We previously reported that Donald Trump had been canceling contracts at Trump Tower for "Friends and Family" during pre-construction sales.
The Chicago Sun Times and Crain's Chicago Business are reporting that former Chicago Sun Times publisher David Radler is suing Trump for refusing to sell him a condo in the new Trump International Hotel & Tower for a discount.
Not the most clever move in the current real estate climate, no?
Check out the great article in the Tribune over the weekend on the impact of the new Transfer tax on Chicago homebuyers.
My favorite quote from a potential homebuyer whose transfer tax will INCREASE by $7,000.
Hopefully, by November, when I close, they will have figured out that sellers should also contribute -- but I am a seller, too, so I am going to get hurt either way.
The thing that still gets me: what does bailing out the pension system of the CTA have to do with Real Estate? Of course, the real answer is that this tax affects so few people in any given year, it was simple for the legislature to shift this tax onto them as they're not an organized voting block. I hope Chicago Aldedrmen remember that although Chicago home sellers are not an organized voting lobby, the Chicago, the Illinois and the National Associations of Realtors are.
I may have lost a potential buyer this week. Although this might not be correct. The customer who contacted me was interested in starting the buying process, but I am not convinced he could have actually followed through.
A customer - Mr. B. - e-mailed me introducing himself as a renter who lives in one of my past client's buildings. He's been a great tenant for Mr. P. for a couple of years and is now ready to try to find a property of his own.
This is a great introduction! But a bit farther in his e-mail, he stated that he'd like to start by looking at a certain property - and sent me a link to a property he found on the internet.
I gave him a call and we chatted for a moment. I tried to make an appointment to get together with Mr. B. suggesting a few dates and times he could come to my office. During the conversation, Mr. B. didn't have his schedule with him and told me a little bit more about what he was looking for. We agreed that he would email me with his availability.
A day later, Mr. B. e-mailed me again to tell me that he was available after 5 pm most days this week, busy this weekend, available after 5 pm all next week and had some free time the following weekend. He included some more information about his qualifications, how much he wanted to spend and how he planned to obtain financing - through a V.A. loan. Again, he asked if I would show him the property he saw on the internet.
I wrote back and cheerily offered a couple of evening appointments but suggested again that we would meet at my office to start with.
In a third e-mail, Mr. B. let me know that he didn't think that I was paying close enough attention. He had a particular way he wanted to conduct business and I was clearly not listening to his request as this was the third time he had to ask to see the potential property. I wrote back to clarify why we had to see each other first in an office setting before viewing properties, but rather than helping set Mr. B's mind at ease that our first meeting would probably lay the groundwork for us to be far more productive on subsequent property searching trips, Mr. B. wrote me back to tell me off.
There are a variety of reasons why I would not meet Mr. B. at the first property, and I thought it would make a great Blog entry to talk about why. Plus I get to let off some steam.
First, there are is a difference between being a "Customer" and a "Client." Everyone out shopping for real estate should learn the nature of their relationship with the agent that they are standing in a house, condo, or 2-flat with.
Mr. B.'s first e-mail indicated to me that he was interested in becoming my "Client." He desired an advocate on his side who could show him properties and represent him in the transaction. In order to form this kind of relationship, some stuff needs to happen. I need to tell you some legal stuff about representing you and what my duties are. I need to tell you about how I intend to get paid. Then I need to learn more about you and your needs and your qualifications in order to find the best property for you, for the best price for you, and for the best terms for you.
In addition, following these steps assures that in case someone accuses me of negligence, or of a Fair Housing violation, I can defend myself by demonstrating that I followed a certain procedure in forming our relationship, and that I repeat this same process exactly the same way for EVERYONE that becomes my client.
I also meet lots of "Customers" during the course of business. Right now I am posting this article during a break between "Customers" while sitting at an open house. While I am here at open house, I am representing my "Client" who is the seller of the property. Folks who happen to come to the open house because they are interested in this property are not represented by me. They are "Customers." I have an obligation to treat them fairly and honestly, hand out forms if asked, and answer questions about the property. But I am not an advocate for the best interests of that "Customer."
But there were a couple indicators that Mr. B. really would not be a good match for the property he was interested in viewing, and I am not in the habit of taking people to see properties that they can not buy.
The property Mr. B. was asking about was a two flat in Wicker Park. It had been foreclosed on by a bank and was sitting vacant. It did not have any renters in it, and was in nearly an abandoned condition. There was no electricity, or heat, or other utilities. No one was maintaining the property or shoveling the snow or making sure the sidewalks had all the ice removed. It was on the market for very close to the value of the land. Now I'm all for the concept of "Buy a lot - get a free house!" but this presented challenges that I don't think Mr. B. was aware of.
First of all, Mr. B. had indicated during his first conversation with me that he wanted something a little nicer than the building he currently lived in as a renter. I sold that building to Mr. P. seven years ago for $365,000 and it was recently appraised for close to $700,000. I know I could sell it for well over $600,000. It is located in a neighborhood not all that different from where the building Mr. B. was interested in. So from my perspective, Mr. B was asking to view a property that would not meet his expectations.
Then, let's say for the sake of argument that I could choose to meet Mr. B. at the first property to view it AND cover the questions and answers, the disclosures, and the other topics I would ordinarily cover in our first meeting. This is possible and I have seen agents do this before. But the property in question was a vacant foreclosed property in nearly abandoned condition. And Mr. B. wanted to meet in the evening. A dark Chicago evening. In the winter. With no lights or heat. Or furniture. You can imagine that this is not an atmosphere appropriate to conduct business. I am not exploring a dark, cold, treacherous property unless I have a real solid idea that this is a property that is interesting to my prospect. In fact, for my investor clients, I usually instruct them to drive by an investment property like this before I take them inside just so they are sure that from the outside of the building and the surrounding area that this is the kind of thing they are looking for.
Lastly, remember Mr. B.'s statement about his V.A. financing? Veteran's Administration financing requires that the PROPERTY also qualify for this loan program - not just the buyer. Though Mr. B. was diligent about beginning his mortgage qualification process, his V.A. loan officer did not tell him about the obstacles set out on the property and its seller. Property subject to V.A. financing must pass a stringent inspection that the property is suitable to be a home for the buyer. V.A. inspectors have been known to demand that gutters be in perfect working order, that peeling paint be re-painted, that the roof be in good condition, that the heating and air conditioning be in good working order and that the kitchens and baths be perfectly suitable for move-in. And these demands are usually placed upon the seller.
The property that Mr. B. identified was a distressed and foreclosed two flat. It was not even clear whether all the appliances were still in the building or had been stolen by previous tenants or the old owner. Certainly the heating systems, the kitchens and baths, and the exterior components of the building were in a state of disrepair. The current owner of the property is a bank and the property is listed "AS-IS." This property would not pass an inspection by a V.A. inspector for certification for ownership by a V.A. loan candidate.
Visiting this property could not only be a waste of time, but could also be perilous considering the weather and un-maintained state of the property.
Buyers, refer back to my previous post on “cred” to refresh your memory on establishing a relationship with an agent. Once you’ve got that established relationship going, then you can ask for the world – and your agent – myself included – will try his (my) best to accommodate just about any request. But without it, exploring in the cold and dark is more than you can expect.
After staring bleary eyed at a variety of statistics and charts detailing the number of active units and sold units throughout Chicagoland, I decided I would post another Chicago joke. The last joke was months ago, and was about Real Estate Agents rather than Chicago, but the Sun Times ran an article on the best jokes about Chicago a few weeks ago, and my favorite is still on my mind.
Besides, agent jokes are as easy as Lawyer jokes.
So, the Department of Homeland Security wants to know which is the most effective police force in the nation, and has been conducting tests on various agencies across the country. They've identified the three best law enforcement agencies in the US and have devised a test to really determine which should be recognized as superior.
The test is deceptively simple: A rabbit is let loose in a forest, and each agency is tasked with retrieving the rabbit.
The CIA goes first. They lay waste to the forest with a top-secret atomic weapon that vaporizes the forest and the entire state that the forest is located in. Afterwards, they declare that the rabbit never existed.
The FBI goes second. They set up loudspeakers and blast all kinds of rock-n-roll heavy-metal music into the forest for days and weeks on end. When no rabbit emerges, they declare that the rabbit is too intelligent, and can't possibly be found.
Three Chicago Policemen enter the forest last. Less than an hour later they emerge from the forest dragging a bloody, battered bear by his feet in handcuffs. The bear is screaming "Alright! Alright! I'm a Rabbit! I'm a Rabbit!"
The Chicago City Council passed an ordinance raising the City Transfer Tax from $7.50 per $1,000 to $10.50 per $1,000 of the sales price of property in Chicago. The tax increase takes effect on April 1 of this year. The increase in this tax will make up the projected $100-million shortfall in the CTA budget not covered by the sales tax increase.
During spirited discussions at City Hall yesterday, Mayor Daley made vague threats to dissenting Alderman about the CTA bypassing their wards. About the only voice of reason seemed to come from 50th ward Alderman Bernard Stone who spoke passionately about the US Congress trying to stimulate the economy and the City Council working at exact opposite goals.
Visit www.wrongtax.com to use the handy property tax calculator to see how much extra the new increased tax will cost you on your new purchase.
Update: From the Chicago Tribune - some of the Alderman who opposed the tax increase listed below. It is safe to assume that all other Aldermen voted FOR the increase, but I will post a full roster when available.
Stone was among those who voted against the measure. So did Ald. Brian Doherty (41st), who termed it "a property tax increase" and complained that the council "was bamboozled by Springfield."
The others who voted no were Alds. Robert Fioretti (2nd), Sandi Jackson (7th), Sharon Dixon (24th) and Rey Colon (35th).
According to the survey of Realtors nationwide released by Bank of America today, the index of affordability is rising.
Affordability tends to drive sales activity; mortgage rates are critical. We believe that affordability is the key determinant of sales and that the downturn in sales activity since mid-’05 was driven by the lack of affordability as home prices and mortgage rates both increased and limited the pool of potential buyers. We think the improving affordability will translate into better sales activity as the year progresses, but acknowledge that it is significantly dependent on mortgage rates.
Here in Chicago, when interest rates dropped, we saw a marked increase in contracts written companywide which should drive the sales figures for the months of March and April.
It seemed appropriate to try to write a witty article about the Primary here in Illinois. But it seems to be a forgone conclusion that Illinois is a Barack Obama state - the results seem to be running 2 to 1 in our Senator's favor. There's not much to comment on - politically. I run with a diverse circle of friends. Dear friends with whom we dine regularly are absolutely convinced that as our next President, Mr. Obama would lean only marginally to the left of Richard Nixon. Of course, my in-laws in Minnesota - near North Dakota - believe that under President Obama the country will be headed in the direction of Socialism. Polite French Socialism, at least, rather than full blown Marxism. Odd, since they're so close to the border that we consider them Canadian.
No, the real races to watch are your die-hard Chicago and Cook County Democratic Party Machine races. Historically, here in Cook County, the Party Machine chooses the candidates who will run in the general election, and in the primaries, only one candidate appears on the ballot. A major hiccup in the machinations of the Machine stymied party officials and no clear anointed-one appeared. Witness, then, the race for the Democratic Nomination for Cook County State's attorney. Six different candidates are actually running a fair and balanced campaign to win the votes of Cook County residents - an unheard of possibility in elections past.
The races for Cook County Recorder of Deeds and Cook County Circuit Court Clerk ran pretty much the way they always have. Candidates were pre-selected by party fathers based on loyalty and past performance. These don't sound like terribly glamorous positions, but beneath these posts are thousands of jobs just waiting to be filled by loyal campaign workers, family members and generous contributors.
If you don't believe me, just ask yourself why the Cook County Assessor, the Cook County Treasurer, and the Cook County Recorder all have separate offices along with their respective armies of bureaucrats toiling in living wage jobs with generous government health plans and retirement benefits.
Do I hear another quarter-point sales tax? Anyone?
The condo that contains this bedroom is on the market right now. As in 2008. Wow.
For those that are interested, here is an interesting Superbowl Sunday traffic update.
Since Friday through right now (Saturday at 5:10) I have received 14 short notice requests to see listings. Most of these requests were either from customers directly, or request from Realtors that captured prospects from website leads.
Coming in at #1 with the most number of calls – Dreamtown.
Coming in at #2 with the second most number of calls - @properties.
Tied for 3 and 4 with one call each – Jameson and Coldwell Banker.
I would be curious to hear whether you all think this is due to (a) buyers bored during the snowstorm while snowed in their homes or (b) compressed demand that would otherwise be spread out over the week but instead tried to squeeze all their showings in a short period of time because of the Superbowl.
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