Steps to Home Ownership in the Chicagoland area Part 1


by Charles McShan



                                                                        Steps to Home Ownership in the Chicagoland area Part 1   Greetings Everyone my name is Is Charles McShan I am a Real Estate Broker at Century 21 Universal located at 7300 N.Western Ave, Chicago Ill.60645.My website is Charles McShan Chicagoland Realtor.com My blog site that you are on is called cmacakachicagolandrealtor.com.I; thank you in advance for reading this. My first 3 Blogs were about the local areas of West Ridge, East Rogers Park, and the Lincoln Square areas of the city of Chicago. I wanted to highlight those areas and bring out the good points. Now we are I June 2019; The weather is warming up.

A lot of thought process must go into buying a Home?  

      A  lot of people will start the process of moving from one home to another, whether they are a Renter or a Homebuyer. With this blog, I want to shift gears and communicate with people who are thinking about becoming a Homeowner. Whether you are thinking about Buying a Home in West Ridge, Rogers Park, Lincoln Square, or for that matter, anywhere in The Chicago Metro area or beyond, Owning a Home is one of the most significant financial investments a person will make. The great American Dream is Homeownership, but careful consideration is required.

     Why is that? Well, there are a lot of reasons but let’s consider just one for now. If you are an apartment dweller and your water pipe under the sink breaks or your roof starts to leak, who do you call? Your landlord. But once you become a Homeowner, you are the Landlord as Gladys Knight, and the Pips once sang. You are the keeper of your home. You will pay all the repair bills along with delivering the Mortgage, Insurance, and everything else that comes with Homeownership.

   . That is a huge responsibility, and when you decide you are ready to become a Homeowner, your first step on that road will be to do your homework. That is not an easy task. To dream about a home is one thing to make it a reality requires a lot of thought process. First, you must think about the type of home you would like to own. Second, where do you want your home to be located? Third-most importantly, can you afford the kind of home that you would like to buy? Unless you are filthy rich, you need to start putting aside extra money for your future home while at the same time continuing to pay your necessary bills for everyday life.

       Your credit score should be over 600 with no recent Bankruptcy. The next question is, how much of a down payment do you need? Well, there are many Loan packages out there. Some will allow you to put as little as 3% down, but that might leave you will a vast monthly Mortgage Payment. Here in the Chicago/Suburban area, you might be able to find City, County, and State assistance for the first time home buyer. Mortgage Bankers stress that home buyer should keep their search to homes that cost no more than three to five times their annual household income. Either way, once you have acquired your down payment funds the next step is to go to go Mortgage shopping.

Shopping for a loan? What are my options?

Needless to say, there are many types of Home Loans on the Market. Some are FHA, Some are Veterans loans. Which one is right for you? Please click here to read this article and you decide. for yourself. >https://www.realtor.com/advice/finance/types-of-mortgages/ Now, Once you figure out the sort of loan you will need the next step is to a Loan Specialist and they will guide you through the preapproval process. Where do you get this loan specialist? The choice is yours. You can go to your credit union, your local Bank, or to a Mortgage company . No matter where you go they will need to prequalify you. What does prequalify mean? Well simply put you must show the loan specialist that you have the financial means to pay for a home loan that will take 15 to 30 years to pay back. To get prequalified you must provide several financial documents to your Loan specialists.

      This information includes checking stubs from your place of Employment. This shows your main source of income. Also included is your Bank statement, This shows your Savings and Investments. Some may feel that my money is my personal business but once you decide to become a Homeowner, Your personal finances will become an open book to Financial Institutions who must make a decision whether or not to Loan you Thousands of Dollars to buy a home. Your Mortgage advisor will then reviews the documents that you gave them and, they then determined how much of a Home you can purchase and. From here the next step is the Preapproval process.

       Here the Lender verifies the documents that you have given them.if all does not match up they will inform you that you need to work on certain things, pay some bills off and improve your credit score. Once you do that you can come back and try again. On the other hand, if all goes right they will issue you a Preapproval letter with a preset price range. You now know how much money they will give you to buy a home. Now, let the search begin.

How many styles of homes are out there on the market?

   So you got the loan, what sort of Homeownership are you looking for? Do you want to buy a Condo, a Townhome, a Single Family Home, or a Multi-unit building for Investment purposes? Also, there is another form of Ownership which is not popular but it is available and it is called a Co-op. Some of you might be asking just what is a co-op or cooperative and how it is different from owning a Condo or for that matter a Townhouse? This article published by Heather Senison can be a benefit to you. Please check it out by clicking here 

The next form of Home Ownership is the most popular and that is the Single Family Home. Once again my Office of Century 21 Universal is located at 7300 N.Western ave in the West Ridge area of the city of Chicago. The Chicagoland area has many styles of homes While this blog might reach people all over the country I do not know what forms of Single-family homes are popular on the West Coast, The Southern area, and the East Coast. I do know what is popular in the Chicagoland area and those types or styles of homes are what I am going to talk about. A lot of people have asked about the different styles of homes and as they contemplate what sort of home would be a benefit to them maybe this Article could be a benefit to them, read here at https://www.homebuilderdigest.com/10 -common-architectural-style-custom-home. 

Now the majority of these homes are located in the Chicagoland area and in other parts of the country. Now there were other Popular types of Chicago homes that were not mentioned. They are The Victorian home https://freshome.com/house-style-victorian-home/ .  You also have the Georgian Style Home http://www.traditionalhome.com/design/get-look-georgian-style-architectu . And let us not forget the type of home that makes Chicago proud and that is the Bungalow.  Please click here >http://www.chicagobungalow.org/chicago-bungalow  You can also add to the list The Greystone Buildings, the 2 and 3-Flat Buildings that can be bought for Investment purposes.

     Sooner or later all these various types of Homes will eventually come onto the market in the Chicagoland area. Let’s say after careful consideration you have decided on the type of home you want, You have also decided on the area you would like to live in. You have saved up a down payment and you have been preapproved for a Mortgage.  The next logical step is to obtain the services of a Professional Licensed Real Estate Broker.

What do Real Estate Brokers?

        Real Estate Brokers are an essential part of the Home Buying Process. How so? They have knowledge about the homes in the local neighborhoods. They have negotiating skills and the best part is their services does not cost you anything out of your pocket. Our Commissions are paid out of the sale of the property. With the help of the Real Estate Broker you put together a list of homes in the area of your choice and within your price range. Personally, as a Real Estate Broker my first step with a potential buyer is to determine a Buyer’s needs and to try and try and satisfy the majority of their needs. 

       That starts with a Buyer Consultation to find out exactly what their needs are. So I create 2 lists. List:1 Place on this list all the things a buyer must have in their new home, in other words, you do not want to see any home under no circumstances that do not have those features you need. List: 2 A buyer would like to have these features in their home but if they cannot get these options they can live in the home without it. As a Real Estate Broker, you have to get the buyer or buyers to understand that no perfect homes out there anywhere the market today. The majority of the homes on the Market are 10 years or older. Like an older car that is still running the older home will need work to keep it in operating order. A lot of the homes will need to be updated, you can update them over a period of time so that should not stop you from purchasing that home. More on that in a minute.

         Now if I and the buyers agree to us working together the next step is to sign a Buyer agreement. Why this agreement? Well, this buyer agreement allows me to do the work necessary to get you the best possible price and do all the work necessary to get the deal successfully closed. This agreement/ contract authorizes me to go to work for you and you agree to work with me exclusively. A lot of people will not see your value and if they can not respect you and your skills it will be best for you not to let them waste your time. That sounds cold but that’s the reality. On the positive side if the buyers you are working with are serious and they appreciate your value and they sign the agreement people then you are ready to roll. The next step is to set up showings. Keep in mind that even with the 2 above lists in your hand this process can get mind-blowing because you can see a lot of homes and it will be hard to separate one home from the next. So it is best to buy a notebook and write every important fact about every home so you can remember it later. People also take photos and videos to help refresh their memory.

  So now we are out there in the area of your choice looking for your future home, How long will it take? That will depend on the style of the home you are looking for and what is available on the market in the neighborhood that you desire. The inventory or selections of homes could be either high or low. But let’s say you find that home. When you enter a home to inspect the property here is what you should do.

We found the house of our dreams. What should we inspect it?

     Check the water pressure by turning on all Sinks, Showers, and tubs. Turn on all electrical switches. Check the operating functions of the windows if possible. Check the Basement for signs of water seepage or flooding. Open and close all doors. Check out the Floors, Ceilings, Ducts. In other words, check out everything. Go outside and check out the Foundation, The siding. Look at the roof, the steps, the lawn. After you do the external inspection then check out the surrounding area. Ask yourself this question. Will my family Feel safe coming to this home late at night? Are their bad people hanging around the area doing bad things? 

  Go to the local Police department and get information on that particular block. Be through please, this will be your biggest Investment. After looking at a number of homes, you will soon make a decision and you will decide on which home you would like to make an offer on. Keep in mind when you say to yourself. This is the home I want to live in the doubting and the hesitation will start. Am I doing the right thing? Does this home have a lot of minor problems? That is only natural. This will be a big investment so you need to make sure that the home is structurally sound. You can handle the minor problems, not the major ones. So what do you do? The next 2 steps very important they most occur almost hand in hand. which occur together. You notify your Broker of your intention to make an offer on a property. He or She will ask you if you have a Real Estate Attorney to represent you. 


Why do I need a Real Estate Attorney?

  Now in certain parts of the Country, They do not need the services of a Real Estate attorney to close a deal.I am going to word this statement carefully and here it goes. I live in the state of Illinois , here if you wish you can also not hire a lawyer but it is strongly advised that you do hire a lawyer that specializes in Real Estate  Why is that, because a real estate contract is exactly that a contract. Once everyone signs on the dotted line that contract is now valid or executed. There is nothing a Real Estate Broker can do to correct or adjust anything on that contract.  Any adjustments, extensions, or questions about that signed contract? A smart broker will keep his /her mouth shut and refer you to legal counsel a misguided Broker will answer your question a can later be penalized or sued for offering legal advice. It has happened. In the Chicagoland area.Only a Licensed Real Estate Attorney can make changes to a Legal Contract or answer legal questions pertaining to your Contract. When you try to save money by not hiring a lawyer you will wind up spending more money in the long term to correct that problem.  So if not for any other reason, the Seller of the Property will have a lawyer representing them. You should do the same unless you are a lawyer.

      So that takes us to the next step. You find a home that you like. You and your Real Estate Broker will offer a price on the home you selected based on the value of the comparable homes in the same neighborhood. Then one of 3 things will happen. 1: They will accept your Initial offer.Not likely. 2: They will reject your offer and give a Counteroffer and thru negotiating you come to a meeting of the minds and close a deal. 3: You do not come to an agreement. You resume your search for another Home. But if steps 1 and 2 go well all goes well you and the Seller signs the Contract the next step is very important. For your protection, this deal to go thru this deal has to be Contingent on your hiring and Home Inspector.

Why do I need a Home Inspector?

 To a naked eye, the home you are desiring to buy looks great but looks can be deceiving. You need a  Home Inspector to look beyond the exterior and look deep into the interior.You need an expert to inspect the home for Major and Structural damage. Keep this point in mind, You get what you pay for. You want an Inspector who will get dirty in the crawl spaces working on your behalf. You can  Inspectors on the internet, or asks for references from people you know. Your Real Estate Broker can recommend Inspectors that they used in the past. This contingency is for your protection so you do not get stuck with a home that has hidden defects.

  This is one reason why you need an Attorney because once the Inspector completes his report he will send you, Your Broker, and Your Attorney a copy of that report. After reviewing that report your Lawyer can legally try to renegotiate your offer-based on what is found in the report. Or your lawyer can withdraw your offer without penalty. You can not withdraw from the deal for minor problems. Every home has a problem. It is the major problem you must avoid. So, what all does a Licensed Home Inspector do? That will be cover in part 2 of Steps to Buying a Home.

The Final  Steps.The Appraisal and the Closing.

Once this process is done then the process starts moving quickly. The Mortgage officer then starts the process of Underwriting the loan while at the same time they will arrange for an appraiser to provide an independent estimate of the value of the house you will be buying. The appraisal will let all the involved parties know if the price you are paying for the home is a fair one. There will be a lot of Documents and paperwork involved during this stage of the home buying process. Either your Loan Officer or the Lawyer will arrange for a Title company to coordinate the paperwork. This paperwork is essential so everyone knows that the Seller has the legal authority to sell the home.

       In part 3 we will go into further details into the Home Appraisal Process. If all goes well, around 30 days the paperwork will be completed and you will be told that everything has been clear to close. You made it to the finish line. On the day of the closing, there will be a final walk-thru of the home to be sold. Here the Buyer checks that the Seller has not taken anything out of the property that was not agreed on. The Buyer also checks that everything is still in working order and if not some financial adjustments must be made.

     Then it is on to the Title Company for the closing. At the closing, both the Seller and you the Buyer will sign off on paperwork transferring ownership.Taxes,credits etc.etc.Here the Check from the Mortgage company is given to the Seller. The Real Estate Brokers from both sides of the deal are also paid directly from the Funds of Selling the Home. The keys to the property are then given to the buyer and the deal is completed. Congratulations you are the New Owner of the House.

     Hopefully, it will be is a good day for everyone involved. Part 4 of this series will highlight in detail who pays what at the closing table. This was part one are the steps to Homeownership. Yes, there are bumps in the road but the transfer of property is an everyday event throughout America and the world. You too can begin the process. Start saving your money and decide on what type f form of Homeownership will suit you and your family. Follow the proper steps and that home of your dreams could be yours. Once you purchased the home of your dream the next step will be maintaining your home. There are companies offering Home Warranties, but everything will not be covered in the warranty and in time the Warranty will expire. So please, put money aside on a weekly or monthly schedule for future home repairs.   

Conclusion!                                                                                                                                                                                                                                              That concludes this blog. I want to thank you for reading it.Once again my office of Century 21Universal it is located at 7300 N.Western ave. Chicago Il. 60645 There are over 80 Real Estate Brokers who speak many languages from all over the world and we all work for the common good of satisfying our client’s real estate needs.  Me personally I am not confined to the North Side. I work from Rogers Park to Morgan Park to Elmwood Park and to all points in between. My job as the photo describes below is 2 fold. I am here to help you buy a home and I am also here to get your home sold. So until the next time take care and have a good day. Charles McShan Website https://www.charlesmcshanchicagolandrealtor.com

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