Buying a Home in West Loop

Why Buy? Buying vs. Renting

To rent or to buy? That's a question many renters ask themselves when considering their housing options. Why pay rent to someone else when you can put that money towards investing in a property that will most likely go up in value over time? On the other hand, why be tied down to a piece of property when you can have the freedom of a month-to-month or year-long lease?

The answer to these questions depends on the individual and the level of commitment you're willing to make. If you have no idea what you'll be doing in a year's time or where you plan to be, taking the home-buying plunge now might be a bit premature. However, if you've reached a point in your life or career where you are considering planting some permanent roots, then the decision to buy is a viable option.

There are advantages and disadvantages to both home ownership and renting. When you own, you can't call the landlord to fix your leaky faucet, or mow your lawn, or paint your kitchen. You alone are responsible for the repair and upkeep of your house or condo unit and you alone foot the bill. On the plus side, you don't have a landlord to tell you that you can't wallpaper your kitchen or sculpt your front hedges into animal shapes. If you decide to go the condo route, however, you will have to abide by the rules and regulations set by the condo association, which have varying degrees of restrictions. So just make sure to read through the fine print before signing on the dotted line. Don't disregard the intangibles - how do you put a price on the pride and sense of freedom that home ownership can give you? Sure, it may seem like a taxing financial investment in the beginning, but if you're comfortable with your mortgage payment, property taxes and condo association fees, then you'll be sitting on quite an investment that will benefit YOU in the long run and not your landlord.

Steps to buying a home

Ten steps... twelve steps... fifteen steps... depending on which website you visit, real estate agency you go with, or book you read on the subject, the home buying process can vary greatly in outline. But what it all boils down to is three main points: 1) Determine what you need in a home and what you can afford. Before you even consider taking the plunge of buying a new home, it's time to do some thinking, some accounting and some planning. The first question you should ask yourself is: can I even afford to buy a home? You will have to go through your monthly debt payments, income and expenses to determine what sort of monthly mortgage you can afford with the amount of down payment you have saved up. And remember, you have to pay closing fees upfront, too.

In addition to working out how much can you afford, you need to decide on what type of home you're interested in buying. A condo, single family, townhouse? New construction, rehab, or fixer upper? What kind of neighborhood can you afford to live in? Consider the property taxes, what assessment fees are required and what kind of appreciation you can expect from the area.

After you buy your dream house, do you have enough money set aside to cover any unforeseen expenses like repairs, a bump in property taxes, or special assessments (if you live in a condo). Do you have job security? Will you be able to afford your mortgage next year and the year after, etc. These are all questions you must answer before you start looking for a home to purchase.

2) Now that you've given some careful consideration to your needs and wants, if you are ready to move forward with the purchase of a home, make sure you know what you can expect in the future. Educate yourself on the mortgage industry and the local real estate market (real estate websites and professional agents are good sources for up-to-date news and trends). Know the lingo of the industry. There are many helpful resources on the web and at your local library, where you can get information on housing markets and the process of buying a home. Much of the information will be seem redundant and comes down to simple common sense, but that's ok, read it all anyway and drill it into your head. Agents and brokers can spend more time finding you a home you like and less time explaining the basics if they know they're dealing with someone who speaks their language. 3) Show brokers you are serious about purchasing a home by getting pre-approved for a mortgage loan. This step provides you with a letter of commitment from a financial institution that proves you can afford the homes you are interested in and that you have a lender who will back your home loan.

Buying tips

Assuming you've done your homework and figured out whether or not you can afford to buy a home; and assuming you've figured out how much of a monthly mortgage payment you can handle; you'll want to consider where you'd like to live. Is price the only factor in your decision? How about safety? Crime rates? How about schools? Is it an easy commute to work? What's important to you? Make a list of your priorities and share them with your real estate agent so that he or she can narrow their search according to your criteria. Hiring a real estate agent may not be required, but it is recommended. Even if you have educated yourself on everything you need to know to buy a home, there are many ins and outs in the real estate business a Realtor is better equipped to deal with and there are plenty of pitfalls that a professional agent can help you avoid. Your agent knows the market and can explain the lexicon and conditions of the real estate world. But remember, the decision ultimately lies with you and the responsibility as well.

Following your financial homework and getting a pre-approved loan, you can decide what type of housing you want. Do you want a brand new home? There are advantages to owning a new construction property. In theory, if constructed properly and according to the current construction codes, new homes should be more energy efficient and free of harmful chemicals like asbestos and lead-based paint. When buying a new construction home it's a good idea to check out the builder's past developments and maybe even talk with residents about how satisfied they are with their homes.

Perhaps you'd prefer the charm and lived-in, welcoming feel of an older home. Do you appreciate the style and architecture a vintage residence offers? While these homes may not be as energy efficient as more modern structures, the good news is the price may be a bit more negotiable. Another advantage to buying an older home is that any early flaws or defects the home might have had (and they all have some) were most likely already detected and addressed by previous owners. When purchasing a home it is important to keep an open mind. See as many homes as you can before making a decision on an offer and be prepared to negotiate. There's the asking price, the selling price and every offer in between. This is where the experience of a real estate agent can be a tremendous asset.

Why is it important to have a home inspection?

As Ben Franklin once said, "An ounce of prevention is worth a pound of cure." In the real estate realm, we can apply that concept to our homes. The better care we take and the more we know about potential problem areas the less we'll have to spend on unexpected issues later on to fix them. That's why it is important to get an inspection of your potential home by a trained professional.

After you've decided on a property you're interested in that you "like the looks of," it's time to get a professional opinion. What looks good to you could have thousands of dollars of potential problems underneath the surface. Licensed home inspectors are trained to notice things that would otherwise escape the attention of even the most diligent and knowledgeable home buyer. A professional home inspector will examine the structure from roof to basement paying special attention to heating and air conditioning systems, electrical wiring, plumbing, walls, floors, windows and doors, ceilings and foundation. He can check for mold or other potential, unforeseen issues that can turn into a huge financial drain if left unattended to. Your home inspector will provide you a report detailing possible problems and concerns with the house or condo unit. You can then point these things out to the seller and make the repair or correction of said problems contingent on the sale. The unbiased, third party opinion of a professional home inspector is an essential step in the purchase of your home.

Owning a Condo

Owning a condo is a bit different than owning a detached home. Anyone thinking about buying a condominium should know what to expect as a condo owner, so here's a crash course to help you out.

As a condo owner, you are the sole owner of your unit. What you share with the other condo owners in your building are the common areas. Inner staircases and landings, back porches and decks, front and backyards, basements and storage rooms, outer walls and lighting, security gates and the roof - these are all jointly owned and are the joint responsibility of all condo building occupants. As a condo owner you will be required to pay assessments to the condo association (a governing body that regulates and manages the joint funds of the condo building occupants).

The money you pay in assessments goes toward general upkeep of the building and regular maintenance. Utilities must be paid to light and heat the communal areas, outdoor spaces need care, the driveway and sidewalks need to be shoveled in the winter, and the building itself will require a certain amount of service. The association decides what the funds should be used for and may vary greatly from one condo complex to the next. Depending on the size of the building, your association may elect to hire a management company who will then contract out any necessary repairs as well as take care of cleaning, landscaping and snow removal. The association also has to cover insurance and have enough money in reserve to cover unforeseen expenses.

As a condo owner you are required to attend your condo association meetings. A board of members is elected to determine the budget as well as draft the rules for the building.

Some buyers aren't too keen on the idea of having to abide by the whim of a condo association and are more suited for owning a house. There are advantages to owning a house that are hard to come by in the condo market. For one, with a house, you typically will gain some semblance of a private yard - probably even front and back - that is your own secluded outdoor retreat and that you don't have to share with the neighbors. Garages are also much more common with single-family homes and, while there are some very big condos, you'll usually get more square footage when you buy a detached residence. You won't have to follow the rules of the condo association, although there are neighborhood associations in some communities that may impose a few lawn care rules here and there. And in spite of a higher purchase price upfront, the value of your home will rise much faster than that of a condo unit.

[back to top]