I haven’t seen any pigs flying yet. And it was 102 degrees when I arrived at work this morning, so I’m guessing hell has not frozen over either. BUT the unimaginable HAS happened, at least in the world of real estate. Cook County second installment tax bills arrived in the mail on Monday, July 2, 2012. Back in April, there was a rumor this might happen — that our tax bills might arrive on time for the first time in over 40 years. And now it has happened. The tax bills have arrived, and are due, as per statute, on August 1, 2012. The statutory deadline for second installment taxes has been ignored for years in Cook County, because the bills are never out by the deadline. But this year they are, so taxpayers, get out your checkbooks. What next? Will the Cubs win the World Series this year?
Do you qualify for a Cook County senior exemption on your real estate tax bill? You may, if you meet the criteria outlined below. If you do, make sure you apply for the exemption on an annual basis (unlike past years, you have to apply annually now to preserve your senior exemption). 1. You have to be at least 65 years old (in the tax year for which you are applying for the exemption).2. The property you are applying for must be your primary residence.3. You must be the owner of the property. If you are not the owner, then you must have a lease for the property which states you are responsible for the payment of real estate taxes. If you submit your application, and you qualify for the senior exemption, you will receive a deduction on your second installment tax bill. Also, if you apply for the senior… read more →
The Mortgage Foreclosure Debt Relief Act (the MFDRA) has provided relief to countless homeowners, or former homeowners, since it was enacted in 2007. Under the MFDRA, homeowners who received debt relief on their principal residence between 2007 and 2012 do not have to pay income tax on the forgiven debt (normally this debt is taxable). It doesn’t matter whether the debt is forgiven as a result of foreclosure, short sale, or mortgage modification. Debt relief under the MFDRA is quite generous — up to $2,000,000 if married filing jointly, or $1,000,000 if single or filing separately. Forgiven debt is still reported on the tax return, but is exempted from income tax if all qualifications are met. Unfortunately, the MFDRA is set to expire at the end of this year, on December 31, 2012. While both Democrats and Republicans are supporting an extension, each party has their own version of what… read more →
What is Shadow Inventory? And what can it tell us about the housing market, and maybe even the economy? Well, simply put, Shadow Inventory is a fancy way of saying Pending Supply. When analysts talk about the shadow inventory of homes, all they are talking about is how many homes are out there on the market. In other words, they are discussing the pending supply of homes on the market. How can the shadow inventory help us determine what’s going on in the housing market? Well, unless you’ve had your head in the sand for the past five years, you’ve noticed that the country is in a recession, caused, at least in part, by the housing bust. As homes were coming on the market, and buyers were disappearing, the Shadow Inventory grew. According to CoreLogic, in October of 2008, there was a 6-month supply of homes out there. And when… read more →
According to RealtyTrac, last month banks filed 16,318 foreclosure filings in Illinois. That’s a whopping 29% increase in just one month. It’s also a 54% increase over May 2011, a year ago. As RealtyTrac puts it, that’s one house out of every 325 homes in Illinois. In Chicago, that’s one out of every 252 homes. That’s a LOT of foreclosure filings, especially when the real estate market is allegedly improving. For the first time in 17 months, the foreclosure rate increased over the same month the previous year. Are banks catching up on their backlog? Will this large injection of foreclosures create a more favorable market for short sales? It all remains to be seen. Banks could certainly use all the help they can get unloading homes that they are in no position to take care. Last month alone, banks took possession of 54,844 properties nationwide. And the filing rate for… read more →
You’ve found the home of your dreams, but it’s a short sale. What are your risks? I’ve listed them below for you. Don’t freak out though. Some (or even most) of these may not apply to your transaction. On the other hand, they may. Try to do as much diligence as you can to find out how serious the seller and his bank really are. 1) The seller’s lender is slow to process the transaction. Wait, let me rephrase that. The seller’s lender is sloooooooooow to process the transaction. This happens a LOT. Do not expect a quick turnaround time. If you need to move quick, a short sale is probably not the way to go. 2) The seller is not diligent in following up with his lender. The seller’s lender will want a lot of paperwork — the seller’s whole financial history, and sometimes even… read more →
Overall, April was a good month for Illinois home sales. Based on data from the Multiple Listing Service (MLS), 9,961 homes sold statewide in April. This a 15.7% increase from April 2011. The median sales price was $135,000, an increase of $5,000 from March 2012. The U.S. Census Bureau defines the nine-county Chicago Primary Metropolitan Statistical Area (the CPMSA) to include the following counties: Cook, Lake, DuPage, McHenry, Will, Kane, Kendall, DeKalb, and Grundy. In those counties, 6,814 homes were sold in April 2012. That’s nearly a 20% increase from last April. However, the median sales price went down to $160,000, which is a 1.5% decrease from last April. That’s not to say everyone of the counties in the CPMSA saw a price drop. From April 2011, sales prices in DuPage, Kane and Kendall Counties increased around 10%. Sales prices in Chicago also increased close to 10% when compared to April of 2011. Moreover,… read more →
Despite all the short sales that seem to sit around forever while lenders ignore them, short sales are faring surprisingly well overall when compared to the last few years. Are lenders finally figuring out it makes more sense to sell a property short than to foreclose it, worry about it, deal with it, and end up selling it for less than they would have gotten in a short sale situation? Possibly. According to Realty Trac, short sales outnumbered foreclosure sales nationally for the first time in January 2012. 23.9% of homes sold in January were short sales. Only 19.7% of sales in the same month were foreclosed homes. Overall, short sales increased 33% in the last year. The greatest increase in short sales was in the western part of the country, with California leading the pack. In fact, nearly 30% of homes sold in California in January 2012 were short… read more →
You have no idea how many people ask me this question. And of course, there is no right answer. The reality is, no one is forcing you to buy either a foreclosure or a short sale. There are houses on the market that are neither foreclosures nor short sales. One of those just might be the right home for you. But regardless, many people have it in their heads that in order to get a great deal, the property must be foreclosed or selling short. If you have absolutely decided that you must buy a foreclosure or a short sale, that brings us back to the title of this post. Which should you buy? While there’s no right answer, foreclosures are typically much faster to process. They are often cheaper than short sales, and while you can’t expect much help or any information from the bank, if you need to close quickly, it’s… read more →
Unlike DuPage County, Lake County, and the other collar counties, Cook County tax bills are usually up in the air until late in the year. Technically, real estate taxes are supposed to be paid by August 1, but in the last 10 years, I’ve never even seen the second installment tax bill out by August 1. There have been years the bill wasn’t out until November! I thought 10 years was a long time, until I found out that the tax bills have not been out by the deadline even once in the last 40 years. This year, however, rumor has it that the bills will be out on time — in July — and will be due on August 1, which is the statutory deadline. If the bills are paid by August 1, all of the various entities that expect money from the county — schools, fire departments, libraries, etc. — should… read more →