How to Buy a House in Chicago
Are you thinking to buy a house in Chicago – The Windy City? Do you have your eye on the bustling historic West Side – Logan Hood? Maybe you’ve got that sought after career promotion and have your heart set on the views from Lincoln Park? Perhaps you want to buy into the next big neighborhood to be gentrified, like Avondale. Whatever suburb you have chosen, there are a plethora of options in Chicago for first time home buyers or seasoned veterans.
Pre-Approved or Pre-Qualified?
There are a few things to consider before embarking on your Chicago house hunting expedition. Before you start the process, make sure you have pre-approval, which is different from pre-qualification. With pre-approval, you have a guaranteed loan. Knowing when you search and find your dream home, and can make an offer, makes the journey stress free. Part of the home buying process involves determining a purchase price as well as the subsequent repayments you are comfortable paying every month. These payments include property taxes, potential homeowner association fees, maintenance fees, etc.
Second Highest Property Tax in the State of Illinois
One downside to buying a home in Chicago is that property taxes have increased by as much as 50% in the last five years. The taxes may affect what you’re able to afford. However, the bonus of buying a home in Chicago is that there is no city income tax that you have to pay. Once you have decided on your spending cap, you can shop with ease in that price bracket.
The home buying process
So Many Houses at Bargain Prices
Figure1: Northern Illinois/Chicago’s Region real estate market statistics
At the moment, there are over 14,000 houses for sale in Chicago, which means you have plenty of choices (for now). The current situation is ideal for the home buyer because you have an excellent chance of finding and getting your dream home. But that situation is steadily changing, and inventory will lessen, so now is the perfect time to invest in buying property. Chicago’s population is large but slow growing. It’s only grown at approximately half the national rate for some time now, which has resulted in home prices being pulled down to well below local income levels. That is why houses for sale in Chicago are such a bargain at the moment.
The city is also becoming a regional hub of high wage manufacturing jobs, which impacts the real estate market positively. We see that in Chicago, home prices are meager compared to the average income. Properties are currently on sale for 25 percent below the average price level. The median price list is about $234,900 for a new home, but it is still possible to buy a house in Chicago for under $200,000. When you see that the median household income in Chicago is $47,010 you can see how buying your own home becomes an affordable option.
“It’s always a good time to buy,” Matt Silver, President of the Chicago Association of Realtors
Location Near The Loop
Chicago’s famous Loop ‘L’ Train
A great perk of living in Chicago is that the city focuses on commuters. You do not have to own a car in the city and pay all of the gas, insurance, parking and maintenance costs; you can only use the super efficient and affordable public transit system. The famous Chicago Loop ‘L’ train is an elevated system traveling above the street congestion, and services all neighborhoods. The closer to the loop, the shorter your commute time. Even if you choose to drive around the city, the average commute time is around 32 minutes.
Steps to Closing the Deal on Your New Home
You’ve been pre-approved; you’ve decided on what you can afford every month, and now you can actively start searching for homes online or via apps that have huge numbers of listings. Your pre-approval can make viewing the house (and the sale) smooth and effortless. You can even drive around your favorite neighborhoods to get a feel for the area. Location is an essential factor in your ultimate choice. When looking at houses for sale in Chicago, always try and see past any exterior surface problems like a bad paint job –you can solve that quickly, but if it’s in the right location, that gives the home a tremendous resale value.
While you can create your short list of ideal homes, the next step is to go and see the property in person before making your final decision.
Put it in writing
When you finally find the home you wish to buy, the next step is writing an offer. If the seller accepts the offer, you can then negotiate the final terms and price. Once you have negotiated terms, the final sale will be contingent on a home inspection and an attorney’s approval. Never waive the home inspection process as you want to be sure there are no hidden problems. A professional will be able to access the property and assure you that the home is safe and secure.
The last step is doing a final walk through. It is your last opportunity to check for any damages and make sure that everything you agreed upon to the terms and conditions has been met. You can now sign the papers for the transfer of the property from the seller to you, and then it’s a closed deal. You will also sign all of the necessary mortgage paperwork.
Now you are ready to move in.
If you’re contemplating to buy a house in Chicago, remember these great attributes going for the city:
Overall crime rate is down and is at a historical low
- There is an architectural style to suit all tastes –postmodern, traditional bungalows, Chicago cottages, etc.
The grid system of the city is easy to navigate with wide streets
Streets are clean
Cost of living is lower than in other big cities like New York
- Every person in Chicago is in walking distance from a park
There are 29 miles of beach in the city
- Huge theater and restaurant scene
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