4 Steps to Making the Best of Home Improvements

July 6th, 2016 by loydaparedes2

When deciding how to remodel your home or rental, it can be a fine line between remodeling too much or not enough. Here a few things to keep in mind:

 

1.  Look to see what your neighbors are doing
The best way to gauge what’s an appropriate improvement is to study your neighbor’s improvements. You can search for sold and rental listings online. Or swing by open houses.

2.  A rental will often need few improvements
The rental income should justify the improvements. Think about how many months or years it will take to recoup your investment. Many tenants look for a place that will be good for them for the next 1-2 years.

3.  An owner occupant will require more bells and whistles
A home which will be occupied by the home owner typically needs to fit their needs for 5-10 years, so their expectations will be higher.

4.  What is the purpose of the improvement?
Is the improvement an investment to increase rental income or resale value? Then be sure you are getting the best bang for your buck. Or are the improvements purely for your enjoyment?
Remember, when doing improvements, it’s important not to over-improve or under-improve the property, as either may result in wasted effort.

Questions or comments? Contact me on Facebook

9 Ways to Know How Much a House is Worth

June 29th, 2016 by loydaparedes2

“Why would the seller set such a high price!” the buyer asks.
“Why would the buyer offer so little!” the seller asks.

The Buyer thinks one thing and the Seller another. This is what happens when Buyers’ and Sellers’ emotions play a role in determining the sale price.

But banks don’t lend on emotions, they lend based on Fair Market Value.

To fully understand the Fair Market Value of a property, Buyer and the Seller should compare the sales of neighboring homes, focusing on the following:

 

1. Recent sales.

calendar
Homes that sold in the last 6 months better reflect current market values than homes that sold 2 years ago.

2. Nearby neighbors.
AvondaleMap

It’s true what they say about Location, Location, Location. Especially in Chicago, neighborhoods tend to be separated by major intersections. If you cross one, you may be in a completely different market.

3. Size.
01_4101WOakdale_Unit1_1_LivingRoom_LowRes  VS  02_2911NTroy_1stFl_1_LivingRoom_LowRes

Find properties similar in square footage, bedroom count, bathroom count. The difference between a 2 bed/1bath home and a 3 bed /2 bath home is tens of thousands of dollars.

4. Condition.
3131NNewland_print_5   VS  3425NRidgeway_print_5

Look for homes with similar finishes. Is it older? Needs to be gutted? Is it newly rehabbed? What quality is the rehab?

5. Land area.

10_3425NRidgeway_26_BackYard_LowRes

Look for similar lot sizes. A property on a double lot may worth a lot more, especially if it’s on a buildable lot.

6. Architectural style.

 01_2911NTroy_1stFl_57_FrontView_LowRes  VS   01_3131NNewland_57_FrontView_LowRes

Look for similar style and age of home. A 1950’s ranch is not necessarily comparable to a 1920’s bungalow.

7. Exterior.

 01_4966NMason_57_FrontView_LowRes   VS  03-05-2012 001

Look for similar construction. Brick does not equate to frame construction.

8. Amenities.
10_3025PearlSt_85_Patio_LowRes

Look for amenities such as facing a park, near transportation, has a backyard deck, has a garage, has a finished attic or basement – all may affect value positively.

9. Negative influences.
funny

Value can be negatively impacted by external influences such as being too close to a highway or train rail, being on a busy street, being at the back of the lot, being in a flood zone.

 

Your Realtor will help you understand how long homes stay on the market and how much they sell for, use this information to guide you to the Fair Market Value.

And this where the real value of your Realtor comes in – she will be analytical, dispassionate, and unemotional – the perfect Spock – at a time when it will be difficult for you to do so.

There’s no need to guess whether the price of a home is too high or too low. With careful analysis you’ll find the price that’s JUST RIGHT.

5 Easy Ways to Impress Buyers with Your Kitchen

June 18th, 2016 by loydaparedes2

These 5 quick kitchen upgrades will make your home more attractive to buyers AND you’ll get a big return on your investment.

Best of all, they’re so easy and quick, you can do them all in one weekend!

1. Install a high-quality laminate countertop


It’s about a fraction the price of granite, but still looks very nice.
You’ll spend about $10-12 per linear foot. If your counter top is 11 feet wide (like mine), you’ll pay around $110-130 dollars! What a bargain!

 

2. Replace the kitchen faucet
faucet
Spend a about $100-150 to get a modern faucet. It will instantly dress up the sink and countertop. If the sink is clean and functional, there’s no need to change it if you put a nice faucet in.

 

3. Change the hardware on the kitchen cabinets
before-and-after-hardware
Each drawer pull will cost about $3-5 each. To make thing easy on you, remove the old hardware and take it to the store. If you buy new hardware with the holes in the same places, you won’t have to bother with trying to drill new holes.

 

4. Install stainless steel appliances
ss appliances before and after
You don’t have to spend a fortune. If you buy them used, either from a store or from craigslist, expect to pay $300-500 for the stove, $500 for the refrigerator, and a microwave you can buy new for $250. If you buy the stove and fridge used, you’ll pay less than 50% their new retail price.

5. Clean, clean, clean!

elbow grease

The kitchen must be the cleanest it’s been since you’ve lived there.
Clean all the grout
Clean the appliances in and out
Most importantly, scrub the cabinet doors. Over time they have absorbed a lot of grease and dirt

 

The kitchen is the most important room in the sale of house. Make sure your kitchen shines. With a few simple and inexpensive upgrades, your kitchen will be ready to impress!

11 Risks in Buying an Auction Home

June 15th, 2016 by loydaparedes2

large_Auction-home-2

Auction homes can be a great bargain, but the purchase is trickier and riskier than a regular purchase.

Here are 11 things you need to know:

1. You can find them with a Realtor
Auction homes are listed in the MLS, so you don’t need to pay for a subscription to a special auction home list. All you need is a Realtor like me.

2. You’ll need to fix the house
The condition of the home might be very poor and need a lot of repair. Sometimes they are not habitable.

3. You won’t be able to see inside
If the house is occupied, in dangerous condition, or the auction house is not providing access, you might not be able to see the interior until after closing. You’ll only get to see the outside.

4. You’ll have to evict people living there
You might have to evict any occupants after closing.

5. The price is higher than advertised
The listed price is not the asking price, it is a starting bid.
In addition, action homes often have a “reserve” price, which is much higher than the starting bid. This is the lowest price that will be accepted. It is not advertised.

6. You’ll have to pay cash
Auction homes usually are sold for cash.
And if you are getting a mortgage, you usually can not write the offer contingent on getting the mortgage approved.

7. You can’t do a home inspection
Usually you won’t do a home inspection after your bid is accepted if you can not cancel a contract due to the inspection results.
It’s better to do a home inspection before writing an offer.

8. You’ll compete against experienced buyers
Many auction sales have multiple bids, mostly from experienced investors. A first time buyer will be at a disadvantage.

9. You have to pay to play
To submit an offer, you have to register for the auction.
Before submitting a bid, the auction house might require a hold on your debit or credit card. It can be as much as $2,500.

10. You can lose your deposit
If you win the bid, you must close, otherwise you might lose your deposit.

11. You’ll pay more than you think
Sometimes the auction house charges a “buyer’s premium,” which is typically 3-5% of the purchase price.

If you have any questions, message me or comment!

Loyda Paredes, ProCasa Realty

https://www.facebook.com/loydaparedesrealtor/

The Secret Behind Seller-Paid Closing Costs

June 11th, 2016 by loydaparedes2

When the seller pays the buyer’s closing costs, the BUYER is paying the BUYER’S closing costs.
Say what now?

Yes, the buyer is actually paying their own closing costs by wrapping them up into the purchase price and financing them.

For example:
A home is listed for $300,000. The seller wants to sell for $290,000.

The buyer offers the seller:

  • Sale Price $290,000
  • Minus closing costs $5,000
  • Net to Seller is $285,000

The seller counteroffers the buyer:

  • Sale Price $295,000
  • Minus closing costs $5,000
  • Net to Seller is $290,000

In effect:
1. The buyers add the closing costs to the price the seller wants
2. Closing costs are financed for the term of the mortgage.

Keep in mind:
1. If you have the cash available, paying your own closing costs saves you interest over 30 years.
2. If paying your closing costs will leave you cash poor, go ahead and add them in your offer
3. In Chicago, expect your closing costs to be about 3% of the sale price.

10 Steps to Selling Your Home Without an Agent

June 10th, 2016 by loydaparedes2

Can-you-really-sell-your-home-without-a-Realtor-

 

Selling a house without an agent is a challenge few people are prepared to undertake. It is possible, but you have to know what it takes.

Here are some of the things to think about when deciding whether to sell your home without an agent.

1. Do you know how to price your home correctly?
To determine the market value of your home, you can order an appraisal, have a broker give you their opinion of value, and study the market. Don’t rely on Zestimates, however.

2. Do you know how to get your home picture ready?
Pictures are one of the most important marketing tools. You need to make sure your home photographs well and have professional photography taken.

3. Do you know how to write copy?
You’ll need to know how to write a description which will appeal to buyers, both emotionally and intellectually.

4. Are you familiar with fair housing laws?
It’s critical to understand and comply with fair housing laws. Compliance covers everything from advertisements, showings, contract negotiations, and every other step of the transaction.

5. Can you be flexible for showings?
Being able to show a home on short notice is key to a successful sale. Buyers are not going to work around your schedule. You have to work around theirs.

6. Do you consider yourself a good negotiator?
Sometimes buyers like to buy directly from a seller because they think since you don’t have to pay a commission, that you will pass the savings off to them. Sometimes the buyer will want to negotiate closing cost credits or repairs.

7. Do you know what other contract terms are important to you?
For example, inspection, attorney’s approval, mortgage, and home sale contingencies are very common.

8. Do you know how to vet the buyers so you don’t waste contract time on unqualified buyers?
If the buyers have an FHA loan, you’ll need to be prepared for what that means for you.

9. Do you know how to draft a contract or have an attorney who can perform that service for you?
A contract is not just about price. There are many subtleties that need to be addressed.

10. And most importantly, can you be dispassionate?
When selling your own home, you’ll need to be emotionally detached to be able to make the best decisions. Sometimes this can be the hardest task of all.

Some people go it alone successfully. It is a monumental task and if you need advice, I’m here to help.

9 Reasons Chicago Landlords Hate Security Deposits

June 10th, 2016 by loydaparedes2

financial-penalties

 

Security deposits in the city of Chicago are subject to very stringent regulations that allow no room for error.
Landlord non-compliance carries heavy fines and are mandatory, meaning there is no leeway to avoid a fine even in extenuating circumstances.

Here are some facts about security deposits in Chicago:
1. Landlords prefer move-in fees
Security deposits laws are so exacting, many landlords and management companies are moving away from them in favor of a “move-in” fee.

2. Payments don’t have to be called “security deposit” in order to be considered as such
Security deposits can also be called pet deposits, last month’s rent, or pre-paid rent. They don’t have to be called security deposit for the same requirements to apply.

3. Prepaid rent can count as a security deposit
If money will be held for longer than 6 months or rent is prepaid more than 6 months in advance, it is subject to the security deposit laws.
If money is refundable, it may be subject to the same laws.

4. A receipt can’t just be any old receipt
When accepting a security deposit, landlords must immediately give the tenant a receipt with several pieces of information. The date received and amount of course, but also the name of the person receiving it, the name of the landlord, the address of the unit.

5. Security deposits must be escrowed
Deposits must be kept in a dedicated interest-bearing account (called an “escrow”) in an FDIC bank. The tenant must be notified in writing the name and location of said bank.

7. Interest must be paid on the security deposit
Interest must be paid on the security deposit to the tenant every annual anniversary of the lease.

8. What happens to deposit after moving out
Once the tenant moves out, the landlord may keep the part of the security deposit that covers damages and unpaid rent.
If a landlord keeps any part of the deposit, they must provide receipts to the tenant 30 days after they move out.
Deposits must be refunded to tenants 45 days after they move out.

9. Harsh penalties for the landlord
Failure by the landlord to comply can make them liable for 2 times the amount of the deposits plus tenant’s court costs and attorney’s fees.

For precisely these reasons, landlords are moving away from taking deposits.

Let me know if you have any questions!

5 Reasons You Should Never Sign A Contract

June 10th, 2016 by loydaparedes2

beforeyousign-900x600

I can’t tell you how many times I’ve heard
“I was told to ‘sign here’ but I didn’t read what I was signing.”

Not everyone takes the time to read contracts, whether it’s for the rental of a home, a loan application, or even a moving company contract.

I’ll admit to making this mistake once. I signed a contract for storage and in tiny print the contract said I would pay the facility for insurance unless I provided evidence of my own. It took me a while to realize I’d been overpaying!

Don’t sign a contract until you’ve read it because:

1. It may be very one-sided.
Sometimes contracts give all the rights to the party who wrote the contract. Once you’ve accepted a contract, you’ll be bound by those terms.

2. The small print may include additional fees.
You may be incurring financial responsibility you didn’t plan for. (see above what happened to me!)

3. If it’s not in writing, it doesn’t exist.
What you’ve been promised verbally might have to be in writing to be enforceable. Contracts often stipulate only written promises are valid.

4. You might incur penalties.
Contracts may have penalties for failure to fulfill your end of the bargain. Make sure you know what those penalties are.

5. You may be signing away your first born. (Haha! Just kidding!)

 

To avoid problems, do these five things:

1. Take the time to read what you’re signing even if others are impatient and urging you to “just sign.”

2. Ask questions if you don’t understand.

3. Hire an attorney to go over things with you.

4. Get everything in writing that you agree to.

5. Don’t really on verbal assurances.

It is in your own best interest to read and understand what you’re signing! Read everything carefully before signing!

4 Surprise Expenses When Buying a Home

June 10th, 2016 by loydaparedes2

Many buyers enter into a sales contract not knowing that there are upfront expenses before even getting to closing.
These expenses add up to hundreds of dollars.

When buying house, be aware of all costs you will incur even before the closing. Costs listed below are typical for the Chicago area.

1. Earnest Money Deposit
The first check you will write is for the earnest money deposit. This is not an expense, but rather part of your down payment. Be prepared to write a check for 1-3% of the contract price. This deposit is refundable under certain circumstance.

2. Home Inspection
The second check will be to the home inspector. For a condo, you can expect to pay no more than $300. For a single family home, add $100. For a 2 flat, add $200. This expense is non-refundable.

3. Appraisal Fee
The third one will be to your lender for the appraisal. Be prepared to pay $300-700, depending on the type of loan. This payment is non-refundable.

4. Hazard Insurance
The last expense before closing is the home insurance, also called hazard insurance. Depending on the size of the home, expect to pay $800-1500 for the first year. Condos might pay only $200-400 per year.
This expense is typically refundable at a prorated rate.

As you can see, you will incur expenses before even getting to the closing. Be sure to budget for them.

3 Reasons Why Dual Agency Is A Bad Idea for the Buyer

June 10th, 2016 by loydaparedes2

EthicsConflict

 

Dual agency is legal in Illinois as long as all parties are notified in writing.
In a dual agency the real estate agent represents the seller and buyer at the same time.

It often happens when a potential buyer directly contacts the seller’s agent (also called the listing agent), views the house, and writes an offer with the seller’s agent.

There are many pitfalls in this scenario. While I have done a handful of transactions this way, I avoid them, and have done them only at the request of the purchaser and seller.

1. You don’t know who represents you.
Agents who will be acting as dual agents are supposed to get authorization in writing from both parties before entering into the dual agency. If you don’t sign a dual agency agreement, don’t assume the agent represents you. They be representing only the other party.

2. Dual agency is a conflict of interest for the agent.
How can you adequately negotiate the highest price for the seller and the lowest price for buyer? It’s impossible. DualAgencyThat’s precisely why a dual agent can’t negotiate price or contract terms. They serve as an intermediary and not as a negotiator.

3. There is no financial benefit for the buyer.
If the seller pays a lower commission to the agent, the savings usually are not to be passed onto the buyer. Only the seller and agent benefit.

While most real estate agents are professional and will act in the best interest of their clients, it’s still in the buyer’s best interest to hire an agent to represent them exclusively.

Many buyers find their agents by contacting them directly about a property the agent has listed. Exercise caution if you decide to write an offer on the agent’s listing.

You won’t have to have the same concerns using that agent to purchase a different property.