As a Chicago landlord, should you collect a security deposit?

I stumbled upon the video below at YoChicago.  Originally titled What new renters need to know about landlord policies in Chicago, I think it is an even better resource for newly minted landlords.  Everything from when to begin marketing to security deposits is covered.

My team and I handle single-unit and smaller-building property management and consult daily with home owners finding themselves in the position of becoming a landlord.

Only issue I have with the video is the one taken regarding security deposits. If managing a single-unit or smaller-building it may be prudent to collect a security deposit.  Thoughts on this?

Carl Sandburg Village

Having just listed a spacious corner residence (Photos and Property Tour) at James House in Chicago’s Carl Sandburg Village, I thought it would be interesting to briefly explore the history and background of The Village. 

Named in honor of the Chicago poet, Carl Sandburg, it is located in the Near North Side community area, specifically from Division Street to North Avenue and from Lasalle Street to a half-block east of Clark Street. 

Originally constructed as apartments in the 1960s, and billed as an urban renewal project, The Village is a complex of high- and low-rise condominium buildings, town houses, landscaped pedestrian malls, and commercial sites.   Various residence sizes are offered throughout the complex from studios to junior 1 bedrooms and on up through larger townhomes.  In 1979 ownership was converted to condominium. 

For more detail, a brief writeup can be found at the Encyclopedia of Chicago or at Wikipedia.  For current details, the Carl Sandburg Village Homeowners Association is a great resource.

Given time constraints I am doing a lot less snail mailing these days. As such, my traditional Chicago Summer Festival mailer will be replaced by this blog post. Metromix has put together a fantastic Chicago Summer Festival Guide 2010. And if you want to hang it on the fridge, they even have a handy Print View.

Post Update:
I just uploaded a printable version of my own summer events calendar.

Having just put my home at 2749 N. Magnolia Avenue on the market, I was searching for a good way to describe Lincoln Park’s Wrightwood Neighborhood. Then I remembered that years ago, 2007 to be exact, I walked through my neighborhood with Joe Zekas of YoChicago. This is a five-part (one, two, three, four, five) video series and boy how times have changed since filming. The neighborhood amenities have continued to improve with two completely renovated parks while property valuations are maintaining.

I consider myself somewhat of a video pioneer, as back then, not many real estate professionals were doing video, and now everyone has their face in front of the lense for better or worse. For me viewing the video is worse than viewing my old baby pictures as I have a “face for radio” as the cliche goes. My college speech teacher also phoned me and said I squint too much and reminded me that “um” is not a word.

That said, we cover a lot of ground from coffee shops to the local fitness club to transportation to public schools to local parks to real estate values.

I don’t often combine my professional real estate and personal blogs but I thought it appropriate this time.

Just wanted to send out a quick save the date notice for the first Supera Park event planned for 2010. Featuring music for kids & families, Karen Banks-Lubicz will be making a return performance on May 15, 2010 at 10:30AM.

Visit the Supera Park website for directions and more information.

Hope to see you at the park!

The answer is maybe, or maybe not. When searching for a condo to purchase in Chicago, determininig whether the property comes with a parking space should be fairly easy right? Well, unfortunately not.

As background, there are essentially four ways that parking is defined in the Chicago market…

None – There is no parking transferred with the unit. Parking is via the street or leased in a surrounding parking garage/lot.

Leased – Parking is typically provided within the building, but is not owned by the unit owner and it is leased on a monthly basis.

Assigned/Limited Common Element – The parking space(s) is owned by the unit owner. The parking space(s) is legally tied to the unit via the condominium declarations and bylaws. The unit can not be sold without parking and vice versa.

Deeded – Again, parking is owned by the unit owner. In this case however, the unit can be sold seperate from the parking space. Both have seperate PIN numbers, assessments, and taxes in fact.

I have always thought about this issue, but what got me really thinking is one of my current listings. Parking is assigned in the building, yet another competing listing in the building has pulled the price of parking out of the list price. It is not possible or probable to sell the parking space seperate from the unit. In fact, the listing states the parking space MUST be purchased with the unit. Really, no Kidding?

This situation raises two issues.

The first is agent handling of parking in their listings. Agents pull the cost of parking out of the list price to get the listing in front of more buyers at a lower list price. That said, if a unit can not be sold without parking (due to definition or owner desire), the list price should include parking, period.

The second is the inability of our local MLS to address and eliminate the first issue. To enforce and correct the first point above, our local MLS needs to address parking in a more consistent manner. This is very easy to do but for some reason has never been systematically addressed.

As a buyer, do not assume parking comes with a condo unit but be sure to have your agent verify parking options in all cases.

So … somehow … after my family left for the day’s activities, our garage door was left open and our bikes were stolen.  So after the crying stopped we put a plan of action together.

First, buy new bikes.  A bit of a hard sell but I have always had luck at Village Cycle.  Any other reccos?

Second, Find a place to ride.  A challenge in the city, but the  City of Chicago Bike Map continues to be an outstanding resource.

Hope to see you on Chicago’s bike trails.

Chicago Geo-Fence

Imagine turning off  Clark Street and heading east onto Belden Avenue in Lincoln Park on a Sunday afternoon when suddenly your phone buzzes with a text message and link to property details and photos:

2 BR, 2 BA condo for sale - $362,900 - 350 W. Belden Ave. #405 – Photos and Virtual Tour

You were notified via an automatic text message about a nearby home you were interested in.  How did this happen?  How were you automatically notified on your mobile phone about the perfect home, in the perfect location at the perfect time?

The answer involves a combination of geo-fencing, GPS technology and mobile phones.

Chris Thorman, who blogs at Software Advice, gave me a heads up on this great idea for marketing real estate in the Chicago area.  His article gives us the scoop on one tool that home buyers may be using in the future to search for homes.  It would work like this:

• A prospective home buyer would fill out a form online detailing their real estate buying requirements;
• The real estate company would set up virtual perimeters called geo-fences around the properties they wanted to market;
• Once a qualified user (someone who desires a certain type of property) enters the geo-fence area, they are automatically notified via text message about that property.

Retail stores are already using this form of location-based mobile marketing to market clothing products to nearby customers.

This could be used to market real estate in the future.  Think of exploring a neighborhood for the first time and as you roll through the streets, receiving a real-time text of open houses in the area that meet your criteria.  Granted, there may be issues to deal with in the Chicago market given the density of similar homes for sale in any one area but this idea seems like it has potential.

Trevi Square in the South Loop

As I just brought a wonderful true loft to market at historic Trevi Square in Chicago’s South Loop neighborhood, I thought it would be beneficial to revisit a loft post I wrote some months ago defining the differences between a “hard” and “soft” loft. 

Here are some interior photos of the Trevi Square loft.  Gotta love that fireplace.  This is what I would consider a true loft in the Chicago market.

I also wanted to include a fantastic YoChicago loft article/resource titled, Buying a Loft Condo in Chicago, that first defines what a loft is and then goes on to outline a number of considerations to take into account when deciding on a loft purchase.  I can’t tell you how many times I get asked the questions, “What exactly is a loft?” and “What is a soft loft?”  Great questions.

I’ve assisted many clients in the purchase and sale of their loft condos.  Contact me any time for assistance.  Happy loft hunting!

The Constellation, 1555 N. Dearborn, Chicago, IL

Located at 1555 N. Dearborn Parkway, Chicago, IL, The Constellation offers some of the best views of Lincoln Park and Lake Michigan through floor to ceiling windows.  It was designed in 1958 by Chicago architect, Milton Schwartz and can be classified as contemporary in design.

Being a fan of unique views and clean, contemporaty architecture, I was pleased to bring Residence #5D to market there last week.   The home is owned and designed by an architect, and plays off the exterior stylings of the building.  Hand-plastered walls set the scene, with furnishings that seem to float atop the dark chocolate parquet floors.

Perched on the southernmost end of Lincoln Park, the views of the park, Lake Michigan, and down Dearborn Parkway put you in the center of all the action in this vibrant Chicago Gold Coast neighborhood.  You even have a view of Lincoln Park and down North Avenue while relaxing in the tub that sits atop a pedestal made of Brazillian hardwood. 

In keeping with the clean theme of the home, I will let the photos and room tours speak for themselves as less is clearly more in this case.  Photos and 360 degree room tours.

Master Bath

Living Room

Second Bedroom with En-Suite Bath

Master Bedroom "Fireplace"

Chef's Kitchen

Mid-last year I wrote a post describing how FHA spot loan procedures can significantly expand your home search. 

As of today, the rules have changed and obtaining a spot approval is no longer an option.  From now on, condo projects/buildings as a whole need to meet FHA guidelines and need to be on the FHA approved list.  This of course means that if not approved, the Homeowner Association will need to go through the approval process.  Rest assured, the FHA promises to “streamline the approval process making it easier, cheaper, and faster” to obtain approval.

Associations should carefully weigh the pros and cons of becoming FHA approved.

Wrightwood Crossing Rendering

Crews Out Early at Wrightwood Crossing Construction Site

Despite some early controversy, it is very promising to see a new construction project succeeding in this challenging Chicago real estate market. Green development, Wrightwood Crossing, located at 1307 W. Wrightwood in Chicago’s Lincoln Park Wrightwood Neighbors neighborhood, appears to be succeeding.

Now in early construction, of the 19 units, 4 are currently for sale and 8 are showing under contract on the MLS. The 2 bedroom units start in the upper $400k range, 3 bedrooms in the low to mid $600k to upper $900k range, and 4 bedrooms are priced at just over $1MM.

Just goes to show that new construction can succeed in this market given quality location / site selection, manageable project size, innovative design, and of course pricing. Get specific information on the units listed for sale here.

Completing a successful Chicago short sale transaction requires communication and proper expectation setting across all parties. An article crossed my desk this morning that I thought would make the perfect outline to set short sale expectations for both the seller and buyer side.

To entice you to read the entire article, the top 10 points (typos and all) are highlighted below.

1) Price is usually set by the agent & seller, not bank
2) Loans owned by 1 bank usually better than 2
3) Lowball offers get slow or no response
4) Agent must check comparables before submitting offer
5) Don’t hang your hat on the property
6) Sellers with other properties or too strong of financials may not qualify for short sale and/or may be asked to pay the difference
7) ”Approved” prices are quickest
8) Some banks want strongest buyers, some want strongest offers
9) Repairs are seldom done, credit is more frequent
10) When you get approval, must close on time

Having completed a number of short sale transctions on both the buy and sell sides, I can attest that all points are on target. The full article can be found here.

Searching Chicago properties by price cut seems to be all the rage these days. As pointed out by YoChicago, a new website, CondoShark, has emerged to capitalize.

Interesting and catchy way to focus on a declining market. That said, our Chicago property search has allowed you to search by Price Drop for some time now. Don’t wait to receive a generic list of properties with highest price cuts. Set up a custom search tailored to your search criteria, across any Chicago neighborhood, and have an alert sent with the latest updates via email or RSS feed daily or weekly.

Check out the latest Lincoln Park price drops of 10% or more over the past 7 days.

Make Lemonade out of Lemons When Searching for a Chicago Home

Reviewing aggressively priced, foreclosure, and short sale listings with my client, it became apparent that she was avoiding certain listings that I felt had potential. Delving a bit deeper she explained…

This property says “As Is” in the description. I don’t want to be stuck with a lemon.

To that I explained that “As Is” in our market does not mean that if an offer on a property is submited and accepted, the purchaser has waived their attorney review and inspection contingencies (A/I). It simply means that the seller (or the bank) are not willing or able to address any inspection issues that arise with the property. All standard contingencies remain in play.

With that, our home search possibilities opened up significantly. We will undoubtedly look at a number of lemons over the coming months but have no chance of being stuck with one. In fact, we may even be able to make lemonade.

I am updating my blog theme. Main post content is available now and fine tuning will occur over the next few days…weeks.

Revised plans for the former Peerless Confection Company site are up for further neighborhood discussion and review. Looking at the Hostess site and Peerless site plans side-by-side as they face one another across Lakewood Avenue, they seem to complement one another nicely.

The Hostess site’s very symmetrical, uniform lines seem softened by the Peerless site’s softer, almost organic plan due to the varied building types, shapes, and sizes. Large setbacks along Lakewood used in both plans and even a park run by NeighborSpace at the southwest corner of the Hostess plan allow for ample green space.

Absorption rate is a fancy term for sales rate or how long it will take to sell unsold inventory. These days as condo lending pre-sale requirements to close a unit are extremely restrictive (51% sold for FHA, Near 70% sold for Conventional) sales rate is more important than ever in assessing whether a new construction purchase is feasable or a wise investment.

Working with a recent buyer, we uncovered the perfect new construction condo. My client loved the floor plans and finishes. At first look sales looked OK as the project had 100 units total and at our viewing there were 25 under contract. Construction crews were working feverishly while we were there.

Digging deeper however, the picture was not so rosy. A bit of research revealed that at this very time last year, the project had 23 units under contract. So 2 units had been sold in the last 12 months. Running the numbers, this yields a sales rate of .16 units/month, in other words, holding all factors constant it would take 37 years to sell the remaining inventory. Just reaching pre-sales guidelines, let alone, selling out the project would be difficult. Of course many factors could change to influence sales velocity such an improved economic outlook, loosened lending guidelines, price, and incentives, etc.

Finishes and floor plans are important but only if the units will be delivered in a reasonable time frame if ever.

I recently had a buyer client ask me whether he really needed a pre-purchase inspection of his new Lincoln Park condo. He said…

“It’s a condo, what could possibly be wrong with the place?”

A lot, and yes, condo inspections are worth every penny. That said, an individual condo unit inspection alone is not sufficient. Most major issues will arise with the building limited-common and common systems such as windows, tuckpointing, roof, elevator, parking garage, deck, etc. So how do you uncover these issues?

In my post Trust, But Verify When Making a Condo Purchase I touched on this issue. To uncover issues with building common elements, a thorough review of meeting minutes and budget can yield a wealth of information.

So while the unit home inspection may reveal that a GFCI near the kitchen sink needs replacement, a review of the association meeting minutes may reveal that the building roof needs to be replaced.

Inspections are important but don’t miss the forest through the trees.