What to Expect in Your 2017 Home Search?
Are you searching for a new home in 2017? What should you expect?
Prices Have Risen
The median sales price in the metropolitan Chicago area has risen 22% since July 2014 levels. However, despite concerns at the end of 2016, interest rates remain historically low. Many buyers this summer have purchased with rates under 4%.
Home values have bounced back significantly since the crash. However, the average median price compared to 10 years ago is still lower for the overall Chicago metropolitan area. For areas hit hardest by the foreclosure crisis, many remain significantly lower than price levels 10 years ago.
The number of foreclosure sales for the Chicago area are significantly lower overall compared to a few years ago. However, there are still some Chicago neighborhoods and suburbs where foreclosures remain a major presence in the market. There are often misperceptions about foreclosures. Foreclosed properties are not necessarily in bad condition or “lowball” opportunities by banks desperate for an offer. The condition of the property is completely dependent on how well the previous homeowner took care of the home. Many are in great condition.
The process for buying a foreclosure is similar to buying any home. The seller just happens to be a corporation versus an individual. Sometimes the submission process to the bank is different. However, the offer includes an offer contract and then negotiation between a buyer and seller to determine an accepted price and terms. The timeline to close is the same.
Multiple Offers Are the Norm
Expect your offer to not to be the only one being considered by the seller. The supply of homes in the Chicagoland area overall is tight and considered a seller’s market. However, supply levels may vary for different neighborhoods or suburbs. Your realtor should prepare you for the realities of the current market while making sure you create the best opportunity of getting your offer accepted.
Mortgage Guidelines Continue to Change
The one thing constant in mortgage guidelines is change. Mortgage guidelines seem to tighten year after year since the housing market fell. As a matter of fact, FHA passed a number of guideline changes in 2015 including how student loans are factored, employment history guidelines and rules for down payment gifts. I have heard many buyers assume that a higher credit score and great income will be a “slam dunk” for the home loan approval process. However, that is not necessarily true. Consult a lender early in the process. You want to make sure how much of a loan you qualify for and if there are any issues to address. Also, expect a 2nd and 3rd verification of the information given. As a matter of fact, the lender is likely to make sure that nothing has changed in your information up to the date of the close. This will be a third party verification so if you have a bankruptcy, past foreclosure or judgement not disclosed, it is likely to be discovered.
It is a great time to buy and sell. For buyers, interest rates have been held at low levels for the past eight years. This is likely to change after this year. Prices will continue to rise. For sellers, the current supply levels in the market favor sellers. And if you are buying a new home in conjunction with your sale, you will want to take advantage of conditions that maximize your combined net effort.