meet your homebuying squad

Meet Your Homebuying Squad

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This group of professionals will help you throughout the homebuying process. As you assemble your homebuying squad, consider working with all of these experts to make your home purchase confidently and with minimal stress. 

Like an athletic team, each member of the homebuying squad plays a crucial role in helping you achieve homeownership. 

MEET YOUR REALTOR® 

On this team, you are the captain, and this is your head coach. Your REALTOR® not only represents you, but also advocates for you and your interests during the transaction from start to finish. 

tiny people on briefcase and clipboard

Whenever you feel lost, confused, worried, stressed or curious, this person is your go-to resource. If they don’t have the answer, they will know how to get it for you! Sit down with your REALTOR® to build a homebuying game plan. Communicate your goals and priorities and establish a communication system you both are comfortable with.  

Also, your REALTOR® may have lenders, attorneys and inspectors they can refer you to, though you are not required to use the people they recommend. 

Best Practice Tip: CC or keep your REALTOR® in the loop whenever you communicate with someone on your homebuying team. 

MEET YOUR LENDER 

Your lender is like your athletic trainer. This is the person who can help you determine your buying power based on your financial health. 

Great questions to ask your lender include:

  • What types of loans am I eligible for?
  • How can I work on my financial health to qualify for each kind of loan?
  • When should I get prequalified or preapproved? (And what’s the difference between the two!?) 
  • And more!

Connect with a lender as early as possible in the homebuying process. That way, there are no disappointing surprises down the road based on your financial limitations. 

MEET YOUR ATTORNEY 

Your attorney is like your defense. This is the person who will review all the paperwork and contracts during the transaction. They will communicate your requests and advocate for your interests with the other party’s attorney. 

person signing a paper

Your attorney will become more involved in the transaction as soon as you’re ready to make an offer on a property. Once the offer is accepted and you move through attorney review and the inspection, you and your REALTOR® will be regularly communicating with your attorney and the seller’s attorney.  

On closing day, they will also sit down with you at the closing table to take you through each document. 

Buyer Best Practice: Use an attorney who specializes in real estate. It can be tempting to use a friend, family member or acquaintance who is a practicing attorney in another specialty, however, real estate attorneys are well-versed in the intricacies of the real estate transaction. 

MEET YOUR INSPECTOR 

Your inspector is like your special teammate. They have a very specific, yet very important, purpose in the transaction: inspecting your future home for damage, financial or physical risk, or code violations. 

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While inspections are not mandatory, they are highly encouraged as they allow you to proceed with your home purchase as informed as possible. 

Once the inspection is complete, they will send an inspection report. Don’t be afraid to ask your REALTOR® questions about the contents of it! If you have a list of requested repairs or credits, this is what you’ll communicate to your attorney. 

BONUS: YOUR FAMILY & FRIENDS 

We can’t leave out your fans and supporters! It’s up to you how involved you would like your friends and family to be in the homebuying process. Whether they’re actively on the homebuying squad or simply on the guestlist for your eventual housewarming party, friends and family can provide helpful perspectives or advice. 

No matter what, you are not going through the homebuying process alone. You have a whole squad of experts who have your back! 

couple carrying boxes

A Beginner’s Guide to Understanding HOA Fees in Chicago

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If you’re buying a condo or townhouse with commonly shared areas or amenities, the property is likely run by a homeowner’s association (HOA). The fees you pay to the association, otherwise known as HOA fees, go towards the ongoing and future maintenance of these amenities and spaces.

Why Do HOA Fees Vary So Much?

The fees can be collected monthly or yearly, and the amount is influenced by a number of factors:

  • The size of the condominium
  • The age of the building
  • Included utilities
  • The amenities or services provided
  • How much is being set aside in reserves
  • The size/square footage of the individual unit or property

Unlike co-ops or townhomes, everyone who owns a unit in the condo building chips in money to take care of the communal spaces. In Chicago, historical buildings and buildings with high-cost features like elevators and pools are more likely to have higher fees.

BUYER FAQ: What is a co-op?

Unlike a condo, you aren’t buying an individual unit. Instead, you buy shares in a corporation that owns the entire building and get a stake-hold to a specific unit. Services will still be bundled into singular community payments like HOA fees. LEARN MORE

BUYER FAQ: Where can you find the breakdown of HOA fees?

Ask your REALTOR®! They can provide the full list of included services from the listing.

What’s The Word On Reserves?

An HOA payment is divided into two major areas: routine maintenance costs and savings for the association’s reserves. These reserves are applied towards “capital expenses” which are typically large-scale or emergency in nature. For example, repairing or replacing the roof is a common reason to dip into reserves.

The reserves are intended to help cover the remaining costs the building insurance doesn’t cover. If the reserves aren’t enough, then a special assessment may be implemented. Even though your HOA fees will include building insurance, it’s highly recommended, and often required, that you get homeowners insurance for your individual unit and personal property.

Luckily, large expenditures like replacing the furnace or the roof are spaced out over many years. When it’s time to use the reserves or mandate a special monetary assessment, the homeowners association will vote on what to do.

Who Runs The Homeowners Association?

The homeowners! Typically, the association board members are elected from within the residents by all the residents in the building. During the regular HOA meetings, homeowners can discuss big projects or issues. When major decisions need to be made — like dipping into the reserves — all homeowners vote on it.

The board follows and implements official rules, bylaws and processes. These are sometimes called covenants or CC&Rs (Covenants, Conditions & Restrictions). CC&Rs determine what kinds of changes can be made to the exterior of your home, determine if you can own pets (and, if so, what kind), state what qualifies as a quorum on major projects in need of a vote and so on.

Buyer FAQ: What is the City of Chicago Condo Ordinance?

Chapter 13-72 of the Municipal Code of Chicago is the City of Chicago’s Condominium Ordinance. This is an official government document that protects the rights of the tenants in condo buildings. You should get a copy from your REALTOR®.

Buyer FAQ: When will you receive a copy of the bylaws or CC&R to review?

The condo association’s documents will be shared with you when you enter the attorney review period. Ask your REALTOR® to provide a complete journey of the transaction!

So, Are HOAs and HOA Fees For Me?

In Chicago, HOAs are a common entity. Explore different neighborhoods and building types if you’re interested in a condo but would like to target a specific price point in monthly HOA fees.

Here are some helpful considerations you should make as a prospective buyer so you can evaluate if a building with an HOA is the right fit for your living style:

  1. How do you prefer to pay for maintenance for your home – are you comfortable with making a monthly deposit for a future expense or with paying out of pocket when the emergency or need arises?
  2. How does something like a monthly HOA fee factor on top of your estimated monthly mortgage payment?
  3. What sorts of utilities are you comfortable being bundled into these fees?
  4. How important are lifestyle amenities like gyms, pools and common kitchens?
  5. How much freedom or autonomy do you want to make changes to your home?
  6. Do you have a preference between owner-occupied or investor-owned buildings?
  7. Do you plan on turning your home into a future investment property?

When in doubt, ask your REALTOR® about HOA fees during the homebuying process.

Female Real Estate agent with a couple

5 Steps to Start the Home Buying Process

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The long and winding road to home buying can be confusing and scary, but it doesn’t have to be! Here are five easy steps to follow in the beginning stages of the home buying process, because knowing the route will help make the ride to your new home smoother and less stressful. 

#1: Create a Plan 

Of course, you want to look at houses. But first thing’s first, do your research and make a plan. Get an idea of your budgets so you know what you can afford. Create a timeline of when you would like to purchase a home and move. Make a list of must-haves, as well as things that would be nice to have but aren’t necessities. Having a plan in mind will help you navigate further down the road. 

#2: Research 

Don’t worry, this research is the fun kind! Take a look at listings online to get a feel for what you like, as well as what will and won’t fit into your budget. 

#3: Find a REALTOR® 

Your REALTOR® will be your guide during this time. Make sure you find the right one for you. They will be your expert and go to on this journey, so don’t be afraid to interview multiple REALTORS® find the one that fits your needs. Use our REALTOR® search to find a Chicago REALTOR® who fits with you!

#4: Choose a Lender and Loan 

Your REALTOR® can recommend trusted lenders to begin the loan process. Each mortgage lender, depending on the company they work for, will be able to provide different fees, rates and requirements, so make sure to find the one that works best for you. 

Then, you will work with your lender to decide which mortgage type is right for you. Options include fixed-rate, adjustable, conventional or government loans, to name just a few. 

#5: Get Pre-Approved 

The last step before you start looking for your forever home is to get pre-approved. Your lender will ask for a variety of documents, from proof of income to bank statements and more, which will all determine what amount you will be able to spend on a home. But remember, a pre-approval does not mean you are guaranteed a loan. Think of it as a way to show buyers that you’re serious about buying a home and making an offer. 

From here, it will be time to looking at places and get that much closer to making your homeownership dreams come true! 

Download our infographic for referrence and to share with your peers!

couple doing research on laptop

4 Ways to Improve Your Credit Score

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Credit scores are a vital part of getting approved for a loan to buy a home. Although you can get a mortgage with a lower credit score, the better your credit score, the better your loan terms will be. If you’re looking for ways to improve your credit score, look no further. Here are our top tips to improving your score for a better mortgage. 

1. Make Payments on Time 

Your payment history is one of the biggest impacts on your credit score. The more frequently you pay your bills by the payment deadline, the better your score will be. If you’re behind on your payments, the first step is to get up to date on them.  

Then, make sure to continue paying your bills on time and in full, if you can. Either get notifications for when your bills are due or set up automatic payments, so you don’t miss a due date. 

2. Pay Off Debt and Keep Low Balances on Credit Cards 

Another large determining factor of your credit score is credit utilization, or how much you owe on a credit card compared to your credit limit. Lenders typically look for a ratio of 30% or less. You can positively impact your credit utilization by keeping your credit card balances down or paying off any debt you have on your cards. Calculate your credit utilization here.

3. Only Keep As Many Credit Accounts As Needed, But Don’t Close an Unused Account! 

Having a mixture of credit doesn’t necessarily lead to a better credit score. Unnecessary credit can even harm your score by creating inquiries on your account and possibly leading to overspending. 

However, if you have an unused account, don’t close it! If the account doesn’t charge you annual fees, closing it could lead to a higher credit utilization ratio. 

4. Keep An Eye On Your Credit Report 

Make sure to check on your credit reports every so often. If you notice inaccuracies, such as late payments or incorrect amounts owed, these are all factors that can drag down your score. If you notice an inaccuracy, make sure to dispute it right away! Click here for more information on receiving a free credit report.

5 Financial Questions To Ask Yourself Before Buying A Home in Chicago

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Finances are typically the most intimidating part of the homebuying process. So, here are five financial questions to ask yourself so you feel as empowered as possible.

#1: How Are Your 4 C’s?

Let’s look at loan eligibility or “buying power.” Most lenders evaluate a person’s buying power based on four elements called “the four C’s.” They are capacity, capital, collateral and credit.

Before you buy a home, make sure you are well-versed on the status of or know where and how to check on these.

  • Capacity: This is your ability to take on a mortgage or pay back a loan. Income, savings and monthly debt payments are some of the factors that affect capacity.
  • Capital: This is the amount of money or savings you have readily available. Think of it as your personal reserves that are not tied to income. Closings cost funds and your down payment funds are types of capital!
  • Collateral: When you take out a loan, this is the monetary value of the property you’re securing against it.
  • Credit: This is based on your credit score and history. A lender wants to know if you have a history of paying other debts on time and in full.

#2: Who’s On Your Team?

When you’re ready to buy a home or begin planning for a purchase in the future, assemble a team of professionals who will have your back and provide expert counsel. They include:

  • A Lender
  • A Real Estate Attorney
  • An Inspector
  • A REALTOR®

#3: What’s Important To You In Your Home and Neighborhood?

Begin creating a list of home and neighborhood features you consider non-negotiables.

For your neighborhood, rank access to public transportation, parking, green space, retail and restaurant density and proximity to schools or hospitals. Depending on what you prefer, this will narrow down building types located in neighborhoods that include your must-haves.

For example, several neighborhoods in Chicago are known for specific architectural eras. Bungalows, two-flats, greystones and courtyard buildings all require different financial considerations when it comes to maintenance.

For your property, consider cost-associated expenses like central AC, laundry, elevators, private outdoor space like porches or backyards and parking garages. It’s easy to just think of the desired number of bedrooms or bathrooms, but these aren’t the only features that will influence the cost of the properties that will fit your needs!

Once you have your ideal neighborhood and home in mind, you can begin to get an idea of home prices in those areas.

#4: What if…?

Look at your financial ability to handle emergencies, life changes and other “what if” situations. Build an untouchable emergency fund with at least three to six months of monthly expenses shored up.

Not only will this give you a peace of mind when you buy your home, it will also boost your capital and likely positively influence your buying power.

Don’t wait to ask yourself what if! Take charge of your finances with these hypotheticals.

#5: Where Do You See Yourself Five Years From Now?

Take a zoomed out look at your professional and personal goals, then apply your housing needs to these milestones. Do you see career changes or promotions in the future?

It may be to your benefit to consider a property with more space than you presently need, because you anticipate having children or getting married. Does the neighborhood you like now sound like it will still be enjoyable to live in or fit your lifestyle growth?

It may also be to your financial benefit to wait at least five years for your home value to increase or for you to build equity or ROI on your investment. When in doubt, ask your REALTOR® what kinds of life milestones in their experience influence home purchase decisions.

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16 Helpful Inspection Report Questions For Buyers

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Congratulations, your offer has been accepted! You now have entered the attorney review period. Typically, a home inspection is scheduled within five days of the accepted offer. An inspection report is an inspector’s documented recommendations and observations of the property’s potential need for repairs. Remember, your inspector’s job is to find any reasonably discoverable issues in your home.

While inspections are not mandatory, we highly recommend utilizing this affordable resource so you can continue through the buying process as informed as possible. The inspection report can be intimidating! We put together prompts to help you feel empowered to ask everyone on your “team” actionable questions.

Questions you should ask your REALTOR®:

  1. Do you have any reputable inspectors you would recommend?
  2. What are three things you advise I look out for in particular?
  3. Will you be able to attend the inspection with me?
  4. What are common issues or challenges to see in this property type?
  5. In your opinion, what are the most important repairs I should focus on or prioritize?
  6. [in the case of a short-sale] When should we schedule the appraisal?

Questions you should ask your inspector:

  1. What do you check and what don’t you check?
  2. How soon after the inspection will I receive the inspection report?
  3. Are you available for follow-up calls if I have questions about the report?
  4. Are there any issues of note on the seller’s property disclosure statement?

Questions you should ask your attorney:

  1. From the seller’s perspective, what requests are they likely to push back on and what are they likely to consider?
  2. How many requests is too many?
  3. Should I ask for a credit or should I ask for a warranty?

Questions you should ask yourself:

  1. How much repair am I comfortable taking on myself?
  2. What are my priorities?
  3. What items am I willing to give up on during the negotiation?

In the end, the inspection report is another tool in your homebuying toolbelt. If you’re feeling anxious, your REALTOR® is always available to provide perspective and experience.