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Whether you’re new to buying a loft or you’re a habituated player in the game, everyone can pick up some useful tips for buying an urban loft now and again. Although there is a standard modus-operandi that apply when buying a condo, as you’ll soon discover there are always tips specific to the local market – this is certainly true when buying a loft in Chicago. As our profession and passion is matching buyers to their most ideal condo, we have firsthand experience on the process, both representing the seller’s and buyer’s perspective, so read on to learn the tips in this handy guide to downtown Chicago condos and lofts, including steps to buying a condo (and oh, are there quite a few, but it may be the wildest ride of your life!).
Guide to Downtown Chicago Lofts: A How to Buy a Loft Primer
First things first: before we tackle how to buy a condo, let’s first address why buy a loft? After all, purchasing a home is one of the biggest milestones in most peoples’ lives. It’s a momentous event where finances, dreams, and commitments collide.
Just a few reasons on why to buy a loft or condo include:
- Lofts are often less expensive than single-family homes
- Loft buildings may offer amenities, such as swimming pools or fitness centers that you may otherwise not be able to afford.
- When weighing the pros of home ownership vs. renting, buying a condo gives the ability to write off tax deductions, including mortgage interest and property taxes. When purchasing a condo, you also have an opportunity to build equity.
- A terrific perk of loft or condo ownership is that owners are not responsible for maintenance of the building or grounds. Generally, your monthly HOA (home owners association) fee covers the repair and maintenance of your condo unit, the building, and public areas.
Caution! You May Not Want To Read This Section Of Our Guide To Downtown Chicago Condos And Lofts
The biology of the word “mortgage” is ominous, rooted in the “Law French” term during the middle ages meaning “death pledge.” Yep, it’s serious. Fortunately, in modern times once you take on a mortgage to buy a condo, you’re not required to fulfill the obligation with a death pledge if you don’t meet the terms, as in the olden times. We’re not sure they had condos back then! These days, you just have to meet your mortgage payments – but still, it’s a serious commitment.
What Is A Mortgage And How To Get Approved?
Okay, so what is a mortgage and how do you get approved to buy your dream condo? After determining how much condo you can afford (a good rule of thumb is purchasing a home that is 2-3 times your yearly salary), it’s time to shop around for a reputable mortgage lender. Not all mortgage lenders are created equal, so be sure to ask questions such as:
- What are the qualifying guidelines for approval?
- How long does the process take to be pre-approved?
- Do you offer fixed rate mortgages or ARMs?
Once you find a mortgage lender that answers your questions satisfactorily, it’s time to run the numbers. The lender will run your credit report, review your W2, tax returns, and bank statements to determine what interest rate they can extend. It’s always a good idea to go through this process prior to the condo search as sellers favor buyers who can demonstrate they are qualified and not simply wishful thinking through their home search. A word of caution – although lenders may deem you financially fit to take on a larger loan, only go with the number you’re most comfortable.
Getting Serious About Buying A Loft: Must-Haves? Can Do Withouts?
Before embarking on the condo hunt, first write out a list of things you absolutely can do without. How many bedrooms and bathrooms are you looking for? Do you favor a school district over all others? Is a garage and large yard “must haves?” What can you live without? Brainstorming a list ahead of time brings focus and intention to your condo search, so don’t skip this step!
Getting Serious About Buying A Loft Must-Haves? Can Do Withouts?
Although you are under no obligation to work with a buyer’s agent, you may find the path towards condo ownership much easier to navigate with a professional in your corner. Buyers agents know the landscape of your location and can negotiate for you with the sellers’ agent on your behalf.
House hunting is fun, but often an emotional time – especially when putting in an offer in a competitive market with multiple bids. It helps to have a trusted, objective professional you can rely on from start to finish. Your buyer’s agent can act as a mediator between you and the seller, as well as provide valuable insight into every step of the condo buying process.
Hurrah! The Most Delicious Step Of All In Our Loft Buyer’s Guide!
You’ve found your dream loft and are ready to put in an offer – now what? A buyer’s agent can guide you on whether to submit a low-ball offer or aim high. However, if you’re free agent buyer, you can determine the right price to offer based on some research:
How much do comparable lofts go for in Chicago? Is the loft you’re in love with reasonably priced?
How long has the loft been on the market? Is the seller “motivated” or do they have time to sit on their property and wait for the best offers.
Is it a buyer’s or seller’s market? If it’s a hot market, where properties are receiving multiple, often all-cash offers, price your offer accordingly.
Seller Accepts Your Offer, Happy Day!
The seller accepted your offer, now what? Review the contract and closing costs, then hire a home inspector to make sure the property has no major defects that may hamper the lender’s approval of the loan.
Local Tips? Buying A Condo In Chicago
Every market is unique, and Chicago is no different. Chicago is the nation’s third largest city and offers more than 70 neighborhoods to prospective buyers. Although the market is very competitive, it doesn’t mean it’s out of reach to new buyers. Both first time homebuyers and real estate investors will find opportunities in Chicago’s condo market, however some budgets will have more success than others. Here’s a rundown of our findings:
- Average Chicago home prices haven’t reached the record highs we saw in 2007. Attached homes are only at 82% of what they were in 2007 – better than many other competitive US markets!
- Condos don’t stay on the market for long – there is competition for these units, particularly the best condos in Chicago.
- Both single family detached homes and condos sell at about 4% under the listing price. Factor this in when determining your offer price, however location does matter.
- While there was more inventory of condos in 2017, condos are a sought-after commodity, outselling detached homes.
We hope this condo buyer’s guide has answered some questions about the local Chicago market, as well as outlined the basic steps in the condo buying process. Onward and good luck!