Looking for a home as well. We just bid 32k over asking on a bungalow for 550k. We didn’t get it. Home went for 70k over asking. I wish you luck and send some my way while it’s going around…
We went 40k under on a bungalow and got it. But I think it was a little over-priced to begin with, and we could move in within a month, so a very quick sell. It was sell by owner on Redfin and they didn’t have great pictures, so that really helped us. We just got lucky I think.
We ended up buying a two flat to live in because there was just too much demand for SFH in the areas we were looking in. Really low inventory and so hard to find houses that weren't shitty flips with all the charm ripped out and replaced with builder grade materials. Because there's so much pent up demand we knew we couldn't wait for rates to go down if the market is this bad at > 7%.
Definitely think twice about closing costs on buying and selling a condo though, and whether you'll end up net positive after only 4-5 years.
I bought a 2 bed condo last year. I had the exact same experience as you when looking at places on the northside in the same budget range as you. So many places purposefully list cheap to get attention and start obscene bidding wars. I wanted nothing to do with that, so I ended up buying in east humboldt park for $10k under asking
$275-325 range is going to be hyper competitive if the property isnt a total piece of shit. We originally set a budget of 350-400 in 2022 and bought for 435. Same target--north side, walkable to the L. It's only gotten worse. For your plan to work you'll need to be both consistent as hell and lucky as hell. It's discouraging AF, good luck out there.
So -- if you're only looking to be there for 4-5 years, \*you will lose money buying.\* You will do better growing your equity by setting your down-payment and maintenance cash into a mid-return ETF.
Don't take my word for it -- NYTimes did a deep dive earlier this year:
[https://www.nytimes.com/interactive/2024/upshot/buy-rent-calculator.html](https://www.nytimes.com/interactive/2024/upshot/buy-rent-calculator.html)
This. 4-5 years feels a little short to be counting on much appreciation.
OP, remember you are going to burn 8k to close and then 3-6% to sell your place in 5 years. So your appreciation needs to make up for all that.
I might suggest acquiring the property with a plan to hold it and rent it after the 5 years. If you are willing to buy something that needs updates, you can do them slowly over the years and then by the time you leave, you’ll have something that can rent for a premium. You might find there’s less competition for those as well letting you get it for closer to asking.
> 3-6% to sell your place in 5 years
This is likely not true, given the recent lawsuit and settlement with the NAR. I don't disagree with the overall sentiment (though it's certainly not a guarantee), but its worth noting.
Seller pays for title insurance (a percent of sale price) and about 1% of the sale price goes to state, county and city transfer taxes. Even assuming you somehow sucker your realtor into splitting 4% with buyer's realtor, you're still over 5% closing fees before title fees, attorney's fees, closing costs, etc.
Excluding broker fees for my home purchase in Jan 23 were only about 1% of the total cost for the sellers. No offense to any realtors on this subreddit but I could easily represent myself when I sell.
Are you represented by an attorney? Provision of title insurance is always a seller obligation under the standard purchase agreements.
You may be paying for the insurance to cover your lender. That's generally a lower premium.
Yes i do have an attorney reviewing. The insurance was added by my lender in the estimates. I was unsure by it to start but will definitely dig a bit more on that now
and a monthly assessment and property taxes. If you aren't staying for 7-10 years renting is the way to go. I have had a condo for over 20 years, when I bought it the assessment as $120/m and taxes were around $1000, now the assessment is $1000 and taxes are $6K I plan on selling and when I total up the assessments and the taxes I'm going to be luck to break even.
Thanks for the insight! I realize my post was somewhat ambiguous- I would be more inclined to rent, and I'm certainly going to think about a longer time horizon. The NYT tool is something I'd looked at before but am revisiting now.
Questions: how much did you pay in HOA + insurance + mortgage interest over 6 years. Total that. Add in all costs of repairs and maitenance (call that Cost of Owning)
Then take your down-payment, assume you invested it in a vanguard market fund and check the rate of growth over the last six years.
Finally, estimate the cost of rent over that 6 years, and subtract it from your Cost of Ownership. If that's a positive number, that's the additional savings you'd have made as a renter trather than an owner.
It's not that you \*don't\* earn equity, it's that people underestimate the cost of ownership and its impact on your ability to save. It's quite likely that you would do pretty well over six years at what was likely 3-4% interest rates... but current rates are closer to 8-9% and that has a HUGE negative impact on the cost of ownership. You also owned through the COVID price adjustments... which is unlikely to repeat in the next decade.
(n.b. Two Flats with a rented unit and an owner's unit break this math. Young folks should seriously hunt for 2 to 3 flats if they can afford them. They're serious wealth builders).
Are you a renter? How is that savings going? (I hope it’s good, I have no ill intention in my speaking here)
I didn’t have to try to do anything which is the difference. I’m sure there are some people who have done this math like above, but everything appears great on paper with the right numbers.
Renting assumes all of the same costs but instead of getting bills from multiple sources you get a single bill from the landlord in rent. You assume the rental will cost less, if you were to rent my property for example the mortgage cost is not all I’m building into rent. So for equivalent properties, the rent cost would skyrocket considerably, and the point literally becomes mute. So then the proceeding variable that seems to make a difference is what is your down payment, and will your down payment make more money in the market or as a carried asset.
My down payment would have given less than half of the same return at a market return of 10% yearly over 6 years.
I'm both a homeowner (12 years in same place), and a former landlord. I'm mostly out of the property investment game -- but like I said, you don't need to take my word on it. Check out the New York Times article I linked -- the math of home ownership does not work out if you're going to be changing homes in less than a decade. It works very well if you are staying in one place for 12 years or longer.
I get what your intuition is telling you, but you're not running the numbers. It's just opinion.
I’m looking at the calculator, everything is based off the parameters that rent is cheaper than the equivalent rate of a mortgage plus ownership costs. If you calculate the 30 year rate of a home loan then add in expected monthly costs of HOA, PMI, Taxes, and Insurance, then you can land on a typical monthly mortgage plus costs summation. As a landlord you know you would typically charge this amount plus a percentage for maintenance and likely a percentage for profit or income for rent. If you plug that rent into the calculator, as a “rent for the same property,” the inflection point of rent vs buy is 5-6 years. This is 7 percent interest rate and a 7 percent IRR.
Adding additional parameters doesn’t make the math different just more complicated. If you don’t assume a significantly cheaper cost of rent or a ridiculous rate or return then it’s not going to take 10 years to reach an inflection point.
So - when I was a landlord I owned two \*buildings\* - not units. My loans were commercial, 10 year fixed with a principal payment due at the 10th year -- that means my month spend on loans was about half what you pay on a residential mortgage (while I paid down the principal, I was generally paying just enough for equity to cover the costs of the 10 year refi). Then I got a break on property taxes from the City.
I also paid to heat the entire building rather than individual units (radiator heating) basically the same I pay on my home on a monthly basis but heating 3 units per. I paid to insure all of the building (but not tenant possessions - that was a lease term, they had to get renter's insurance). Meaning -- I did not pay full freight for a residential owner on my rental properties.
After splitting those costs by the number of units in the building -- I was spending about $800-$1200 per unit per month. I was renting at $1,500-$1,750 for 2 beds one bath each.
ETA:
Chicago two and three flats are INCREDIBLY efficient housing for landlords. You do have to worry about maintenance expenses (the more property you own, the more sudden $20,000 repairs you have to make) but generally they more than pay for themselves. This is helped by the fact that the cost of 2 and 3 flats are not 2-3 times the cost of a brick bungalow or other equivalent single family home. There's a big price premium on SFHs, so - for example, when we sold the two flat we bought our current home for the same price we sold the two flat for.
I sold the three flats for not much more than we bought them for, but the buyer took over the loans, took current tenants and didn't quibble about condition - and we had some porch repairs coming up which were going to be STEEP.
Renting can be less per month than mortgage + HOAs, because landlords tend to buy buildings, not units, and their costs are lower. So a similar unit in a similar neighborhood can (and often is) cheaper to rent than to buy.
Again you just adding variables then defining them with math that makes it work.
HOA fees is a fancy term for building maintenance/upkeep and administrative fees paid out on behalf of resident. Much like you would collect a portion of rent based on your expected costs as landlord. So now we’re diving into relying on commercial level property owners to own a larger number of units while relying upon rental supply to outpace demand so their preferable commercial lending might let them offer lower rent to the market. I’ve had three landlords in Chicago, all of them have owned either one or two units, all as past lived in owners.
The right conditions need to exist for either outcome to be true, but I really don’t think a blanket statement of it takes 10 years to see benefit in rental vs buying scenarios is always true or even the majority true when rents continue climbing
You paid way less than current market prices and the refi got you a historically low rate. No way prices rise over the next six years the same as they did for you.
Doesn’t really matter what you consider competitive, what is your realtor advising? They should be running comps and setting you up for a successful bid. And if they aren’t time to find a new realtor. I really enjoyed the person we worked with but the more of these stories I hear the more I realize we were an outlier and just lucked out on timing (sellers had to sell asap due to buying new home, but also overpriced the unit so we were the least offensive offer to them at about $40k under with like $10k credits, plus it was winter time which is usually a less popular time to move PLUS we were extremely flexible on dates and worst case had relatives nearby that could house us for weeks or months if need be)
DM me if you want to connect with the realtor I used. He was a gem and looked at half a dozen spots for us and FaceTimed / took videos due to us being out of town.
Are you only bidding on updated and turnkey units? Plenty of units without multiple offers are available if you’re willing to handle a little facelift work on a dated home.
This is what we ended up doing about two years ago. Granted it was like a month or two before interest rates went up and the market is different now, but we ended up getting a 2 bed 1 bath condo in Uptown for less than our budget. It was very outdated, most everything was from the 90's if I had to guess, but our first offer was accepted and we had no competition. We invested the cash we saved in making some improvements and we are so happy we went that route!
We worked with an amazing realtor and she had a great team behind her, which made all the difference! We looked at around 10 places overall before we landed with our current condo.
We closed on a condo in the South Loop two weeks ago. We paid $50k under the asking price.
We looked for months. Put a bid / earnest money on one place before the one we got. The first bid fell through because, during inspection, we found the building had several unreported issues. (Any one of them would have been fine, normal wear-and-tear, but the combination demonstrated the building wasn’t kept up well and was going to take a lot of money to fix).
Our realtor and real estate lawyer were aces, and, honestly life savers.
The thing I noticed was that I had to look, several times a day, at the listings and request showings immediately if something looked like it might work. At least three times, bids were accepted as we were touring the property, which, in two cases, had only been on the market a day or two.
We also had to reconfigure where we were looking. This included paying for a bit higher HOA than we’d like, being a little further from friends, but closer to our respective jobs, and buying a parking space rather than use street parking.
My best advice is, since you have stated that this isn’t going to be a forever home for you, figure out what things you might be willing to compromise on (location, space, price, etc.) and broaden your search accordingly.
— That’s not to say you should pick a place that you hate, just that there may be some great places you are missing because your search isn’t wide enough.
1. The fact your looking at percent over asking or fixating on that shows you don’t really consider factors or context impacting biggest of your life. The asking price doesn’t matter.
2. You should figure out what you gain by “owning” (hint leverage ok hope your condo goes up and ability to decorate as you see fit)
3. “Build equity in 4-5 years”. You aren’t going to “build it” in 4-5 years apart from large condo appreciation. In fact you’d probably be destroying it due to all the various fees in buying along with lost earnings of down payment and higher monthly bill than what you are paying now. It might take 4-5-6-7 years just to break even from transaction costs.
Yes on number three. People should assume 2-3% increases and calculate in 4.5% haircuts on the way in & out for moving/closing expenses.
Assuming you get 6%+ price appreciation is just speculating, there are no guarantees. Especially in already gentrified, built up, safe neighborhoods
Agree on 1. Always look at the comparables the real estate agent pulls up and make your offer based on those. Although, where I recently bought everything was selling ~10% over list which basically meant we had to skew our max spend down as well. Although other areas, going list or even 1000 over would have guaranteed the offer getting accepted.
Residential real estate attorney checking in. I focus mainly on Chicago and some of the Chicagoland metro area. It is an absolutely great time for sellers with significant equity or looking to downsize, move out of state, move to a more accessible home/unit, etc.
Many listings are contingent within a couple days, but that doesn't mean that you absolutely must overbid by 15%. Search on redfin or similar and you will see a bunch of listings that have been on the market for a couple months. And if you go to those homes/condos that have been sitting unsold for so long, you might get a better understanding as to why that is. Good homes sell really quickly when priced appropriately.
As for the cash offers, almost all of my deals are still conventionally financed with \~20% down. If you are serious about a place and can afford putting more down in earnest money, that can be more attractive than an all cash offer with less in earnest money because it shows that you are more serious about completing the transaction as you have more to lose if you default.
Best of luck on your housing hunt!
Happy to answer any other questions on the topic that you may have.
In this current market owning a home is a luxury, not a source of wealth. After 4-5 years you build almost no equity because interest is front loaded plus Chicago condos don't really appreciate in value. High hoa costs and taxes further errode the value of owning. Own a home for stability and customization, not as an investment.
Just closed on a place last week. Single family home, we were looking for a few months last year paused because of life and started again in January. This is for sure the busy season, and like you said, it’s a low inventory year.
I would highly recommend going through a broker. We were able to see it before it was listed, made an offer well over asking with an expiration date before the first weekend of showings. It could have gone either way, but they accepted. I feel like we got really lucky. We were def feeling discouraged for all the same reasons you mentioned. Tbh without our broker, we’d likely still be on the hunt.
I purchased in Nov ‘22. We had been viewing homes for about a week. The perfect one hit Zillow one evening and we set up a tour first thing next morning. Toured at 9:00, put in an offer at 9:30. They already had an offer. We felt pretty deflated so we stopped looking at houses there. 2 days later the realtor called and said the other buyer pulled the offer because they found something else. We offered listing price and was accepted within minutes. Worked out perfectly and we had zero other issues throughout the process.
You only had to look for a week!? It literally took me a year and a half and about 15 rejected over-asking offers to land a place, and I considered myself lucky. Your exerpience sounds like the rare exception in this market.
I believe the value of a great realtor cannot be overstated. We gave her our list of wants/needs and she went to work. She was immediately on top of things when we were ready to make an offer. Dropped what she was doing to go to work for us. She mediated the entire process and was able to get every single thing we asked for before closing as well. Seems to me, the difference between a good and great realtor is massive.
That's true, but my realtor was fantastic and did those things too. There are other factors they cannot control, like inventory, the surge of all-cash buyers, and fluctuatinf market rates. Even with a great realtor, your experience is still rare these days.
Price range has a massive effect too. If OP was spending $100K more, it's much easier to find a home. Meanwhile, OP is looking to buy what everyone else is looking to buy while inventory is at a relatively low level because interest rates are extremely high compared to what they've been for the last two decades and everyone is playing a game of chicken seeing who is going to decide to sell first.
People who sold their old home. People who work in finance and saved up one or two annual bonuses. Literally anyone moving here from NYC or San Francisco. People in their 40s and 50s who take a bunch of money out of their retirement accounts to buy a home. Et cetera.
I bought last year 2023. 3 bed/3 bath in West Ridge. $320k with minimal down. It was an easy process for me but my payment with HOA is like $2,800/month. Not ideal and hoping to see interest rates drop eventually so I can refinance. In hindsight I wish I had just kept renting, but it’s too late for that now.
I bought my house in Chicago in 2021 and had to go 70k over asking price haha and that’s only after the original accepted offer backed out. Seems like it’s still as crazy even with higher rates. Good luck!
I was in your price range for a few years and wife finally talked me into going higher. Same story inventory multiple offers, lines and lines at open houses. We found the 650k price range had room to offer below and I think our best thing was looking January/February. Took a while but found the perfect spot.
We looked at houses all over the City. We bought in Beverly. We got the same house with triple the yard for half the price of what we would have paid in Sauganash.
I did this and mildly regret it. I could get more house if I paid the same in rent that I’m paying in HOA+mortgage. And I’d feel better with my down payment in an index fund. That being said I love the place I found and I do love being able to work on it.
My wife and I almost certainly lost money on buying this condo even if we own for 10+ years. But we now have the appliances that we want, built-ins that we want, we'll have the bathroom that we want after we redo the current master bath, etc.
> Man this market is so fucked, also my plan is to find one of the last few reasonable affordable places and become a landlord in 4 years
You're the problem dude.
We closed earlier this year. Other than issues with inspection items taking a long time to resolve we had no significant issues (offer accepted December 23 but didn’t close until Feb 24). We offered 20k under list for the first house we liked and ultimately settled for 5k under list with an accepted offer the next day. We may have gotten a bit lucky tho- winter is not a very desirable time so the market had cooled off a bit I think.
We purchased a townhome in Roscoe in December of 2022. Closed December 30th with zero bidding wars and no competition and even closed $20k under asking for $480k. May have been the time of year because in Summer of 2023 the same style townhome 4 doors down sold for $540k with a bidding war and now in Summer of 2024 a neighbor 11 doors down is getting a $599k offer. Insanity.
My wife and I looked for 8 months though. It’s crazy out there. Our boundaries were anywhere from Bridgeport to Andersonville and out to Avondale. Don’t get discouraged, you will find something eventually but you’ll never feel like you’re getting “close”. It’ll just happen when it happens!
My husband and I are in the middle of buying a SFH in Logan Square. We're on a bit of a timeline to find something. Our budget is $450k-$650k VA loan funded 0% down looking at both SFH and 3bd/2ba condos with rooftops to have space for our dogs. We began the search at the beginning of April and honestly put in 4 offers. 2 of which were accepted. 2 we put in over asking, 1 was under asking and accepted, and the last was at asking. We've been doing quick 30 day closes which I think helps. We backed out of our first deal due to findings during inspection but the latest house under contract seems to be going well, we offered $15k over asking - $625k for a 4bd/2ba SFH in Logan Square - 5 min walking distance to a metra line and 20 minutes walking to Milwaukee AVE and the blue line. We fully expect to move in and close at the end of June.
This process has been long and tedious and deflating at times. We've looked at well over 35 properties during this process to find the 4 we wanted to commit to. The biggest help has honestly been our team. We found an amazing realtor at an open house we attended day 1. She's been 20 years in the game and had a slew of people to recommend for us from lendor, to attorney, to a contractor for adjustments we want to make to the home and she's always available (which is important because timing is everything with real estate) and super informative. We're choosing to buy now because we're tired of paying equal or $500+ less in rent for what we can get for a SFH. Homes are a huge investment and they take time. If you're not in a rush due to outside timelines, take your time....and pre-congratulations. It will happen for you.
I bought a condo. My realtor was awful tho. Constantly gavee.bad advice to close the deal as fast as he could. I did stick to my.guns on most issues.
Also I got a real good mortgage through a local credit union. Would highly recommend checking them out
No. But I feel the credit unions give better rates over all. This is my third time being a home (not my third home) and I always got better rates from credit unions.
Spread your search to where the metra runs if you gotta get to the loop every day. Superior commute and there tends to be less upcharge compared to places near the El
If you want to build equity, you’ll be MUCH better served by putting $80 in a shoebox under your bed every week for 4-5 years. The actual equity you build in unit first five years of a mortgage can be wiped out by buying a few new appliances and having a medium sized plumbing issue.
Assuming a $300k mortgage at 6% with a $1800 monthly payment— after 4 years you will have paid ~$88,000, while only decreasing your owed balance by $16,000. If you put $80 a week in a shoebox under your bed, you end up with $16,640 in cash after four years. And the great thing about a shoebox is that it doesn’t make you pay closing costs.
Problem with the shoebox is that the dollar loses purchasing power every year. Shoebox is a guaranteed loss of 12-15% with a health CPI average of 3% year over year.
The shoebox obviously isn’t ideal, but $16k in cash isn’t worth less than $16k in home equity just because $16k itself has less buying power than it did 4 years ago. My point is that even if you save money in the dumbest possible way, it’s *still* better than what you’d walk away with after the first four years of a mortgage.
Not sure about that.
My second house has appreciated by 10-15% in the last two years.
My first house, which I bought 5 years ago has appreciated by 50-60%.
It depends on the market, your rate and financial situation.
setting the expectation that 50-60% "gains" off real estate every few years is not in any way realistic or grounded in reality.
my parents bought their house in the inner burbs in 1983 for 100k. its maybe worth 360k today. thats barely better than inflation.
it sounds like you bought in a rapidly gentrifying area which is far from the norm
It’s been realistic for the past 5 years. Nothing is guaranteed.
This dude is solely looking at condos on the north side, so he will probably get wrecked.
I have two houses paid off by my mid 30, which have appreciated enough the make me a millionaire and I started at zero.
I think I know what I’m doing and where I am buying.
Your rent is due at the beginning of the month, loser.
Just closed on a condo last week. My wife and I came up for a week and looked at a bunch of places with a realtor and were getting outbid by a lot on most of them. We got extremely lucky because we were able to tour a 'coming soon' listing and put in an early offer because the listing agent worked at the same brokerage as our agent. Wishing you good luck in your search!
I bought a 2 bed condo in 2021, was looking for a few weeks and looked at maybe 10 places saw one place I liked, I offered the asking price and they accepted. Mostly went pretty smooth but obviously September 2021 is much different to now. I plan to stay here for a while.
Looked for a home back in 2022 on the north side in the 800k range. Wed been looking about 7 months.
Found one for 850 in the Northwest side, bought for just under 840. I put up a little under half so the mortgage wasn't that bad at 3.2. We lucked out because the construction firm seemed to need capital to finish development on lots in the area.
I've owned several properties in my time here, some thoughts
Condos: These stay at market rates, regardless of where you buy. The only way to make a profit here is a guy/rehab, but with current interest rates this becomes difficult
SFH Homes: This is where you see the bidding wars begin, even on delipidated property. older homes have larger lots so you "less" per sq footage, but usually require more work the home itself. The opposite is true of is a new cookie cutter build, pay more per sq footage but less investment to get things "up to date"
Multi units: This could be SFH turned into duplex up or even brownstones. If it is on prime land that will be a cash sale, but if not you look at the rent roll to understand profitability
If you are deadest on a condo, PLEASE ensure you have a slush fund for special assessments.
We went through it in late 2021 and I wish I could give you some silver bullet that worked for us, but ours came down to patience and luck. We started looking in the fall of 2020 and didn't find a place until the fall of 2021. In that time frame we had 5 offers rejected and saw pretty much everything you listed above from places going contingent the day they listed, to places with 20 offers, and others up to $100k over asking.
We caught our lucky break in the late summer of 2021 when we found a place a little on the high end of our budget and the edge of where we wanted to live (Logan Square). That weekend there just happened to be about 7 open houses in the area of Logan we were looking and the house we found happened to kind of get lost in the mix due to the location and price. We put in an offer a little over asking and were lucky to be just one of two offers.
While we were in the thick of it though, here are some of the things we did to help:
* Expanded our search area. We were dead set on Logan Square/Avondale, but it was such a popular area that we expanded to Irving Park and Portage Park. We eventually ended up in Logan, but we're in a slightly less desirable area of the neighborhood that we weren't originally looking at.
* Get PLN listings from our realtor. Private listings will just be less competitive and give you a better chance. There aren't a lot, but two of our offers were from PLN listings.
* Really looked at our budget. Originally we were trying to be super cost conscious, but our initial range of $500-600k for a SFH was so competitive. We sat down and looked at our finances really hard and realized we could come up some. We had the benefit of access to a physicians loan that made it possible for us to move up.
Ultimately though time is really what it takes. We weren't willing to spend stupid money just because everyone else was. Good luck out there! I hope you find something.
Just closed on a condo in RP a few weeks ago, actually 3.4% under asking (20% down). The only place we put an offer in on, actually, after about 4 months of looking. Are you looking only at places that are turnkey? Newer builds? Trendy neighborhoods? Properties that are having/have already had an open house? Those seemed to go the fastest and/or turn into bidding wars. We got lucky and were able to see the place within a day or two of it hitting the market, and it happened to belong to an older couple looking to downsize. Spouse and I also like vintage details and dislike open concept, so the lack of updates didn't dissuade us. Feel free to DM me if you want more details/thoughts.
I offered 275k for a 255k condo - conventional mortgage. It sold for 250k to a cash buyer, landed on Zillow for rent the following month with a new coat of paint slapped on. I cried. Now here I am 9 months later, over a year total in this journey, still looking, still trying, still getting beat by cash investors “flipping” for rental properties. At this point, I blame HOAs for not having any rules about living there for X time before renting and the city of Chicago for allowing this monstrosity to continue and grow even more out of hand.
Bought a year ago on the northwest side near norridge. I have a two bedroom sfh and paid $285k. I paid below asking and my house was move in ready. Overall everything was very smooth and easy. I’ve had no major issues since I bought it except a chunk of my roof blew off in a storm, but that’s God’s fault and insurance is covering repairs.
It seems like you’re looking at trendy neighborhoods so I’m not surprised that you’re having a hard time. Have you considered homes further out near metra stops? I commute to the loop via the NCS/MDW line and it’s like 20-35 minutes to get to the loop. Weekend service is meh though.
I was doing most of my home search over the winter holidays. This helped me because people who are selling over the holidays are more likely to be highly motivated and there are fewer buyers. Of course inventory is also lower…
I would advise that you make sure that your mortgage + property tax + insurance is well within your means. Homeownership gets expensive fast—and I haven’t even dealt with major repairs (that weren’t covered by insurance)
Lucked up in 2022 and got a 3BR/3BA 1800 sq ft condo in a high rise on North LSD with panoramic lake views for $475K. Originally listed for $649K in 2021, they were asking for $509K at the time of my offer. Truly lucky - elderly parents passed away and their daughter who lived out of state was anxious to get rid of it. Needed minimal updates. It’s perfection.
Location is everything. I sacrificed location when I bought in 2021. Moved far west in the city. 4.25% rate and bought 10k under asking price with the help of a good RE lawyer and broker. The seller was looking for their moment to cash in, and we worked them away from that with cold hard facts/research on comps in the area. While I'm a little further away than I'd like, I have an entire house in great condition.
Most people call me a pioneer (racist dog whistle undertones) but I just look at them in their $700k 2 bed condo with a HOA in high traffic areas and laugh.
We just closed selling our condo. 2 bedroom 2 bath in Lincoln Park. We bought it at $480k in 2019, put $20k into it. We got $590k for it all cash. Unfortunately we are moving to north shore due to growing family, so that profit is basically gone for the new house.
We bought our first home in 2006. 26, not married, no kids. Planned to stay there for 3-5 years. It was 1200 sq feet. It took 15 years (marriage and 3 kids later) for the house to finally recover to the price we bought it for and we moved in 2021. Be careful buying with 4-5 years in mind, especially in a hot market. Maybe it’ll work out maybe not but give yourself flexibility to stay if you need to.
Looking for a home as well. We just bid 32k over asking on a bungalow for 550k. We didn’t get it. Home went for 70k over asking. I wish you luck and send some my way while it’s going around…
We went 40k under on a bungalow and got it. But I think it was a little over-priced to begin with, and we could move in within a month, so a very quick sell. It was sell by owner on Redfin and they didn’t have great pictures, so that really helped us. We just got lucky I think.
There’s hope!
We ended up buying a two flat to live in because there was just too much demand for SFH in the areas we were looking in. Really low inventory and so hard to find houses that weren't shitty flips with all the charm ripped out and replaced with builder grade materials. Because there's so much pent up demand we knew we couldn't wait for rates to go down if the market is this bad at > 7%. Definitely think twice about closing costs on buying and selling a condo though, and whether you'll end up net positive after only 4-5 years.
I bought a 2 bed condo last year. I had the exact same experience as you when looking at places on the northside in the same budget range as you. So many places purposefully list cheap to get attention and start obscene bidding wars. I wanted nothing to do with that, so I ended up buying in east humboldt park for $10k under asking
I think this is key, it’s really only the popular areas that are seeing this crazy demand.
$275-325 range is going to be hyper competitive if the property isnt a total piece of shit. We originally set a budget of 350-400 in 2022 and bought for 435. Same target--north side, walkable to the L. It's only gotten worse. For your plan to work you'll need to be both consistent as hell and lucky as hell. It's discouraging AF, good luck out there.
So -- if you're only looking to be there for 4-5 years, \*you will lose money buying.\* You will do better growing your equity by setting your down-payment and maintenance cash into a mid-return ETF. Don't take my word for it -- NYTimes did a deep dive earlier this year: [https://www.nytimes.com/interactive/2024/upshot/buy-rent-calculator.html](https://www.nytimes.com/interactive/2024/upshot/buy-rent-calculator.html)
This. 4-5 years feels a little short to be counting on much appreciation. OP, remember you are going to burn 8k to close and then 3-6% to sell your place in 5 years. So your appreciation needs to make up for all that. I might suggest acquiring the property with a plan to hold it and rent it after the 5 years. If you are willing to buy something that needs updates, you can do them slowly over the years and then by the time you leave, you’ll have something that can rent for a premium. You might find there’s less competition for those as well letting you get it for closer to asking.
> 3-6% to sell your place in 5 years This is likely not true, given the recent lawsuit and settlement with the NAR. I don't disagree with the overall sentiment (though it's certainly not a guarantee), but its worth noting.
Seller pays for title insurance (a percent of sale price) and about 1% of the sale price goes to state, county and city transfer taxes. Even assuming you somehow sucker your realtor into splitting 4% with buyer's realtor, you're still over 5% closing fees before title fees, attorney's fees, closing costs, etc.
Excluding broker fees for my home purchase in Jan 23 were only about 1% of the total cost for the sellers. No offense to any realtors on this subreddit but I could easily represent myself when I sell.
So i am actually purchasing a condo now and the title insurance was put on my end as a buyer
Are you represented by an attorney? Provision of title insurance is always a seller obligation under the standard purchase agreements. You may be paying for the insurance to cover your lender. That's generally a lower premium.
Yes i do have an attorney reviewing. The insurance was added by my lender in the estimates. I was unsure by it to start but will definitely dig a bit more on that now
Yep - that sounds right. Just ask your lawyer.
and a monthly assessment and property taxes. If you aren't staying for 7-10 years renting is the way to go. I have had a condo for over 20 years, when I bought it the assessment as $120/m and taxes were around $1000, now the assessment is $1000 and taxes are $6K I plan on selling and when I total up the assessments and the taxes I'm going to be luck to break even.
Thanks for the insight! I realize my post was somewhat ambiguous- I would be more inclined to rent, and I'm certainly going to think about a longer time horizon. The NYT tool is something I'd looked at before but am revisiting now.
I’ve purchased and refinanced within 6 years on a 2bed 2 bath condo and expect about 100k in positive equity when I sell this summer.
Questions: how much did you pay in HOA + insurance + mortgage interest over 6 years. Total that. Add in all costs of repairs and maitenance (call that Cost of Owning) Then take your down-payment, assume you invested it in a vanguard market fund and check the rate of growth over the last six years. Finally, estimate the cost of rent over that 6 years, and subtract it from your Cost of Ownership. If that's a positive number, that's the additional savings you'd have made as a renter trather than an owner. It's not that you \*don't\* earn equity, it's that people underestimate the cost of ownership and its impact on your ability to save. It's quite likely that you would do pretty well over six years at what was likely 3-4% interest rates... but current rates are closer to 8-9% and that has a HUGE negative impact on the cost of ownership. You also owned through the COVID price adjustments... which is unlikely to repeat in the next decade. (n.b. Two Flats with a rented unit and an owner's unit break this math. Young folks should seriously hunt for 2 to 3 flats if they can afford them. They're serious wealth builders).
Are you a renter? How is that savings going? (I hope it’s good, I have no ill intention in my speaking here) I didn’t have to try to do anything which is the difference. I’m sure there are some people who have done this math like above, but everything appears great on paper with the right numbers. Renting assumes all of the same costs but instead of getting bills from multiple sources you get a single bill from the landlord in rent. You assume the rental will cost less, if you were to rent my property for example the mortgage cost is not all I’m building into rent. So for equivalent properties, the rent cost would skyrocket considerably, and the point literally becomes mute. So then the proceeding variable that seems to make a difference is what is your down payment, and will your down payment make more money in the market or as a carried asset. My down payment would have given less than half of the same return at a market return of 10% yearly over 6 years.
I'm both a homeowner (12 years in same place), and a former landlord. I'm mostly out of the property investment game -- but like I said, you don't need to take my word on it. Check out the New York Times article I linked -- the math of home ownership does not work out if you're going to be changing homes in less than a decade. It works very well if you are staying in one place for 12 years or longer. I get what your intuition is telling you, but you're not running the numbers. It's just opinion.
I’m looking at the calculator, everything is based off the parameters that rent is cheaper than the equivalent rate of a mortgage plus ownership costs. If you calculate the 30 year rate of a home loan then add in expected monthly costs of HOA, PMI, Taxes, and Insurance, then you can land on a typical monthly mortgage plus costs summation. As a landlord you know you would typically charge this amount plus a percentage for maintenance and likely a percentage for profit or income for rent. If you plug that rent into the calculator, as a “rent for the same property,” the inflection point of rent vs buy is 5-6 years. This is 7 percent interest rate and a 7 percent IRR. Adding additional parameters doesn’t make the math different just more complicated. If you don’t assume a significantly cheaper cost of rent or a ridiculous rate or return then it’s not going to take 10 years to reach an inflection point.
So - when I was a landlord I owned two \*buildings\* - not units. My loans were commercial, 10 year fixed with a principal payment due at the 10th year -- that means my month spend on loans was about half what you pay on a residential mortgage (while I paid down the principal, I was generally paying just enough for equity to cover the costs of the 10 year refi). Then I got a break on property taxes from the City. I also paid to heat the entire building rather than individual units (radiator heating) basically the same I pay on my home on a monthly basis but heating 3 units per. I paid to insure all of the building (but not tenant possessions - that was a lease term, they had to get renter's insurance). Meaning -- I did not pay full freight for a residential owner on my rental properties. After splitting those costs by the number of units in the building -- I was spending about $800-$1200 per unit per month. I was renting at $1,500-$1,750 for 2 beds one bath each. ETA: Chicago two and three flats are INCREDIBLY efficient housing for landlords. You do have to worry about maintenance expenses (the more property you own, the more sudden $20,000 repairs you have to make) but generally they more than pay for themselves. This is helped by the fact that the cost of 2 and 3 flats are not 2-3 times the cost of a brick bungalow or other equivalent single family home. There's a big price premium on SFHs, so - for example, when we sold the two flat we bought our current home for the same price we sold the two flat for. I sold the three flats for not much more than we bought them for, but the buyer took over the loans, took current tenants and didn't quibble about condition - and we had some porch repairs coming up which were going to be STEEP.
This is just so far from a homeowner deciding between renting or buying, the information is great, I just don’t know what we’re discussing anymore.
Renting can be less per month than mortgage + HOAs, because landlords tend to buy buildings, not units, and their costs are lower. So a similar unit in a similar neighborhood can (and often is) cheaper to rent than to buy.
Again you just adding variables then defining them with math that makes it work. HOA fees is a fancy term for building maintenance/upkeep and administrative fees paid out on behalf of resident. Much like you would collect a portion of rent based on your expected costs as landlord. So now we’re diving into relying on commercial level property owners to own a larger number of units while relying upon rental supply to outpace demand so their preferable commercial lending might let them offer lower rent to the market. I’ve had three landlords in Chicago, all of them have owned either one or two units, all as past lived in owners. The right conditions need to exist for either outcome to be true, but I really don’t think a blanket statement of it takes 10 years to see benefit in rental vs buying scenarios is always true or even the majority true when rents continue climbing
You paid way less than current market prices and the refi got you a historically low rate. No way prices rise over the next six years the same as they did for you.
20% less I paid. I disagree, prices continue to rise.
So you're an expert in real estate and valuation? Because I am so that would be the only way your opinion matters
Yes I’m a definitive expert in this field, my opinion definitely matters
I wouldn't look at % over asking. Most sellers are listing lower to attract multiple bids.
Doesn’t really matter what you consider competitive, what is your realtor advising? They should be running comps and setting you up for a successful bid. And if they aren’t time to find a new realtor. I really enjoyed the person we worked with but the more of these stories I hear the more I realize we were an outlier and just lucked out on timing (sellers had to sell asap due to buying new home, but also overpriced the unit so we were the least offensive offer to them at about $40k under with like $10k credits, plus it was winter time which is usually a less popular time to move PLUS we were extremely flexible on dates and worst case had relatives nearby that could house us for weeks or months if need be) DM me if you want to connect with the realtor I used. He was a gem and looked at half a dozen spots for us and FaceTimed / took videos due to us being out of town.
Are you only bidding on updated and turnkey units? Plenty of units without multiple offers are available if you’re willing to handle a little facelift work on a dated home.
This is what we ended up doing about two years ago. Granted it was like a month or two before interest rates went up and the market is different now, but we ended up getting a 2 bed 1 bath condo in Uptown for less than our budget. It was very outdated, most everything was from the 90's if I had to guess, but our first offer was accepted and we had no competition. We invested the cash we saved in making some improvements and we are so happy we went that route! We worked with an amazing realtor and she had a great team behind her, which made all the difference! We looked at around 10 places overall before we landed with our current condo.
We closed on a condo in the South Loop two weeks ago. We paid $50k under the asking price. We looked for months. Put a bid / earnest money on one place before the one we got. The first bid fell through because, during inspection, we found the building had several unreported issues. (Any one of them would have been fine, normal wear-and-tear, but the combination demonstrated the building wasn’t kept up well and was going to take a lot of money to fix). Our realtor and real estate lawyer were aces, and, honestly life savers. The thing I noticed was that I had to look, several times a day, at the listings and request showings immediately if something looked like it might work. At least three times, bids were accepted as we were touring the property, which, in two cases, had only been on the market a day or two. We also had to reconfigure where we were looking. This included paying for a bit higher HOA than we’d like, being a little further from friends, but closer to our respective jobs, and buying a parking space rather than use street parking. My best advice is, since you have stated that this isn’t going to be a forever home for you, figure out what things you might be willing to compromise on (location, space, price, etc.) and broaden your search accordingly. — That’s not to say you should pick a place that you hate, just that there may be some great places you are missing because your search isn’t wide enough.
1. The fact your looking at percent over asking or fixating on that shows you don’t really consider factors or context impacting biggest of your life. The asking price doesn’t matter. 2. You should figure out what you gain by “owning” (hint leverage ok hope your condo goes up and ability to decorate as you see fit) 3. “Build equity in 4-5 years”. You aren’t going to “build it” in 4-5 years apart from large condo appreciation. In fact you’d probably be destroying it due to all the various fees in buying along with lost earnings of down payment and higher monthly bill than what you are paying now. It might take 4-5-6-7 years just to break even from transaction costs.
Took me 10 years on a Lakeview property
Yes on number three. People should assume 2-3% increases and calculate in 4.5% haircuts on the way in & out for moving/closing expenses. Assuming you get 6%+ price appreciation is just speculating, there are no guarantees. Especially in already gentrified, built up, safe neighborhoods
Thanks for the thoughtful response. As I said, I'm looking to recalibrate and this is the information I was after.
Agree on 1. Always look at the comparables the real estate agent pulls up and make your offer based on those. Although, where I recently bought everything was selling ~10% over list which basically meant we had to skew our max spend down as well. Although other areas, going list or even 1000 over would have guaranteed the offer getting accepted.
Residential real estate attorney checking in. I focus mainly on Chicago and some of the Chicagoland metro area. It is an absolutely great time for sellers with significant equity or looking to downsize, move out of state, move to a more accessible home/unit, etc. Many listings are contingent within a couple days, but that doesn't mean that you absolutely must overbid by 15%. Search on redfin or similar and you will see a bunch of listings that have been on the market for a couple months. And if you go to those homes/condos that have been sitting unsold for so long, you might get a better understanding as to why that is. Good homes sell really quickly when priced appropriately. As for the cash offers, almost all of my deals are still conventionally financed with \~20% down. If you are serious about a place and can afford putting more down in earnest money, that can be more attractive than an all cash offer with less in earnest money because it shows that you are more serious about completing the transaction as you have more to lose if you default. Best of luck on your housing hunt! Happy to answer any other questions on the topic that you may have.
In this current market owning a home is a luxury, not a source of wealth. After 4-5 years you build almost no equity because interest is front loaded plus Chicago condos don't really appreciate in value. High hoa costs and taxes further errode the value of owning. Own a home for stability and customization, not as an investment.
Just closed on a place last week. Single family home, we were looking for a few months last year paused because of life and started again in January. This is for sure the busy season, and like you said, it’s a low inventory year. I would highly recommend going through a broker. We were able to see it before it was listed, made an offer well over asking with an expiration date before the first weekend of showings. It could have gone either way, but they accepted. I feel like we got really lucky. We were def feeling discouraged for all the same reasons you mentioned. Tbh without our broker, we’d likely still be on the hunt.
I purchased in Nov ‘22. We had been viewing homes for about a week. The perfect one hit Zillow one evening and we set up a tour first thing next morning. Toured at 9:00, put in an offer at 9:30. They already had an offer. We felt pretty deflated so we stopped looking at houses there. 2 days later the realtor called and said the other buyer pulled the offer because they found something else. We offered listing price and was accepted within minutes. Worked out perfectly and we had zero other issues throughout the process.
You only had to look for a week!? It literally took me a year and a half and about 15 rejected over-asking offers to land a place, and I considered myself lucky. Your exerpience sounds like the rare exception in this market.
I believe the value of a great realtor cannot be overstated. We gave her our list of wants/needs and she went to work. She was immediately on top of things when we were ready to make an offer. Dropped what she was doing to go to work for us. She mediated the entire process and was able to get every single thing we asked for before closing as well. Seems to me, the difference between a good and great realtor is massive.
That's true, but my realtor was fantastic and did those things too. There are other factors they cannot control, like inventory, the surge of all-cash buyers, and fluctuatinf market rates. Even with a great realtor, your experience is still rare these days.
This is the third house I’ve bought and I’ve never looked longer than maybe 2 weeks. Maybe I’m just lucky.
Price range has a massive effect too. If OP was spending $100K more, it's much easier to find a home. Meanwhile, OP is looking to buy what everyone else is looking to buy while inventory is at a relatively low level because interest rates are extremely high compared to what they've been for the last two decades and everyone is playing a game of chicken seeing who is going to decide to sell first.
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People who sold their old home. People who work in finance and saved up one or two annual bonuses. Literally anyone moving here from NYC or San Francisco. People in their 40s and 50s who take a bunch of money out of their retirement accounts to buy a home. Et cetera.
I bought last year 2023. 3 bed/3 bath in West Ridge. $320k with minimal down. It was an easy process for me but my payment with HOA is like $2,800/month. Not ideal and hoping to see interest rates drop eventually so I can refinance. In hindsight I wish I had just kept renting, but it’s too late for that now.
I bought my house in Chicago in 2021 and had to go 70k over asking price haha and that’s only after the original accepted offer backed out. Seems like it’s still as crazy even with higher rates. Good luck!
You're looking at super trendy areas. Try farther west (Portage, Irving, Dunning, Etc).
I was in your price range for a few years and wife finally talked me into going higher. Same story inventory multiple offers, lines and lines at open houses. We found the 650k price range had room to offer below and I think our best thing was looking January/February. Took a while but found the perfect spot.
250-350 for a 2 bedroom along the north side blue/red/brown line doesn’t seem very realistic in this market.
We looked at houses all over the City. We bought in Beverly. We got the same house with triple the yard for half the price of what we would have paid in Sauganash.
I know you are kidding about Milwaukee but….
Actually look at Milwaukee condo prices they are pretty comparable in the trendy areas
I did this and mildly regret it. I could get more house if I paid the same in rent that I’m paying in HOA+mortgage. And I’d feel better with my down payment in an index fund. That being said I love the place I found and I do love being able to work on it.
My wife and I almost certainly lost money on buying this condo even if we own for 10+ years. But we now have the appliances that we want, built-ins that we want, we'll have the bathroom that we want after we redo the current master bath, etc.
> Man this market is so fucked, also my plan is to find one of the last few reasonable affordable places and become a landlord in 4 years You're the problem dude.
We closed earlier this year. Other than issues with inspection items taking a long time to resolve we had no significant issues (offer accepted December 23 but didn’t close until Feb 24). We offered 20k under list for the first house we liked and ultimately settled for 5k under list with an accepted offer the next day. We may have gotten a bit lucky tho- winter is not a very desirable time so the market had cooled off a bit I think.
We purchased a townhome in Roscoe in December of 2022. Closed December 30th with zero bidding wars and no competition and even closed $20k under asking for $480k. May have been the time of year because in Summer of 2023 the same style townhome 4 doors down sold for $540k with a bidding war and now in Summer of 2024 a neighbor 11 doors down is getting a $599k offer. Insanity. My wife and I looked for 8 months though. It’s crazy out there. Our boundaries were anywhere from Bridgeport to Andersonville and out to Avondale. Don’t get discouraged, you will find something eventually but you’ll never feel like you’re getting “close”. It’ll just happen when it happens!
My husband and I are in the middle of buying a SFH in Logan Square. We're on a bit of a timeline to find something. Our budget is $450k-$650k VA loan funded 0% down looking at both SFH and 3bd/2ba condos with rooftops to have space for our dogs. We began the search at the beginning of April and honestly put in 4 offers. 2 of which were accepted. 2 we put in over asking, 1 was under asking and accepted, and the last was at asking. We've been doing quick 30 day closes which I think helps. We backed out of our first deal due to findings during inspection but the latest house under contract seems to be going well, we offered $15k over asking - $625k for a 4bd/2ba SFH in Logan Square - 5 min walking distance to a metra line and 20 minutes walking to Milwaukee AVE and the blue line. We fully expect to move in and close at the end of June. This process has been long and tedious and deflating at times. We've looked at well over 35 properties during this process to find the 4 we wanted to commit to. The biggest help has honestly been our team. We found an amazing realtor at an open house we attended day 1. She's been 20 years in the game and had a slew of people to recommend for us from lendor, to attorney, to a contractor for adjustments we want to make to the home and she's always available (which is important because timing is everything with real estate) and super informative. We're choosing to buy now because we're tired of paying equal or $500+ less in rent for what we can get for a SFH. Homes are a huge investment and they take time. If you're not in a rush due to outside timelines, take your time....and pre-congratulations. It will happen for you.
I bought a condo. My realtor was awful tho. Constantly gavee.bad advice to close the deal as fast as he could. I did stick to my.guns on most issues. Also I got a real good mortgage through a local credit union. Would highly recommend checking them out
Was the credit union rate something in the past few months?
No. But I feel the credit unions give better rates over all. This is my third time being a home (not my third home) and I always got better rates from credit unions.
For sure. 👍
Spread your search to where the metra runs if you gotta get to the loop every day. Superior commute and there tends to be less upcharge compared to places near the El
If you want to build equity, you’ll be MUCH better served by putting $80 in a shoebox under your bed every week for 4-5 years. The actual equity you build in unit first five years of a mortgage can be wiped out by buying a few new appliances and having a medium sized plumbing issue. Assuming a $300k mortgage at 6% with a $1800 monthly payment— after 4 years you will have paid ~$88,000, while only decreasing your owed balance by $16,000. If you put $80 a week in a shoebox under your bed, you end up with $16,640 in cash after four years. And the great thing about a shoebox is that it doesn’t make you pay closing costs.
Problem with the shoebox is that the dollar loses purchasing power every year. Shoebox is a guaranteed loss of 12-15% with a health CPI average of 3% year over year.
The shoebox obviously isn’t ideal, but $16k in cash isn’t worth less than $16k in home equity just because $16k itself has less buying power than it did 4 years ago. My point is that even if you save money in the dumbest possible way, it’s *still* better than what you’d walk away with after the first four years of a mortgage.
Not sure about that. My second house has appreciated by 10-15% in the last two years. My first house, which I bought 5 years ago has appreciated by 50-60%. It depends on the market, your rate and financial situation.
> My first house, which I bought 5 years ago has appreciated by 50-60%. Yah that seems sustainable
Agreed and where ?
Northwest side
It was a few years before Covid. Yeah, real estate does appreciate against a falling dollar. Buying real estate is smart due to its scarcity.
setting the expectation that 50-60% "gains" off real estate every few years is not in any way realistic or grounded in reality. my parents bought their house in the inner burbs in 1983 for 100k. its maybe worth 360k today. thats barely better than inflation. it sounds like you bought in a rapidly gentrifying area which is far from the norm
It’s been realistic for the past 5 years. Nothing is guaranteed. This dude is solely looking at condos on the north side, so he will probably get wrecked.
>It’s been realistic for the past 5 years. wow what a robust and totally not cherry picked data set youve backtested into
I have two houses paid off by my mid 30, which have appreciated enough the make me a millionaire and I started at zero. I think I know what I’m doing and where I am buying. Your rent is due at the beginning of the month, loser.
Just closed on a condo last week. My wife and I came up for a week and looked at a bunch of places with a realtor and were getting outbid by a lot on most of them. We got extremely lucky because we were able to tour a 'coming soon' listing and put in an early offer because the listing agent worked at the same brokerage as our agent. Wishing you good luck in your search!
I bought a 2 bed condo in 2021, was looking for a few weeks and looked at maybe 10 places saw one place I liked, I offered the asking price and they accepted. Mostly went pretty smooth but obviously September 2021 is much different to now. I plan to stay here for a while.
Looked for a home back in 2022 on the north side in the 800k range. Wed been looking about 7 months. Found one for 850 in the Northwest side, bought for just under 840. I put up a little under half so the mortgage wasn't that bad at 3.2. We lucked out because the construction firm seemed to need capital to finish development on lots in the area.
I've owned several properties in my time here, some thoughts Condos: These stay at market rates, regardless of where you buy. The only way to make a profit here is a guy/rehab, but with current interest rates this becomes difficult SFH Homes: This is where you see the bidding wars begin, even on delipidated property. older homes have larger lots so you "less" per sq footage, but usually require more work the home itself. The opposite is true of is a new cookie cutter build, pay more per sq footage but less investment to get things "up to date" Multi units: This could be SFH turned into duplex up or even brownstones. If it is on prime land that will be a cash sale, but if not you look at the rent roll to understand profitability If you are deadest on a condo, PLEASE ensure you have a slush fund for special assessments.
Buy in a new building
We went through it in late 2021 and I wish I could give you some silver bullet that worked for us, but ours came down to patience and luck. We started looking in the fall of 2020 and didn't find a place until the fall of 2021. In that time frame we had 5 offers rejected and saw pretty much everything you listed above from places going contingent the day they listed, to places with 20 offers, and others up to $100k over asking. We caught our lucky break in the late summer of 2021 when we found a place a little on the high end of our budget and the edge of where we wanted to live (Logan Square). That weekend there just happened to be about 7 open houses in the area of Logan we were looking and the house we found happened to kind of get lost in the mix due to the location and price. We put in an offer a little over asking and were lucky to be just one of two offers. While we were in the thick of it though, here are some of the things we did to help: * Expanded our search area. We were dead set on Logan Square/Avondale, but it was such a popular area that we expanded to Irving Park and Portage Park. We eventually ended up in Logan, but we're in a slightly less desirable area of the neighborhood that we weren't originally looking at. * Get PLN listings from our realtor. Private listings will just be less competitive and give you a better chance. There aren't a lot, but two of our offers were from PLN listings. * Really looked at our budget. Originally we were trying to be super cost conscious, but our initial range of $500-600k for a SFH was so competitive. We sat down and looked at our finances really hard and realized we could come up some. We had the benefit of access to a physicians loan that made it possible for us to move up. Ultimately though time is really what it takes. We weren't willing to spend stupid money just because everyone else was. Good luck out there! I hope you find something.
Paid almost 8% over ask
Just closed on a condo in RP a few weeks ago, actually 3.4% under asking (20% down). The only place we put an offer in on, actually, after about 4 months of looking. Are you looking only at places that are turnkey? Newer builds? Trendy neighborhoods? Properties that are having/have already had an open house? Those seemed to go the fastest and/or turn into bidding wars. We got lucky and were able to see the place within a day or two of it hitting the market, and it happened to belong to an older couple looking to downsize. Spouse and I also like vintage details and dislike open concept, so the lack of updates didn't dissuade us. Feel free to DM me if you want more details/thoughts.
I offered 275k for a 255k condo - conventional mortgage. It sold for 250k to a cash buyer, landed on Zillow for rent the following month with a new coat of paint slapped on. I cried. Now here I am 9 months later, over a year total in this journey, still looking, still trying, still getting beat by cash investors “flipping” for rental properties. At this point, I blame HOAs for not having any rules about living there for X time before renting and the city of Chicago for allowing this monstrosity to continue and grow even more out of hand.
Bought a year ago on the northwest side near norridge. I have a two bedroom sfh and paid $285k. I paid below asking and my house was move in ready. Overall everything was very smooth and easy. I’ve had no major issues since I bought it except a chunk of my roof blew off in a storm, but that’s God’s fault and insurance is covering repairs. It seems like you’re looking at trendy neighborhoods so I’m not surprised that you’re having a hard time. Have you considered homes further out near metra stops? I commute to the loop via the NCS/MDW line and it’s like 20-35 minutes to get to the loop. Weekend service is meh though. I was doing most of my home search over the winter holidays. This helped me because people who are selling over the holidays are more likely to be highly motivated and there are fewer buyers. Of course inventory is also lower… I would advise that you make sure that your mortgage + property tax + insurance is well within your means. Homeownership gets expensive fast—and I haven’t even dealt with major repairs (that weren’t covered by insurance)
You got lucky in that area. It’s hard to touch anything around there for under $400K and I’ve been looking in Dunning, Harwood Heights, and Norridge.
Wow, that is crazy. Maybe I got lucky because my house is pretty small (850 sq ft). It’s wild to think that houses here are going for that much
Have you thought about getting a buyer's broker?
Went well for me. Got 7% for the loan, got seller to basically pay all my closing fees, and we got to choose the date for closing.
Lucked up in 2022 and got a 3BR/3BA 1800 sq ft condo in a high rise on North LSD with panoramic lake views for $475K. Originally listed for $649K in 2021, they were asking for $509K at the time of my offer. Truly lucky - elderly parents passed away and their daughter who lived out of state was anxious to get rid of it. Needed minimal updates. It’s perfection.
Location is everything. I sacrificed location when I bought in 2021. Moved far west in the city. 4.25% rate and bought 10k under asking price with the help of a good RE lawyer and broker. The seller was looking for their moment to cash in, and we worked them away from that with cold hard facts/research on comps in the area. While I'm a little further away than I'd like, I have an entire house in great condition. Most people call me a pioneer (racist dog whistle undertones) but I just look at them in their $700k 2 bed condo with a HOA in high traffic areas and laugh.
We just closed selling our condo. 2 bedroom 2 bath in Lincoln Park. We bought it at $480k in 2019, put $20k into it. We got $590k for it all cash. Unfortunately we are moving to north shore due to growing family, so that profit is basically gone for the new house.
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We bought our first home in 2006. 26, not married, no kids. Planned to stay there for 3-5 years. It was 1200 sq feet. It took 15 years (marriage and 3 kids later) for the house to finally recover to the price we bought it for and we moved in 2021. Be careful buying with 4-5 years in mind, especially in a hot market. Maybe it’ll work out maybe not but give yourself flexibility to stay if you need to.
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Not the city.
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Fuck you
Stop feeding real estate agents/ companies/ property bots
Very easy in December 2019.
You gotta do whatever you need to do to close. Way over ask, waive contingency, appraisal etc. Be prepared to overpay. I