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The market has been a little off recently with the amount of foreclosures and pre-foreclosure short sales taking over the real estate market in Plainfield and Naperville, but not all properties in both Plainfield and Naperville are being sold a deep discounts.  Buyers always ask me how much they should offer if they want to have their offer accepted by the seller.  Sellers likewise ask how much they can expect to be offered for their Plainfield and Naperville properties.

On average over the last 6 months, sellers in Plainfield got about 96% of their asking price for both town homes and single family properties, with the exception of single family homes with 5 or more bedrooms, which got about 94% of their asking price. One reason that the sellers with 5+ bedroom houses may have gotten less than asking price is because it was over priced to begin with.  Bedrooms typically add between $7-10K to the value of a house, but not often more than that.  Another reason is that there is not as great of a market for homes with more than 4 bedrooms, lessening the interest that buyers would have in a home that may be more than what they need.

In Naperville, it's a similar story but the numbers are down just a bit. For all single family homes available in Naperville that closed in the first 6 months of 2008, the single family home sellers are are closing at about 95% of their asking price with the exception again being the 5+bedroom market.  Those homes are fetching about 94% on average.  Attached single family homes are fairing a little better with a sale to list price ratio of about 96%.  The exception is one 4 bedroom attached single family home that closed at 98% of the asking price, which strangely enough, is converse to the situation with 5+ single family homes in Naperville.

Plainfield Market Statistics for the last 6 months:

Naperville Market Statistics for the last 6 months:

A few things to remember about how much you should offer on a properties in Plainfield and Naperville are:

• Is the house you are interested in over-priced?  Any good Realtor would, and should, pull the neighborhood comps and do a market analysis on the property you are interested in BEFORE you make an offer.  Find the true market value before you start negotiating and then go from there.
  

• Owners of exceptionally well kept homes in Plainfield or Naperville that are already priced well may be less willing to negotiate.  They know they will sell their home to the next person if you make an offer that is too low.  Often these sellers are often willing to wait for a higher priced offer.
  

• Ask about their motivation.  Do they need to move? Are they just testing the market? Have they been transferred?  Experiencing a life change due to birth, death, marriage, divorce or illness? 
  

• Does the property need repairs or have deferred maintenance that needs to be addressed?  If so, how much do you think it will cost to repair?  Is the house priced accordingly?

• Does the property have some kind of functional obsolesce that will make it difficult for you to sell in the future?  Power-lines or freight train tracks cutting through the back yard?

• How much have similar properties sold for in the neighborhood?

• And finally....How much do you really want that house?!
  

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Under the new housing bill that gives first time home buyers a tax credit, first time home buyers will be eligible for a tax credit for up to 10% of the property up to a maximum of $7,500.  In order to qualify a buyer can not have owned a home in the last 3 years.

Here's how the new first time buyers tax credit works...

• Married couples who file separately will each get a credit of $3,750, and unmarried couples who file jointly can divide the $7,500 credit between them.

• This program is actually a loan that must be paid back over the next 15 years at 0% interest, in the second year of home ownership.  A 1st time home buyer who qualified for the whole credit would pay $500 for 15 years or about $41.67 per month.

• The credit will only apply to homes bought after April 9,2008 and before July 1, 2009.

• High-income home buyers dont qualify: Eligibility begins phasing out for single filers with adjusted income of more than $75,000 and $150,000 for joint filers. It completely phases out at $95,000 for singles and $170,000 for married couples filing jointly.

While having to pay back the credit over time seems like it dilutes the benefit, many homeowners will  enjoy the benefits of a higher tax return. I'm sure the money can be put to good use for home improvements and some of the higher cost home purchases such as appliances and furniture.

Under the new FHA guidelines it just got a little tougher for 1st time buyers to purchase their first home with an FHA loan, but hopefully this new bill will help soften the blow.

Just to be clear, it's not a credit you have to take if you meet the criteria, but just know that it is available to you. 

It's still a great time to buy a house!  If you are in the market to buy or sell a home, or know someone who is, it would be my pleasure to help you with all of your home buying or selling needs in the Plainfield or Naperville area.  Call me at 630-673-6233.

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How much you should offer on a pre-foreclosure or bank owned property depends on a few different factors, but if you play your cards right, it could lead to a really great deal on Plainfield on Naperville real estate.

Plainfield and Naperville Short Sales:

If you are making an offer that has not yet been foreclosed on and that is subject to bank approval, you are making an offer on a property that is still in the possession of the homeowner. The owner decides which offers make it to the bank for the final approval. Offers that are too low will eat up the buyers time in which they may elect to decline the offer; but offers that are close to or near market value may entice the lender to accept less than what is owed to satisfy the debt of the homeowner in default.

Short sale approval can take anywhere from 1 day to 8 weeks, depending on the lender, and the amount of accounts in default that a case manager is handling. Most lenders are in the process of negotiating hundreds of loans in default. The response of each lender will be determined by the efficiency of the way the required information is packaged by the person in charge of handling the short sale.

If the sellers financial information is missing or incomplete, the file will sit on a desk, unaddressed for days or even weeks! The case managers are overloaded with files from sellers in default and they will not chase down the person in charge of the short sale for missing information. If you have an offer in on a short sale and you have not received a response after 4 weeks, ask the person handling the file to check with the lender to make sure that all required information is on file and accessible to the case manager. You need to make sure that the person performing the short sale has good contact with the bank and that they are proactively pressing the bank for a decision.

Plainfield Bank Owned Properties or REO's:

Bank owned properties are corporate owned homes that have been sent to the auction but which were returned to the bank's possession when there were no bids offered above the banks opening bid. (which is usually for the amount that is owed.) These properties are then marketed by an experienced REO agent who sets the price, taking into consideration the condition of the property and the banks desire to quickly sell their property at a fair market price. On the other hand

How much should you offer for those distressed properties in Plainfield or Naperville?

What condition is the property really in?

Are the repairs cosmetic or is there structural damage that needs more than just a little elbow grease? Homes with serious issues such as structural damage or mold issues will always be the most deeply discounted properties on the MLS, but they will also require the most amount of money and time in repairs, especially if the mold inside of the house is toxic. The next two areas of the house that will yield a decent discount it damage to the drywall, the carpet or flooring, sinks, cabinets and counter tops... and missing mechanical appliances such as a furnace, air conditioner, sump pump, & hot water heaters. The final degree of discount comes from the things that may not be perfect, that are easy and inexpensive to fix.

What kind of cash reserves will you have to make repairs?

Most of the homes that area bank owned will need some kind of work. They may need new carpeting, appliances, landscaping. Keep those repairs in mind when discounting the property by comparing the Plainfield or Naperville neighborhood values to the amount of work, and the amount of money that needs to be spent, in order to bring the property up to the neighborhood market values. Make sure you will have the money available to you to make those repairs, especially if they are required by the lender (for FHA loans) or by the village.

Are there other offers on the house?

If you are making an offer on a pre-foreclosure home in Plainfield or Naperville and you find yourself in a multiple offer situation because the listing agent discloses that there are multiple offer on the property; it is always in the best interest of the buyer to bring your best offer to the bank. Presenting offers to the seller is the first hurdle to overcome, but then you still have to get the bank to agree to the loss it is willing to accept. Most often the real negotiation begins after the offer has been handed off to the bank. A seller that truly understands the process, knows that they have the best chance of having the short sale accepted by their lender to avoid the foreclosure, by getting the best offer as quickly as possible.

A few tips from an agent in the trenches:

• Don't submit a ridiculously low offer if you want a quick response.
• Lenders will not typically accept offers asking for seller paid closing costs, points, or fees. There are exceptions, but only when the contract is heavily negotiated. Make sure your financing is solid you want to be taken seriously.
  
• Lenders will NEVER accept an offer that is subject to a home sale contingency. Never, ever, ever. Nope, just to be clear it won't happen.
  
• The bank will most likely counter any offer that comes across their desk. It's their policy, and I always expect it to happen and anticipate it.
• Most short sales take anywhere from 2-8 weeks for approval. Foreclosures are at record all time highs, and there are a limited amount of loss mitigators in each department.
• A contract that is subject to bank approval is not fully executable until it is accepted by the lender, which means your offer could be bumped mid process by a better offer. This is subject to debate by several local area attorneys as to whether the contract becomes fully executable when signed by the seller, or when it is approved by the bank. I would refer to a real estate attorney to clarify if this situation were to arise.
• Liens, property taxes, and homeowners association fees need to be paid prior to closing by the seller (lender) and it's important to take those losses suffered by the bank when assessing the loss the bank is willing to accept.
• On an FHA loan, the minimum amount that a bank can accept on a short sale is a NET offer of 82% of the APPRAISED value of the property. This is what the bank needs to see on their side of the HUD on the closing or settlement statement.
• Only work with an agent who knows about the foreclosure process if you are buying a pre-foreclosure or bank owned property.
  

If are looking for an REO or pre-foreclosure house in Plainfield or Naperville, IL, I can provide you with a current list of properties available for sale in the area. It's really important to be pre-approved for a loan before you even begin to look at these types of properties because the lenders are looking for a quick close. I can arrange a meeting with one of the mortgage brokers that I work with if you are ready to get pre-approved for a loan.

Call me for your complimentary list of foreclosed or pre-foreclosure properties in the Will county area at 630-673-6233 for access to the hottest market in real estate right now.

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I don't even know where to start with this one simply because for my Plainfield neighborhood it's not just one or two homes in foreclosure, there is at least 10 that are bank owned already with at least another 10 that are well on their way.

There is no doubt that foreclosures will bring down the property values in Plainfield and Naperville neighborhoods, but what about the eye sores they become within the neighborhood?

The weeds are covering the walk to the front door, and the lawn hasn't been cut all summer.  There is significant amounts of debris from long gone Spring storms that swept through the area...

Contacting a Homeowners Association or the village about a problem with unkempt properties in your Naperville or Plainfield subdivision may seem like the answer, but until the bank actually regains possession of the property, there isn't much that can be done about the disheveled condition of the exterior until the property is sold either back to the bank or to new owners.
 

Are Plainfield and Naperville foreclosures starting to affect your neighborhood?

As a responsible person, the whole idea of not paying the mortgage seems crazy to you.  Perhaps you have faced tough times too, BUT... you didn't get through it by using our credit cards, or the equity in our home. You're not only angry that your neighbors left you with a vacant eyesore in the lot next to yours, they made it your business by trashing the property and bringing down the value of your home.

There is a difference between luxury and necessity.  Cable is a luxury. Cell phones are luxury. Internet is a luxury. Air conditioning is a luxury. Eating out is a luxury. New clothes are a luxury. New cars are a luxury. Entertainment is a luxury... food, water, and shelter are necessity.

For people who have fallen on hard times, you would expect to see some refraining going on, but what happens when homeowners in foreclosure haven't scaled back and haven't done without to make ends meet?

For those sellers in default, trying to sell their house through a short sale before the auction will probably cause the bank to not very open to negotiating the sellers debt.  Part of the process of a short sale includes close and careful scrutiny of a seller in default's bank statements.  They have to prove they haven't been able to afford their payments due to a hardship from the time they stopped making their payments.  If there is an $2,000 purchase at Best Buy for a new flat screen t.v. on their bank statement, you can probably bet that the bank won't be letting them off the hook too easily.

Buy many of the homeowners in default aren't even trying to work with the banks.  These are the homes with the unkempt lawns, broken windows, and run down exteriors. These are the abandoned homes that were never listed for sale.  Does this make you angry? 

Here is why everyone isn't willing to swallow the sub prime excuse anymore:

Adults who have the privledge of due diligence, have the opportunity in America to be EDUCATED in the home buying process.

I'm a Realtor, and yes we've taken our lumps for the situation too.  The thing is though, my fiducuary responsibility as a Realtor is to be the procuring cause of the sale, not determine and decide what my customer can afford to pay each month.  I think that many buyers even today would benefit from pre-purchase counseling or homebuying seminars.

Why do Plainfield and Naperville families lose their homes to foreclosure?

Death, divorce, disease, devastation, and debt. 

I have worked with some unfortunate sellers who have faced hard times, and on the flip side of that I have worked with some sellers who by their own admission made very bad financial decisions.

There are sellers out there who have done the right thing by trying to sell the house to avoid a foreclosure... but there are many more homeowners in foreclosure who leave behind a damaged property, sticking it to the lender, and in the end... ultimately you. 

Everyone pays the price for the surge in foreclosures one way or another, whether it's through depreciation on the value of your home, or through a reduction in the amount of money banks are willing to lend customers with good credit.  Both of these situations affect the economy in big ways.

Is there an end in sight to the amount of foreclosures in Plainfield and Naperville, IL?

The only end to the current state of the real estate economy that I see is a call for more proactive measures from homeowners in default who need to try to sell their homes before they become bank owned properties.

Instead of walking away from the house, I would suggest to anyone facing foreclosure to put any money that they can save into a bank account to cover the difference between what the house can be sold for quickly against depreciation, and what the bank will accept as a short sale. It could also be use it to build up a cash reserve that can will cover your first months rent and security deposit when the time comes to move and get back on your feet.

Even after the auction, the lender can file a judgement against you for the difference between what the house sells for at the auction and what you currently owe your lender.  You are always better off trying to sell your house instead of walking away. If you are facing foreclosure and need an agent that is experienced with performing short sales, call me at 630-673-6233.

If you are looking to find a property below market value or want to invest in the Plainfield or Naperville area, I can help you find a house that meets your needs.

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Tour 3 of the most desirable townhomes and floorplans in the town houses in Brookside Glen this Sunday, July 27th, from 1-4 pm!

Start your tour at 8382 Dunmore Dr., Tinley Park in Brookside Glen and pick up a list of homes available for viewing. 

To get to the townhomes at Brookside in Tinley Park take I-80 and exit at LaGrange Rd and head south to 191st Street.  Turn left at 191st Street and then right at 88th Street.  From 88th Street turn left at Bantry and then left on Dunmore.