The Illinois Association of Realtors announced last month that December’s total home sales were up 20.1 percent compared to December 2008. The report marked the fourth consecutive month that sales were on the upswing—so is the Chicago real estate market looking up?
Perhaps, but the Illinois Association of Realtors also reported that last year’s demand tipped heavily toward short sale and foreclosed homes. The abundance of foreclosed Chicago homes or Chicago condos may seem like the best way to get a great deal in real estate. But purchasing foreclosures and short sales requires more attentiveness to the buying process, and buyers need experience and expertise at their side if that is the type of real estate purchase they’d like to make. Here are 5 key considerations buyers need to take when looking at a foreclosed home:
1. You must do your due diligence. If it looks too good to be true, it probably is, and buyers need to understand how what appears to be a great value upfront could turn into a financial disaster once you’ve signed the dotted line.
2. You get what you get. Foreclosures are typically sold as-is, and without the same required disclosures that come with a traditional sale. So there is often no way to know every detail of a home or condo, and no recourse if it’s not what you expected.
3. The health of the whole building counts. If you’re looking at a foreclosed Chicago condo, it’s critical to consider the standing of the entire building, not just the unit up for sale. The shape of the building itself, along with the condo association, will play key roles in your purchase and the value of the condo.
4. Be cautious of smaller buildings. If a Chicago condo community is made up of a only a handful of owners, it only takes one failed owner to greatly affect the rest of the building and the health of the condo association.
5. Beware of newer buildings.Chicago new construction is often a very appealing option, but buyers must exercise additional caution when purchasing a unit built in the last five years. With the current market, many new construction condo buildings have less owner-occupied units and are more susceptible to foreclosures—a building with many foreclosures will affect your resale value, no matter how healthy your individual unit is.
Don DeBat summed it up best in a recent column when he said that buying a foreclosure requires expertise and an agent that puts the buyer’s interests first. Without someone to consider all of these less-than-obvious essentials, buyers could find themselves later devastated with their Chicago real estate purchase.
If you’re looking for someone to guide you through the ins and outs of the purchase of a Chicago home or Chicago condo, please contact agent Sheldon Salnick at (312) 498-5080 or by email at [email protected].