Thursday, April 11, 2024

Navigating the process of moving can be a daunting task, especially when faced with the unfortunate reality of dealing with unethical moving companies. It's crucial to safeguard yourselves against fraudsters who seek to exploit unsuspecting consumers. As your trusted realtor, I'm here to provide you with essential advice on how to protect yourself from falling victim to these scams.
Protecting Yourself Against Unethical Moving Companies:

Written Contracts: - Ensure all agreements are in writing. - Contracts should clearly detail services and costs. - Seek clarification for any vague terms. Beware of Dishonest Intermediaries: - Verify legitimacy through research. - Check history, reviews, and insurance coverage. - Insist on face-to-face meetings for accurate quotes. Watch Out for Hidden Fees: - Gas, assembly/disassembly, bulky items, etc. - Ensure all fees are clearly outlined in the contract. - Avoid companies with unclear pricing structures. If It Seems Too Good to Be True, It Probably Is: - Trust your instincts. - Prioritize transparency over enticing offers. - Stay informed and vigilant throughout the process. Stay Informed and Vigilant: - Research moving companies thoroughly. - Trust but verify all claims and promises. - Prioritize transparency and clear communication. Your Trusted Realtor is Here to Help: - Count on your realtor for guidance. - Empower yourself with knowledge. - Ensure a smooth and hassle-free relocation experience.
By following these bullet points, you can safeguard yourself against fraudulent moving companies and ensure a successful relocation process.
For questions about your move, or to list your home or find a new one, don't hesitate to get in touch with me first!

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Wednesday, February 12, 2020

Condo vs. Co-op: What's the difference?

Condo vs. Co-op: What’s the difference?

Will Tveit | MBA - Broker Associate - Realtor, Dream Town Realty







Condo vs. Co-op: What’s the difference?
In searching for an apartment, you might find some described as “condos” or “condominiums” and others as “coops” or “cooperatives.” 

While it is true that many (but not all) coop apartments are located in classically designed pre-War buildings, the term “co-op” does not describe the style of the building but rather the ownership terms of the apartments.
With a condominium (or condo), you are buying a physical apartment (as defined by legal description) as well as a share in the common elements of the building. A condo association, led by a board of directors, manages the building’s exterior and common elements, including landscaping, while the unit owners maintain the interiors of their individual apartments.

When you purchase in a co-operative (or co-op), you are technically not buying real estate. Instead, you are purchasing shares of stock in a legal entity (usually a corporation) that owns real estate. Your shares of stock entitle you to occupy a specific apartment, as defined in the Proprietary Lease you receive with your stock certificate. So in the end, you have the same thing (a place to live), but how you achieve this is a bit different.

History of Co-op Apartments
Some of the finest pre-War and Art Deco buildings in Chicago’s Gold Coast, Lincoln Park, Lakeview, and Hyde Park neighborhoods are coops. Coops predated condominiums as the earliest form of apartment ownership in Chicago.

In the beginning, coops were popular among Chicago’s leading families. Each building had admission requirements, much like private country clubs. Their criteria included financial capacity and social stature. Because they were corporations, coops were exempt from fair housing rules and were able to discriminate. Bank financing was not available; purchasers paid for their shares of stock in cash.

In the late 1980s, banks started getting more creative, offering opportunities for co-op purchasers to discretely obtain financing. However, as coop financing was not allowed, shares of stock could not be openly pledged as collateral. Thus, the earliest coop loans were unsecured lines of credit. As shareholders could not sell their apartments without first retrieving these certificates, they needed to remain on good terms with the bank.
By 1994, some co-op buildings had started to openly permit shareholders to pledge their stock as collateral and obtain financing. This shift in policy made sense, as home mortgage interest deductions were (and still are) a valuable write-off against income taxes. As co-ops began to allow financing, it was with carefully designed rules that included:
  • Limits on the percentage of the purchase price (or appraised value for existing co-op owners) that could be financed.
  • The requirement that the lender executes a “recognition agreement” acknowledging the co-op's rights, especially with respect to approving future sales.
Today, there are only a few co-ops left in Chicago that require purchasers to pay 100% cash. The rest allow purchasers to obtain loans for anywhere from 55% to 90% of their purchase price depending on the building. Another major shift is that co-ops can no longer reject a potential buyer for reasons other than their ability to afford the home. Consequently, the make-up of coop residents is more diverse than in the past.

Maintenance Fees and Real Estate Taxes

Buyers new to co-ops are often surprised by the fact that the monthly fees for co-ops are higher than for condos. However, this is usually because co-op fees include two additional areas of expense that condo owners pay separately.
In both condos and co-ops, fees are collected from homeowners/shareholders to pay for building maintenance and insurance. In both cases, residents carry separate insurance for the interior components of their apartments including everything from the walls in.

But two other expenses are not handled the same way:

Real Estate Taxes
Both condo and co-op owners pay real estate taxes. But how they receive and pay their bills varies.

  • In condo buildings, each homeowner receives a tax bill directly from Cook County.
  • In co-ops, shareholders do not receive individual real estate tax bills. Instead, Cook County issues a single tax bill to the corporation. Shareholders pay a proportional share of the total bill based on the number of shares of stock they own. In most coop buildings, real taxes are included in the monthly assessments, similar to the way some condo or single-family homeowners may pay their real estate taxes each month into an escrow along with their mortgage payments.
Real estate taxes paid for condos and co-ops are tax-deductible and qualify for both homeowner’s and senior citizen exemptions.

Capital Projects
In all buildings (condos and co-ops), capital improvements are needed from time to time. These projects vary depending on the age and condition of the building and may include the need for tuckpointing, a new roof, new elevators, upgrades to the building’s electrical service, replacement plumbing risers, a new boiler, or new windows. While most buildings are diligent about maintaining a reserve fund for capital projects, there can be a gap between reserve fund balances and capital requirements, resulting in the need to collect additional funds from homeowners.

The way that condos and co-ops customarily fund capital improvements can be another distinguishing feature.
  • Condo buildings typically utilize “special assessments” to pay for capital improvements. They can be structured as a one-time payment or as a series of payments over months or even years.
  • Co-ops, on the other hand, can pledge the building as collateral and obtain a mortgage (or line of credit) that can be used to pay for capital improvements over a longer period of time. In such a case, shareholders pay their pro-rata share of the building’s monthly mortgage payment along with their regular maintenance fees. Obtaining a loan to pay for capital projects can be viewed as preferential over a special assessment, as the cost of the improvement is less burdensome. Any interest shareholders pay on the coop’s mortgage is tax-deductible, just like interest on their home loans.
Board Approval / Admission Requirements
In condo buildings, homeowners have virtually no say in who moves into the building. Some condo associations (mostly older ones) have a provision in their by-laws that gives them the “right of first refusal.” This provision was designed to provide a back-stop to prevent someone from dumping their apartment at an excessively low price, injuring values in the building. However, the hurdles involved in exercising a right of first refusal (including the requirement that the association buys the unit from the seller at their price) make it nearly impossible.
Still, under the right of first refusal provision, condo associations may request copies of sales contracts, applications and/or credit reports. 
Co-ops have a more involved application process. The main reason that co-ops still “approve” buyers in this day and age is to confirm the buyers’ ability to afford their homes, including association fees, real estate taxes and potential future capital improvements. If someone buys a co-op and stops paying their monthly assessments, neighbors would be on the hook for more than just their maintenance fees.

Consequently, co-op purchasers are usually required to provide the following: an application, a detailed balance sheet, and several personal and professional letters of reference. Some co-ops also ask to see tax returns. After the coop board has received and reviewed the buyer’s application, an interview is scheduled, and then the buyer is officially approved.

Most coops discourage flipping or buying purely for investment. For that reason, rentals are rarely allowed except under extenuating circumstances, and then, only with board approval.

Financing
Condo associations do not get involved in how purchasers finance their apartment. That is between the lender and the buyer. As noted earlier, most coops do have restrictions in this area, primarily as it relates to the amount a coop purchaser can borrow as a percentage of their purchase price. Most coops now allow buyers to borrow around 75% of their purchase price, some more and some less. However, a few buildings including 209 E. Lake Shore Drive, 1500 N. Lake Shore Drive, and 2430 N. Lakeview still require buyers to pay for their entire purchase in cash.

The good news is that the portfolio of loan products available to coop borrowers is relatively diverse and competitive with condo financing options.

Conclusion
In the last few decades, buyers have shifted away from co-ops.
  • A large number of new condominium buildings came online with amenities like private outdoor space and deeded, onsite garage parking--perks that are not often available in pre-War buildings. 
  • The sky was the limit on what banks would lend condo owners, so many took advantage of this. Some people obtained highly leveraged loans, borrowing more than their purchase price.
  • Many felt the co-op application process invaded their privacy, and they wanted to avoid it altogether.
Ironically, as over-leveraged condo owners and investors in certain buildings have failed to meet their obligations resulting in a drop in home values building-wide, the benefits of buying in a coop are making a comeback. While the coop approval process, caps on financing, and restrictions against buying for investment do not guarantee financial immunity for shareholders, they are a good hedge.

Friday, February 22, 2019

Will Tveit - Real Estate | My Blog - Market Conditions | willtveit.com - dreamtown

      


      
Recently, I've been asked by friends, prospects, and acquaintances, as well as former and current clients about our current market, specifically what's going on? 

Well, folks, we seem to be entering a buyer's market.

To better understand this market, let's first look at the current real estate conditions:

1. Prices at all-time highs

For the past several years, home prices grew at twice the rate of inflation and faster than incomes. Not surprisingly, we are now at record price levels.

However, price growth has definitely been slowing over the past several months. And we're even seeing some softness in the market, with an increasing number of price cuts.

2. Mortgage rates rising

The current 30-year fixed mortgage rate stands at 4.63%. That's almost a 1% increase over just a year ago and the highest level we've seen since 2011.

3. Dropping affordability and demand

Combined with current high prices, the rise in mortgage rates is causing a decrease in affordability.

Earlier in the year, affordability was estimated to be at a 10-year low. Not surprisingly, this is having an effect on demand, with mortgage applications down 16% over last year.

When these factors are viewed together, there appears to be a fundamental shift in the market.

Home price growth is slowing, and home prices might eventually start to decrease. Mortgage rates are expected to continue to grow. And if that happens, we will slowly but surely enter a market where buyers, not sellers, have the final say.

So what does this mean for you?

Well, if you're looking to sell, it means the time to act is now.

Around Chicago, I still see a lot of demand for homes. However, over the next several months, it's likely that national trends will catch up with us here in the Chicago area as well.

The good news is, you have an opportunity to act before this happens.

If you decide to list your home this winter, you might benefit from the current high prices as well as the solid demand around Chicago. In other words, you could sell quickly and for top value.

In case you’re considering it, you can get more info on what your home is currently worth by filling out this home evaluation form:

Enter your home address here to find out what your home is currently worth

And if you are ready to get the process rolling while this opportune moment still lasts, give me a call. I'm here to help.

Have a great day,

Will Tveit | MBA - Broker - Realtor
Dream Town Realty | Chicago & North Shore





Sunday, February 17, 2019

Real Estate News from Will Tveit | Realtor - dreamtown


Spring 2019

REAL ESTATE NEWS
Brought to you by

2019's Hottest Home Decor
By Barbara Pronin
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Comfort is trending for 2019, a consensus of home decorators agree, with more people seeking warm colors, intimate spaces, and a casual but sophisticated lifestyle.

Designers looking to pair physical coziness with emotional comfort forecast seven decor trends:

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Scaled down furnishings - After years of favoring large furniture and open spaces, consumers are aiming for a ‘nesting’ environment and choosing smaller pieces arranged in more intimate settings.

Wall coverings - The return to traditionalism brings with it a return to wallpaper, fabric wall coverings and murals. Expect to see plenty of rich shades of green in fabric and wallpaper patterns.

Color changes - While blues and indigos have been huge in recent years, green is the new blue for 2019 and is likely to be used in everything from upholstery patterns to kitchen furnishings.

Color ‘pops’ - People are ditching beige minimalism in favor of fun colors, especially in family-friendly spaces. Yellow is the hottest color for small accent pieces–from ceramics to lamps to sofa pillows.

Warm woods and traditional styles - Antiques and even second-hand items are having their moment again, with consumers looking for skirted tables, wooden chests and other wood pieces with a sense of history.

Indoor and outdoor fireplaces - The coziness trend favors indoor fireplaces, working or not, with homey hearths as a nice spot to gather. Outdoors, fireplaces are preserving the joy of summertime barbecues.

Crafts and artisanal accents - In a world of increasing mass production, there has been a shift back to artisanal and boutique choices in pillows, wall hangings, quilts and other accent pieces all around the home.
How to Reduce Your Home's Carbon Footprint
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Garden
You may work to reduce your personal carbon footprint by driving less and recycling, but do you consider the footprint of your home? Here are some tips to make your home and your wallet a little greener.

Buy efficient appliances. Appliances are getting more efficient every year, and some have better energy and water-use ratings than others. The energy rating of an appliance is easy to find and can be a great guide for those looking to reduce their electricity and water consumption.

Install low-use fixtures. Shower heads, toilets, faucets, and other fixtures now come in models that use less water than others. These fixtures can lower a home's utility bill as well as reduce the amount of water a home uses.

Plant a garden. Plants remove carbon dioxide and give off oxygen. Keeping a garden can help counteract your carbon output, provide a fun hobby and supply you with homegrown vegetables or beautiful flowers. Install a drip irrigation system so that plants get only the water they need.

Landscape using climate-appropriate plants. Local plants are better adapted to the environment, are non-invasive to other species and require less water than outsiders.
                                     
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If you are thinking about buying and/or selling a home, contact your real estate expert,
Will Tveit | Real Estate with Dream Town Realty first!  Will Tveit's direct number is 312.498.8348, and his email is Will@dreamtown.com. Also, feel free to check out Will Tveit | Real Estate's website at WillTveit.com

For the best service and most fastidious attention to detail in Chicago and on the North Shore, contact 
Will Tveit | Realt Estate today!   🏡
                                     ______________________


Will Tveit | MBA-Broker-Realtor
Dream Town Realty | Chicago - North Shore
1567 Maple Ave., Evanston, IL 60201
mobile: 312.498.8348 | email: Will@dreamtown.com
web: www.WillTveit.com | www.1640MapleEvanston.com