Blog
Chicago’s famous grid-style system present throughout the city combined with extensive train and bus lines makes Chicago one of the most accessible cities via personal or public transportation in the country. We decided to take a look at what Chicago neighborhoods are the most ideal for the modern-day commuter.
To read the full blog and see the full list read the original article at Pearson Realty Group.
Every year InfoSparks in collaboration with Midwest Real Estate Data (MRED) generates and publishes an annual market report on some important to know stats from the previous years. Analyzing trends locally and nationwide they are able to provide the Chicago real estate world an understanding of past trends as well as realistic expectations on what's to come.
The inventory of homes for sale remained low, as home seller activity did not rise proportionally to meet this demand.
The number of homes available for sale in 2021 was lower than in 2020 by 33.6%.
On average, sellers received 98.5% of their original list price at sale, a 2.5% year-over-year increase.
Detached Single-Family home prices were up 14.7% compared to the previous year. Attached Single-Family home prices were up 11.6%.
Read the big takeaways on this new data and more at the Pearson Realty Group blog!
Finding the right agent for your needs is a crucial first step in our Chicago first time home buyer guide. When shopping for agents, you want an experienced realtor that can answer any first-time buyer questions you have and that you can get along with well. You want to look for an agent that is familiar with the areas you are searching in - some inside knowledge of certain neighborhoods is invaluable in the home search process. Going to some larger reality sites such as Zillow or Trulia will automatically match you with an agent based on your search - useful but very impersonal.
This is where having a trusted network or community of people you can turn to for recommendations will pay off. Having someone's trusted word on an agent's experience and more importantly, goodwill & ethics will be invaluable in this process for a Chicago first time home buyer. Facebook neighborhood groups are a great place to start if you don't have many contacts in the area you are looking into - many business leaders and community organizers discuss things here and can give some great recommendations.
Our expert team at Pearson Realty Group of over 80 Chicagoland agents on staff is ready to help you through every step of the home buying process. Search all properties for sale on our buyer's search page and feel free to call us anytime, we have agents involved in all neighborhoods of the city and can find your dream home today!
There are no stupid questions, especially when it comes to purchasing your first home. Remember, this is your realtor's job - they studied the laws, they have the knowledge, and the know-how to get answers they don't have. When you're a Chicago first-time home buyer you can't be timid or nervous to ask redundant or simple questions, this is your hard-earned money and you deserve the best service when searching for such a serious purchase.
Put some time aside, write down a list of any questions that you think of, and make sure you are confident in the answers you receive. The Washington Post put together 8 important — and overlooked — questions to ask before buying a home, this is a great jumping-off point for brainstorming ideas for your specific property. Inquiring about the quality of schools, noise levels, monthly appliance/utility cost, traffic levels, are more than appropriate and expected behavior with serious buyers.
A common complaint about bad agents is the inability or unwillingness to answer perceived "dumb" questions. This leads to confusion, distrust, and questioning the entire purchase process - an agent can either provide or take all the confidence in the deal for you. So very much like our advice to find the right agent, don't be afraid to leave an agent that isn't working out for you. While there are many red flags for dropping an agent, inability/refusal to provide properly requested information might be the largest one to look for.
Excitement tends to take over many first-time home buyers when seeing properties in person. While these feelings are absolutely warranted, it's important to keep your composure and not rush into things. This applies equally to every part of the home buying process. Revisiting properties, getting second opinions, and evaluating your agent's performance are just a few things you should spend some time on before pulling the trigger on any home.
While both of these are beneficial in planning your expenses and financial expectations for your first home purchase, they are drastically different in practice. A pre-approved loan essentially acts as a realistic but hypothetical loan process - it is all potential not guaranteed. You are provided with a lender, a summary of your financials, and an estimate on what you could potentially borrow. This is usually not preferred by sellers as it does not give them as much confidence in comparison that you will be able to complete the purchase.
On the other hand, a pre-qualified loan is on the opposite end of the spectrum. This process ends in you having a definitive loan amount guaranteed by a future lender. This is done with a hard credit check, a deep look at your financials, and a more in-depth application that covers much more than a pre-approved loan. The clear advantage of a pre-approval loan is that you are able to begin your home search with more confidence and realistic expectations. Another big difference is that pre-approval takes significantly longer than pre-qualified, although doing so will save you an indefinite amount of time, effort, and stress in the future.
Here at Person Realty Group, we have built up relationships with some extremely trustworthy lenders and services that make this process easy on you. Contact us today to speak to someone about finding your dream home today!
One way cold seeps into your apartment during Chicago winters (especially in older buildings) is cracks & gaps in your windows forming over time. An easy fix is to purchase from caulk to re-seal any cold breezes coming through window gaps. Another method that is quite effective, but less visually pleasing/functional is to use a Shrink Film Insulator Kit. This can be particularly useful in some older homes that do not have modern energy-efficient windows. Making sure your landlord is okay with you sealing the windows is always a good idea, as they may have a professional(s) to perform the task.
Threading the same needle as window leaks, gaps in your doors can cause your heating bill to be larger by allowing heat to escape. This is much easier to determine compared to window leaks but has extremely similar solutions - to seal the gap. Draft stoppers are popular fixes and come in many styles whether they be plastic strips that stick to your door or weighted cloth insulators. It will take you longer to order than it will to install - a no-brainer energy-saving method.
Many older apartments (especially two and four flats) in the city will primarily have wood flooring, which tends to retain the cold temperatures. Buying runner and area rugs go a long way in providing simple insulation for your apartment's overall temperature. You will find the heater running less and less when you have things like rugs that can retain a bit of 'heat'. This is will also insulate any noise you make (to a degree) so this is a great cheap, simple, no-brainer quality of life improvement for any apartment renter.
Check out the full list of apartment renter tips for Chicago winters HERE!
Asking for tenant estoppel is a great way to cover your tracks, and avoid future dilemmas over a tenant's lease. One thing an estoppel does is provide proof of cash flow. More importantly, estoppel prohibits a tenant from going back on their lease and making an argument that their lease should be changed. Also, this will bring to light any issues or promises that the seller has with the tenant and make sure that you as the buyer are made aware before closing.
Many times the "projected" numbers are far off from the actual expenses that a property may have. Obviously, an owner may not be forthcoming with the actual numbers, however, it is still worth a shot. You never know the actual costs until you do thorough research. It may be wise to get to know the owner and figure out if you can trust him or not. This can help confirm if your initial underwriting (or investment analysis) is in-line
Plumbing issues can be costly. Typically, an inspector's process does not include an inspection of the underground sewer system. One thing to ask your inspector is if they can complete any underground plumbing camera inspection. If not, no worries! We always recommend getting a specialist out there to make sure the entire sewer is not caved in, has breaks major clogs that could cause issues in the near future.
Having a reliable property manager is a necessary investment, and figuring out who it is going to be is a very wise thing to do before closing. A solid property manager will know exactly what to look for in a property. They will find costs that will be incurred in the future, that you may not have realized on your own. Generally, an experienced property manager will have a great perspective on what can and can't be done to a building, and what problems will occur in the future. Here at Pearson, we have excellent property management, and more information on this can be found here.
The Illinois Development Authority will be accepting applications for the Illinois Rental Payment Program (ILRPP) on Monday, May 17 at 9 a.m.
As an emergency rental assistance program, ILRPP is designed to help Illinois households that are unable to pay rent due to the COVID-19 pandemic. The program is funded by a $500 million grant that will help thousands of renters avoid eviction so they can remain safe during the pandemic.
The maximum grant amount is $25,000 per tenant and the approved amount will be given directly to the owner. Applicants are eligible for up to 15 months of assistance, paying up to 12 months of missed rent payments and up to three months of future rent payments. The coverage period is June 2020 through August 2021.
The emergency rental assistance is free to tenants and owner/housing providers so there is no application cost. To receive funding, both the owner and tenant must submit a joint application and provide valid email addresses, a long with additional household information to apply. If the application is approved, the grant will be paid to the owner/housing provider in the form of a check.
Owners are highly encouraged to reach out to tenants to discuss the application process and begin preparing materials. Your property management company should also be able to assist in connecting with tenants.
For additional information on the Illinois Rental Payment Program, including eligibility and documentation requirements, please visit www.ihda.org/ilrpp. All ILRPP applications must be submitted online at ILRPP.IHDA.org and will be accepted starting on Monday, May 17.
Housing Provider Frequently Asked Questions: CLICK HERE
Tenant Frequently Asked Questions: CLICK HERE
There’s nothing better than Springtime in Chicago. The weather gets warmer, flowers start to bloom, and people are outside ready to enjoy the sun. Spring is also the start of renting season. For rental property owners this means seasonal maintenance and building updates. To help owners maximize renting season, we’ve put together a Spring cleaning checklist that will help improve ROI for rental properties.
Gutter and downspouts clogs are very common after fall and winter. Inspecting and clearing out gutter debris is a critical step to avoiding external building damage. This can be done with a garden hose or owners can contact their property management company to take care of any larger issues.
Spring season means warm weather, and warm weather means that people will be spending more time outside walking around. One of the easiest ways an owner can boost property return is through landscaping and creating curb appeal. This includes trimming trees, planting flowers, power washing the building, and creating an overall welcoming environment. Not only will the curb appeal attract new potential renters but it will also keep current residents happy.
Cold Chicago weather can cause shingles to loosen up, allow rain to seep into the foundation, and cause major problems. The cold also means animals are looking for spots to keep warm and the roof to a rental property is an easy target. This is why it’s important for property owners to have the roof inspected every spring. They should be on the lookout for water damage, loose shingles, and any potential access points for animals. This maintenance will also help prevent bugs and insects from nesting under the roof when they emerge with the warm weather.
Spring cleaning extends to more than just clearing out clutter. Properties that have common areas like a lobby, mail room, hall entrance, workout space etc., should be thoroughly inspected and considered for updates. Building updates are a great way for owners to improve property ROI and can be as simple as repainting or adding interior décor. When a space looks fresh and modern, it boosts property appeal, attracts new renters, and improves the building’s overall status. A more luxurious feel/look to a property provides owners the opportunity to adjust the cost of rent to match the new features.
Air conditioning systems can be affected by the low winter temperatures. This can cause problems when residents decide it’s time to start up the A/C so a proactive approach is best. A/C maintenance includes things like checking panels, pipe insulation, outdoor coil, and filter replacement. Changing furnace and A/C filters ensures that residents are getting the most from the property’s HVAC systems and can prevent costly repairs in the future. These small but necessary maintenance tips will help maintain current tenant relationships and gives them the opportunity to leave positive feedback which can attract future tenants.
If you’re a home owner ready to sell, check out Pearson Realty Group’s tips for getting your home ready for the market. Click here to learn more 〉〉
Governor Pritzker extended the Illinois eviction moratorium to April 3, 2021. Executive order 2021-05 was signed on March 5th and included both an extended moratorium and made a change to the procedures for evictions.
Imminent threat / Dangerous Tenants case: Once a landlord receives an Illinois Tenant Declaration from a tenant, they may only proceed with the eviction if the tenant:
Pose a direct threat to the health and safety of other tenants
Are an immediate and severe risk to the property
This means that emergency evictions can move forward even if a tenant is a “covered person” under the executive order.
Tenants are considered a “covered person” if they meet all four of the following:
1. INCOME: At least one of the following applies to me:
(i) I expect to earn no more than $99,000 in annual income for Calendar Year 2020 (or no more than $198,000 if filing a joint tax return), or
(ii) I was not required to report any income in 2019 to the U.S. Internal Revenue Service (IRS), or
(iii) I received an Economic Impact Payment (i.e., the stimulus check) pursuant to Section 2001 of the CARES Act.
2. INABILITY TO MAKE PAYMENT DUE TO COVID-19: I am unable to make a full rent or housing payment due to a COVID-19 related hardship including, but not limited to, substantial loss of income, loss of compensable hours of work or wages, or an increase in out-of-pocket expenses directly related to the COVID-19 pandemic.
3. BEST EFFORTS: I am making my best efforts to make timely partial payments that are as close to the full payment as my circumstances permit, taking into account other expenses that I must pay (e.g.,food, utilities, phone and internet access, school supplies, cold-weather clothing, medical expenses, child care, and transportation costs, including car payments, maintenance, and insurance);
4. AT RISK: If evicted, I would likely become homeless, or be forced to move into and live in close quarters in a new shared living setting because I have no other available housing options.
Chicago’s Eviction Protection Ordinance was approved in June 2020 and is still in effect. The ordinance requires that landlords extend a seven-day cooling off period if tenants respond to the five-day notice with a Tenant Notice. The tenant has to prove unpaid rent stems from financial hardship that are caused by the pandemic. The Ordinance is meant to help protect tenants from loss of shelter, while protecting landlords by requiring tenants to pay rent.
Tenants who are served with an eviction notice after failing to pay rent are covered under the COVID-19 Protection Ordinance. The ordinance does not apply to other material breaches of the lease agreement. This does not mean that tenants are free from paying rent. They are still responsible for outstanding rent balances.
If a landlord decides to move forward with eviction fillings over unpaid rent, they will need to prove to a judge that they made an effort to work with the tenant first. Landlords must show they entered good faith negotiations with the tenant including repayment plans or mediation efforts.
However, landlords should be mindful that even after proving a willingness to accept late payments the eviction process may not proceed. Additionally, in order to accept partial payment the landlord must back out of the eviction process and start over with a new five-day notice. Landlords must also have a letter that requests “strict compliance” with payment deadlines.
Since Illinois has a moratorium on residential evictions that provides the same/higher level of public health protection than the CDC’s order, the CDC’s moratorium does not apply. However, if the moratorium is not extended after April 3, 2021, the CDC’s order will apply. This would provide a temporary hold for qualifying IL renters for almost two more months.
Now nine months into the pandemic, it’s clear that the housing market has fundamentally changed for renters, homeowners, property managers, and housing providers. Property manager Jenny Coopmans says the toughest part of her job now managing rent collections. “We have to make sure we can collect enough funds to keep the properties afloat. Owners are still responsible for mortgage payments, maintenance, insurance and other costs associated with the upkeep of the building,” she says.
There’s a lot to keep up with from federal orders to the state's eviction moratorium and local legislation changes. We’ll cover the latest updates so that you can prepare for what's ahead.
In an executive order, Gov. Pritzker first put a moratorium on evictions starting on March 20. Since then, he’s opted to extend the order every month as it nears expiration and on October 16, the governor did just that. At a press conference, he stated, “Remember, nothing really has changed in terms of the effect of COVID-19 and its effect on the economy, its effect on people’s jobs and their ability, or inability, to pay their rent or mortgage.” So for now, this means the statewide moratorium on evictions for non-payment will last until November 14.
To be clear, the moratorium only prevents the court filing and enforcement of evictions, renters must still pay rent. There are some cases where the court will permit evictions but only when a tenant is breaking the law, posing a threat to others, or causing severe damage. These types of evictions are less common because they’re harder for housing providers to prove in court. So, the majority of eviction cases are due to non-payment.
In September, the CDC issued a moratorium on evictions until the end of the year. The CARES Act also had a moratorium on evictions, but it applied to much fewer properties and tenants. The CDC’s order includes all residential properties that are occupied by tenants who are receiving government assistance, have had their income impacted by the pandemic, or if they’d be homeless if evicted. Right now, the governor’s order is what applies to Illinois. The larger federal order would only come into play if the state’s mandate expires for good in November.
The challenges of the pandemic brought Chicago’s housing issues to the forefront of the city’s agenda. Many policy makers called for changes to protect the fragile market, and while the ordinances primarily protects renters, they do have provisions that everyone should know.
This summer, the City Council approved the eviction protection ordinance which requires landlords to make a “good faith” effort in situations of non-payment. This means a conversation about payment plans or involving a third-party mediator. The ordinance also protects housing providers by requiring tenants to pay rent. Typically, a tenant has five days to respond to a landlord’s intention to file an eviction. A separate mandate, the Fair Notice ordinance which passed at the same time, extends that period to a total of 12 days if the tenant indicates they’ve been affected by COVID-19. It also requires that landlords must give 60 to 120 days notice (depending on how long the tenant has lived there) to tenants for non-renewals or rent increases.
Most of the measures put forth by policy makers have focused on preventing a wave of evictions. Coopmans says that owners need to be taken care of, too. “It’s crucial to provide assistance to both renters and property owners,” she says.
Receiverships typically begin when a mortgage loan goes into default due to lack of payments from the commercial property owner. Similar to a home loan, once the property is in default a lender will likely initiate foreclosure proceedings. As the property goes into foreclosure, a lender will want to limit the bank’s liability and ensure that:
The value of the commercial property isn’t damaged in any way by the borrower
Any income for the property is being put towards the loan and maintaining the property only
This is where a receiver comes in to play. The receiver is requested by a lender and appointed by the court. They act as a neutral third party and it’s their job to meet the above objectives and are responsible for managing the property until the foreclosure is complete.
In addition to defaulting on a loan, a commercial receivership may be entered if:
The value of the property is enough to satisfy the loan debt
Waste has been committed on the property
The government is foreclosing on the property to reconcile back taxes
As stated above, a receiver is a neutral third party individual or company that was requested by a lender and will be in charge of managing the property throughout the foreclosure proceedings. While the request comes from a lender, the receiver takes direction from the court only and acts in the best interests of both lender and borrower.
Above all, receivers are required to:
Honor and uphold the contractual rights of the tenants in the commercial property
Safeguard the welfare of all tenants and guests
Continue to manage ongoing operations and expenses
Make all commercially reasonable efforts to maximize profitability from the property
Exercise its best efforts on behalf of the lender and borrower.
Maintain & secure the property (i.e. vandalism or damages)
Negotiate and pay property expenses and taxes
Sell the property (with court’s permission and additional party consent.)
Selling a property before the foreclosure ends can produce more net proceeds than a foreclosure sale. By agreeing to the preforeclosure, the defaulting borrower might be able to avoid a deficiency judgment
Take over the bank account associated with the commercial property
Establish itself as new management
Manage new and current leases and collect rental income
Make necessary repairs, work with local government to address any violations, and oversee any ongoing construction
Receivers are appointed by the court upon a lender request. Lenders are given the right to request a receiver upon most commercial mortgages when the borrower defaults. Depending on the case, some courts find a default to be sufficient enough grounds to grant an order of receivership. However, others require more proof that it is necessary.
A receiver will assist a lender in recovering funds by protecting the value of the commercial property.
Depending on the skill of the appointed receiver, a property’s value may even increase- which both a borrower and lender can benefit
Lender and owner lose control of the property, its income, & potentially its disposition
Receivers can be costly to hire and the lender is required to cover the cost of whomever the court appoints.
Overall, each commercial property is different making it important to weigh the potential liabilities. Does construction need to be done? Has management been abandoned and for how long? Are there any environmental concerns? Does the commercial property require marketing for tenants? From there, a decision can be made on if a receivership is worth pursuing.
