Tax Appeal Season

It is now open tax appeal season for those of us who own property in the Lake View Township of Cook County. The anticipated closing date is slated for October 18th but, as in years past, is subject to change. According to the Chicago Sun-Times, over half of the 127,472 appeals filed in 2005 resulted in a lower assessment. Two of the most common grounds for appeal that I personally have come across as a Realtor are "Lack of Uniformity"--a nearby and comparable home has received a lower assessment; and "Less Than Market Value"--a home was purchased for less than the "fair market" amount assessed. You may request a "Complaint Form" by calling the county Board of Review at 312-630-5540.

Tribune Article Reprint Part 1-Geno Petro

Put Spotlight on Lighting
By Annemarie Mannion
Special to the Tribune
Published November 26, 2004

There's no better--and inexpensive--way to create a sense of mood than through lighting, said Geno Petro, a real estate consultant with Chicago Home Estates in Chicago. Petro ought to know. Like doctor-turned-developer Mitch Newman, Petro is following a different career path than he had planned when in college.

Petro majored in theater with an emphasis on lighting design. In Newman's two-story condo in Bucktown, Petro advised Newman to consider not only the look of the light fixtures but how much light they cast when he shows his home.The dining room, for instance, has red pendant lights hanging over the table. It is next to the kitchen, which has under-cabinet lighting and overhead can lights.

Petro played with the dimmer switches to show how the pendant lights should cast a crimson glow. In the kitchen, the under-the-cabinet lights should be lit to create depth, and the overhead lights should be on, but not at their fullest level.

The idea, he said, "is to create a better mood, welcoming and warm as opposed institutional or cave-like," he said.Being able to control the level of lighting a room is important, he said."I think you should have dimmers in almost every room. Especially if you have (ceiling) can lights. When you turn those on, they are just blazing."

The good thing about lighting is that it is relatively inexpensive to add and can change a room's mood or look. "It doesn't cost a zillion dollars to add a dimmer or to get a cool-looking light fixture," he said.And sellers should not ignore natural light. "It's the most important source of light--the light that comes through your windows," he said.Lighting, whether from a lamp or window, can make even a run-of-the-mill room more appealing."It's the best way to make an average room stand out from other average-looking spaces (on the market)," he said.--

Annemarie Mannion
Chicago Tribune

Tribune Article Reprint Part 2-Geno Petro

HOUSE CALLS
Upping the `wow' factor of a Chicago duplex

By Annemarie Mannion
Special to the Tribune
Published November 26, 2004

On a clear day, Mitch Newman can see the outline of Chicago's famous skyline. That's not so unusual, perhaps, but Newman can see it from the comfort of his master bathtub.

As a former artistic director for Thirsty Theater, a small theater in the Pilsen neighborhood that stopped productions two years ago, Newman knows how to create drama. And his bathroom--with a taupe-and-cream marble Jacuzzi-style tub, skyline view and glass-enclosed shower--shows it.

"On a good day you can see downtown. It's like the Emerald City. It's amazing," said Newman, who also was a family-practice physician.

The bathroom is in a four-story brick building in Chicago's Bucktown neighborhood that Newman built. Using a small inheritance, Newman, 47, decided four years ago to focus on residential development. He worked with an architect to design the three-unit building, which includes the two-story, four-bedroom duplex in which he now lives.

Now Newman is moving on to his next project. Once his unit is sold, he plans to relocate to a condo in a building he is developing in Lincoln Park.Although he has become acquainted with the ins and outs of overseeing building construction, Newman has spent little time decorating his duplex. "I literally bought the dining room table in order to show [the unit]. I have a minimal amount of furniture," he said.Geno Petro, a real estate consultant with Chicago Home Estates in Chicago, agreed that Newman needs to add furniture and artwork and replace generic fixtures to draw buyers' interest and add drama.Newman said his unit will be listed in the $600,000 range.

Because of its higher price and because the unit will be competing with new construction, Newman needs to pay attention to small details that newer units likely will have, Petro said.For instance, the door hardware in Newman's home is gold. Although unit is only 4 years old, Petro said it already looks dated and recommended replacing it with brushed nickel.The same advice goes for the maple pulls on the kitchen's maple cabinets. "I'd go with the brushed nickel knobs. They'd go with the stainless-steel appliances," said Petro.He also recommended painting the master bath to maximize its appeal.The walls are off-white. Petro recommended painting them taupe or a deeper shade to complement the marble.

"If you had one place to paint, I'd paint this room," Petro said. "Most bathrooms aren't huge spaces so you can make a big statement in a bathroom."The bathroom, which is on the top floor, will likely be the last room that buyers see as they complete their tour.However, Petro said that Newman also can attract buyers by creating dramatic statements as soon as buyers walk through the unit's front door."People walk in and they're already deciding if they like it or not," he said.

For example, Newman's front door opens into a small foyer that leads to a staircase with a landing at the midpoint. Petro advised hanging a compelling piece of artwork on the landing's wall to draw buyers' attention as they climb the stairs."You need to have that `wow' factor," he said. "Put something there--like a piece of art that's cool and hip and will jump out a you."He also recommended changing the staircase railing. "I'd change the railing to some kind of stainless steel instead of the [white] painted railing. It will look more contemporary and it would only be a couple hundred bucks," Petro said.

The living room features a fireplace and soaring ceilings. But Petro recommended Newman replace a white ceiling fan with something less generic-looking and move a drafting table piled with blueprints to a bedroom.The unfurnished bedroom then could be turned into a home office, he added."I'd still keep it minimalist. But anything you could put in here that makes it look like an office would be good," he said.Another bedroom has a large entertainment center that looks dated. "That's a hand-me-down. It's probably 25 or 30 years old," said Newman.

If Newman isn't planning on keeping it when he moves, Petro advised replacing it with a newer entertainment center and turning the room, which presently serves as a catch-all for boxes and other items, into a family room. "The next [entertainment center] doesn't have to be so big," he added.The unit also has two outdoor decks--one off the kitchen and one off the master bedroom. Petro advised that Newman arrange potted plants and furniture on the decks to make them look more useable and inviting."It has a city-urban feel to it, which is cool," Petro said of one deck. "

But organize it. Put all the potted plants in one area and then put the patio umbrella up [when the unit's being shown]. Make it look inviting."

The $800,000 House?

Over the past year or so I discovered an interesting Real Estate wrinkle I call "The $800,000 House Phenomenon." I didn't recognize it at first because I think it used to be called "The $600,000 House Phenomenon" but as the housing market changed, so did the phenomenon. And although I personally find it unique to the Northeast Side and North Shores of Chicago, its probably present in every market in any city at some pricepoint or another. It lays out something like this:

A client, or more accurately a young couple, decides to buy their first big single family home. If they are North Shore buyers then they have visions of a white, Center Entry Colonial built in the 1940s-50s on a 'Father of the Bride', 'Home Alone' or any John Hughes movie setting type of street. If they wish to reside in the city proper (in this case Chicago) then its a beautifully rehabbed brick and lead glass expanded cottage or carriage house, walking distance to the lake, zoo and parks. This is their housing vision. They live in nice, tricked-out condos now but they want 'The House.' And again, this phenomenon is very neighborhood specific. Its a 'location' thing.

The fact that "The $800,000 House" is obviously under a million dollars makes it appear 'do-able' from a financing point of view--after all, who really wants to spend a million bucks on a house when you're still in your early to mid thirties? Anyway, at least once a week I get a request to assist in the search of just such a home..."around the $800,000 range...in a great neighborhood..." And here is the reality:

Two-thirds of the houses I find in this price range are either overpriced by a hundred thousand or so already (sometimes more) or just poorly remodeled little things with low ceilings, average to bad bathrooms and kitchens that if priced more correctly, would already be torn down. And needless to say, you can pretty much forget New Construction. Across the board, my clients are generally a little discouraged by what I send them in this price range because what used to be the $800,000 neighborhood is now the nesting ground of the soon to be built 2.5 to 3 million dollar 6.000+ square foot New Construction House. Its still an $800,000 Neighborhood--it just doesnt include the actual HOUSE. This all has to do with a Real Estate term called 'The Highest And Best Use" of a property which I think is pretty self-explanatory. And I dont think its a bad thing either. I sell a lot of New Construction that serve higher and better uses than what previously stood on the site.

But it is a little sobering when you actually come face to face with what's on the market (housewise, that is) for under a million in Chicago. Many of the homes dont look enticing enough from the MLS picture to even request a showing. And most, if not all of my clients' condos from which they are moving have better finishes and appointments. Again, I find that these properties comprise about two-thirds of what's out there. One must keep in mind that the 'Location' rules and if the 'Location' happens to have a ho-hum building on it with a bulldozer parked in the driveway, so be it. The truth of the matter is the million dollar plus housing market expands and ticks up every month leaving the $800,000 House that someone might actually move into a little further behind in almost every way. But this too, is a good thing. You gotta have 'appreciation' and on a personal level it makes my job more interesting, more challenging, and more rewarding when I do connect with the perfect house. And they do
exist. Read on.

Most of the remaining third of inventory are correctly priced at land value only and WILL be torn down if they dont fall down on their own waiting to close. The remainder of the remainder--those few rare gems that boast curb appeal, livability and attractive pricing--are what I'm talking about. Now we're in 'the zone' and the scenario plays out like this:

On a weekly basis, a handful (maybe less) of homes in the $800,000 range appear on the market and by "market" I mean a good portion of the Northeast Side of Chicago and almost all of the desirable "upper-end" North Shore communities within an hour drive of the Hancock Building. Many have had new and sometimes drastic price reductions because the now increasingly discouraged owners who originally felt their homes were worth "a million" realized the Buying side of "the market" wasn't responding. This is usually attributed to a combination of timing and simple Incorrect Pricing and is a topic I have addressed at length in a previous Blog. These homes are too nice to tear down and while not without a few obvious flaws; dated baths and kitchens, small closets, no central air, odd shaped or irregular sized lots---they are still, all things equal, solid properties with decent curb appeal worth maybe in the mid to upper 700s as of this writing. Many of these may be a little overpriced but are still able to command a negotiated offer that is acceptable to both the Buyer and Seller. I negotiate more than my fair share of these as well.

And finally, what's left of the above handful are the cream of the housing crop--new on the market with significantly better renovations and curb appeal, on the prettiest streets in the most desired neighborhoods with the highest rated public schools. These go into multiple offers the first day or so on the market with few or no contingencies and virtually No Negotiation. These are the true $800,000 Homes. These are homes that more than one Buying entity likes (loves) (desires) enough to write a contract on the spot and close in 30 days. These are the ones that WILL be worth a million in short order. They are generally priced right for a timely sell as the house is already flush with Equity and the Owner needs to move on NOW--no fooling around, no testing the market. As I mentioned earlier, I have at least one person a week asking me if I know of any of these. And what do I do?

I put them in the car immediately and tell them without hesitation about this "$800,000 House Phenomenon" I discovered...


Geno Petro
Chicago Home Estates

Contingency vs Bridge Loan

I believe the most important link in the Real Estate chain of events is the Mortgage Commitment. I also know that while "Price" may seem like the biggest hurdle to deal with, especially with First and Second time Buyers, its really "Monthly Payment." And this is never more evident than when the deal depends on the sale of an existing property.

From a Listing Agent point of view, offers that come in with Riders 4A or 4B,("Home Sale" and "Home Close" Contingencies respectfully) are in most cases instant, if not automatic, deal breakers. Unless the new property is New Construction 3-4 months+ from the delivery, its just too risky for the Seller. Enter the Mortgage Contact. Many deals in my career have been held together with the invaluable help of a great money man. View my mortgage guru here.

A Bridge Loan is a reasonable alternative to a Home Sale/Close Contingency. And when discussed early on in the process, the Buyers know exactly what monthly commitment they're looking at should their existing property not sell before the new property closes. Most listing agents will not hesitate at all to proceed in negotiations if they are sure a Bridge Loan has been structured before the offer is submitted. But don't just take my word for it. Go to my Mortgage Guru link and see what he has to say.

Geno Petro
Chicago Home Estates

Television Real Estate and a State of the Union

You've probably seen the shows. And if you're reading this then you've definitely seen the shows. The ones on HGTV and TLC: 'Sell This House', 'Curb Appeal', 'House Hunters', 'Trading Spaces', Flip This House, etc, etc, etc...You are obsessed with Real Estate. You watch Reality Televion Real Estate and you read Real Estate Blogs. You may have even dabbled in a transaction or two beyond the old homestead.

There was a time back in the olden days when the only fix for the Real Estate junkie was 'This Old House.' That was way over 20 years ago, maybe even 30. Then slowly but surely the spin-offs and copy-cats began showing up--one on Sunday morning, another late Thursday night repeated again on PBS in various oddball morning and afternoon slots. Bob Vila and Norm Abrams became household words. A late 20th Century investment niche suddenly emerged . More tangible and less volatile than the stock market of the 1980's, Real Estate was the new thing to talk about at happy hours and cocktail parties. Real Estate became King.


I know because I bought my first house in those early 1980s alongside all my other gainfully employed peers. We pontificated and expounded on the art of negotiation and speculated on the hope and promise of 'appreciation'. We second guessed our Realtors and were careful to calculate our upgrades-- dollar for dollar return on a new bathroom, 15% more on a new kitchen, negative 30% for a room addition. Little or nothing for paint or carpet...that was just to keep the wife happy. We gathered powertools and Home Improvement books and opened charge accounts at Lowe's. We studied the Sunday Real Estate Section for comparables and Open Houses.

The world-wide web was still a good ten years away and we were doing it the old fashioned way; by watching 'This Old House' and buying Carlton Sheets investment programs from late night Infomercials. My mobile phone was four pounds and deadbolted to the console of my car, its antenna drilled through the glass of my back window. It cost me $200 a month for the actual phone (retail $2,400) and $300 more a month for the limited service. Interest rates were in the mid-teens. I used to walk 5 miles uphill each way to a Sunday Open House....I sold insurance for a living.

Fast forward to today, last evening to be exact. From 7:00 at night when I walked in the door from my last showing of the day to 11:00PM when I couldnt physically click another channel on the remote in my hand, there were no less than 17 Real Estate related programs on seven different channels. Even former Chicago music promoter Downtown Scotty Brown is now an LA Realtor and featured on a show premiering on Bravo! this fall. CableTV is our new 'Bookstore'--our 'SOURCE', as it were. Cable Channels 61-71 are the new "Do-It-Yourself" aisles. The Internet is our 'Sunday Paper'. The once secretive Multiple Listing Service is available to anyone with a lick of computer savy. PDAs are our new computers. We PodCast and Blog just for the sport of it.

Everybody was doing it. Even I was ready. I quit my job and became a Realtor at the turn of this past Century. I wake up in the morning after a restless night of disjointed and oblong transactions and half-deals going sideways, making millions for my clients and flipping castles in dreamland. I dress for the day and do the same thing in the Real World. I arrive home before dusk and retire the day--but not before kissing the wife and dog, chasing the cat from my chair, throwing something in the microwave, and surfing the web and cable channels for anything that pertains to Real Estate.

Geno Petro
Chicago Home Estates

10 Steps Before Listing

1. Start at the Street. Pretend you are a prospective buyer seeing your home for the first time. What do you see from your car? Make your home so inviting buyers will get out of their comforting cars and walk to your front door. Place fresh seasonal flowers, in pots or planted, along the front walk or by your front door. Brighten the
hallways of your condo's common areas, especially if its a small association.

2. Make Repairs. Lubricate squeaky door hinges, fix dripping faucets, and make sure toilets flush properly. You get used to the minor faults in your home, so ask a friend to inspect for minor defects.

3. Exterminate. One bug or spider, dead or alive, can cause some buyers to leave immediately.

4. Remove Clutter. Not only does a neat, organized house feel larger and more inviting, clutter-free homes give prospective buyers a chance to see the home’s features.

5. Deep Clean. Remove dust, spiders, and odors.

6. Depersonalize. Pack your personal mementos and photographs. Give your buyers the opportunity to visualize their personal effects in your home.

7. Lighten Up. During the winter months, use bulbs with the highest wattage recommended in light fixtures. Add small table lamps for extra lighting. If you have room on your kitchen and bathroom countertops, a small decorative lamp adds a warm glow with a designer’s touch.

8. Wash Walls or Repaint. Fresh paint gives you the best return on your money.

9. Clean Carpets or Replace. You may be accustomed to the way your carpet looks, but what do buyers see? If you're selling to first-time home buyers, they most likely won't have the money beyond the down payment to pay for new carpeting. Move-up buyers expect perfection, even if they want to tear it all out.

10. Consider having your pets taken care of by family or friends. Some home buyers are allergic to pets, while others will be turned off by pet odors. You get accustomed to your pets' odors, but these scents drive buyers away.

With a little thought and effort, you can persuade buyers that your house exceeds their expectations-- and is worth getting out of the car.

Geno Petro
Chicago Home Estates

On Warren Buffett...

The following is a recent quote I came across from Warren Buffett...


Buffett: “Dumb lending always has its consequences. It’s like a disease that doesn’t manifest itself for a few weeks, like an epidemic that doesn’t show up until it’s too late to stop it. Any developer will build anything he can borrow against. If you look at the 10Ks that are getting filed [by banks] and compare them just against last year’s 10Ks, and look at their balances of ‘interest accrued but not paid,’ you’ll see some very interesting statistics.”

Does anyone ever understand what he's saying???


Anyway, here's a definition of a "10-K":

A comprehensive summary report of a company's performance that must be submitted annually to the Securities & Exchange Commission. Typically, the 10-K contains much more detail than the annual report. It includes information such as company history, organizational structure, equity, holdings, earnings per share, subsidiaries, etc.


Does that help?

Geno Petro
Chicago Home Estates

Purchase Steps in Chicago

STEPS TO BUYING PROPERTY IN CHICAGO

* Initial Consultation (Screen/Interview Buyers Agents)
* Mortgage Pre-approval
* View Prospective Homes
* Identify a Property
* Present Purchase Contract To Listing Agent
* Initial Earnest Money ($1,000 Made Out To Listing Office)
* Negotiate Offer (Counteroffer, Price, Terms, Close Date)
* Acceptance Of Offer by Seller (Agreement)
* Final Signatures And Initials On Original Contract
* Contact, Fax Documents To Attorneys, Lenders, Etc.
* Contingency Periods Begin (Mortgage, Home Sale--Usually 30 Days)
* Attorney Period Begins (Usually 5-10 Business Days From Acceptance)
* Acquire Budget And By-Laws (Condominium)
* Professional Home Inspection
* Attorney Approval on Contract (5-10 Business Days After Acceptance)
* Balance of Earnest Money Due to Listing Office (5-10%)
* Appraisal (Lender)
* Loan Commitment
* Communicate With All Parties
* Acquire Homeowners Insurance Policy
* Interview With Condo/Co-Op Board (Usually In High rise Buildings)
* Await Closing
* Transfer Utilities & Change Of Address
* Schedule Movers
* Estimate Of Funds Needed At Closing (Good Faith From Lender including $7.50 per $1,000 City Transfer Stamp to be paid by Buyer)
* Final Walk Through Or Punch List (New Construction)
* Closing
* Celebrate! You're A Home Owner!!

Geno Petro
Chicago Home Estates

Things are Moving...

The following is a sampling of the North Side Chicago market year-to-date 2006, as I see it:

Since the beginning of the year my 1541 W. Roscoe Penthouse sold and closed for $540,000; My 2327 W. Medill Penthouse listed at $599,900 went under contract for near list price and just closed. 230 E. Ontario #303, an investment condo downtown, is being negotiated as of this writing.

1015 W. Barry is an awesome property in the heart of Lakeview--perfect for a small family or artistic couple. Its a Single Family House listed at $624,900 open Sundays from Noon til 3:00PM. A Virtual Tour (VT) for it and all my listings can be viewed at ChicagoHomeEstates.com.

My 670 W. Irving Park in the landmark Pattington has been off the market since Christmas but will be coming back on in February. It is listed at $359,900 and is gorgeous. See VT.

On the buy side I closed 1133 W. Cornelia in Wrigleyville for $500,000--$25,000 under list price, and represented a client with an offer on a Gold Coast investment unit at 1212 N. Lasalle. This past week I negotiated a contract on a $450,000 Loft in Wicker Park for the fellow I send my mortgage business to.


I will be marketing a New Construction Single Family House on an oversized lot for 1.4 million in early March in the Lincoln Square area and I just listed a West Loop Loft with skyline views at 1200 W. Monroe priced at $399,900. Weekends from 1-4 I host Open Houses at 1835 N. Wolcott, a Single Family House in Bucktown listed at 1,499,000 as well as my 1015 Barry House in Lake view.

Please call or e-mail me anytime, I return all calls and messages promptly. Check out our website at ChicagoHomeEstates.com where the Chicago MLS is at your fingertips. Also check out Blockshopper.com for comparable closed properties in the Lincoln Park and Lakeview neighborhoods. Its a great place for info.

Geno Petro
Chicago Home Estates
GPetro@CHEMail.com
772-975-2130

Chicagos Home Weblog--It Makes Sense

Being a Developer

Rarely a week goes by without someone asking me about developing their own project--be it a new construction condo project, building a single family home as a vanity residence or buying an old apartment building to convert. What most people don't realize is there are scores of licensed Realtors in the Chicagoland area looking to do the same thing for themselves, not to mention all the Attorneys and Bankers with access to even more privileged information on distressed or unlisted properties from tax and estate scenarios. And most Realtors skilled in this area already have a strong portfolio of experienced Builders ready to pay cash and close in 30 days for the right property. I always have a buyer for the right piece of Land.

It used to be that a novice investor could take a position on a property and "flip" it to another buyer before or at Closing with little risk or downside. Banking is so regulated now (as far as RESPA is concerned) and the margin is so tight on new construction that this once common occurance is now becoming a rarity. As of this writing, condo inventory is high in Chicago. I.E...there's a lot on the market to choose from. The rapid appreciation of previous years has turned to a more gradual steady growth.

Land, on the other hand continues to briskly appreciate but the zoning and permit process in the city is such, that only the most expert and experienced of investors should proceed and with caution. What's right for tearing down and developing on one block might be a totally bad move just across the street. The following are just a few things that the would be developer has to know and possess: F.A.R, Zoning Laws and Regulations, Setback Requirements, Height Restrictions, Exception and Variance Restrictions, Neighborhood Covenants, the Alderman's Desires, the Permit Process, Reliable Architect Counsel, Expert Legal Counsel, A Strong Trade Resource, Cash, and the ability to close in 30 days! That's just for starters.

The world of Real Estate is an exciting and vibrant one--especially in Chicago. Just remember that due diligence is in order, consult professionals before proceeding and when its time to make an offer, "Cash" is King.

Geno Petro
Chicago Home Estates

It Makes Sense--Real Estate

photo by loosetooth.com

A Couple of Things:

On Pricing a House Correctly...
Everyone believes a) their baby is the most beautiful child on earth and b) their house is worth more than it really is. Gentle persuasion is key with "b." With "a"...its always nice to agree.

When a Seller wants "Feedback"...
It doesnt really matter what "everyone" thinks of a listed property (showings, open houses, etc...) It only matters what ONE person thinks...the Buyer. The right person always comes around when the house is marketed properly.

On the Housing "Bubble" ...
Approximately 1,000 properties a week close in Chicago. Even if the market slowed by 10%--900 would still close. Property is still selling and the Title Companies still have a full lobby the last day of the month.

Choosing the Right Representation...
When an agent boasts "I've been doing this 25 years" its not necessarily a good thing.
Some people have 25 years experience but many more have the same one year experience 25 times. The best negotiator isn't always the one with the most tenure. In fact, some super busy agents are just that..."super busy." Its worth the time taken to find an "advocate" to represent you.

Geno Petro
Chicago Home Estates