their best interests in mind and they trust me. There are few feelings in this world better than that!

Secondly, I want to thank the people who have supported me in my career. Mainly my family and friends. When I first started it was tough sledding. I was not earning much of an income but those around me saw the desire I had and encouraged me to follow what I believed in. 10 years later those same people are still encouraging me every day of my life!

Lastly, I want to thank my industry peers. I have had the pleasure of friending some of the best people in the world who not only supported me but also encouraged me to go after my goals. It would be easy for them to look at me as a competitor but to be looked at as a friend is amazing!

I want to leave you with this, be thankful for everything in your life. Stop and think about all you have. The people in our lives are who make us who we are. Thank them and make sure you let them know how they have helped make you what you are!  

Don't Believe Every Zestimate You Read!

We live in an amazing time right now. A time where we have access to unlimited amounts of information that fits in the pockets of our pants. Did you know there is more technology in our smart phones that in the spaceship Neil Armstrong stepped out of on to the moon! It's crazy! But all of the information could also work against you. What is real and what is fake? Fake news is all around us and in real estate, it is no different. Many of the sites consumers access are filled with data that is sadly, mostly inaccurate. 

One of the biggest sites, if not the biggest is Zillow. Zillow is full of lots of great information. Great details on the property, things to do in the area around the building, and of course the listing photos. The one thing it really can't do, is give you an accurate price of that property. Zillow's pricing estimate or ZESTIMATE is not a true representation of the market value of that property. A Zestimate is just an estimate based on an algorithm that takes into account, beds/baths, size, and location. A Zestimate does not look into the condition of the property, the floor level it's on if it's in a large condo building, the view, which way the unit faces, and if has parking or a balcony.  The ONLY way to get the true market value of a unit is for a real estate agent to pull the comparables or "comps" for that property. A Zestimate is OK to start with when looking at pricing but when it comes to making an offer, make sure your does a market analysis for you. Let the professional show you the value based on all of the factors I mentioned above.

Also, a quick note on the tax assessors assessment of value. I've had clients bring up this value as well when it comes to the market value of a property. The tax assessor uses a similar algorithm as Zillow. It is just an estimate and not the true value. Think about it; there are millions of properties in Chicago, do you really think the city sends people out to assess each one? We don't have the money for that no matter how may parking tckets I have gotten this year!

If you want to see an example of a market analysis please look at Chapter 11 of the CHapter Resources tab of my site. I have a sample one you can download there. 

Best Time to Buy Real Estate?

I am often asked, "when is the best time to buy?" In Chicago, this is a relatively easy answer, WINTER! Yes, you read that right. It is best to buy when its freezing cold, 3 feet of snow on the ground, with skin piercing winds. OK, a little extreme in that last sentence, especially as mild as our winters have been in the last few years. But let's think of our winter season as a typical one where it is cold and not one where were wearing shorts to Christmas dinners.

During the winter time, a few things happen. 1) The amount of buyers in the market goes way down and 2) seller's that are just "testing the market" go away leaving only real sellers in the market. The two biggest selling and buying season in Chicago are spring and fall. This is when the most buyers are out there and when most sellers will list their properties. Once the holiday months come around, many of these people put things on hold until spring. It's not a lot of fun to look at properties or deal with showings during the holidays. But that is when the best opportunity for deals exist.

When the holidays come around, seller's that tried testing the market will pull their properties off and wait until spring before relisting. This leaves any properties on the market as people who really need to sell. These sellers know its annoying to have to leave for showings in cold weather and are only doing so because they truly need to unload their place. Plus many need to sell before the end of the year for tax reasons. For these reasons many more sellers are willing to negotiate off their price and are willing to take less just to get the property sold. 

On top of this, the buyer pool goes way down so your competition for these properties is not as tough as it is in spring and fall. People buying usually do so during the warmer months because that is when things like leases are ending, its more fun to look during the warmer months, and there is typically more available to look at.

So keep in mind, if you really want a "deal" like everyone says they do, look during the holidays and winter time. Don't wait until the weather warms up or you will likely be paying more than you want to.

Buying a Condo Can Be Scaaaarrryyyy? Buyer Beware!

Ok, its Halloween so a little extreme on the title but if you are considering buying a condo there are some things you are going to want to be aware of. The main thing is, you want to make sure you are buying into a financially solid and well-run building. Now, this might sound like a no-brainer but its important enough to keep repeating. Buying into a good building will make sure your investment will be an appreciating asset and not a depreciating one. No one likes to lose money right?!

So what do I mean by a "good building?" Well, there are a few things that you will want to make sure you find out about ideally before you make an offer:

  1. What are the current reserves of the building?
  2. What is the ratio of owners to renters in the building (or ownership percentage)?
  3. Are there any special assessments currently or planned?
  4. Are there any lawsuits or litigation currently in the building?

These four questions are ones you or ideally your agent should be asking. A good agent will try to get this info before looking at the property but sometimes it won't be available. In these instances, they can typically find it out later before making an offer. Below is a break down of each to help you better understand them.

Reserves: This is the amount of money the building has in an account for a rainy day. This is the money that can be used to fix or address any issues with the building.

Ownership Percentage: It is very important that a building has 50% owners but ideally more. This is because lenders want to see 50% or more to lend int he building. If there are too many renters and people cannot get a loan, the value of the building goes down as only cash buyers can purchase there and cash usually gets a discount. Plus owners take better care of the building than renters do. 

Special Assessments: This is what a building will call for IF there is not enough money in the reserves account to cover whatever is needed to be done. The building's association will agree to have everyone help pay for the project out of pocket. This could cost you thousands of dollars. Plus lenders won't lend in a building with a special assessment so it can hurt your value as well.

Lawsuits/Litigation: These can also hurt your value. If someone is suing the association or if the association is suing someone like for example a developer, lending becomes difficult in the building and again, the values will go down as cash-only buyers will be able to buy in. 

If it is a small building and self-managed sometimes its hard to find this info out before placing an offer. Don't worry though. During the attorney review period, your attorney will be requesting this information from the association for you to review. IF for some reason you still can't get the info your lender will also be requesting it. So don't worry there are plenty of layers of protection in place to make sure you are making a smart decision.

Don't Loose Focus!

I get it, house hunting can be a lot of fun. It's what we see on TV every day from shows like House Hunters and Million Dollar Listing. But reality is nothing like those shows. House hunting is not as glamorous as it seems. Honestly, the process can be frustrating as all hell! Especially in a hot market where properties sell faster than they come on the market. This is why I tell my buyers to get focused!


What do I mean? Look everyone likes to look at real estate. It really is cool to check out different types of properties, neighborhoods, and styles. But realistically, doing all of that is not going to help you find the property you ultimately want to buy. For example, if you have a budget of $250,000 do you think it makes any sense to look at properties that are listed at $500,000? NO! Don't even go to the open houses. People, STAY WITHIN YOUR BUDGET!!! I can not stress this enough. Once you speak to your lender and find out what you can afford and stay in that range. The more you wander outside of your range the more unrealistic your range becomes.  Think about it. If you look at a brand new property way out of your price range, do you really think anything you see after that is going to compare? Heck no! Stay within your budget at all times and this means open houses as well.

Also, don't get caught up on finishes or upgrades properties have. Your focus should only be on the layout, natural light, building, and location. The finishes you can always change. You can upgrade a kitchen or bathroom and refinish or replace flooring but you can not change the layout natural light or location of that property. You can not take that unit and put it on the other side of the building away from the brick wall it looks at. So when you walk into a property make sure to focus on if the space works for you.

Remain focused from day one and you will find what you are looking for a lot faster and be a lot happier!

Build Your Team or Pay!

When you are buying a home there are a lot of "moving" parts and people involved. Yes, that was a pun. But seriously, not only do you need to make sure you hire the right agent to represent you but you also will need an attorney, lender, and home inspector.

Most people who buy in Chicago do not realize that Illinois is what is called an "attorney state." This means that we use real estate attorneys to handle all of the paperwork once an offer is accepted. This is different in most states where the real estate agent handles all of these items. I can not stress this enough, make sure the attorney you hire is a REAL ESTATE ATTORNEY. Yes, there is a huge difference between some who does real estate full time and someone who only has real estate as part of their practice. A real estate attorney will know what to look for in all of the paperwork and will protect you better than a general attorney. Attorneys are typically paid at the closing, a one time fee, around $500-$600. Note: they are not paid hourly like a typical attorney.

Lenders are the money people. These are the people who are going to know your deepest darkest money secrets. Well, not really but you get the idea. They are going to know your personal financial situation, so make sure you are working with someone who you are comfortable with. These people need to know how to do loans in Chicago as well. Especially if you are buying a condo. Most lenders can do a single family home, but condos in Chicago are a lot different. Anyone who does not work in Chicago a lot is going to drop the ball which could cost you time and money. Mainly if they can not get the loan approved.

Lastly, your home inspector. These people are worth their weight in gold. ALWAYS HAVE A PROPERTY INSPECTED. You don't have to have an inspection but that's like going into battle without a weapon. You never know what can be wrong with a property and an agent is not going there to look for these issues. Hire a good property inspector to inspect the property. A good inspector will be able to point out any issues that can cost you money either right away or in the future. Inspections only cost a few hundred dollars but they can save you thousands!!!

Putting together a good team can be the difference between buying a solid property that will appreciate and one that will be a money pit. Your agent should be able to recommend good people for you. But if not I highly recommend doing your research online. Of course, you can always as me a well.


Why Are There No New High Rise Condos?

If you have been driving around Chicago in the last few years you will have seen a lot of cranes int he air. In fact, right now there are currently 50+ cranes reshaping the Chicago skyline and landscape. With all of these cranes you would expect there to be a lot of condos coming to the market soon. Well no. Most of the cranes you see right now are either helping to raise rental buildings or office buildings. The few condo buildings you do see will need very large pocketbooks. Any new condo building going up will have units priced around a million or more. 

Why is this?

The main reason you do not see high rise condo buildings going up is the cost of building them far exceeds the profit margin for the developers. Developers are in the business to do one thing, make money. Becuase materials and labor costs have risen so much in the previous years it is affecting builders bottom line when it comes to developing lower priced high rise condos. This is why you see the big price tags. If a developer is going to put up a condo building it is going to be a luxury one right now. 

How does this affect the market?

In a healthy market supply and demand equal each other. Right now, demand is far greater than supply. Typically this void is filled by new construction. Since that is not possible currently in the mid price point the market continues to be a seller's one. The hope is one day some of these rental buildings will become condo buildings creating more units to hit the market and balance things out. unfortunately, that is far from happening. So in the meantime enjoy the gorgeous new buildings and hope that you know someone buying in them.

What Area is For You?

If you read my previous blog post, you would have found out that there are 77 neighborhoods in Chicago. 77 fricken neighborhoods! Yes, this is a very large city overall. If you look at a map you can see just how big Chicago really is. But not every area is created equal. Not every area offers the same types of properties, nightlife, and neighborhood feel. So where should a person start narrowing down where to live?

There are a few questions I will ask buyers when I meet with them:

  1. Do you need to be close to public transportation or the highway?
  2. What type of property do you want to live in?
  3. What type of neighborhood do you prefer?
  4. Do you need parking or outdoor space?
  5. What is your price point?

Once I have this conversation, then I can get a better feel for what people are looking for. For example, if someone needs to be close to the expressway then they are going to be looking on the west side of the city. If they need public transportation then areas Like Lake View, Lincoln Park, and River North might be best. If they want a single family home and do not have a million plus budget then they will need to look on the west side and northwest sides of the city, west of I-90/94.

Many buyers I meet with have really no idea of where they want to live. It is totally OK if this is you. What I suggest doing is have some fun and go explore different areas. Go grab a drink and dinner, or get lunch. Walk around the areas at different times of the day. Go for a drive around in the areas and stop in at open houses to get a feel for the type of properties are available there. This should be your research time and trust me, the more research you do up front the more likely it will be that you will find the place you are looking for. If you are looking at many different types of areas and properties it will be impossible to make a decision. This will cause you to miss out on properties you really want. 

So my advice, do your research up front. Speak to your agent about different areas you are considering. Your agent should be able to help narrow them down for you. Then once you know where to focus start your property search for real and start seeing the properties you are most interested in. If you do this, you will be able to move fast on the one you feel is right for you and won't miss out on your dream home!

Chicago is Not Like Any Other Market

If you read the title of the blog it can easily look like I'm about to start bragging about my hometown city. While I do love this place and think it's amazing, that is not what I want to talk about. 

Let's start with Bravo. Yes, the TV station. Have you ever watched any of the Million Dollar Listing shows that run all year long? My guess is you at least have seen a few. For the record, I love them, I think they're entertaining as hell! At some point during the show, the agents will be negotiating with either another agent or a seller about the price of the property. As funny as it is to hear them go back and forth, there is one thing that is constantly talked about: COMPS. A "COMP" is just another word for a comparable property. Meaning that they are comparing the house they are representing to another one to determine price. While arguing you will hear them say something like "the house down the street sold for $1,000 a square foot." Then you will see them calculate the price in their head based on the size of the property. This is where Chicago is unique.


This is something that not a lot of people know about here. Chicago instead bases their price off what other similar properties are selling for, not the price per square foot of them. Please keep this in your mind as it is very important. Chicago has 77 different neighborhoods and it would be impossible to do price per square foot for each. Not to mention many neighborhoods have neighborhoods within that neighborhood i.e. Wrigleyville is really a smaller neighborhood within the larger Lake View neighborhood. 

I really want you to understand this. It is important when you are considering what offer prices to put in on properties. Your agent should run what is called a Comparative Market Analysis or CMA on any property you are interested in making an offer on. This CMA will compare the subject property to similar ones in the area. The CMA should give you a range of the value of the property. 

So when you are "running numbers" and creating your excel spreadsheet analysis please do not look a the square footage in terms of pricing. Yes, its good to know the size but that is only one factor that goes into figuring out a price. Also, as you will see by the example on 

NOTE: The only time we do calculate price per square foot in Chicago is in new construction and luxury high-rises like The Waldorf Astoria. 

Why is a Pre-Approval so Important?

I get asked the question a lot "I'm thinking about buying, where do I start?" I'm always excited when people ask me this instead of something they heard off a Bravo show like "What is the price per square foot on this 900 square foot condo?". Asking an agent where you should start is important. If that agent tells you anything besides "you need to speak to a lender," find yourself a new agent. The pre-approval is the most important part of the buying process! Read that last line a few times and get it ingrained in your head. IT NEEDS TO BE DONE FIRST!!!

Why is a pre-approval so important? Well, you cant build a house without building a foundation first right? Well, you can't make an offer on a property without a pre-approval (unless you are paying cash, which is a whole other story). 

Getting a pre-approval is not a difficult process. But I highly suggest asking your agent for a recommendation and speaking to a few lenders. Don't get trapped by the promotions of getting approved quickly you hear on TV or the radio, they are not the same as speaking with a true lender. As with agents, not all lenders are created equal. But it is important to work with a lender who knows what they are doing and has done loans in Chicago. Chicago is a unique market and not all lenders can get loans approved here. Trust me I've seen it a million times where a buyer goes with some big bank who promises them the world, then completely under delivers. Smaller local banks are usually your best option since they are focused on the Chicago market and know what it takes to lend on the different types of properties here. I also mentioned earlier about speaking to multiple lenders. I always suggest speaking to at least 3 lenders and having them compete for your business. Lenders know you are speaking to other lenders and they need to work to earn your business. When you are speaking to them do not just get hung up on the interest rates. Also, discuss what fees the lender has and if there are any lender credits they offer. Make sure to work to get the best deal you can get and be comfortable with the lender you choose. Most important, these people are going to know your financial situation so you have to trust them. 

Finally, you should never look at a property seriously without a pre-approval. Imagine if you found the home of your dreams and you want to make an offer but have to wait a day or so to get a pre-approval and in that time it gets sold. You would be devastated. So make sure you get this done first so you are ready to act quickly and pull the trigger on any home you want to buy!