Chicago Suburb Real Estate & Area Guide

I work with a lot of buyers and even I am amazed at how many listings are coming up that are short sale listings. 

What is a short sale? 

So many buyers have heard the term but don’t know what it means.  A basic definition is that a short sale is where a bank/mortgage provider agrees to consider allowing the property to sell for less than what is currently owed on the mortgage.  These are also referred to as pre-foreclosure sales as the seller is trying to avoid foreclosure by attempting to sell their property.  I have heard of some areas such as Florida where short sales are accepted even when owners are current with their mortgage payments.  Normally, the home owner has to prove why they can no longer afford the property and fill out a form and write a "Hardship Letter" before the bank will even consider a short sale.

From my networking it seems like different banks handle short sales in different ways.  Most will not give their complete approval in the beginning but will just state that they will consider a short sale.  This is one thing that makes them difficult for the seller, any buyers and their real estate agents.

What is the process? 

The seller has to start the process by requesting a short sale from their bank or mortgage company.  They must fill out whatever paperwork the bank requires.  It seems like the majority of banks don’t offer an actual price they will accept nor will they suggest a listing price.  With a short sale listing I handled we were told the bank would not accept anything less than 20% of appraised value but they would not send an appraiser out until an offer is made.  I was never notified of an appraiser needing to view the property with the exception of the buyer’s appraiser. 

So the seller and I decided to choose a price that would fall within what we considered 20% of appraised value and also a price low enough to generate interest.  This was a listing that was on the market for approximately one year with plenty of showings but no offers.  We made many price reductions throughout the listing period prior to the short sale.  

What happens when it is listed as a short sale? 

The property gets listed in the MLS just like any other property but agents usually warn buyers and agents that it is a short sale and needs bank approval.  They usually state to allow ample time for this to happen.  In other words, be prepared to wait for quite some time!

When my seller and I started marketing the property as a short sale and reduced the price we got an offer pretty quickly followed by two more.  The first offer was ridiculously low but this was before I was even given the bank’s position that they will not accept anything less than 20% of appraised value.  The next two offers were full price offers.

I submitted all offers to the fax number I was given and in the format that I was instructed to follow.  We waited and waited.  The agents kept calling me and I kept calling the loss mitigation person I was assigned to.  Most of the time I left a voice mail.  Only towards the end was communication established.

In the beginning my seller called the loss mitigation department once a week.  After more than a month passed by (might have been near the 2 month point) he was told his file was closed.  He asked why.  The person he was on the phone with checked and stated it was closed because some of the faxed paperwork was not readable.  The seller was furious and asked why we were not notified.  The person did not know.  I prepared the paperwork over again and actually sent the information via UPS.  I was actually told that is not the way they handle it, it must be faxed!  Well, after a lot of work we faxed everything again and the ball finally started rolling.

But we still waited.  It was going on 3 months of waiting when a fourth offer came in that was over full price.  I offered all of the other buyers a chance to come up with their best and final offers.  A couple weeks later the fourth and highest offer was accepted.  Two buyers waited over 3 months to find out their offer was not accepted (I don’t count the first offer as they were informed that there were better offers).

The buyer that ended up purchasing the property was happy and didn’t feel the wait as they happened to come in at the right time - when the bank was actually working the file.  So these buyers didn’t think the short sale was so bad after all.  I’m sure the first two buyers did not want to bother with a short sale ever again!

I am now working with a buyer that has made an offer on a short sale and we’re going on 2 months of waiting.  The listing agent seems to have some communication with the loss mitigation department but he can’t give us any real information because he doesn’t know anything.  We either have to wait or move on.  Fortunately, my buyers have the time to wait but I think they’re getting a little restless. However, I have to admit that if their offer is accepted they will have gotten a good deal.

Why does it take so long?

Once I had communication going with the short sale listing the gentleman I worked with told me if he worked 24 hours a day, 7 days a week he still couldn’t catch up.  There are too many files for too few employees.

Others in the industry feel that some banks would rather let the property go into foreclosure and then sell it at market value rather than taking a loss up front.  I don’t know what to think.   I have read stories of buyers and agents making an offer as far back as October 2007 and still waiting for an answer.  And I thought a little over 3 months was long!

I’m teaching my buyers about the downfalls of short sales

I am currently working with first-time buyers that viewed a short sale listing and just showed interest in another new short sale listing that hit the market.  I told them truthfully how it works and the fact that if they went this route on their first purchase it could very well be quite a bitter experience.  I’ve showed them good properties that were not short sales.

Of course, if they decide to make an offer on a short sale I will do so but I don’t look forward to it.  Months of waiting, phone calls to the listing agent when I know full well if they know anything they’ll call me.  Phone calls from my buyers asking for news when no one has any information.

Many agents I’ve spoken to have decided not to bother showing short sale listings anymore.  I fully understand and wish I could keep my buyers away from them.  Even if I stopped short sale listings from being sent via buyer automated searches, they still find them on Realtor.com and other online sources.  And I believe in sending my buyers everything out there.

I’ll follow-up with the current short sale I’m involved with to share how it turns out. 

There has been much debate over the local story about a Tinley Park mother of three that left her sleeping toddler in the car while she accompanied her other two kids to a Salvation Army kettle to donate some money.  The child was sleeping plus it was icy out.  The family station wagon was parked at the curb about 30 feet away and was locked with the emegency flashers on.

This happened at a Crestwood Wal-mart and a community police officer arrested the Mom when she returned to her car.  The arrest changed this Mom’s life and her family’s.  She was arrested in front of her children.  The family was investigated by DCFS.  She has been the center of a well publicized child neglect case.  Anyone that knows this woman feels she is an excellent parent.

She was to appear for her trial today but Cook County prosecutors dropped the charges.  I feel that this was heavy handed law that was dished out by a community police officer patrolling the Wal-mart parking lot.  He was probably angry that Mom parked at the curb instead of in the lot and noticed the sleeping toddler inside.    Illinois law states that if a child is left in a car for 10 minutes it could be considered child endangerment.  This did not take 10 minutes.

How do you feel about this?  Please place your vote (and your argument) on this debate page created in Squidoo - click the link below:

Tinley Park Mom Arrested for Leaving Toddler in Car

I network with other real estate professionals on several different real estate forums and communities and I read through all of the real estate publications I receive as being a member of 3 separate real estate organizations I belong to.  I have read a couple of articles that upset me with their implications.  These articles state that we, as real estate agents, need to shoulder some of the blame for the current state of short sales and foreclosures, meaning the buyers we worked with that are now losing their homes.

I’m sure there might have been some unscrupulous agents that were in cahoots with bad mortgage companies that were working together to crank out one bad loan after another.  But with the surge in foreclosures, I truly don’t think this kind of thing was happening as widely as it might seem.  

It Used to be Simpler

Since I am entering my 25th year in real estate I’ve been through all kinds of markets and mortgage programs.  In fact, I used to pre-qualify all of my buyers on my own.  It was pretty easy, they either qualified for conventional financing or FHA (I also had a few VA mortgages).

Once mortgage options got trickier I let the loan officers do their job.  With automation at their fingertips it took me less than a minute to give out one to three of my favorite loan officers’ contact info to a potential buyer.  I was told they couldn’t qualify for anything or I received a pre-qual letter telling me the amount they qualified for.

It Is Not For Me to Judge

Once I let go of the pre-qualification procedure I didn’t know the financial specifics of my buyers.  Again, I left that to the loan officer.  If I got a pre-qual letter I did not question anything.  I guess the difference is that I used long-standing, reputable loan officers/mortgage providers so there was never any doubt in my mind whether the buyers could really afford what they were purchasing. 

Even if I knew something that might have brought that question up in my mind, I just don’t feel it is my place to say, "You know, I don’t think you can really afford to buy this - I don’t care what your loan officer said."  I’m supposed to sleep better knowing that these buyers found another agent that showed them homes and wrote an accepted contract instead of me?  This has nothing to do with gaining or losing a commission.  I don’t feel it’s my business to dig into things that are between buyers and their loan officer.  I have neer been in such a situation, but these are my feelings for any agent that might be. 

As a Listing Agent We Have Even Less Power Over the Buyer

There was one time where I questioned a buyer’s choice of mortgage company.  I and others had bad experiences with this particular company, although it was a different loan officer.  The selling agent admitted that others had told her the same thing about the company but she insisted that she never had a problem and that this particular loan officer was wonderful.  So we accepted the offer and went through the mortgage company which got the deal closed.  Just like with real estate agents, the loan officer can make the difference.

Some Buyers Come to Us With Their Mortgage Company of Choice

Although I can try to get them to consider one of my reputable mortgage companies, I cannot force the issue.  So every once in a while I have to deal with a mortgage company I’ve never used before.  In the many years I’ve been in the business I haven’t had much trouble with my own buyers.  

So Who Is to Blame?

I don’t blame buyers, especially first-time buyers who just don’t know any better.  And I truly believe they do not know better as it can be very confusing to understand the mortgage process and underwriting rules.  Even a more seasoned buyer can find the process and documentation confusing.

Unless a real estate agent is working a scam with a bad loan officer/mortgage company, I don’t see how real estate agents can be held accountable for selling to buyers that should not have gotten a loan in the first place.  We are not loan officers, we might not have all of the buyers financial information and most buyers prefer it that way.  We are hired as their agent to find them their home to purchase.  The loan officer/mortgage company is hired to provide a mortgage so the home found through the real estate agent can be financed.  

Countrywide Financial is being investigated and there might be lawsuits in the future.  That lawsuit will not trickle down to agents that sent their buyers to Countrywide or that worked with buyers already qualified or approved by Countrywide.  Wells Fargo is being sued by the city of Baltimore and there are multiple lawsuits against many different mortgage providers.  Again, as far as I know, there are no lawsuits against individual real estate agents regarding an agent’s liability for selling a home to a buyer going into foreclosure.  I’m well aware there are many other lawsuits against agents and if you do a search on REALTOR Mike Little being sued you’ll have hours of reading.

Buyers Need to Take Some Responsibility

I have worked with many buyers that were pre-qualified for a much higher monthly mortgage payment than they were comfortable with.  I am currently working with first-time buyers that are not looking up to the limit of what they can afford per their pre-qualification.  This was a decision they made so I created their automated search based on what they are comfortable with.

Let’s say they drive by a home that ends up being at the top of their price range and want me to show it to them.  They love the home and get their offer accepted.  They move in and start feeling the pinch of their mortgage on their young lifestyle.  Maybe one of them loses their job or one starts spending like crazy on the house and runs up the charge cards.  Maybe the home loses value next year and they are upset that they’re now paying a mortgage that is more than the home is worth.  

Am I to blame for any of these situations?  I do not give my buyers guarantees that their property will increase in value.  I also give them comps before they write an offer.  In fact, if a buyer views at least 3 homes they will be able to quickly figure out which one is priced the best.

I’m kind of getting off track here, but I just cannot take the blame if one of my buyers defaults on their mortgage for any reason.  It has never happened (that I know of) but if it did I refuse to take any blame.

Lawsuits Will Point the Finger in the Right Direction

Current investigations and pending litigation will set the bar for who is to blame for the increase in foreclosures.   If it is proven that buyers were given mortgages that should have never been approved to begin with, then the mortgage companies involved need to be punished.

It’s hard for me to refer to the original World Music Theatre by its current name, The First Midwest Bank Amphitheatre.  That just isn’t a very catchy name.  I knew something was up when my husband told me that Jimmy Buffett (sorry, not a fan) was going to be playing at Bridgeview’s Toyota Park instead of the venue that put Tinley Park real estate on the map.

In fact, The First Midwest Bank Amphitheatre was put up for sale last summer at a price tag of 50 million dollars.  I’m not sure what is meant by the following taking from the Southtown Star newspaper:  The current owners, Live Nation, will not sell it to anyone who would maintain it as an entetainment vanue.  But in another paragraph it is stated:  The man charged with selling the property, CB Ellis Vice President Mike Nardini, has said an interested buyer likely would enclosed the 12,000-seat portion to use as a small amphitheater and ditch the lawn seats.  Isn’t that still considered an entertainment venue?

Concert ticket sales have fallen 16% from 2006 to 2007.  Even though I never really cared for this particular venue and only attended a few concerts when it first opened up, it’s sad to see this Tinley Park landmark go away.  I can imagine that the nearby residents will be very happy to see it end because it will also end the noise and traffic they’ve endured for years.     

Sorry, I removed this widget as it needed too much work as every time you make a new post you have to manually update the widget.  Also seemed like once I added it I had trouble adding photos to my blog and although I’m not sure that was the reason, I decided not to keep it up.  You might notice the little newspaper on the right hand side of this blog.  If you click on it you’ll see my blog posts set up in the form of a newspaper.  I happened to find it the other day while reading some other blog posts on the Active Rain real estate networking site.  I noticed some of the blog posts with fun little additions to their sidebars.

I did a search on "widgets" and found the newspaper thingy.  What is it good for?  I’m still not sure at this moment.  But it was fun seeing my posts set up in newspaper columns.  It doesn’t give me any on-page search engine optimization benefits and I really don’t know what to do with it.  Supposedly, it allows anyone to print out this blog.  I haven’t tried that yet but plan on doing so just to see how it lines up on an 8 1/2" x 11" sheet of paper.  Maybe I can use it as a quickie newsletter.

It might actually make for easier reading instead of having to scroll through my latest posts.  The only thing I don’t like is that it doesn’t show any of the graphics I use so it’s pretty bland at pure black and white reading.  Another negative is that I have to somehow manually update it if I want my newest posts to appear. 

More and more fun little widgets are popping up in the blogging and website world so you might find something else new on this blog down the road.   

You’ve recently met Matt Orr, my unlicensed assistant.  Now I’d like to introduce Susan O’Halloran, who has been a REALTOR for around 14 years.  She has been with Coldwell Banker of Tinley Park and I’ve been trying to get her to join me at Classic Realty Group since I started there.

Sue and I met in 6th grade and have been friends ever since.  Sue took some time off of selling real estate when she was part-owner of a popular downtown restaurant/lounge called T. J. Costello’s (named after her Dad).  She then purchased a long-standing restaurant lounge in Orland Park called Paddy B’s and sold the business last year. 

She finally teamed up with me, Judy Orr, at Classic Realty Group and I’m very excited with our partnership.  We have already put together a 50,000 ValPak mailer and are getting listings together.  We are currently working on the newsletter that I send out monthly.  Our March issue is a bit different as it’s sponsored by Sam Maguire’s of Orland Park since March is a big month for this Irish restaurant/lounge.  Let us know if you’d like a copy.

Our team now incorporates 38 years of real estate selling experience.  Our knowledge, experience, personalities, marketing expertise and professionalism offers a powerful combination that will make your buying and or selling experience the best you could have.  We know this is probably the biggest financial decision you will be making and we want you to enjoy the process as much as you possibly can.  Our aim is to make you our Lifetime Clients and join our long list of raving fans. 

I wouldn’t have remembered, but last Valentine’s Day was also snowy and cold.  I looked up my last Valentine’s Day in Chicago Suburbs post to see what I wrote about.  Can’t remember what I did, though.

My husband asked me to think about where I wanted to go on Valentine’s Day.  Not one regular restaurant popped up in my mind (only visions of waiting an hour to get seated no matter where we went).  I hate waiting in restaurants.

Then I thought about the places I really love.  Places my friends would not accompany me to (well, they did once for my birthday and complained loud and clear).  I love Polish buffets.  My first choice was Bobaks in Chicago but I gave a second choice of The Batory Buffet, a Chicago Ridge restaurant located at 10135 S. Harlem Ave.  I didn’t think there’d be any waiting since it’s got plenty of tables and has never been crowded, even when a wedding party was starting to set up one time we were there.

Not being crowded was an understatement.  There were only two tables occupied when we arrived (and this was around 6:00).  Soon we were the only two diners in the place.  My husband had his Polish beer and I had iced tea, which tasted like real brewed iced tea.

The food was good, as usual.  I love Polish food but even though I’m a dessert lover, their desserts are probably my least favorite.  They always seem dry and bland tasting.  They did have some kind of an apple struedel-like square which was tasty and moist.  I had no idea what it was until I bit into it.

They also didn’t have labels over everything although you could figure most of it out.  They seem to be missing the entire glass "awning" over one side of one of their buffets.  They have a salad buffet area and then two different main meal buffets filled with dumplings, mashed potatoes, fried potatoes and vegetables (my favorite of the night), pierogies (I forgot to take one!), rice, buckwheat, and meats such as shank, beef, chicken, fish, meatballs, beef stew and ribs.  And let’s not forget the different versons of sauerkraut.  The stuffed cabbage was my second favorite item of the night.

I don’t know how they stay in business.  There is never a crowd which is a shame.  But it made for a fun and relaxing Valentine’s Day for my husband and me and it almost felt like he reserved the whole restaurant for me!  All we needed was an accordian player.

We also stopped at the Polish deli next to the buffet but didn’t buy much.  In fact, I laughed at some of the packaging as I wouldn’t know how to prepare half the stuff as it was all in Polish.  Both establishments close at 8:00 and there was a rush right at closing time.  In fact, one gentleman tried going into the buffet and didn’t seem too happy when he was obviously told it was closing (and it was only 7:50 - I guess she didn’t feel like staying open for one person). 

This is not the usual kind of post I make as it really is an inside the industry post that is not of interest to the general public.  But I know I get some real estate agents reading here that are web savvy so I thought I’d mention this fun little contest. 

My main website, which this blog is part of (you can find my website link in the menu at the right titled "Back to Cook County Home") was created by Real Estate Webmasters (REW).  They also host a forum for everything real estate, which is for buyers, sellers, real estate brokers and agents and even website designers or search engine optimization (seo) gurus.  I actually am a moderator for the forum.

One of our forum members came up with a contest about trying to optimize for a particular keyword phrase, the greatest real estate agent in the world.  The winner of the contest gets a great website package from Morgan Carey of REW worth thousands of dollars.  Tony Sena, of Wanna Network, is also offering a promotional page on his website for the winner.

Although I do have a competitive streak in me, I just don’t think I can beat out the top dogs that are participating.  I’m too busy for one thing and truthfully, I just don’t feel I have the savvy with seo that some of the other players do.  But I still wanted to participate so I joined up with Eric Blackwell and we are certainly in contention - and he hasn’t pulled out all the stops yet. 

As I mentioned in the post about 2008 Chicago Suburbs Real Estate market predictions, I had my best year ever in 2007.  For years I’ve been toying with the idea of hiring an assistant to help me with day-to-day chores and paperwork.  However, I have a bad time delegating. 

I wasn’t sure how to work it out as I work mainly from my home office.  Do I hire someone to work at their home or would they go into my Orland Park office?  There were so many decisions.

I have asked two of my children to work for me but they never committed to it.  Finally, I got my 24 year old son Matt to be my unlicensed assistant.  He’s working mainly on mailings right now and hopefully he’ll help with appointments and more. 

The funny thing is, I was 8 1/2 months pregnant with Matt when I took my real estate license exam back in 1983.  I was so uncomfortable because he was kicking like crazy.  Plus, the chairs we had to sit in were the one’s where the little writing desk is attached and I barely fit.  I was so flustered I wasn’t sure if I passed, but I did.

So I can always tell how many years I’ve been in real estate because Matt was born shortly after I got my license.  It’s only fitting that he join me in the biz.  He also works as a roadie for my husband’s band, The New Invaders.  He’s keeping it in the family!