Tuesday, August 28, 2007

All Talk, No Walk

A Real Estate contract is generally not enforceable in the great state of Illinois unless it is a) Written, b) 'Signed-off ' on by competent parties (Acceptance), and c) Some form of Consideration ($$$) is placed in an escrow account to show 'Good Faith' on the Buyer's part. Think of it as the Holy Trinity of the home buying experience.

It's the 'Good Faith' part of the experience I wish to address here. The truth is, most of the negotiation process in this Northside Chicago market takes place verbally. Once a written Offer is submitted to the Seller's side of the deal, the details usually get hammered out by the respective Realtors involved via cell phone, text messages and email. Sometimes we are The Negotiators, other times, mere Messengers. Either way, there are at least four channels of emotion, rationality and objectivity that need to be successfully navigated--the Seller, the Listing Agent, the Buyer, and the Buyer's Agent-- not to mention the chorus, and supporting cast of Attorneys, Home Inspectors, Lenders, Appraisers, and Blood Relations waiting in the wings for Act II to begin. Once there is signed Agreement the 'experience' as it were, takes off in another direction altogether. Another story for another day.

So here's the scenario: A potential Client sits at her computer, Googles 'Search Chicago Real Estate' and of course, lands on Page One. After surveying the first 10 choices she decides to click on ChicagoHomeEstates.com because...well, it just sounds so right. Chicago...Home, no...even better... Estates. She then decides to choose an Agent so she can Register on the site for greater access, picks the best looking one and Voila!...she arrives at my Home Page. Once registered, she is free to search the Chicagoland area for a home or rather...an estate of her dreams. She requests a showing for a Condominium that piques her interest. I respond.

Now this is where the afore mentioned 'Good Faith' begins. Our website Features our own Listings while at the same time providing a Search Engine for the entire MLS of Northern Illinois. This is provided under under the guidelines of Broker Reciprocity and is about as clear as clear can be, in my opinionated opinion. Every Listing that is not in the Chicago Home Estates personal inventory has a clearly marked icon (a little house button to click for more info) stating so.

There is a question asked and a response box to be checked: Working with a Realtor? YES or NO.

Check NO, and I'm her guy.

Check YES, and her own Realtor will need to show her the requested property (and should probably also invest in his own website with advanced Search Engine capability). Just so you know, there are only two sides of any Real Esate transaction as far as Realtors are concerned--the List side and the Buy Side. There really isn't any more room in a deal for a third Realtor. We have a name in the business for such a soul. We call him 'The Unpaid One.'

It is at this point in the experience that I make it crystal clear to my potential Client that her Request For Showing either is or is not my own Listing (I have no intention of ever being The Unpaid One) and I proceed from there.

Now let's just say that we meet at the property, introduce ourselves to the Listing Agent, and take the tour. Thirty minutes later she decides the place is perfect and wishes to make an Offer. Whether I write the deal or not I have established what is called Procuring Cause on that particular property, thus avoiding any possibility of becoming The Unpaid One. We soonafter fill out an approved Board of Realtors contract, sign in all the appropriate spaces, forward it on the the other side of the deal, and wait for a counter-offer.

It is at this point that the verbiage begins. Several phone calls back and forth between all parties involved and hopefully, a middle ground can be found. Let me walk you through the dialogue of a recent negotiation attempt that mirrors my example above. The gender has been changed to protect the idiot,,,I mean innocent..

"The List Price is $639,000," I said. "I suggest we come in around $605,000 and hopefully get this deal done under $620,000. " Just so you know, while aggresisve in negotiations I am not a 'low baller.' If the Listing in ridiculous then that's another story but in this competitive Chicago market, most properties sell within 3% of the Asking Price in less than 120 days.

"We are obviously not on the same page," says my Client. "I will not consider offering anything with a '6' in it. Tell them $550,000 and we'll close in three weeks." (In case math wasn't your best subject in grade school, that's $89,000 under List Price.) I put on my Messenger outfit and prepare to deliver the news.

"Good news is...we have an Offer for you!" I say to the happy, happy Listing Agent. "Bad news is we are coming in 15% under List." Actually, I don't really say any of this. Instead, I just let the ink on paper speak for itself.

As expected, our opening Offer was met with dead silence by the other side. After 10 minutes of verabal resuscitation and another 3 or 4 minutes of 'point and counterpoint' with the Listing Agent I was finally able to persuade him to just give us a counteroffer. He called back an hour later. "$625,000. November 30th Close." This was good.

"Not good enough," was my Client's response. "$565,000 and we want our September Close date..."



"They are willing to spilt the middle and come down below their 'Drop Dead Number,' I inform my Client. "$600,o00." I deliver the news feeling more like The Negotiator than the Messenger for the first time in a couple of days. I know that I am but $1 away from getting a deal done with no '6' in it. I am indeed, the man.

"Okay, but I want $10,000 more back in the form of a Closing Cost Credit paid to me at the settlement table," demands my Client. "Net sale price of $590,000. It's my final Offer. Make it happen Geno!" Bad Faith. Bad Faith, but I do as directed.

And I do get it done, feeling a little uneasy about throwing in a Closing Credit curveball so late in the negotiation (poor form, to be sure). The Sellers however, eventually agree after several more hours of persuasion, and I forward the good news to my Client.

And then within a matter of hours my Client bails out of the deal totally. The reasons and excuses were numerous but the real reason (and thus the point of this sad but true essay) is she could. The original contract was written over the phone and faxed to all parties (not unusual for people with busy schedules and allowable by law), no Initial Earnest Money check was ever collected (again, the initial check is but a token gesture and is not needed until Signed Agreement occurs), and the motivation to Sell was greater than the motivation to Buy in this case. My internet Client was just fishing around the bottom of the lake seeing what she could snag on the cheap. Looking back, it was just a lot of words accompanied by very little action, not the least important of which was the Seller's signature. Lots of talk with no accompanying walk.

Postscript: As it turns out the Buyer (no longer my Client at this point) tried to go around me and cut a deal with the other side on her own shortly before this all even started. When that didn't fly she then tried to persuade me to take my commission out of the Listing Agent's portion hoping to keep the Buy-Side Co-Op for herself. Again, failure to launch.

In the end, she had just agreed to use my proffered services as the great Negotiator/Messenger I am, and waste my time for half a week ultimately doing what she felt was in her own best interest. And I'm actually cool with that. Thus is the nature of the beast we call the internet.

The other three deals I'm presently working on (all internet Registrants on our site) are as sweet as blueberry pie--the people couldn't be nicer. Half of my annual business comes from a mixture of the ChicagoHomeEstates.com website and the Blog you are presently reading. The other half is made up of past Clients and referrals. And only a few deals a year come from people who can't talk and walk at the same time. C'est la Vie, say I.

Monday, August 13, 2007

Ol' St Joe Is Good To Go

When I walked through the big oak doors of the Archdiocese of Chicago's Holy Relic Bookstore a few weeks ago, I knew for sure that I'd be lying to a clergyman within minutes. Like many post-WWII children who hail from the eastern seaboard, I attended Catholic school for the first six years of my education and became proficient at an early age with all the loopholes surrounding Confession, Penance, and Absolution. I figured out pretty early on that if I had to tell a fib then I could just as easily get out of trouble with God by reciting a few Hail Marys and an Act Of Contrition. A quick Amen later, and I was off on my merry way to play and lie another day...

So by the time my poor parents figured out that parochial school tuition was a waste of money on a perennial 'C' student with little or no priestly ambitions, the imprint of Guilt (and all the psychological antibodies associated with it) had already left a permanent mental stain on my psyche. In other words, even at 50 years of age I still get a twinge of remorse when I hear my own voice speaking less than truthfully. You think it would stop me...but it doesn't.

"Do you have any statues of Saint Joseph," I asked the young, pale seminarian working the register. He was wearing black pants, a black collarless shirt and a black buttoned up sweater. It struck me funny that a lad similar to him, and no older than him for sure, had terrorized me well into my second year of grade school forty-three years earlier. Still, I felt a little guilty for my intentions and what I had mentally rehearsed in the car ride over....The statue would 'be for my boss (lie), whose name was also Joe (true), for his birthday (lie). He too, is a devout Catholic (not sure, but pretty certain a lie) and would be surprised at the kind gesture on my part (no doubt)'--just in case someone at the store happened to inquire why I was really there in the first place..

"Yes," he said. "We have three sizes of Saint Joe. The small one is $3.00, the big one is $8.00, and the stone statue for the garden is $49.00.

"I don't have a garden," I told him, immediately wishing I could snatch back my words from the thick, dusty bookstore air. The lie barely had time to dry as it floated in the silent space between us. I felt the frowns of invisible Guardian Angels looking on in judgement, if not downright disapproval. The young man just looked at me with his holy brown eyes.

I meant to say "My boss, Joe, doesn't have a garden" but you know how it is once you start lying. I decided to plod forward anyway, offering as little as possible to the web I'd already begun to weave, and just get the hell (heck) out of there---with my statue.

"The $3.00 one will be fine," I said, feeling like a real cheapskate. A cheapskate liar, actually.

"Cash or Charge?" he asked, writing out my receipt with perfect parochial penmanship. I felt like he was mocking me. I almost pulled out my American Express Gold Card but thought better of it.

"Cash," I said, my eyes fixated now on the $3.00 sticker attached to the small, cardboard box on the counter wondering if I was even allowed to charge something on Amex that was only $3.00. Saint Joseph looked a little Chinese to me through the small, cellophane window. I had a fairly good idea where it was made as I removed the statue from its box and examined the bottom of the plastic painted relic. Taiwan. Close.

The young man, back at the register now, charged me tax. I wanted to object---the Church being non-profit and all-- but I let it slide since I was there on such false pretenses in the first place. Although, according to the unwritten laws of Karma... as I understand them, I should be entitled, not only to any duty-free (and Guilt-free) religious purchase for whatever reason I choose, but also to a couple free cracks to the side of his head for retribution of his predecessor's cruel and usual actions back in the day. That too, I let pass without incident trying my best not to blow what was left of my Christian cover.

I was almost out the door with my sacred score when I heard him speak from across the room..."Good luck selling the house."

I froze for a second. God, or perhaps one of those invisible angels, must have whispered something into his inner ear. My true motives were now exposed. I should have dressed nicer--no boots, no jeans. Should have taken the diamond stud out of my ear. Of course I couldn't pass myself off as a decent Catholic much less be in possession of any friends named Joseph or otherwise, who might even appreciate receiving such a $3.00 Chinese statue from a heathen such as myself. What was I thinking?...I should have sprung for the $49.00 garden model and stuck with my original story.

"You know, we have a complete St. Joseph's Home Selling Kit for eleven dollars more," he said. "It's blessed, too."

He led me to a Patron Saints display aisle where they also stocked kits for St. Francis of Assisi (Animals), St. Adelard of France (Gardens), and a St. Lucy/St. Clare 2-for-1 package (Eye Disorders). St. Joseph, by far, had them all beat as far as inventory went. There was even a Discontinued shelf with one last remaining St. Christopher (Travellers) who apparently lost his Patron Saint status during a corporate re-org when Vatican I came to an end. I almost bought it out of pity (and because he was the only statue without Asian features) but I was already over budget for this folly.

Onward Christian Soldier...

Back at home I took out the instructions, along with the statue and remaining contents from my upgraded St. Joseph Home Selling Kit, and laid them all out on a tiny patch of earth in front of my Condo. I dug into the mulch area next to a bush where my dog pees every morning and placed the Chinese looking statue into the hole, upside down and facing west. I covered the treasure with mulch and walked back into my home feeling like the least successful Listing Agent on the North Side of Chicago--forty days on the market, no Offers, and to top it off---snickered at and upsold by a second year Theology student in a cardigan sweater. That was the weekend before July 4th.

I forgot it was even there until yesterday when I was talking to my mother on the phone. She mentioned an article in her local paper back east about the powers of Saint Joseph and how she herself, had been praying for the sale of our place for the past two months. I told her the bookstore story and we laughed until we almost cried. She's not nearly as irreverent as me but I gotta tell you...I learned it somewhere.

A few hours later my phone rang and I received my first 'second showing' in weeks. An hour or so later another 'second showing' request came followed by an e-mail later in the day from a suburban agent. She said an offer was on its way and that her clients had seen the place a month earlier and was hoping it was still on the market.

I opened my desk drawer and rustled through my papers for the Saint Joseph instruction sheet. I'm pretty sure I was supposed to be praying too along the way but I can't say for sure as the sheet must have gotten thrown out with the rest of the kit. That's just the type of Catholic I am--throw the instructions out with the box and hope nothing breaks. The truth is, I can't imagine that a saint as renowned as Joseph could care less if I ever sold my house regardless of how many of his kits I buy or how many prayers I say for my own sake. I know that advertising in the Chicago Tribune doesn't fare much better, either

An Offer has yet to arrive on my fax machine but I've since concluded that the real secret lies in those mother's prayers. If anyone has the Old Man's ear upstairs, they do. Think about it...what in this world is closer to God than words from a mother's lips? Put together a combination of that, a big enough lever, and a $25,000 Price Reduction ....and get ready to move some Earth, baby.

Thursday, August 02, 2007

West of Western...(Avenue, that is...)

For the past two or three months I have been venturing farther and farther north and west in my Real Estate travels. I was pleased to discover, much like Columbus, that the world is not flat (contrary to what many believe) and that I in fact, would not sail my Mini Cooper off the edge of the Earth if I happened to wander a block or so past California (Avenue, that is...). That subconscious mother's voice that had been yelling into my inner ear these past few years (alright, all my life) ...

"Genie, stay away from those far west streets. You'll get side-swiped by a part-time realtor. Those 'west of Western' (Avenue, that is...) agents communicate by pagers and Supras (electronic lock-boxes for the laziest of Listing Agents) and every property has at least 2 kitchens with aunts and uncles everywhere. There's not a Starbucks to be found, Sushi is a four letter word (to them) and you'll be wearing a gold blazer with a name tag within a month. You'll have to put your picture on your business card. Please be careful son..."

...that voice...has finally subsided. It's safe now. The Northside spill-over has officially begun. My wife and I recently purchased a house in the Forest Glen neighborhood of the city (I saved my beloved spouse just seconds before she became an honorary Trixie, I am certain).

And by 'safe' I mean from an investment standpoint. With basic land values steadily hovering above $750,000 per 25'x125' parcel in Lincoln Park, most single family home buyers have no other choice but to expand their searches outward from the sweetspot of the upwardly mobile speedball of Chicago's Northside, and head west. And for those of you who are not from this topographic region, just believe me when I say that heading east is not an option--big, big lake....And while I suppose there are arguments to be made for meandering north or south, it is my professional opinion that northwest is indeed, the only way to fly. My last five deals have occured in this geographic annex of Greater Chicagoland and if it's good enough for my clients then it's good enough for me. I will soon have a yard to cut and a house to paint every 10 years.

The thing is, if you want a relatively spartan single family home in the neighborhood I presently reside in (Lincoln Park) then you'll have to spend around a mil. If you want it to be real nice then you'll need to spend around 2 mil; exquisite...3 mil. Exquisite and in the best part of Lincoln Park, 5 mil for starters; 30 mil if you want a Pritzker for a neighbor. If all of the above price points are not in your housing budget but you just gotta have the 'hood and all it has to offer, then guess what...? C.O.N.D.O.M.I.N.I.U.M.

Bottom Line: If you want to spend less than seven figures for an actual house--and you don't mind having a Petro for a neighbor--then by all means, sell the Condo, point your vehicle in a westwardly direction, continue 30 or so blocks past the edge of the Earth (California...Avenue, that is), and claim your stake before all the other Trixies and Chads get here first. A Starbucks is sure to follow--I'm betting heavily on it. Sushi, however, might be another story altogether.

Geno Petro