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Recovering Northern Illinois Real Estate Market Poses Timing Concerns Move-Up Buyers Can Overcome
Today, in the metro Chicago real estate market and across much of northern Illinois, the seller-buyer confronts an active market with rising prices and strong demand but a relatively limited inventory of homes for sale.
It’s a market that makes any home easier to sell if it is presented and priced properly, noted Rich Toepper of RE/MAX Unlimited Northwest in Crystal Lake, Ill. On the other hand, it means that sellers who want to buy another home could find their choices limited and, in some instances, intense competition for the most attractive properties.
Toepper has been seeing growing interest from homeowners in trading up to a nicer home, whether that means something larger, or with better features or a more desirable location. One reason for the increase in move-up activity, he believes, is the realization by homeowners that trading up lets them take advantage of the fact that demand for moderately priced homes has recovered faster than demand for those with higher price tags.
“Sellers of a home worth $225,000 may be getting $25,000 or $30,000 less than they would have six years ago, but the home they then can buy today for $325,000 probably would have sold for $400,000 or more in 2008,” Toepper said.
One question RE/MAX brokers hear regularly from clients who want to sell one home and buy another is: what should we do first? Given current market conditions, Toepper and many other brokers recommend getting that next home under contract before listing the current residence.
Following that strategy, however, isn’t without complications. Buying before selling means buyers won’t know exactly how much they’ll get for their existing home. It also brings up the question of whether their offer on a new home should be made contingent upon selling their current residence.
According to Tim McCaslin of RE/MAX Sauk Valley in Sterling, Ill., adding such a contingency to an offer can work against a buyer in a competitive situation, so it’s best to avoid it if possible. McCaslin advises buyers to consider two things when making that decision. Is the home they want to sell likely to attract a buyer quickly, and if it doesn’t, can they afford to own both their current home and a new home for a few months?
How can you judge if your home will sell quickly? McCaslin suggests asking your broker about the local market. How many days are homes like yours taking to sell? How should you price your home to assure a relatively quick sale? And what steps can you take to maximize the appeal of you home?
“If you’re comfortable following your broker’s advice on pricing and getting your home in shape to show beautifully, the outlook for a quick sale should be excellent,” he said. “The only caveat qegkj is that an unusual home typically takes longer to sell than one with a traditional design. For example, if a house has four bedrooms and 2½ baths, but two bedrooms and the half bath are in the basement, finding the right buyer may take longer than it would if all four bedrooms and two full baths were on the second floor.”
Another thing that can help make it easier to buy and then sell, according to Warren Davis of RE/MAX Premier Properties in Chicago, is to get the financing for both the purchase and sale firmly in place.
“Make sure your own mortgage financing is pre-approved. You don’t want the financing for the home you are purchasing to fall through – especially once your existing home is under contract,” said Davis. “And expect the same of your buyer. If you get multiple offers for your home, you may want to choose the one that poses the fewest financing issues. That way you can move ahead with more confidence.”
RE/MAX has been the leader in the northern Illinois real estate market since 1989. The RE/MAX Northern Illinois network, with headquarters in Elgin, Ill., consists of 2,000 sales associates and 100 individually owned and operated RE/MAX offices that provide a full range of residential and commercial brokerage services. Its www.illinoisproperty.com provides comprehensive information about the network and about residential and commercial property for sale in the region. The northern Illinois network is part of RE/MAX, LLC, a global real estate organization with 90,000+ sales associates in 90+ nations.