If you’re in the market to buy a home, you probably already know there are many things you need to keep an eye out for; the list goes on and on and on. Well, here’s another one you may not have thought about just yet: Was the house ever used to make meth? And if it was, should you care? Well, yes, you should absolutely care. Meth can get into various surfaces in a home, and cause all sorts of health problems for the home’s occupants. Many homes used to manufacture meth were re-wired, which means there might also be a serious electrical hazard. And of course, meth remediation (yes, that’s a thing) is expensive. What should you look out for? Well, the home may have a strong chemical smell. There might be chemical stains on plumbing fixtures in the bathroom. You might feel a burning sensation in your throat or… read more →
The National Association of Homebuilders recently reported that residential construction increased in 2013. Overall, there was an 18.3% increase in residential construction spending over 2012. Specifically, construction of single-family homes was up 20%, and remodeling was up 14%. Multi-family saw the greatest increase, at nearly 35%. Increased construction shows the economy is looking up! Let’s hope it stays that way.
In November of 2013, the American Society for Testing and Materials (ASTM) approved a new standard for Phase 1 environmental studies. Here are some of the new requirements 1. The environmental consultant must look into the possibility of hazardous vapors migrating onto the property. 2. If neighboring properties are in public regulatory databases, the environmental consultant must conduct a review of those regulatory files. 3. The environmental consultant must identify recognized environmental conditions even if they have been resolved. When negotiating a contract where environmental studies will be required, keep in mind that the additional requirements may take additional time, so plan your due diligence accordingly.
When buying commercial property, especially if it’s vacant land and oftentimes even when it’s not, you have to know the condition of the real estate, and that involves an environmental study. The first step is to get the Phase 1. The Phase 1 is an environmental study designed to identify harmful environmental conditions that are affecting or may affect the property. It is essentially the first step in your environmental due diligence, and it can often determine whether or not you even proceed. The person conducting the Phase 1 will typically make a site visit, look into public records, check out the area where the Property is located, and review maps and images of the Property. Based on that, he will determine if the subject Property might have any environmental issues. For example, it might be a problem if there is a gas station next door. Or, from public records, he might figure out… read more →
According to a report released by the Federal Housing Finance Agency (FHFA) last month, mortgage giants Fannie Mae and Freddie Mac have continued to buy questionable mortgages despite notice that there are issues with property appraisals. Apparently at some point during the process of buying the loans, the FHFA evaluates them. Between the summer of 2012 and early fall of 2013, the FHFA alerted Fannie Mae and Freddie Mac to appraisal issues on $107 billion in mortgage loans. Despite that, Fannie Mae and Freddie Mac went ahead and bought those loans anyway.
If you qualify for a Senior Exemption on your real estate taxes, you might also qualify for a senior freeze. A senior freeze is a great way to keep your taxes down, because it will essentially freeze the assessed value of your property to whatever the assessed value is the year you qualified. You won’t be subject to annual increases in the assessed valuation of the property, as long as you continue to qualify. To qualify for the 2013 senior freeze: 1) You must be born in 1948 or earlier. 2) You must own the property you are applying for, and it must be your principal place of residence. If you do not own it, but you have a lease that states that you are responsible for the payment of real estate taxes, that is sufficient. But you must have owned the property or had a leasehold interest… read more →
If you are a senior and you own a home in Illinois, you could qualify for a senior exemption on last year’s real estate taxes. While the first installment of 2013 taxes has already been paid, the second installment won’t be due for month, and you can still get the benefit of the senior exemption if you qualify. To get a senior exemption for 2013: 1) You must have been at least 65 years old during 2013.2) You must own your residence. If you do not own, you may still qualify for the senior exemption if your lease states that you are responsible for real estate taxes.3) If you moved during the tax year, you can apply for and receive a prorated senior exemption. Make sure you submit your HUD or settlement statement, proof of age, proof of residency, and a copy of a recent real estate tax bill. Contact… read more →
Are things really getting better? RealtyTrac recently released it’s Foreclosure Market Report for January of 2014. Unfortunately, foreclosure filings increased 8 percent since December 2013 nationwide. Perhaps the large increase is just because less foreclosures might have been filed over the holidays? Who knows. What we do know is that according to RealtyTrac, there were nearly 125,000 new foreclosure filings nationwide in January. What’s more, Illinois had one of the highest rates of foreclosure filings in January. Only Florida, Nevada and Maryland has more. The top five were rounded out by New Jersey. On the bright side, to the extent you’re looking for a home, there might be some more inventory out there in the near future as a result of all of these foreclosures.
The Senate Finance Committee recently proposed some startling tax reform changes directly affecting real estate and real estate transactions nationwide. If their proposal is enacted, here are some of the changes investment properties would face:1) Section 1031, which allows deferral of taxes owed on like-kind exchanges, would be repealed. For general information on what a 1031 Exchange is, click here.2) The tax incentives for energy-efficient improvements to large apartment buildings will be repealed.3) All real property would be depreciated over 43 years on a straight-line basis. The current depreciation periods (39 years for commercial non-residential property, 27.5 years for residential property, and 15 years for leasehold improvements) would no longer exist.4) Recaptured depreciation would be taxed as ordinary income, instead of at 25% as it is currently taxed.All of this would make real estate investments more expensive for the owner. Let’s see what happens. . .
The Illinois Department of Financial and Professional Regulation (IDFPR) has amended the licensing requirements for real estate appraisers. The following changes went into effect on December 31, 2013: If you are an associate or trainee appraiser, you must: 1) Give the name and address of your supervising appraiser to the IDFPR; and2) Keep a log for each supervising appraiser you work with, detailing the type of property, the type of work you performed, and other details. If you are a supervising appraiser, you must: 1) Directly supervise associate or trainee appraisers for their first 500 hours of experience;2) Have a valid license as either a certified general real estate appraiser or a certified residential real estate appraiser; 3) Give the IDFPR the name of each new associate or trainee appraiser within 10 days after you hire them; 4) Give the IDFPR the name of each associate or trainee appraiser immediately after they leave your employ.