Desperate for a Sale? Raffle It Off!

There is a relatively new trend rolling across the country: Sellers who are having trouble moving their homes are using raffles in a last ditch effort to find buyers for their property.

It is poorly understood, even by some real estate attorneys, because it is not used that often. Many states have laws against it, in fact, and the process generally needs to involve a legitimate charity for legal reasons.

In Illlinois, it is legal to sell a home using a raffle. Here is how it works: A prospective home buyer needs to find a non-profit organization to run the raffle and to receive any proceeds that exceed the legitimate selling cost of the home. For example, if a home is determined to be worth $200,000, and the charitable organization and homeowner sell 3,000 tickets for $100 each, the extra $100,000 will go to the non-profit organization. The homeowner can keep the legitimate amount that the home is worth.

The real trick to this is that even though the process is legal in Illinois, the state has some of the most complex charitable gaming laws of any state where these raffles are legal. The state law defines “net proceeds” as “the gross receipts … less reasonable sums expended for prizes, local license fees and other reasonable operating expenses incurred as a result of operating a raffle.” The complete law falls under The Raffles Act.

One of the largest web sites listing homes for sale via raffle is USA Home Raffle, which brings homeowners into contact with non-profit organizations in their area. Another web site raffling Illinois homes is House of Dreams.

What do you think? Would you consider raffling your home if it has been on the market for several months and has not found a buyer? It does seem to have that “you may already be a winner”-feel to it, but who wouldn’t put up $50-$100 for the chance at a home worth $200,000?

Wrigleyville after the Fall

It has happened so many times in the past that it really could not have been too unexpected. The pain of yet another crushing playoff loss still lingers, however. Perhaps it was the symbolism and equanimity of 100 years or the thrilling way they played for much of the regular season. There truly seemed to be something different about this team. Unfortunately, they were not as different in the one category where it mattered–winning in the postseason.

Sure, the North Side is down about the latest Cubs collapse, but one of the great things about Wrigleyville is how resilient it is. You shove it down and it keeps getting back up. At least there’s no need to worry about that ban on alcohol sales after clinch games in and around Wrigleyville. It never got to the point of actually having to look at a map and figure out where the mayor decreed the confines of the neighborhood ended. It will be interesting to see if Hizzoner tries that one again should the team be fortunate enough to make it back to the postseason.

For now there are open houses on tap to check out this weekend. What better way to spend a beautiful early fall afternoon then touring some of these listings. At least parking won’t be much of a hassle and you don’t have to worry about drunken revelers hurling on your would-be doorstep.

821 W ROSCOE St #1
Price: $699,000
Beds:     4
Baths:     3
Open House: Sunday, October 12, 11:00 AM – 1:00 PM

3133 N LAKEWOOD Ave #2C
Price: $679,900
Beds:     4
Baths:     3
Open House: Sunday, October 12, 12:00 PM – 2:00 PM

1750 W GRACE St
Price: $598,500
Beds: 4
Baths: 2
Open House: Saturday, October 11, 12:00 PM – 3:00 PM

Four-Bedroom Beauties “On Sale” in Lincoln Park

You’ve seen those lovely pied-a-terre’s in Lincoln Park and often let yourself dream of owning one. You know, perhaps something off the park, several bedrooms, a fantastic kitchen. Oh, and don’t forget parking. Now, this is a free-standing house, I don’t want to pay assessments, and give it some curb appeal. Not long ago this would have cost you at least $1 million or so. These days, however, the price on those dream homes has come down dramatically.

Here are a couple of beautiful 4-bedroom listings in Lincoln Park for under $700,000:

Single Family Home

2128 N BISSELL Ave
Price: $670,000
Beds:  4
Baths: 3.1
Sq. Ft.:  2,400
$/Sq. Ft.:  $279

Condominium

1982 N MAUD St #P
Price: $679,000
Beds: 4
Baths: 2
Sq. Ft.:  2,600
$/Sq. Ft.:  $261

Here are some other Lincoln Park properties that have recently seen price reductions:

2515 N SEMINARY St #E
Original List: $829,999
Current Price: $789,900
Beds: 4
Baths: 3
Sq. Ft.: 3,000
$/Sq. Ft.: $263

1724 N MOHAWK #1
Original List: $819,900
Current Price: $775,000
Beds: 3
Baths: 3
Sq. Ft.: 2,400
$/Sq. Ft.: $323

641 W WILLOW St #202
Original List: $939,000
Current Price: $899,000
Beds: 4
Baths: 3.1
Sq. Ft.:     -

Wicker Park Sees Lower Inventory, Lower Sales

Wicker Park has seen its inventory decline, but prices have declined as well, which flies in the face of everything I learned in Economics. Lately, though, it seems long-held economic beliefs are out the window. Everyone is trying to figure out where the market is currently at, and there is good evidence that prices from a couple of years ago are not a bad place to start. Prices on single family homes in Wicker Park appear to be hovering around those of homes that sold between 2005-2006.

Following are some single family homes that recently sold:

1011 N. Winchester Ave
Sold For:
$582,000
(09/12/2008)
Beds: -
Baths: 3
Sqft: 1,974
Year Built: 1879

1725 W Wabansia Ave
Sold For:
$635,000
(08/27/2008)
Beds: -
Baths: 2
Sqft: 1,440
Year Built: 1987

1740 N Winchester Ave
Sold For:
$650,000
(08/28/2008)
Beds:  -
Baths: 2
Sqft: 1,176
Year Built: 1879

All the World’s a Stage

With the market as tight as it is for selling homes, this is one of the most difficult markets to move inventory in at least the past 5 years. Everything you can do to make your house more appealing to a potential buyer is important. Generally, there are four actions that you can take to increase the value of your home in this kind of market:

• Lighten and brighten – Returns about $3 in increased value for every $1 spent
• Clean and unclutter – Returns about $4 in increased value for every $1 spent
• Landscape – Returns about $4 in increased value for every $1 spent
• Stage home – Returns about $5 in increased value for every $1 spent

Some properties will not have a whole lot of work to do, others will take weeks of work to get to the point where they are ready for the market. It is not always necessary to hire a professional, but it is a good idea to bring in someone unfamiliar with your home who will tell you the truth about how it looks. For starters, get rid of the clutter. You have to be ruthless about removing any items that could cause potential buyers to get distracted or make them uncomfortable.

If you think that you might need some help going the extra mile, here are some web sites in Chicago that can help:

• Real Estaging
• Staging Chicago
• Time to Stage

Staging has become so important that one firm even specializes in not only making sure that the furniture and fixtures are in place and looking spotless, but that people are provided to live in the homes if the current owners have already relocated. The Nashville firm Showhomes will move in an “account manager” to live in the home so it does not appear empty and soulless.

Lending Rates Shrinking (Excellent)…Along with Available Loans (Bogus)

The good news: Interest rates on housing loans are at their lowest point in six months. The bad news: If your credit report has a few blemishes, it may be difficult to obtain one of those loans. Not too long ago, it was ridiculously easy to get a home loan. I remember a loan officer telling me as recently as last year that “If they can fog a mirror, they can get a loan.”

My how things have changed. So how hard is it to get a loan these days at a rate that won’t make the prospective house unaffordable? Experts say the rules for obtaining a home loan have undergone more revision in the past 18 months than during any comparable period since the Great Depression, as lenders attempt to streamline practices that landed the industry in its present bind.

The federal government recently put some numbers on this upheaval: It sifted through 21 million mortgage applications and reported that about one-third were denied last year. The main reason was the applicants’ credit history, the Federal Reserve reported.

Here is a rundown of what you’re up against if you’re looking for a home loan in the current upside down real estate world:

Conventional Loan v. FHA Loan

Determine which type of loan you will need. Conventional programs typically provide private mortgage insurance to provide for a lower down payment and easier qualification guidelines, and conform to Fannie Mae or Freddie Mac standards (although what those are these days is anybody’s guess). FHA loans are typically designed for low- and middle-income borrowers and many first-time buyers.

Down Payment

FHA
The good news is that FHA loans require only about 3% down, but this will increase to 3.5% on January 1st. It is typical for sellers in today’s market to cover the buyers’ closing costs, as well, which can usually be another 3%.

Conventional
Even with excellent credit, the bare minimum these days is 5%. However, most applicants for conventional mortgage loans can expect to put down at least 10%.

Credit Score (For your free annual credit report, click here)

FHA
There is no steadfast credit-score requirement for an FHA loan but many banks have become increasingly stringent about credit scores. Requirements will vary from one lender to the next, but the typical credit score for an FHA loan is around 580.

Conventional
The minimum score to obtain a conventional loan is 620; However, for the best available interest rate on a conventional loan, the borrower will need a near-perfect 740.

Obviously a lot of the sub-prime mortgage opportunities that were so gleefully tossed about over the past several years have limped off into the sunset…along with several of the banks and financial institutions convinced that the risky loans would never come up lame.

Cub-Boom!!

Okay, first an apology. In a post on August 30th, I referred to the p-e-n-n-a-n-t and inferred the Cubs actually had a chance of winning it. I am SO sorry, oh Wild Gods of Baseball Fate and Fanaticism, please forgive me. In mentioning the P-word, I did not mean to send them on a losing streak that started that day with a loss to the Philadelphia Phillies and continued for the ensuing week until they finally beat the Cardinals.

I will never again use the P-word and the Cubs in the same sentence until that day has actually arrived.  Of course, thousands of other people probably had similarly sound scientific explanations for the slide: They wore the wrong hat to the game that day; They placed their beer in the wrong cup holder; A black cat crossed their path on the way to the ball park; A Phillies fan parked in their reserved spot. Why do you think superstition plays such a heavy role in baseball’s history? A losing streak can always be explained by something supernatural, but a winning streak just means you’re getting timely hitting, solid pitching and practicing solid fundamentals (but don’t change your underwear just in case).

On the ground in Wrigleyville, despite crunch after crunch in the housing and financial markets, what is left of the construction boom is still evident in half-a-dozen new-construction condominium buildings with units for sale in the area. With median prices per square foot currently hovering in the $200 range, there may be price reductions in the near future on several of these listings.

BTW – Congratulations National League Central Division Champion Chicago Cubs! Keep it Rolling!

Here is a look at some of the new construction:

3832 N ASHLAND Ave #4S
Price: $509,000
Beds: 2
Baths: 2
Sq. Ft.: 1,300
$/Sq. Ft.: $392

630 W BARRY St #GS
Price: $549,000
Beds: 3
Baths: 3
Sq. Ft.: 1,800
$/Sq. Ft.: $305

508 W MELROSE St #2B
Price: $598,400
Beds: 3
Baths: 2
Sq. Ft.: 1,761
$/Sq. Ft.: $340

TIF-ed Off?

Just north of Wrigleyville is an exciting urban neighborhood called Buena Park. Squashed between Wrigleyville, Uptown and the lake, it is something of a secret that has terrific potential. Unfortunately, alderman Helen Shiller, for years has ignored cries of neighborhood residents to provide an atmosphere for more retail businesses, that is, until recently.

A few months ago, Peter Holsten began development on a deserted parcel of land, Wilson Yard, which was formerly a CTA bus barn. The development is controversial because it is using Tax Increment Financing (TIF) money from the city for the project. The original proposal called for a 12-screen movie theater, an Aldi supermarket, a Target, residential housing and street-level retail space.

According to the Fix Wilson Yard web site, the plan now calls for “178 units of 100% low-income housing (with family housing income ceilings of 21% low income, 56% very low income and 23% extremely low income), no movie theater, and no confirmation that Target is coming. Holsten Real Estate is now the lone developer and owner of all the low-income housing. The TIF commitment has soared to $52 million, 34% of the cost of the entire project.”

Although the Aldi was built and opened at the beginning of the year, the bustling street traffic that was originally predicted based on an entrance facing Broadway was scuttled in the actual design, so all foot traffic must follow the sidewalk around to the rear entrance by the parking lot. Plans also called for a multi-level parking garage for 382 cars and an additional 173-car surface parking lot. Currently the plans for additional parking are murky at best.

Neighborhood residents are so concerned that they have put together a legal team comprising two different law firms with specialties in fighting municipalities on Land Use and TIF issues. Both firms have leading attorneys in their respective fields.  Fighting TIFs has long been an uphill battle, but recent Illinois Appellate Court action may provide a new hope for those wishing to fight city hall. Attorney John Meyers has won taxpayers the right to sue developers who may be getting too sweet a deal off TIF-designated land.

Windy Citizen has put together this convenient Google Map of TIF districts in Chicago. See if your neighborhood is getting TIF-ed.

Not SoHo…SoNo

The development taking shape near the model units–1454 N. Dayton–at the western edge of Old Town/Lincoln Park called SoNo is a play on the location (South of North Avenue). The 28-story condominium tower designed by Laurence Booth with Smithfield Properties will feature 275 one-, two- and three-bedroom units and 15,000 square feet of retail space. This area has a load of attractive entertainment options, including Steppenwolf Theatre and nearby shopping  such as Crate and Barrel, Best Buy, The Container Store and the new REI.

The location is an interesting gamble because most of the neighbors are still primarily commercial/retail. Also, directly southeast of this area is the soon-to-be-former Cabrini Green Housing Project, now part of the Near North Redevelopment Initiative. The CHA has been slowly relocating residents from the notorious high-rise buildings in the housing project to less blighted mixed-income developments such as North Town Village but there are still between 2,000 and 4,700 residents in the towers. Demolition continues and relocation is supposed to be fully complete by the end of 2008.

When complete at the end of the year, units in SoNo will range in size from 788 to 1,656 square feet.  Pricing starts in the high $200,000 range for a one-bedroom.

How does the new construction pricing compare with other units near the Clybourn Corridor? We’ll compare using a 2-bedroom/2-bath unit currently listed on Redfin:

860 W BLACKHAWK St #1402
Price: $505,400
Beds: 2
Baths: 2
Sq. Ft.: 1,416
$/Sq. Ft.: $357
Assessments: $505

Nearby condominium units of similar quality:

1866 N SHEFFIELD Ave #B
Price: $475,000
Beds: 2
Baths: 2
Sq. Ft.: 1,650
$/Sq. Ft.: $288
Assessments: $193

1529 N CLEVELAND #3S
Price: $509,900
Beds: 2
Baths: 2
Sq. Ft.: 1,700
$/Sq. Ft.: $300
Assessments: $119

1520 N CLEVELAND Ave #2
Price: $520,000
Beds: 2
Baths: 2
Sq. Ft.: 1,580
$/Sq. Ft.: $329
Assessments: $135

1872 N CLYBOURN Ave #307
Price: $595,000
Beds: 2
Baths: 2
Sq. Ft.: 1,800
$/Sq. Ft.: $331
Assessments: $457

There are Views and Then There are VIEWS

After soaring into the stratosphere in the last post, I thought I would come back down a little closer to ground-level today. All this interest in million dollar condos sky high started me thinking about some of the loftier full-service residential units available in Lincoln Park.

I started looking at the pricing on some 2-bedroom/2-bath units with similar amenities to see how they stack up. All of these buildings have pools, roof decks and 24-hour doormen. Amazingly, even with these amenities as a baseline, and assessing units with similar square footage, there can be dramatic differences in pricing.

I looked at some of the other qualifying factors such as a park view and parking to see if that might indicate some of the reasons for the dramatic price swings, but surprisingly many of them were consistent in these areas as well. A park view certainly seems to be at least one factor in bumping the price considerably higher: All views are not created equal. Assessments are always a huge factor in high-rise pricing, so those fees are also included below:

This building is new construction by an acclaimed architect: Highest quality finishes, marble baths, fireplace, split level:

2520 N LAKEVIEW Ave #17B2
Price: $797,000
Beds:  2
Baths:  2.1
Sq. Ft.: 1,454
$/Sq. Ft.: $548
Park View: Yes
Parking: Two assigned garage spaces; deeded spaces sold separately
Assessments: $545

This unit includes a balcony, which is nice extra outdoor space, as long as it is not too high. The 27th floor can be quite breezy for a balcony, and certainly is not for agoraphobics:

2500 N LAKEVIEW #2702
Price: $675,000
Beds:  2
Baths:  2
Sq. Ft.: 1,400
$/Sq. Ft.: $482
Park View: Yes
Parking: Two assigned garage spaces
Assessments: $896

This is a solid unit with updated finishes and certainly in the ballpark for Lincoln Park:

2626 N LAKEVIEW #808
Price: $409,900
Beds:  2
Baths:  2
Sq. Ft.: 1,250
$/Sq. Ft.: $328
Park View: No
Parking: Fee-based assigned garage parking
Assessments: $651

This unit was recently price reduced from 369K (good-looking bargain):

345 W FULLERTON Pkwy #904
(No pool)
Price: $349,900
Beds: 2
Baths: 2
Sq. Ft.: 1,200
$/Sq. Ft.: $292
Park View: Yes
Parking: Fee-based assigned garage parking
Assessments: $722

This unit features all new finishes and fixtures in bathrooms and kitchen:

2700 N HAMPDEN Ct #8B
Price: $345,000
Beds:  2
Baths:  2
Park View: Partial
Parking: Fee-based assigned garage parking
Assessments: $439