Top 10 Chicago Real Estate Deals | River North

My past SOLD listing @451 W Huron

Click the highlighted link to view my Top 10 Chicago Real Estate Deals in the River North neighborhood of Chicago.  Priced between 1- 1.6 Million $$ USD. (2016 Winter)

Geographically, the River North neighborhood is tucked in between Superior Street to the north, the winding Chicago River to the west and south, and that great State Street to the east. It is steps away from the Magnificent Mile shopping district of Michigan Avenue and a mere five buck and change cab ride to almost anywhere else in the downtown vicinity. For public transport, the Chicago Brown Line ‘L’ rumbles gently overhead with platform stops at both Chicago Avenue and the Merchandise Mart. CTA buses run ‘round the clock in every other direction. Taxi, Uber and Zip Car options are endless.

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Geno Petro | CHICAGO REALTOR®

@genopetro

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Romancing the Deal

I'm in the middle of a deal right now that is a little reminiscent of a plot line from Romancing the Stone---peril lurks around every corner and a single false step will insure either one of those big rocks rolling my way in a catacomb, or me getting yelled at by someone, for sure. At the very least, there's a feeling of impending doom and I'm being portrayed as ill intentioned Ralph, the Danny Devito character who's only in it for the money. "You know, I bet you can buy a great townhouse down here...for around five or six dollars," says poor Ralph in mock sincerity as his Sufi Arab captors drag him across the desert floor and into the darkness...

Actually the deal I'm referring to is already negotiated, out of Attorney Review and clear to Close--sort of. The 'deal' itself is cool...for the most part--only the final appraisal lingers in the wings. The actual condominium that is attached to the deal is what has a Curse on it. You see, it's New Construction. It has the notorious New Construction Curse wherein everything surrounding the transaction begins on a flat note back at Day One, continues off key, pitchy and not quite in tune through all the syncopated stages of completion, until the last and final hour when the heaviest lady at Chicago Title sings Goodnight Irene at the settlement table and everyone is free to pile into the elevator and exit the building in silence, all feeling that they somehow got gypped out of the real treasure along the way.

Even good news seems like bad news when the New Construction Curse has been cast:

Agent: "Good news, folks. The cabinets have arrived. "

Buyers: "Where were they?"

Agent: "I don't know. On the truck? Stuck at the Canadian border? Held up in Customs?" Doesn't matter. They're here now."

Buyers: "Ten years later."

Agent: "Weeks. Ten weeks later"

Buyers: "Seems like years. What color were they again? I think we might want to go with a differrent finish. How hard is that to change?"

Ralph stands at the very edge of the 900 foot craggy cliff contemplating the pros and cons of taking just one more baby step....

At this point he is only in it for the money, it would seem. And while most two-party deals move along as smooth as silk and without high adventure; like carrots and peas or Forrest and Jenny, such is not the case with those deals which are Cursed. It usually starts out with a simple email exchange:

Dear Ralph,

I found your website on Google. May be relocating to Chicago. Please enroll me in your Dream Locator. I want the world and I want it cheap.

Jack T. Colton, Mercenary at Large


**************

Dear Jack,

Not a prob. The world's sucking major wind these days. It's a world buyer's market. Come on down.

Ralph

**************

Ralph,

Roger that. I'll be in town on Saturday. Rock on.

Jack

**************


Then the househunting trip is scheduled, conducted and consumated. Fifteen condominiums are visited in a single weekend and a decision is made within 48 hours:

"I'll take the one by the lake that is almost ready. Tell them to upgrade the cabinets, beef up the lighting allowance and be ready to close in 60 days. I want the preferred parking space, steam showers in all bathrooms and California Closets throughout the unit. Heat the floors, paint it all blue, and pay half my Closing Costs at settlement. Tell them if they do all that, we got a deal..."



I do as I'm instructed and get them to agree. What else can they do? It's a world buyer's market and there's no shortage of world right now, not in Chicago anyway. They always agree to what they can't deliver. That's what 'they' do best. And 'they' know who I'm talking about, too.

It's my belief that such a 'Curse' often begins during the negotiation with unreasonable expectations. Not always, but often. Anyway, here's how the afore-mentioned scenario has played out for me and my client up until this point in time:

January 25-26: Viewed 15 different properties; some resale, some new, some proposed.

January 27: Submitted an offer on a Model unit in a New Construction project in near move-in condition.

January 28: Negotiated details with the Listing Agent and Builder and reached a verbal agreement with only minor changes.

January 29: Another higher offer comes in and is accepted and signed by the Builder. We get bumped out of the Model deal but are offered a 'yet to be built out' unit on the same terms, one floor above.

January 30: We accept the deal on the the condition of a 60 day completion and a close of escrow on April 1st. They agree.

January 31-March 6: My iPhone barely rings. Nothing significant transpires except: Cabinets are delayed. Original lighting is no longer in stock. The wrong color granite is ordered. Paint color is three shades off. Closets are on back order.

March 7: Chicago City Council votes overwhelmingly to increase the Property Tax Stamp on home sales by 40% and passes it on the the Buyer effective April 1st.

March 8: We ask to move up the Closing date one day to March 31st but the Builder is reluctant to do so.

March 9-16: New selections are chosen and things move along at a snail's pace.

March 17: City Council reverses its decision and votes overwhelmingly to pass the 40% Tax Stamp hike onto the Seller instead, effective April 1st.

March 20: The Builder immediately agrees to complete and close by March 31st and all hell suddenly breaks loose. My iPhone rings and pings every few hours, 24/7 for the next 3 days; Builder, Lisiting Agent, Appraiser, Cabinet Guy, Loan Officer, Underwriter, Appraiser, Listing Agent, Buyer, Appraiser, Listing Agent....did I mention the Appraiser?

March 21: Here I sit, frustrated and contemplating walking the earth like Caine in Kung Fu except no Shaolin Monk, am I. In fact, staying in any place with less than a 3 star rating is a little distasteful to me not to mention my martial arts are a little rusty to be hitting the road barefoot, at age 51. The iPhone is ringing and pinging even as we speak. I pause and listen to the voice mails and then read the multiple texts email messages. I have no more answers for this day. I fly out of town at 5:30AM tomorrow morning for a weekend with family and loved ones. What can I say? It's not my only deal. There are also a half dozen other Listings with my name attached that need an equal amount of attention. And again as many Buyers in the car as well. Everybody has questions. I scramble for the correct answers. I let the Sufis have their way with me...

The Curse will be there when I return; of this I'm certain. I also imagine most of my Listings aren't going anywhere between now and Monday either. And just as sure as Michael Douglas, aka Jack T. Colton, gets Kathleen Turner in the final scene and poor, pithy Ralph gets his just desserts in the desert, we will all live to star in another sequel and grapple with another 'Curse' or two before it's lights out for everybody.....Jewel of the Nile, or otherwise. And not to mix movie metaphors but 'That's all I have to say about that..."



Geno Petro

The Big M.O. (...on the Buy Side)

No, I don't mean Modus Operandi although I do sometimes wonder what makes certain people (mostly Realtors) tick. What I am referring to is the other M.O.--the acme of all residential real estate negotiation scenarios; one of a handful of situations in the constantly fluctuating Buy/Sell world of Property where someone will definitely lose if all parties play it out to the end; the number one 'case in point' I'll always make for securing experienced Buy side representation. I'm talking about the...Multiple Offer i.e... Two Buyers + One Property= One Winner + One Loser---perhaps.

And I see this occuring just as much now in a relative Buyers market, (high inventory to Buyer ratio) as it was in a so-called Sellers market, (low inventory to Buyer ratio) a few years back. The best examples in each price point bracket will always be first in line to get Offers. And when more than one party presents an Offer at the same time, the highest level of expertise is required on the Buy side of the deal. My next post will address the List side of the M.O. which can be equally as nerve racking for the Seller.

"Two people are in love with me...what to do?" Seller.

"Marry the one with the most money," Seller's Agent.

Whenever there is a large surplus of inventory like we are experiencing presently--a Market flush with Condominiums, Single Family Houses, Multi-Units or just good old vacant Land--there are many fine Properties from which to choose. And it's always the best of the best Properties that generate the most 'buzz' and end up with more than one contract on the fax machine at the end of the day.

The following pointers are therefore in order:

First, and foremost...have Realtor representation. Even the least experienced Agent in our office negotiated more transactions so far this year than most Buyers have experienced in their lifetime. And a 'top producer' (10-20+ million dollar annual volume) has the ability and savvy to structure an initial offer in ways you might never imagine on your own. And contrary to my short romantic dialogue above, it is not always just about Price--Close dates, Contingencies (of which there are many that can kill a deal instantly), Tax Pro-ration and Stamp 'language,' Closing Cost Credits and Buy-Back Clauses (New Construction), Addendums, PITI clauses, Inclusions, Exclusions.... all come into play.

Next, have a pre-plan. I always let my Clients know about the possibility of an M.O. before we submit an Offer. I explain that the majority of the time, going to 'Full Price' might still only give us a 50/50 chance at getting the property depending on how the Sell side is handling the negotiation of the Offers.

"How much do we love this Condo?" are words I've uttered many times in my career.

Be able to work the Sell side of the Offer. I'm not going into detail about this here but trust me, the real professionals can get enough 'scoop' to obtain a 'house advantage' (pun intended) in most M.O. deals. At the very least, we know which questions to ask about the 'ground rules' set by the other side and how to keep them to their word if things start to go sideways. I always research the Closed history of the Listing Agents to check out their List Price/Closed Price ratios. Then I always ask who the other Agents are involved in the M.O. and research their Closing history as well.

Be able to advise when its time to bow out and 'get back in the car.' I don't win every Multiple Office because there are occasions when it's best to just stop and let the other party pay too much. Other times the Seller just 'likes' the other deal better, all things equal, and you lose out anyway. People are funny. 'Funny how?' Don't get me started. But as we approach the 'tipping point' of any deal in which more than two parties are involved, I'll always pose the following question to my Buyers...

"How would you feel if you left this deal then found out later that the other party got the Property at a price you would have paid?" The answer to this question has a lot to do with how we proceed in the negotiation.

There are several strategies when it comes to negotiating a Multiple Offer and your Buy side representative needs to be well versed in all of them. Quick response time and the ability to 'appraise' the value of any given Property are but two of the qualities you must require of your Realtor. And equally as vital is his (my) ability to know when its right to just 'go for it' and get the deal done or...to simply walk away and let the other guy 'win' that one. It is a Buyers arena, after all these days. So if you're going to jump into the Chicago Real Estate game, you have to be prepared for the big M.O. when it comes into play.

photo by velocitypress

Geno Petro

8 New Ways To Kick An Old Dog (habit...I meant habit)

First off, I'm a dog lover and would never kick a real one unless it was chewing off a limb. The metaphoric hound I speak of though, is Starbucks---the coffee people. I've mentioned them before and often. They've clearly got me... and as my 'mug shot' (an Ardell DellaLoggia-ism) in the sidebar clearly shows, it is one of the few remaining vices I'm not ready to let go of. Keep this in mind for a moment as I'm actually writing this article in response to a comment I received on another Blog I post on.

I was making mention of the fact that it seems that every available residential corner 'ripe' for Development on the North Side of Chicago either has, or is slated to have, a Starbucks on the sidewalk level. For those of you not in the 'know,' the neighborhood of Lincoln Park I live and work in is a densely populated section of the city, jammed shoulder to shoulder (this is the City with Big Shoulders, by the way) with new construction projects--retail below with condos and lofts above. This is unique to the busier main street annexes of most new neighborhoods, with single family homes and four level townhouses generally situated on the quieter side streets--luxury single family homes. The land they're perched on sells for a half-million minimum these days and that's even with a relative down tick in new construction housing starts. Let's just call it upscale, for Real Estate purposes.

Anyway, the commentor posed the question, ...is it a "prerequisite for gentrification to have a Starbucks on every available corner" these days? The commentor is a Realtor from Knoxville where I'm pretty sure whiskey is the beverage of choice (not to imply he isn't a God fearing gentleman or didn't take the 'pledge' as a youth) so I decided to do a little snooping around using the patented Starbucks Locator before I responded to my new southern friend. This is what I found:

* There are 112 Starbucks within 5 miles of my home, that's 40 blocks in city terms. I'm not even sure what a mile exactly is these days but my last car didn't even get 80 blocks to the gallon if that means anything.

* Knoxville has a total of 5 Starbucks--one is on campus and another is apparently in the Hilton.
* All of China has 165 as of this writing but many, many, many more are expected, I hear.

So if the presence of a Starbucks is indeed an indicator, the question really should be "Is Chicago more like Knoxville or Mainland China as far as Development goes?" I don't know. I sort of like Chinese Food and although I've never actually eaten Knoxville Food I have made mention in a previous post about my in-laws from Tennessee and, as much as I love them personally, how I'm not a big fan of any dish that has the word casserole in its title.

I also discovered that the annual income of the average Chinese citizen is around $3,800 so it goes without saying that most stores there do not have condominiums above them. There might not even be condominiums there, period. And at that amount of income, the stores they do have may very well not even serve coffee. Lest I digress much more, I will share with you my initial response to the comment(or) and how I came up with 7 more since the original posting. All of these should prove reasons enough for me to consider moving to a less 'happening' neighborhood or at the very least, try and kick the coffee habit for good--but with a Grande Costa Rican Blend in the cup next to my keyboard I write:

1) The new requirement, I propose, is that there must be a new Starbucks inside any existing Starbucks-thus creating a Starbucks 'squared' as it were--a Starbucks to the 2nd Power for all you budding String Theorists.

2) No more than three Starbucks on any 4 corner intersection. The sole remaining corner must be reserved as a stroller parking area for the toddling Starbuckonians of the future.

3) A FICO score of at least 620 is required for pre-approval of any Starbucks Coffee Card.(except of course, in China)

4) No predatory lending allowed for any single beverage (coffee, not whiskey) costing more than $7.00 not including tip and tax.

5) The open bottom rack below the glassed-in scone and pastry display of every Starbucks store must be checked three times daily for the E-Coli virus or at the very least Mumps, as all those juice bottles and food items are constantly being handled, touched and licked by the owner/occupants of previously mentioned strollers and perambulators parked on corner 4.

6) At least one Starbucks Manager per 8 hour shift must not be a Vegan.

7) A printed psychological Disclosure, clearly written and posted in a prominent place by the register, is to explain why I should leave a tip for a beverage I had to use an American Express Gold Card to buy and exactly why it is that I feel guilty if I don't. This Disclosure should also direct any interested party to one of the various 'Self-Help' groups already situated in the sofa area of the store at any given time of day.

8) Any neighborhood Starbucks location may not be used as a valid business address for IRS purposes no matter how many hours a day an individual works on a laptop there.

You see, it's a demographic thing. And its really not about Starbucks per se but its customers--myself included. This is who we build for and who I sell to and represent. They are of child bearing age for the most part and although it wasn't the way I was raised, the trend today is to include all family members no matter how young, in day to day events. (They didn't tell us nothin' when I was growing up.) My Broker calls it the 'Suburbanization of Chicago.' Anyway, my kid will be 29 on her next birthday so I wonder why I even care...

And if I have to get in my car and drive to get a cup of coffee then I don't want to live there, either. If I need to access a WiFi signal in the middle of my day then I have 112 choices in the 40 block area that I work in. And what the heck, I use American Express for just about every other thing I buy anyway. And to quote Steve Martin in My Blue Heaven, "...Hey, I'm Italian. I tip everybody." So the answer to the comment is YES...in this writer's opinion it is a prerequisite to have a Starbucks in, or at least close to, any new neighborhood Development. I just won't eat anything off that bottom shelf.


image by martin.netwg

Geno Petro