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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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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.

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On July 22nd, the House of Representatives passed a housing bill that is expected to be soon passed by the Senate, and signed by President Bush. There are many provisions to the bill, but the significant provision that will affect buyers is below. It comes directly from the Chairman of the Mortgage Bankers Association of America’s opinion on the legislation:

• 

  FHA Modernization: Authorizes a $25 million appropriation to improve technology, processes, program performance, eliminate fraud and provide appropriate staffing. Effective January 1, 2009, it also increases the FHA loan limit to the lesser of 115 percent of the local median home price or $625,500 with a floor for lower priced markets of $271,000, establishes a 12-month stay on FHA’s proposal for risk-based premiums, sets the down payment requirement at 3.5 percent and prohibits seller-funded down payment assistance (both direct or through a third party).

Okay, so what does this mean to buyers?

Potentially significantly higher loan limits for FHA financing…. which is actually great for buyers!  A down payment requirement of 3.5% instead of the current 3% down requirement, which is a  ½ %  increase over current FHA requirements, which isn’t so bad, and  the elimination of seller assisted down payment assistance programs, i.e.; AmeriDream, Nehemiah, etc…   Well, that’s HUGE, especially for first time home buyers!

In reading the full article, the proposed changes should take place Jan. 1, 2009, assuming no changes are made by the Senate or President Bush. If you been waiting for prices to come down further, but are in need of down payment assistance, and don’t have a cash gift from your parents for the down payment, it would probably be in your best interest to close on your new home before the new year
!
As with all new guidelines, once the new ones are in effect, there will be NO exceptions made. 

If you wait until after the new FHA guidelines to take effect, you might be too late to take advantage of some very beneficial seller incentives in this buyers market.  3% seller paid closing costs equal $6,000 in seller incentives on a $200,000 loan, which in this market can break the lending criteria for certain buyers. 

If you want to know more about the amount and type of loan you can qualify for give one of my loan officers a call.  Dale Noble from Wells Fargo will be happy to answer any of your lending and mortgage questions:

Dale Noble
Home Mortgage Consultant
Wells Fargo Home Mortgage  M2968-012
4332 Fox Valley Center Drive
Aurora, Il. 60504      

630.428.0317 Tel
630.820.5221 Tel
630.878.5012 Cell
866.359.5903 Fax

dale.noble@wellsfargo.com
http://www.ilendfast.com

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I was checking the MLS for a client tonight that is specifically looking for pre-foreclosure or foreclosed houses in Plainfield.  I was surprised by how many newly listed single family homes I found under $200,000 on the market tonight.  I keep close tabs on the market in Plainfield, but recently there have been quite a few drastic price reductions on bank owned (otherwise known as REO’s) and pre-foreclosure listings in Plainfield in the last 2 weeks.

The difference between the kind of homes that were foreclosed on 5-6 years ago and the homes that are bank owned in Plainfield today, is that owners in this market are taking their belongings, and walking away. 

In the past the interior or foreclosed homes were damaged and destroyed by the previous owner out of anger and frustration from their situation.  Today, owners are simply throwing their hands up and waving the white flag.  Most of these owners have tried to sell their homes through a Realtor in Plainfield by doing a short sale, but simply ran out of time to find a buyer before the auction date.

Many foreclosed homes in the Plainfield area are in excellent condition and are simply in need of minor cosmetic repair.  New carpet, paint, and possibly some new appliances will make them as good as new and are a relatively quick fix and relativley low cost repair.

Don’t get me wrong though… there are some extremely beat up, dirty, smelly, nasty, abused homes out there!  Trust me, you don’t want to see one of those on a hot summer day!  (Not on a full stomach anyway ;)  I have invested in foreclosed homes in Plainfield for the last 2 years.  I know what to look for, and I know what makes buying a Plainfield foreclosure a great deal as both as an owner occupied property as well as for an investor.

I know investors are looking to purchase at 60-70% equity postitions and that owner occupied buyers want to protect their new home purchase from the current predicted rate of depreciation of 15-20% over the next 3 years.

Don’t leave your next home purchase to chance.  Call me at 630-673-6233 to find out what purchasing at the right price can do to leverage your position of equity in the Plainfield and Naperville real estate market.