Home Inspection – Chicago Home Buyers Guide | Zenlist

Chicago Home Inspection

How Much Does a Home Inspection Cost?

Home inspection costs are generally based on square footage of the property in question. The national average for a 2,000 square foot home is $324, though it ranges anywhere from $277 to $388 depending on the market.

In Chicago, specifically, the average a bit higher. Angie’s List reports an average between $375 and $550, while Home Advisor puts it between $260 and $351.

These averages do not include specific inspection services like:

  • Termites inspections (additional $65 to $100)
  • Asbestos inspections (additional $400 to $800)
  • Radon inspection (additional $100 to $200)
  • Mold inspections (additional $300 to $500)
  • Swimming pool inspections (additional $90 to $130)

The prices on these more specialized services vary based on the size of the property and the company providing the inspection.

How Much Can a Home Inspection Save You?

The total amount a home inspection save you depends on the deficiencies and repairs found on the property. Identifying major issues, like problems with the roof, foundation or mold, can save you significant costs and hassle down the line. More minor issues may save you slightly on your sales price or make no difference at all.

Let’s look at a few of the most common issues found during home inspections for some reference:

  • Foundation issues – These can cost anywhere between $1,852 to upwards of $6,000, depending on the extent of the damage.
  • Mold – Mold problems can run between $2,000 and $6,000 to address and can cause a slew of health problems and allergies.
  • Wiring issues – Problems with electrical systems or wiring often require major repairs costing between $8,000 and $15,000.
  • Roof problems – This is one of the most common issues found during home inspections. If the full roof needs replacement, it can cost $7,000 or more.

HVAC, plumbing and appliance issues are also found often in Chicago home inspections. The costs on these vary depending on the extent of the damage found.

Getting a Home Inspection in Chicago? Follow These- Dos and Don’ts

The home inspection is a vital part of the homebuying process, as it helps buyers ensure they’re making a safe and sound investment – both for their loved ones and their finances.

Not to be confused with an appraisal, a home inspection is intended to evaluate the overall condition of the home, not determine the value of the property.

During a home inspection, the inspector will examine the property’s roof, plumbing, heating and cooling systems, electrical systems, foundation and more in light of local safety and building codes, as well as construction best practices. Once the inspection is complete, the inspector will deliver a report detailing their findings.

Must-have Chicago Inspections

In Chicago, buyers will want to at least have the basic home inspection, which covers things like: appliances, plumbing, foundation, roof, HVAC, plumbing, electrical systems and the overall interior and exterior of the home.

If the inspector notes mold anywhere on their findings report, buyers should also consider a professional mold inspection to ensure the home is safe to inhabit. In some cases, buyers may also want to consider the following inspections:

  • Termite inspections – The Eastern Subterranean Termite is a common sight in Chicago – particularly in the Glenview area. As termite issues can cost around $3,000 or more to address, spotting these before buying a property is vital.
  • Radon testing – The city of Chicago’s health department has recommended residents test for radon in their homes and new properties. Considering the service is on the more affordable side (just $100 to $200, on average), it may be worth it for peace of mind.
  • Asbestos inspections – For buyers considering older properties or homes where asbestos is known to be used, an asbestos inspection is a must.

More specific inspections like those for pools and other systems depend on the exact features and home of the location being purchased.

How to Save Money on a Home Inspection

Though you certainly don’t want to cut corners on something as important as a home inspection, there are a few ways to potentially reduce costs when seeking inspection services.

  1. Go hourly. If the contract doesn’t require a formal report or a full inspection, buyers may be able to ask for an hourly rate or reduced price on their service.
  2. Find an inspector that also does repairs. In some cases, inspectors may be qualified to perform certain repairs. When this is the case, buyers may be able to ask that the cost of the inspection is credited toward any repairs, should they be necessary.
  3. Be prepared to negotiate. By heading back to the negotiating table, buyers can request repairs or credits when deficiencies are found.

In many cases, a comprehensive home inspection can save buyers thousands of dollars. When repairs or deficiencies are found, the report can serve as a bargaining chip to negotiate a lower sales price.

Still, despite these potential savings, it’s important not to overpay for your inspection. Make sure to get quotes from at least three different inspectors before moving forward, and weigh experience, knowledge and price when choosing which inspector to employ.

After the Home Inspection – Three Possible Outcomes

There are generally three scenarios that can emerge from a home inspection.

  1. The inspection can reveal the home is safe, sound and in need of no repairs or fixes. If this is the case, the transaction can move along to the next step in the homebuying process.
  2. The inspection can reveal moderate issues with the home. When minor repairs and fixes are needed, the buyer can negotiate a credit to help pay for the repairs or ask the seller to make the fixes themselves before closing.
  3. The inspection may reveal serious or costly issues. When major deficiencies or problems are found, the seller may opt to back out of the deal entirely. They may also choose to renegotiate the sales price of the home or ask the seller to cover a portion of the closing costs to make up for the financial loss of the repairs.

A real estate transaction isn’t done until the money changes hands and the deed is transferred. Thanks to contingencies and home inspections periods, there are plenty of chances for buyers to safeguard their investment and ensure they’re making the right decision for their household.

What Does Contingent Mean In Real Estate? – Real Estate Market Guides | Zenlist

What does contingent mean? In real-estate contingent means the seller has accepted a purchase offer, but the sale is contingent upon certain conditions which have to be met.

In the real estate world, contingency clauses – also referred to simply as “contingencies” – exist to protect both sides of a transaction. They provide an escape hatch of sorts, allowing the buyer or seller to back out of the contract should certain conditions not be met.

How Do Contingencies Work?

 

A contingency clause defines a specific action or condition that must be completed before the contract can be considered binding. You will often find these clauses in real estate contracts or as part of the initial purchase offer on a home.

To get an idea of how contingencies work when buying a home, it’s important to first understand how a real estate transaction functions. These typically go as follows:

  • A buyer makes an offer to the seller, who then accepts or rejects the bid.
  • The seller may choose to counter the offer or negotiate parts of the deal until both sides are in agreement on the terms. If the parties cannot agree, they go their separate ways and no obligation is made.
  • If they agree to the terms, the buyer makes an earnest money deposit, indicating their good faith and intent to purchase the property. This is typically 1 percent of the sales price of more. These funds are usually held by an escrow company until closing day.

Contingencies may come into play as part of:

  1. The initial offer. The buyer may include contingencies in their bid from the outset.
  2. The negotiation phase. Either the buyer or seller may opt to add (or remove) contingencies as part of the bargaining process.

 

Contingencies: The Nitty Gritty

 

Contingencies always come attached to a deadline. If the buyer or seller has not canceled the contract by the deadline, they can no longer back out of the deal.

Contingency clauses also include details as to what conditions must be met, as well as the precise steps of the cancellation process should a party decide to pull out.

Regardless of what side of the transaction you are on, you should always make note of these contingency details when considering an offer or contract. Make sure to add them to your calendar to prevent missing any important deadlines.

Types of Contingencies

 

There are generally four types of contingencies you’ll come across in real estate transactions. These include:

  • The Appraisal Contingency – This is a buyer-initiated contingency that offers options should the property appraisal comes in under the purchase price. The buyer can choose to either renegotiate the purchase price or back out of the deal if an agreement cannot be reached.
  • The Home Inspection Contingency – This is another contingency designed to protect the buyer, giving them a “due diligence” period during which they can have the home inspected by a professional. Should issues arise during these inspections, the buyer can negotiate repairs, renegotiate the price to account for the condition of the home or cancel the contract entirely. Home inspection/due diligence periods typically last anywhere from three days to two weeks.
  • The Mortgage Approval Contingency – This contingency protects the buyer in the event their loan terms change significantly or they are unable to secure financing. Typically, if a lender offers a different deal than states in the initial offer, changes the loan type or requires more of a down payment, the buyer can cancel the contract and will no longer be on the hook for the purchase. Almost all buyer use these contingencies unless they are paying with cash.
  • The Insurance Approval Contingency – Another common contingency, this one says the buyer can back out of the transaction should they be unable to secure homeowner’s insurance at an affordable price. Though it doesn’t happen often, sometimes insurance companies will refuse to cover a home if it’s had mold or other serious issues in the past.
  • Right to Assign Contingency – A standard contingency for real estate investors. A wholesale contract could include an Assignment of Contract, which gets an investor the option to back out of a deal if unable to assign the real estate contract to another buyer in a certain timeframe. This contingency is used by wholesalers to protect themselves in the event a buyer defaults.

 

It is important to understand what does contingent mean because a home is usually the biggest purchase of a person’s life, and contingencies such as these ensure that investment is a sound one. They afford buyers the chance to assess the property, make sure its value is appropriate and secure financing to cover the costs. If the conditions of the contingencies aren’t met, the buyer can back out and find a property that better suits their long-term financial needs.

Keep in mind, as each contingency period ends, you must either remove the contingency from the contract (in writing), elect to move forward with the transaction or cancel the contract.

Waiving Contingencies

 

In some cases, you may want to waive contingencies, either when first presenting an offer or during the negotiation phase. You should only waive contingencies if you are absolutely sure of your decision. Canceling the contract without a contingency would cause you to lose your earnest money deposit.

The most common reasons for waiving contingencies are:

  • To stand out from other buyers – If you’re in a bidding war or making an offer in a particularly competitive market, waiving contingencies may make you a more attractive buyer to sellers. Many buyers will waive inspection or appraisal contingencies in order to stand out and secure a property when competition is hot. In San Francisco, a seller’s market, waving contingencies and all cash offers are very common and often the best way to win against other bidders.
  • To speed up the closing process – You can waive contingencies after you’ve already put an offer on a home, skipping things like appraisals, inspections, and other time-consuming steps. This can speed up the purchase process — often a benefit to both buyer and seller.

In general, sellers are always going to favor offers with fewer or shorter contingency periods, as this gives them more confidence in the buyer and their ability to follow through. Most sellers want to avoid going back to the drawing board, which would only draw out the process and delay their move.

Days on Market (DOM) – Real Estate Market Guides | Zenlist

Days on Market is the age of a real estate listing. It’s how many days the specific home listing you’re looking at has been up and active on market.

If you’ve ever looked at an online home listing, or more in general at the real estate market, you’ve likely seen the initials “DOM” somewhere on the page. An acronym for Days on Market, DOM might seem like just another one of the million data points listed for a home, but the truth is it’s actually quite important. Days on Market, along with median home price is one of the key metrics to evaluate a real estate purchase.

What Does Days on Market Mean?

Put simply, average Days on Market is the age of a real estate listing. It’s how many days the specific home listing you’re looking at has been up and active.

Typically, showings start the day a home is listed, so if you’re looking at a property that was listed 14 days ago, other buyers have been considering the property for about two weeks.

Every day a home is listed as active, which means it’s sellers are currently accepting offers, the DOM stat will go up. When the home’s status is changed to pending (after the seller has accepted a bid), days on market will stop accruing.

Hot or Not?

The DOM stat is a great gauge of how a specific housing market is performing. In a hot market, where demand from buyers is high, DOMs tend to be on the low end. In markets where demand isn’t so great (or inventory of housing is particularly high), DOMs are usually higher.

If you’re considering multiple cities or markets to buy in, you can typically get a feel for how competitive each market will be by looking at the average DOM for each area. The lower the number, the more competition you’ll likely face in your home search.

How is average DOM calculated for an area?

To determine the average days on market, agents take the last 30 days to six months of sold listings, add together the days on market (before each listing went pending) and divide that total by the number of listings.

For example, say an agent had six listings in December. Three of those listings were on the market for five days, one listing was on the market for 21 days, and two were listed for 30. The average days on market for December, in this example, is derived by adding 5 + 5 + 5 + 21 + 30 + 30, which equals 96 days. Then dividing 96 by six listings will equal 16 average days on market. In most markets, this is a on the low end of DOMs, indicating a “hotter” area and rising buyer demand.

What DOM Means for Home Buyers?

DOM can be a powerful tool to use as a home buyer. Both long and short DOMs can give you insight into the marketplace, the sellers and their potential for negotiation. All of this can help guide your approach to buying.

A long DOM, for example, means a home has been on the market for quite a while. Knowing this, it’s safe to assume the seller is becoming desperate to get the property off their hands. This can mean they’re more willing to negotiate on price.

Long DOMs can also indicate something is wrong with the property, and that buyers are visiting the home but not putting in any offers. You can do two things with this information: avoid the property knowing it may have some flaws, or use those flaws as leverage to negotiate a lower price.

There are a few other assumptions that can be made from a long DOM:

  • The property is overpriced. This is very common. Maybe the seller is overzealous about what they can get for their home, or the agent has looked at comparables and believes the property may be worth more than other properties in the area. Either way, approach the home with caution and have your agent evaluate the home’s price before you put in a bid.
  • The seller is not interested in selling quickly. This could be because it’s an extra property they own, it was inherited from a family member, or the sellers have already moved into their new home. Either way, they’re not motivated to get it off the market quickly and are willing to wait around for a higher bid.
  • The market is “cold.” If there’s lots of housing inventory in the area or buying demand is low, homes will simply take a bit longer to sell.
  • Showings haven’t been possible. If the property has tenants, is being refurbished or has other factors at work that preclude buyers from seeing the home, this could result in a longer-than-average DOM.
  • The seller’s agent is unqualified. The problem could be the agent or their lack of skills and experience. Poor listing images, bad marketing, unattractive descriptions or just poor selling skills can all affect a property’s DOM. If the agent is working for a reduced commission, and therefore has less motivation to sell the home, this can also have an impact.

Short DOMs, on the other hand, are typically the sign of a seller’s market, meaning homes are selling fast and properties are in high demand. These hot markets often have a low level of housing inventory as well.

When a home has a short DOM, it indicates the property was just listed. In most cases, sellers are unwilling to negotiate this early in the process unless they are very motivated to leave the property. A short DOM may also mean you’ll need to act fast. Homes sell quickly in hot markets, so if you see a property you like, you’ll want to put in a bid ASAP if you want a chance. Work with your agent to put in a right-sized offer that will get serious consideration from the seller. You may even need to go above listing price to get noticed.

Zenlist Insights: How Agents Relist a Property and Reset Days On Market (link)

Chicago Real Estate Market Sales | 2017-2018 Zenlist

Every city has its own unique real estate market, and Chicago is no different.

We took a look at the last few months of data and found some pretty interesting changes going on in the Windy City – even some that buck national trends. From a surplus of inventory to a penchant for expensive areas and detached homes, Chicago’s buyers are paving their own way in today’s housing market.

New listings are outpacing sales by a big margin

We hear a lot about housing inventory being low, but it seems that’s far from true in Chicago. According to 2017’s data, only about half of the city’s listed properties sold last year. Out of a whopping 61,245 listings, a mere 33,001 sold – just over 53 percent.

And it seems that trend is likely to continue, too. Over the last five years, the number of sales has grown just 5 percent. New listings? Those jumped 22 percent.

The trend is a curious one, especially as much of America faces a severe dearth of homes on the market. Continuing population loss in the city could certainly play a role. Out of the nation’s biggest cities, Chicago experienced the greatest drop in population in 2017, losing about 20,000 residents over the course of the year. It marked the second consecutive year the city netted a loss.

There’s no shortage of detached properties

If you’re on the market for a detached property, you’re definitely in luck; Chicago appears to have them in spades.

Over the past five years, detached property listings have jumped a whopping 25 percent. Demand isn’t keeping up though; sales on detached properties notched up a mere 4 percent for the same period. And in 2017? They rose only 2 percent.

Meanwhile, new listings on attached/condo and multi-unit properties are keeping on point with demand. It begs the question: with all this inventory available, could prices on detached properties soon be on the downturn? Only time will tell.

The best-selling neighborhoods are also the most expensive

Chicago’s most popular neighborhoods certainly aren’t that way for their bargain-basement prices. In fact, many of the city’s top spots are also its costliest.

Take Near North Side, for example. The community claimed the title for most properties sold, but its average price is in the budget for very few. For 2017, the median sales price in the neighborhood was a shocking $1.075 million. This number’s likely influenced by a handful of detached properties in the area, which tend to go for around $1.9 million each. The average condo in the area is just $405,000.

Lincoln Park is another similar region, taking a top-five ranking for most sales and also claiming an average median sales price of $999,000. Detached homes in the area run for a cool $1.58 million, and 200 of those were sold there last year. The neighborhood also has the city’s most expensive condos, averaging about $490K each.

A little pro tip? If you’re interested in either of these communities but don’t have pockets deep enough, you may want to lean toward Near North Side. The average property sold for 31 percent under its listing price last year, so there may be a little wiggle room when it comes to price.

 

Chicago Real Estate Market 2018

Chicago Real Estate Market 2018

The Chicago real estate market is big. Really, really big.

With more than 70 neighborhoods, a wide array of property types and plenty of hungry buyers, it’s one of the nation’s most robust and competitive markets out there.
But that doesn’t mean it’s inaccessible.
Whether you’re on the hunt for your first home or you’re a serial real estate investor looking to expand your portfolio, 2018 might still be your year. We’ve analyzed the last year of local real estate sales, and trends indicate now may be the time to buy – at least for some.

 

1/3/2018 UPDATE: WE RECENTLY UPDATED THIS ANALYSIS ADDING THE NUMBER/TYPE OF PROPERTY SOLD (LINK)

Prices are up – but not by that much.

You hear a lot about the ever-rising prices of the American housing market. But here in Chicago, average home prices are still below their record highs. In fact, prices on detached properties stands at 89 percent of what they were in 2007, and attached houses are still at 82% percent. Last year, there was actually a slowdown in growth on single-family detached properties (meaning now may be the time to buy one if you’re on the market!).

If you’re ready to buy, you’ll need to act quickly.

Properties are selling fast, and the average days a property stays on the market has been steadily dropping. Attached single-family homes have seen a 19 percent dip in days on market since 2016, and multi-unit properties have dropped 13 percent. Attached units are also on a slow decline – and have been since 2011. The moral of the story? If you see a property you like, act fast; it won’t be on the market long.

The listing price is probably negotiable.

Unlike in many metro areas, Chicago homes are actually going for under their listing price. Single family detached and attached homes show the biggest differential, selling for about 4 percent under their listed price, while multi-unit properties had a 2 percent one, meaning they’re going for a little closer to listing price than other properties. Either way, this means you likely have a little room to negotiate – no matter what type of property you’re buying. This is also the first year multi-unit properties are selling below listed price in the last 5 years.

Condos, duplexes and attached homes are a hot commodity – at least for today.

A big chunk of properties sold last year were attached homes, meaning condos, duplexes and the like. Detached homes came in second, while multi-units came in third. There was also more inventory in the attached space in 2017, with fewer on the multi-unit end.
This indicates it could be a good time to buy an attached property – but only for now. Data shows prices on single-family attached homes are growing faster than other housing types in the Chicago market. You’ll want to get in before the differential between listing price and sales price starts to tighten even more.

Get your detached house now.

If you’re on the market for a detached home, you also may be in luck. This type of properties move slowly, and their prices aren’t rising like other housing options. Still, new listings are stable for attached homes, so you’ll want to act fast. As listings will start to dwindle and demand rises, buyers will lose bargaining power when it comes to price.

Neighborhood matters.

Chicago is home to nearly 80 different neighborhoods, and let me tell you: they’re definitely not created equal. Each offers different pros and cons, as well as unique levels of competition, supply and pricing. If you’re not looking to spend an arm and a leg on your property, you’ll probably want to avoid the city’s most expensive neighborhoods: Lincoln Park, Near North Side and Lake View. Lincoln Park came in with an average sale price of $1,174K for 2017, while Near North Side wasn’t much less at $1,135K. If you’re going for a detached single-family home, you’re looking at an average of $1.83 million or $1.86 million, respectively.
Lake View was slightly more affordable overall, with an $899K average price. Single-family properties in this neighborhood ran a cool $1.32 million in 2017.

Price aside, Chicago neighborhoods also vary greatly by time on market, meaning where you buy will play into how fast you need to act. In the Lower West Side community, houses sell the fastest at just 52 days on the market. The neighborhood also has a very small spread between listing price and sale price, indicating the market is pretty competitive at the moment.
Near West Side and Archer Heights also see properties fly off the market at just 54 and 56 days on market. Still, if you can get in fast, Near West Side is a great buy. Attached homes sell for about 10 percent below listing price.

North Park offers the deal of the year.

When looking at Chicago real estate market, for a true steal, look to North Park. Though homes average about 67 days on market (slightly higher than the record-holding neighborhoods, but much lower than the city’s average of 90), they’re also going for a whopping 30 percent below list price. Plus, looking at new listings versus properties sold, it appears there’s still plenty of inventory on the market – including many single-family, detached homes.

Chicago’s Millennium Park

Chicago-millennium-park

Chicago’s Millennium Park

Chicago’s Millennium Park is a large public park located in the Loop community area of the city. It covers a 24.5 acre section of North Western Grant Park. This park was opened on July 16th 2004, and since then it has become a top tourist destination in Chicago and the Midwest with over 25 million annual visitors. While there are many of reasons to visit this park at any time of the year, here are some highlights to keep in mind when you visit it.

Chicago-Millennium-Park-Jay-Pritzker-Pavilion

Jay Pritzker Pavilion

This open air pavilion is the crown jewel of Millennium Park. This open air pavilion has 4,000 fixed seats plus an additional lawn seating area that fits 7,000 additional people. The pavilion hosts a wide range of music acts and performances, which range from mainstream bands, classical musicians, opera singers and others. All events at the pavilion are open to the public, including the rehearsals. You could hire a city guide who would take you and inform you of who is rehearsing and at what times.

Other events include the Annual Millennium Park Summer Film Series, where every Tuesday evening at 6:30 pm, from June 13 to September 5th, classic blockbuster films are shown at the pavilion. The event is also completely free, and the movies are shown with concert-hall quality sound system for a memorable movie going experience. Cinephiles and those looking to explore a different side of Chicago will love attending this festival.

Chicago-AT_T-Plaza-Cloud-Gate

AT&T Plaza and Cloud gate

The AT&T Plaza is a public space that hosts the world famous Cloud gate sculpture, designed by the Indian born British artist Sir Anish Kapoor. This sculpture is a highly polished, reflective steel sculpture that looks like a giant bean made of mercury. This culture reflects the city’s skyline, and it’s a huge hit with tourists, and with those looking for the perfect selfie.

Chicago-Millennium-Park-Crown-Fountain

Crown Fountain

The crown Fountain is an interactive piece of public art designed by Jaume Plensa., made up of two black granite monoliths facing each other. Each monolith is about 15 feet in height, and have LEDs sandwiched under glass bricks. There is also a reflecting pool placed between the monoliths. The towers uses the LEDs behind the bricks to display faces and animation. On hot days, water spouts from the towers and the faces projected through its LEDs making it look like the subjects mouths are spouting out the water, just like a gargoyle fountain.

Chicago-Millennium-Park-Harris-Theater

Harris Theater

The Harris Theater is a performing arts theater located along the northern edge of Millennium Park on Randolph Street. It was constructed in 2002, in order to have a venue for small and medium-sized music and dance groups. It serves as a home venue for many different music and dance groups including the Chicago ballet, The Dance Center of Columbia College Chicago, Mexican Fine Arts Center Museum, Old Town School of Folk Music, Hubbard Street dance Chicago, and many others. The theater has hosted several successful jazz performances, and other unique events such as “Imagine Tap”, a show that features an array of tap dance styles. Unlike many other venues of this kind, the Harris’ theater is unique for its industrial aesthetic.

Chicago-millennium-park-rink

McCormick Tribune Plaza and Ice Rink

The McCormick Tribune Plaza and Ice Rink is a venue located along the western edge of the Millennium Park. It opened up on December 20th 2001 and became the first attraction in Millennium Park to open. It is generally open for ice skating from mid-November until mid-march. It hosts over 100,000 skaters annually. It is also completely free if you bring your own skates, but if you don’t own a pair, you can always rent them for only $12.

For the rest of the year, the rink gets converted into Chicago’s largest open air dining facility, which also includes a large walk-up bar. The 150-seat outdoor restaurant offers scenic views of Chicago Millennium Park and hosts various culinary events and musical performances during its months of operation.

Chicago-Millennium-Park-Lurie-Garden

Lurie Garden

The Lurie Garden is a five-acre garden that pays homage to Chicago’s motto, “Urbs in Horto” (City in a Garden). This garden features thousands of plants of more than 240 varieties. Most of the plants are native to North America, and all are grown organically, with no extra chemicals. Because of the huge plant biomass, it has become the home of migratory birds, butterflies, honeybees and songbirds. The Lurie Garden offers free educational programs, presentations and events for the whole family year-round, and it focuses on presenting an urban model of responsible horticulture.