Short Sale Case Study – A Family Kicks Starts Finances

Name – Edward and Anna from Elgin, IL
Occupation – Manager and teacher
Income – $75,000 combined
Total Debt Load – $125K mortgage 1 + $20K HELOC = $145K

Do you qualify for a short sale?  Find out here:
Qualifications for a short sale

Reason for Selling:
After being downsized at his company, Edward found himself unexpectedly unemployed. As the  family’s main breadwinner, the family counted on his paycheck for stability. He was able to find a new job quickly, but he was disappointed in the large pay cut. With the reduced income and bills piling up, the family quickly drained their emergency fund. Although Edward was trying to find a better paying position, it was going to take longer than they expected.  Edward and Anna realized the mortgage was now out of their comfort range to afford.

First, they talked with their lender and were able to get a temporary reprieve on their payments with a loan modification.  However, the loan modification ran out after 6 months’ time and the regular mortgage payment was reinstated.  Edward had not found better employment and they were no closer to affording their mortgage.  Edward and Anna decided to look into a short sale and remove their mortgage burden.

Next steps: a pre-screening and a market analysis
Talking with them at their kitchen table on a quiet Tuesday night, we knew right away we could assist them.  When Edward and Anna contacted our team, we knew they had exhausted all efforts to save their home.  They had just hit a rough spot along the road of life, as so often happens.  First, we looked over their mortgages and expenses.  Then we looked at current market values for homes in the area.

A comparative market analysis for the home indicated a market value of $120K, which was less than what was owed. This property was underwater, meaning they owed more than what it was worth.  The home was in fair condition and would be sold as-is.  Edward and Anna were relieved to find out that they did not need to make any repairs or fixes on their home before the short sale. They paid no money out of pocket for the short sale. Our team listed the home at $119,900.  A buyer made an offer of $110K, which the bank countered to $115K.  The buyer agreed and the short sale was processed.

Results:
Under the short sale process, the lender also took care of the attorney fees, closing costs, title fees, and agent commissions.  Using a program called Home Affordable Foreclosure Alternatives, or HAFA program, Edward and Anna could receive a closing cost credit of $10,000 because they were owner occupants with a clear hardship – loss of income. They also realized a short sale would impact their credit score for a much briefer time period than a foreclosure.  The family decided it was the best strategy for them and completed the short sale.

Now:
After short selling their home, Edward and Anna made a difficult decision to move in temporarily with family locally in Elgin, IL, until they could sort out their next steps.  Edward continued to look for work.  Their patience and persistence paid off.  Five months after the short sale was completed, Edward found a better paying position with a new company in the area.  They  are saving up their money, rebuilding their emergency fund, and plan on buying another home soon.

 

Did you know?  
In addition to short sales, Fox Valley Short Sales offers full broker service for regular and distressed listings, for all buyers and home sellers, rentals, as well as investors in residential properties across the northern Illinois and Chicago region. All team members are trained to coordinate short sales effectively and retain the full skills and expertise of fully licensed Realtors®, including access to the resources of the local Illinois MLS database.

For more information and details on short sales and more, please contact Jennifer Kinzle, 630-854-4360. Email me direct  jkinzle73@gmail.com to get on track for 2016.

Contact me:

Direct/Text:  (630) 854-4360
Facebook: Fox Valley Homes – Jennifer Kinzle, Broker
Fox Valley Investors Group: Fox Valley Investor Group – on Facebook
Email: jkinzle73@gmail.com
Twitter: @jkinzle
Website:  www.FoxValleyShortSales.com
Instagram: @jkinzle
MeetUp: Fox Valley Investors MeetUp Group

 

Charles Rutenberg Realty of Illinois
1733 Park St, #150
Naperville, IL 60563
LIC 481.010.165

Homeowners vs. Investors

 

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“I’ve never bought a home.  Should I look at my first home as an investment?”

This question came up recently at my Fox Valley Investors Group MeetUp.  (details: Fox Valley Investors  ) .  Our group is open to everyone and we get folks of all experience levels, backgrounds and ages when we do our on-site property evaluations.  It was great how this person took the first step into a broader world of real estate by coming out to the property evaluation, and didn’t have any expectations about investing in property.

I took the liberty of explaining how a personal home is not the same as an investment property. Everyone needs a roof over their head,  but a property investor has a few extra.  The difference between investing and home ownership is huge.  Here’s my take:

99 problems plus your own home
A homeowner has one roof, one furnace, one set of pipes and one water heater to worry about.  An investor typically has their own home plus several others on their worry list.  Investors inherit new problems from other locations such as running background checks, deciding on lease terms, fixing broken furnaces in winter,  leaky roofs, calls in the middle of the night on plumbing and weekends, too.  Working a regular 40 hour/week job?  Consider how you’ll handle those extra fixes and issues on your nights and weekends year round.

“But I love this house!” said no investor ever.
Investors don’t love their investments, they love with the profits and checks that come along with a successful business.  Falling in love with a house is not good for business and can undermine a sound business plan. However, falling in love with a house and envisioning cozy family holidays, Super Bowl parties with friends, a big garden, relaxing nights or a remodeled kitchen,  are the exact right reasons to make a purchase to enjoy for years to come.

X marks the spot
Homeowners live in their homes to enjoy them, to maintain them, and to do with as they please.   They might want a home close to work, by a nature preserve, something without stairs, or with a huge back yard.  Their personal preferences trump the investor card every time.  That’s important because building your life in a new home can be a great perk of home ownership. Often people move to a single family home after years of renting and paying a landlord.  The freedom to own your walls, ceiling, garage and basement without needing to share it can be alluring.  I’ve had new homeowners so excited to have a laundry room that they install the washer and dryer before unpacking a single box on Day One!  And if you’re ready to paint the walls in Fired Up Orange, now you can go for it!

Make it personal
Knowing the difference between a detached, professional business approach to buying an investment and falling in love with a white picket fence is important to understanding your first home purchase.

So go and search out those dream homes on the internet.  It’s an adventure to boldly walk through a front door of a house for sale to see if it is right for you!  Will it be as great in person as it looked online?  Maybe.  But one thing is for certain: your first home will be a great “investment”.  Absolutely, yes!  As long as you’re loving the roof over your head and the lifestyle it offers, you’ll be ahead every time you pay the mortgage.

So, what’s your motivation for buying a home?  Interested in investing in properties?  Have you tried a house hack like buying a fixer upper to live in as you fix it?  Find out if a house hack is right for you!  Attend our next meet up and learn from the local property pro’s.  Join us here:  Fox Valley Investors

Free Property Report
Property markets change every 90 days!  But folks sell homes all year long.  Take the first step and get a free market report by going here:
Free Property Report

 
Questions?  Contact me:
Jennifer Kinzle, e-PRO Broker
Charles Rutenberg Realty of Illinois
Email: Jkinzle73@gmail.com
Twitter: @Jkinzle
Web: St. Charles Fox Valley Homes

 

 

Is your home priced wrong?

The 2015 Spring Housing Market Approaches: Are you on target?

I’ve shared this with my local clients and I’m happy to pass it along to you.  It is no secret that the number one reason why a home doesn’t sell is price.  But if you’re lacking visitors, offers, showings  and drive ups as well, the property is more than likely over priced by 12% or more.  If a property gets some visits and showings, then it is closer to hitting the sweet price point, roughly between 6 to 12% over the purchase price.  Finally, if a home gets plenty of showings and visits but no offers, it is likely over priced just by 4-6 %.  Dropping the price 1% at this point will often open the floodgates to hesitant buyers.   Keep in mind too, that the longer a home sits on the market, the less appealing it looks to buyers.  Consider a new market comparison at the 90 day mark to see if anything has changed in your specific neighborhood.

While the Chicago markets are not back to their previous levels, there are plenty of buyers who are ready and willing to purchase great homes this spring.  Despite the frigid winter, homes sales have continued without fail.

Want to know more about your home’s current market value?   Ask a Realtor for a current market report and find out what’s really going on in your neighborhood.

Are you in the Fox Valley area? Contact me below to get a personal review of your home, no strings or commitments.

Jennifer Kinzle, e-PRO Broker
Charles Rutenberg Realty, Elgin Fox Valley

Basement Blues?

It happens every year.  Right after the holidays pass, the reality of a long, cold Illinois winter smacks us on the forehead.  We’ve got shut in fever and we’ll be looking for something to do in the tiny sliver of daylight we get in January.  But wait, there is another option.

Many folks already know the best way to deal with the dark and cold weather of winter in the Fox Valley area requires plenty of indoor activities and lots of imagination.  If you’re a parent with kids under age 5, you’ll be looking for some fun things for the kids to do indoors.  After running through the local library programs, South Elgin’s Never Grow Up playroom, friends’ playdates and kid classes, you might want to think about investing in your own basement!

As clutter keepers, basements rule.  But think about clearing out a section for play time out of that clutter and even an unfinished basement can be a change of scenery for the winter indoor playtime.  It can be as unfancy as a few area rugs to ward off a chilly concrete floor, plus a few bright lights and you’re good to go.  We hung a chalkboard on the wall and let the mess play out on the floor without worry or fuss when a masterpiece strikes back.  When we put the tricycle and scooters down there, the kids soon had a circle race track going and are wearing tracks in the floor with all the use.  Unfinished basements do come in handy!

photo by http://www.mynearestanddearest.com

In addition, a basement either finished or partially finished, can be a nice selling point for future residents when it is time to change homes.  Game rooms, wet bars, work out rooms and organized storage areas are all a plus when buyers are seeking a new home.

However, don’t put necessary home fix ups on the back burner, when considering a basement remodel.  The best bang for your buck is to start with the kitchen and baths in any house is always these two areas first, the rest can wait.  If you’ve already got those basics covered, then consider a basement update.  Ideally, if you’re planning on staying long term in the home (10+ years) remodel for yourself.  A full basement remodel that you enjoy for the long term is a worth while investment.

If you plan on moving out in 5 years or less, why not consider a remodel with an eye towards the next home buyer.   This is a short term investment, so get the basics done and don’t worry about the rest.  Homeowners  in this scenario are likely to recover a large part of the costs when they are ready to sell.

If all else fails, bundle up and head outdoors.  Although the daylight goes quickly, there’s a lot to enjoy right here in the nature loving Fox Valley area.

photo by Teklanika Nature Photography

 

 

 

Coming Soon! The Trails of Silver Glen in South Elgin

Welcome home to The Trails of Silver Glen!

New home buyers in South Elgin now have 127 lots to choose from starting in November 2014.  Homeowners looking for gourmet kitchens, open floor plans, rich hardwood floors and oversized, bright windows will find it all right here. Thoughtfully designed floor plans, from the experienced home builders of Pulte, puts the best features at your fingertips.  Granite countertops, stainless steel appliances, luxurious soaking tubs and spa-like master baths are available features.  Why not enjoy your home and neighborhood on the southern edge of South Elgin?

The first home deliveries are scheduled for summer 2015.  Pulte is offering new homes to buyers looking for lots of space in South Elgin but with the amenities of Saint Charles’s recreation and top tier schools. Homes will be offered in two sections, with square footage starting at 2,400.

Great neighborhood schools in District 303 include Ferson Creek Elementary, Haines Middle School and Saint Charles North High School.  The Trails of Silver Glen have easy access to great shopping and are close to nature trails, parks and recreation.  Located at the corner of Silver Glen and Randall Road, this new subdivision offers convenience for homeowners and visitors alike.

Pricing has not yet been announced, but is expected to begin in the high $300’s.  Lock in your preferred lot and secure your financing now, while interest rates remain low in 2014.

There are no models on site to tour currently.  However, similar models in other subdivisions are open to walk through with a buyer’s agent.

Real Estate Branding Nightmares

Cobb & Webb Realty

 

Spider Free Homes

 

Laughing Coffin Real Estate

 

No Vacancy Real Estate

 

Reaper Realty

Bloodsucker Real Estate

 

Warlock Realty

 

Last Listing Realty

 

Two Story Terrors

 

Helen Back Real Estate

 

Scare & Crowe Realty

 

Deadbolt Realty

 

Coffin Estates Realty

 

Breaking Dawn Real Estate

 

Stake-Free Homes

 

 

Two Mummies and a House Realty

 

 

 

New Crypts Realty

 

Haunted Homes Realty

 

Headless Homes, Inc.

 

 

 

(*Disclaimer: all names listed are pure fiction and any relation to a real business name, living or undead, is completely unintentional.  Happy Halloween!)

Contingency Clauses-Hedge Against Disaster

Who wouldn’t like to know what the future holds?  In my line of work, knowing the future would be helpful.  I’d like to know if mortgage rates will rise, if that renter will skip town, and if the foundation on this property will fall into a sinkhole.  But as a non-superhero type, I have to rely on more ordinary means.  One way to hedge against future distress when it comes to buying a property:  contingency clauses.

A contingency clause is part of the purchase agreement you, as a buyer, signs when submitting an offer to buy a home.  Contingency clauses are most often used under financial or appraisal terms.  A financial contingency is related to a buyer’s ability to secure a mortgage (financing terms) for the property.  If the financing falls through, and the buyer cannot meet the financial obligations, the seller agrees to release the buyer from the purchase agreement and refund the earnest money.  I have seen the seller be unrelenting and demand satisfaction on the contract.  This gets ugly fast, so I usually recommend  a quick and clean cancellation so the seller can move on to find a more suitable buyer.

An appraisal contingency is one based on a third party’s assessment of a property’s value.  If the list price is $200,000 and the independent appraisal comes in at $150,000, the buyer can break the contract with the appraisal contingency and back out.  Or in some cases, the buyer can use this to re-negotiate the purchase offer price.  In such a case,  the seller is usually wiling to lower their price in order to get the property sold.

Another version of a contingency that I’ve seen used is based on a third party home inspection.  Most common on older homes, the buyer is cautious in approaching a home because of it’s general condition.  They put in a contingency clause that allows them to cancel the contract if a major defect is found in the property, such as a crumbling foundation, asbestos, or lead paint. Such issues involve an expensive and often lengthy repair and many buyers shy away from such issues.

There is a catch however, with using contingency clauses.  Sellers who have a lot of interest in the property and see multiple offers tend to skip over the hassles involved with contingency clauses.  Using them in a multiple offer situation can stack the deck against the buyer.  A purchase agreement without any contingencies makes for a stronger offer than one with several contingency clauses in place.

Looking for property listings?   Check out http://www.elginfoxvalley.com/

Avoid Doom, Price it Right!

Elgin Fox Valley, IL – Does a home in your neighborhood look sad and depressed to you?  Has it been on the market for too long, sitting and waiting for a new buyer to come along?  Realtors call this DOM or Days On Market, and it can spell Doom for a listing.

graphic by http://www.wcci.biz

When the DOM is getting longer, the listing appears old.  Usually when showing homes, buyers want to see the newest, freshest home listings first, because as with all things, the best go quickly.  Buyers know that a great home, when priced right, will be snapped up and placed under contract fast.

The buyers agents often get stuck with two choices, either try to convince their buyer clients that there is really nothing wrong with the home that’s been sitting for 180 days, or give up and suggest to their investor clients to step up with offers.  There will not, repeat, NOT, be a billboard flashing “OVERPRICED BUT NICE INSIDE, REALLY” put up in your neighbor’s front yard.  A good listing agent will advise their client as to why there are no offers or very few showings.  Then they can offer suggestions and feedback as to the next steps.

Agents seek to find the ideal balance between plenty of showings and many offers as per the highest market price that the home will support.  I look forward to helping my clients avoid languishing on the market.  Let’s avoid “DOOM” together!

JenniferKinzle@yahoo.com

 

 

Tiny Homes Find Big Market

Fox Valley – While recently suffering from a nasty summer cold, I was able to flip through various cable TV stations and landed on FYI,. Crammed in between  the Feast and the Furious and Kitchen Nightmares was a show called Tiny House Nation.  So, once again, you really can find everything on TV with 500+ channels.

http://www.fyi.tv/shows/tiny-house-nation

There’s been a big push lately of advertising to showcase tiny homes that carefully tiptoe the fine line between storage shed and cramped living space,  or as real estate agents will say, “cozy”.  Noting that the average size of an American home today is over 2,300 square feet, the Tiny House Nation show firmly upholds that less is more.  Check out the entire episode of the production of a tiny home on their website:

http://www.fyi.tv/shows/tiny-house-nation/videos/river-escape

But wait, there’s more.

photo from homeideas.pics

Tiny home building companies like Tumbleweed, Tiny House Company,  http://www.tumbleweedhouses.com/, are enjoying significant growth as folks from woodcarvers, to hobbyists, to new families are seeking to simplify and downsize, while reducing mortgage payments. Costs to purchase a tiny home on wheels range from $57,000 and up, depending on the size.

photos from The Elm, from Tumbleweed, Homes To Go

However, you cannot simply park one of these anywhere you wish, so be sure to allocate in advance for proper zoning and a private lot unless you currently own your home and have properly zoned space on site.

Tumbleweed also sells designs for building smaller footprint homes, which are exclusively built to be highly functional and space saving, but without the trailer/wheels.

The Harbinger Grande (below), for example, requires sufficient square footage on a lot as it is a permanent fixture (no wheels).  It can be built on ground level, on a concrete slab or over a basement.  The options are as wide open as one’s checkbook, as with most home options.  Although they have plumbing and electricity, few have central A/C or forced heat, so this style of living may not fit well in northern climates during a harsh polar vortex winter, or what we here in Chicago call “snowy”.

They can be installed with a contractor on your selected property.  Again, be sure to consult with local zoning and building professionals to ensure all requirements are met.

Photos from Tumbleweed Houses, the Harbinger Grande

Tiny houses are answering a need for many homeowners who seek privacy and customization in their living arrangements.  Not everyone is suited to tiny living, but having more high quality options available with great prices certainly makes a strong argument for downsizing.

 

Jennifer@ElginFoxValley.com

 

Family Circle Highlights Top 10 Best Towns for Families

Check out this article to see the top town according to Family Circle magazine:

http://www.familycircle.com/family-fun/money/10-best-towns-for-families/

According to this article, Elmhurst was the winner for Illinois, not Naperville??

Jennifer@ElginFoxValley.com