Cities and towns in Northeast Illinois have so much to offer. Chicago, for instance, is rich in culture and world-class amenities. Visitors come from all over to see landmarks like Willis Tower, the famed Navy Pier, and the beautiful waters of Lake Michigan. People are drawn to the area’s smaller cities, like St. Charles and Lake Forest, for their picturesque views and small-town charm.
No matter what part of Northeast Illinois you are interested in, you likely have questions. Amy Crane is an expert in St. Charles, IL, real estate, and properties throughout the greater Chicago area. She has compiled a list to help buyers and sellers with questions about the market. Below are some of the most googled questions about real estate.
Should I still buy in a seller’s market?
The housing market can be fickle, and there is no way to tell how long before it returns to a buyer’s market. In a seller’s market, it is more difficult to find a home, and sellers are less willing to negotiate. Buyers usually end up paying more in a seller’s market. However, people cannot always wait until the market changes to purchase a home. Ultimately the decision of when to buy is up to you and your real estate agent, but it is possible to buy during a seller’s market.
Buy or rent?
That depends on many factors. Here are a few to consider.
After purchasing a home, it usually takes three to five years before you can sell and make enough profit to pay off the loan and other costs.
- Do you plan on owning the home for at least three to five years?
- Do you have good credit?
- Can you afford the costs associated with buying a home?
If you answered yes to all of the above, buying might be a good option.
How do I know what my home is worth?
There are several methods to find out what your home is worth.
-
Use an online tool. Search for terms like home value calculator or questions like What is my home worth?
-
Search a real estate website for homes similar to yours in your area and then compare prices.
-
Find an appraiser. For a fee, an appraiser can estimate what they think your home is worth.
-
Contact a real estate agent. A real estate agent can show you comparisons of homes that sold near you and help you determine the asking price. They know the market and are an invaluable resource to homeowners.
What can I afford?
An online calculator is one way to give you a rough estimate of what you can afford. Search online with terms like affordability calculator.
How much do I need for a down payment?
-
Conventional and Federal Housing Administration (FHA) loans can be anywhere from 3%-10%.
-
Veterans Affairs (VA) and some U.S. Department of Agriculture (USDA) loans do not require a down payment.
When should I apply for a mortgage?
Before applying for a loan, ensure your finances are in order.
- Check your credit score. Scores range from 300-850. 670 or higher is considered good.
- Be able to show a stable income.
- Have a down payment.
- Most lenders say your debt-to-income ratio should be lower than 43%. Search debt to income ratio or DTI calculator to calculate your percentage.
- Once you are ready, you can search for lenders, but it may be best to contact a real estate agent first. They work with lenders in your area and can assist you. Keep in mind that some preapproval applications cost a few hundred dollars. They also expire. If that happens, you must pay to go through the process again. So you do not want to apply too soon.
Do I have to have a real estate agent?
The benefit of having a real estate agent outweighs any perceived disadvantages. The National Association of REALTORS® states 86% of home buyers work with a real estate agent. Typically, buyers do not pay agent fees. The sellers do. So, there is no financial gain for a buyer not to have an agent. In cases where the seller does not have an agent, they will still have to pay the buyer's agent. Also, some states require a real estate attorney to manage the paperwork, which has fees.
How much do I have to pay a real estate agent?
There are no laws setting rates. The market determines commission rates, which vary by state and type of property sale. Commissions generally run between 5-6%, split between the buyer’s and seller’s agents. According to the National Association of REALTORS®, in 2020, some commissions dropped to 4.94%.
Can I negotiate my agent’s commission?
Real estate agents spend a lot of time trying to sell your home, and they only get paid once they sell it. You can ask an agent to lower their fee, but the agent might say no. Remember that the fees cover the agent marketing and showing your property. There are some low-commission agents, but they provide fewer services than traditional real estate agents.
Can I back out of real estate contracts?
Yes. The seller and the buyer can back out of a contract, but it might cost them financially. It all depends on the terms of the agreement and what safeguards were written into it.
Is the housing market slowing?
The housing market has been slowing due in part to higher interest rates. Other reasons are the high home prices and the low sales inventory. Mortgage rates recently dropped below 6.5%, meaning more people may be willing to return to the market.
Is the real estate market going to crash? If so, when?
The crash 15 years ago was caused by a bubble created by banks giving loans to people who could not afford them. That is not what is happening now. Most experts believe we are seeing a market correction, not a crash. One reason the market is not expected to crash is that low inventory keeps prices from dropping dramatically. Experts predict that prices may drop slightly, but not enough to crash.
When will the market improve?
No one can say for sure when the housing market will improve. However, experts are cautiously optimistic. Data from the National Association of REALTORS® points to the market slowly normalizing.
You have questions: Amy Crane has answers.
Whether you are selling a home or looking to buy one, the real estate market can be confusing. So many details can be overlooked if you do not have someone you can trust on your side. Amy Crane would like to be that person for you.
Whether you are interested in houses for sale in Geneva, IL, or selling property in downtown Chicago, Amy is a trusted resource. She likes helping people and is a tough negotiator. She will not only help guide you through the process but also help you get the best deal. Reach out to her today. You will be glad you did.
