07 July 2008
A Phenomenal Realty Group!
The Newton Collins Group is very excited about the times we are in...relating to the housing industry of course. Many real estate agents and lenders are falling by the waist-side. I have bumped into quite a few at several retail stores wearing a uniform and assisting me with my purchases. I am not gloating or glad that they have to work at Target, Starbucks, etc...I am just glad that there are fewer real estate agents in my area! That being said, I would like to commend and congratulate the phenomenal realty group of agents who have been able to stick it out in this market. It has been great working with all of you. I am finding that our deals are closing smoothly and our lenders are really working hard. The listing and selling agents seem much more professional and thorough.
07 May 2008
How much House do I really need????
How much do you really need to buy?
Here is an article by Millard Fuller, President and Founder of Habitat for Humanity International. It really hits 'home' in terms of sitting down and REALLY thinking about your wants vs. needs...
Even though a lender might think you can afford to buy a certain house, you must always consider the ramifications and decide what you really can and want to afford yourself.
Buying More is not always Better
Here in the United States the bottom line is usually "the more, the better". Buy as much as you can for yourself; you deserve it. But in many cases you may really want to buy less, or at least not push your finances so much that you really have to strain to afford that house some Web based calculator says you can afford.
Let's say you have an income of $50,000 and my web calculator says you can afford a $160,000 house. What that really means is a lender will give you a loan large enough so that you can purchase that $160,000 house. If you are someone who regularly barely keeps your checking account above the minimum you really will not be able to afford the house. The only way you may be able to keep up with the payments is to throw more and more on your credit cards. And then you will curse me and my silly calculator.
It definitely depends on the housing market in your area. In some places a $300,000 house is a luxury home, in other places that is barely a starter home. People who live in the more affordable areas have the most options. They are the ones who must decide not only "how much can I afford?" but "do I really need all that I can afford?".
Bigger Houses cost More
Another factor people often forget is that the bigger a house you have, the more it costs to own it. If you move from a 900 square foot apartment to a 2500 square foot house, you are going to have a whole ton of floor space you are going to want to fill with furniture. You have a lot more space to heat and cool, lots more to clean (or you hire out the cleaning as an additional expense.) Then there is the yard and maintenance issues you never had to deal with in a rental unit. Don't think that the monthly payment is the vast majority of your house costs, there are plenty more costs to worry about. By buying a home that is 20% smaller than the one you can afford from the lenders' points of view, you can also save on utilities, furnishings, maintenance, property tax and insurance. Everything is relative.
Another factor is property appreciation. In more expensive neighborhoods the number of people who can afford to buy them decreases substantially as prices increase, since incomes have not been increasing as quickly as property values. So the amount of headroom for appreciation in more expensive areas is much more limited than in more moderately priced areas. During the huge real estate run up in the last few years, many of the already overpriced regions have seen their properties rise not as quickly as many more affordable areas.
The Neighborhood Factor
Then there is the neighborhood issues. If you live in an expensive house in an "exclusive" area, the costs definitely do not end with your house payments. For example, if you live in a more expensive area, the homeowners there will also tend to drive fancier cars, are more apt to join private organizations and send their children to private schools. After living there a while you learn to accept that this is the norm and that becomes the typical standard of living in your (and your family's) eyes.
Much of this is discussed in the book The Millionaire Next Door by Stanley and Danko. People who live in expensive neighborhoods are not necessarily the ones who own the most assets, just the ones who spend the most money. Their environments give them a model of how much money should be spent. That's just natural due to day to day exposure. And every persons actions affect others in a specific environment. If just one neighbor buys a new Mercedes that is no big deal. But then if after looking at it a while his neighbor decides maybe he needs a new car, so he gets a Lexus. Then another neighbor thinks "well, if they can afford new cars, I don't see why I can't", so she goes out and gets herself a BMW. Soon people who drive home in that neighborhood in a 3 year old Accord will think there is something wrong with themselves. However several blocks away in a less affluent area that 3 year old Accord looks pretty darn nice...
You might find yourself perfectly happy in a less expensive neighborhood in a less expensive house. If your housing costs then end up only being 10 to 15% of you earnings, think of all the extra money you will have. Plus the "neighborhood" factor changes. Personally I have found that middle of the road neighborhoods are more friendly and comfortable than more affluent ones. You also want to consider who you want your children to think of as normal peers and a "typical" lifestyle. ("But, Dad, everybody flies to Europe for Spring Break!").
"But I'm doing it for the kids for better schools"
Many people use the "better schools" argument as their reasoning for buying an overpriced home in an overpriced neighborhood. In less expensive parts of the country like the midwest, it may well make sense to spend an extra $20,000 or even up to $50,000 for a home in a better district since that may only cost you a few thousand more per year than living in a less desirable school district. But in more expensive regions of the country (e.g. the West and East Coasts), when you start paying $100,000, $200,000 or $300,000 more for a home solely because it is in a "better district" you could easily take the savings by living in a cheaper district and spend that amount on a premiere private school. In a less desirable area, the same size and quality home will be substantially cheaper, so you can live better, in a less "exclusive" (i.e. "snooty") area, and send your kids to good schools for less or the same amount of money.
Here is an article by Millard Fuller, President and Founder of Habitat for Humanity International. It really hits 'home' in terms of sitting down and REALLY thinking about your wants vs. needs...
Even though a lender might think you can afford to buy a certain house, you must always consider the ramifications and decide what you really can and want to afford yourself.
Buying More is not always Better
Here in the United States the bottom line is usually "the more, the better". Buy as much as you can for yourself; you deserve it. But in many cases you may really want to buy less, or at least not push your finances so much that you really have to strain to afford that house some Web based calculator says you can afford.
Let's say you have an income of $50,000 and my web calculator says you can afford a $160,000 house. What that really means is a lender will give you a loan large enough so that you can purchase that $160,000 house. If you are someone who regularly barely keeps your checking account above the minimum you really will not be able to afford the house. The only way you may be able to keep up with the payments is to throw more and more on your credit cards. And then you will curse me and my silly calculator.
It definitely depends on the housing market in your area. In some places a $300,000 house is a luxury home, in other places that is barely a starter home. People who live in the more affordable areas have the most options. They are the ones who must decide not only "how much can I afford?" but "do I really need all that I can afford?".
Bigger Houses cost More
Another factor people often forget is that the bigger a house you have, the more it costs to own it. If you move from a 900 square foot apartment to a 2500 square foot house, you are going to have a whole ton of floor space you are going to want to fill with furniture. You have a lot more space to heat and cool, lots more to clean (or you hire out the cleaning as an additional expense.) Then there is the yard and maintenance issues you never had to deal with in a rental unit. Don't think that the monthly payment is the vast majority of your house costs, there are plenty more costs to worry about. By buying a home that is 20% smaller than the one you can afford from the lenders' points of view, you can also save on utilities, furnishings, maintenance, property tax and insurance. Everything is relative.
Another factor is property appreciation. In more expensive neighborhoods the number of people who can afford to buy them decreases substantially as prices increase, since incomes have not been increasing as quickly as property values. So the amount of headroom for appreciation in more expensive areas is much more limited than in more moderately priced areas. During the huge real estate run up in the last few years, many of the already overpriced regions have seen their properties rise not as quickly as many more affordable areas.
The Neighborhood Factor
Then there is the neighborhood issues. If you live in an expensive house in an "exclusive" area, the costs definitely do not end with your house payments. For example, if you live in a more expensive area, the homeowners there will also tend to drive fancier cars, are more apt to join private organizations and send their children to private schools. After living there a while you learn to accept that this is the norm and that becomes the typical standard of living in your (and your family's) eyes.
Much of this is discussed in the book The Millionaire Next Door by Stanley and Danko. People who live in expensive neighborhoods are not necessarily the ones who own the most assets, just the ones who spend the most money. Their environments give them a model of how much money should be spent. That's just natural due to day to day exposure. And every persons actions affect others in a specific environment. If just one neighbor buys a new Mercedes that is no big deal. But then if after looking at it a while his neighbor decides maybe he needs a new car, so he gets a Lexus. Then another neighbor thinks "well, if they can afford new cars, I don't see why I can't", so she goes out and gets herself a BMW. Soon people who drive home in that neighborhood in a 3 year old Accord will think there is something wrong with themselves. However several blocks away in a less affluent area that 3 year old Accord looks pretty darn nice...
You might find yourself perfectly happy in a less expensive neighborhood in a less expensive house. If your housing costs then end up only being 10 to 15% of you earnings, think of all the extra money you will have. Plus the "neighborhood" factor changes. Personally I have found that middle of the road neighborhoods are more friendly and comfortable than more affluent ones. You also want to consider who you want your children to think of as normal peers and a "typical" lifestyle. ("But, Dad, everybody flies to Europe for Spring Break!").
"But I'm doing it for the kids for better schools"
Many people use the "better schools" argument as their reasoning for buying an overpriced home in an overpriced neighborhood. In less expensive parts of the country like the midwest, it may well make sense to spend an extra $20,000 or even up to $50,000 for a home in a better district since that may only cost you a few thousand more per year than living in a less desirable school district. But in more expensive regions of the country (e.g. the West and East Coasts), when you start paying $100,000, $200,000 or $300,000 more for a home solely because it is in a "better district" you could easily take the savings by living in a cheaper district and spend that amount on a premiere private school. In a less desirable area, the same size and quality home will be substantially cheaper, so you can live better, in a less "exclusive" (i.e. "snooty") area, and send your kids to good schools for less or the same amount of money.
16 April 2008
Chase Bank Chicago Home Ownership Legacy Tour
Be sure to come see us at the Chase Bank Home Buyers Legacy Tour
Date: Saturday, May 3, 2008
Location: UIC Forum at the University of Illinois in Chicago, Illinois
Address: 725 W Roosevelt Rd. , Chicago, IL 60608
Meal: FREE LUNCH will be served!
8:30 to 3:30pm
The home lending environment is changing.Are you making all the right decisions?
The tour is an interactive day of informative workshops, one-on-one consultations, and valuable industry insights that will help you make the right decisions concerning your mortgage.
WORKSHOPS
We've chosen the best keynote speakers and industry leaders that will help you make smarter decisions about mortgages and the homeownership process.
MARKETPLACE
We've chosen an elite group of partners that will provide you with the tools you need to make the best decisions for you and your family!
KEYNOTE SPEAKER:Mellody Hobson
Chicago
Mellody Hobson is President of Ariel Capital Management, LLC-a Chicago-based investment management firm which celebrates its 25th anniversary this year. With over $13 billion in assets under management, the firm serves individual investors and 401(k) plans through its no-load Ariel Mutual Funds and manages separate accounts for institutional clients. As President, Mellody is responsible for firmwide management and strategic planning, overseeing all operations of Ariel's business outside of research and portfolio management. In 2006, she was elected Chairman of the Ariel Mutual Funds Board of Trustees. She joined the company in 1991 after graduating from Princeton University where she received a Bachelor of Arts degree from the Woodrow Wilson School of International Relations and Public Policy.
Mellody has become a nationally recognized voice on financial literacy and investor education. Specifically, she is a regular financial contributor on ABC's Good Morning America as well as a spokesperson for the annual Ariel/ Schwab Black Investor Survey, which examines the influences and investing habits of Black and White Americans. She is actively involved with a variety of civic and professional institutions. Her community outreach includes her role as a board member of the Chicago Public Library as well as its foundation, The Field Museum, The Chicago Public Education Fund and The Sundance Institute. She is also a director of three public companies: DreamWorks Animation SKG, Inc., The Estée Lauder Companies Inc. and Starbucks Corporation. Additionally, she is on the Board of Governors of the Investment Company Institute and a former Trustee of Princeton University. Mellody is a member of the Economic Club of Chicago, the Commercial Club of Chicago and the Young President's Organization (YPO).
Her professional and civic leadership have brought her to the forefront of media attention. In 2004, The Wall Street Journal profiled Mellody as one of 50 "Women to Watch" in the corporate world. In 2004, Time magazine identified her as one of 25 business influentials setting the global standards for management, ethics, marketing and innovation. In 2002, Esquire magazine named Mellody as one of "America's Best and Brightest" emerging leaders. In 2001, the World Economic Forum in Davos, Switzerland named her a Global Leader of Tomorrow (GLT), and Fortune magazine recognized her as one of 25 "Next-Generation Global Leaders."
The Newton Collins Group is a Proud Sponsor of this event. We will be there to answer any questions or concerns that you may have about the housing industry. We look forward to seeing you there! Questions? 773.263.6013
You can register now or when you get there! FREE lunch and goodies throughout the day!
To Register please Call 1.800.541.0368
Click below to Register!
Register NOW!
Date: Saturday, May 3, 2008
Location: UIC Forum at the University of Illinois in Chicago, Illinois
Address: 725 W Roosevelt Rd. , Chicago, IL 60608
Meal: FREE LUNCH will be served!
8:30 to 3:30pm
The home lending environment is changing.Are you making all the right decisions?
The tour is an interactive day of informative workshops, one-on-one consultations, and valuable industry insights that will help you make the right decisions concerning your mortgage.
WORKSHOPS
We've chosen the best keynote speakers and industry leaders that will help you make smarter decisions about mortgages and the homeownership process.
MARKETPLACE
We've chosen an elite group of partners that will provide you with the tools you need to make the best decisions for you and your family!
KEYNOTE SPEAKER:Mellody Hobson
Chicago
Mellody Hobson is President of Ariel Capital Management, LLC-a Chicago-based investment management firm which celebrates its 25th anniversary this year. With over $13 billion in assets under management, the firm serves individual investors and 401(k) plans through its no-load Ariel Mutual Funds and manages separate accounts for institutional clients. As President, Mellody is responsible for firmwide management and strategic planning, overseeing all operations of Ariel's business outside of research and portfolio management. In 2006, she was elected Chairman of the Ariel Mutual Funds Board of Trustees. She joined the company in 1991 after graduating from Princeton University where she received a Bachelor of Arts degree from the Woodrow Wilson School of International Relations and Public Policy.
Mellody has become a nationally recognized voice on financial literacy and investor education. Specifically, she is a regular financial contributor on ABC's Good Morning America as well as a spokesperson for the annual Ariel/ Schwab Black Investor Survey, which examines the influences and investing habits of Black and White Americans. She is actively involved with a variety of civic and professional institutions. Her community outreach includes her role as a board member of the Chicago Public Library as well as its foundation, The Field Museum, The Chicago Public Education Fund and The Sundance Institute. She is also a director of three public companies: DreamWorks Animation SKG, Inc., The Estée Lauder Companies Inc. and Starbucks Corporation. Additionally, she is on the Board of Governors of the Investment Company Institute and a former Trustee of Princeton University. Mellody is a member of the Economic Club of Chicago, the Commercial Club of Chicago and the Young President's Organization (YPO).
Her professional and civic leadership have brought her to the forefront of media attention. In 2004, The Wall Street Journal profiled Mellody as one of 50 "Women to Watch" in the corporate world. In 2004, Time magazine identified her as one of 25 business influentials setting the global standards for management, ethics, marketing and innovation. In 2002, Esquire magazine named Mellody as one of "America's Best and Brightest" emerging leaders. In 2001, the World Economic Forum in Davos, Switzerland named her a Global Leader of Tomorrow (GLT), and Fortune magazine recognized her as one of 25 "Next-Generation Global Leaders."
The Newton Collins Group is a Proud Sponsor of this event. We will be there to answer any questions or concerns that you may have about the housing industry. We look forward to seeing you there! Questions? 773.263.6013
You can register now or when you get there! FREE lunch and goodies throughout the day!
To Register please Call 1.800.541.0368
Click below to Register!
Register NOW!
For our Chicago Real Estate Buyers!
The Newton Collins Group is doing well in this market and you Chicago real estate buyers should be doing well also! Even though this IS considered a 'Buyers Market' here in Chicago, there are things buyers should know: 'Lowballing' (putting in a bid for a property that is WAYYYY below market value) can quickly put a bad taste in the sellers mouth; EVEN if it turns out you were willing to to bid at a more reasonable price point. I have seen many deals lost with 'Lowballing'. A great Real estate agent will sit and discuss with you the pros and cons of a property and gather comparables of how much other properties have sold for in the same neighborhood. With this information, along with your Mortgage Approval letter from your lender you can submit a resonable offer to the seller and GET the home of your dreams!
For our Chicago Real Estate Sellers!
Gwen and I would just like to say that business has been pretty good and we are loving that the Chicago sunny weather looks to be headed our way. For our sellers out there: Curb appeal is VERY important! Do your best to keep your walk ways clear of trash, leaves, branches, etc. Also keep those hedges trimmed. It's about time to start planting flowers and keeping your lawns trimmed also. Remember that many potential buyers drive by homes BEFORE they call their real estate agents to schedule showings!
Spring is in the Air in Chicago...Time to Buy Real Estate!
Hello all!
So how many dismal reports about the horrible state of the real estate industry must we indure? Can anyone out there please type in a GREAT experience they have had in regards to buying and or selling real estate in the 'down' market? We woould LOVE to hear/read your stories!
So how many dismal reports about the horrible state of the real estate industry must we indure? Can anyone out there please type in a GREAT experience they have had in regards to buying and or selling real estate in the 'down' market? We woould LOVE to hear/read your stories!
19 November 2007
Hard Working REALTORS are STILL Doing a Booming Business in this Market!
We have been hearing it everyday for the past few months..."It's a BAD real estate market!", "How are you guys making any money?", "I feel sorry for you having to be a REALTOR in THIS market!"....WHAT????? Our business is booming! The great thing about a market like this is that the REALTORS who are/were just dabbling in this business as a part time hobby have gone out to find...as they say, 'A REAL full-time job' in some other industry...Macy's, Home Depot, Pottery Barn, Crate and ...well, you get it. And we say "GREAT!" leave all these wonderful buyers, sellers and investors to us FULL-TIME REALTORS! This is definitely NOT a business for the faint at heart. You have to be willing to put in the time, money and inclination. If you treat it like a hobby, you most likely WILL have to have another job. On the other hand, if you treat it like your business, you WILL succeed...so hang in there!
Subscribe to:
Posts (Atom)
