Why Isn’t this house Selling

Back in October, I wrote about Stupid Seller Tricks. What I forgot to add to that post was that it isn’t always clear who is doing the driving: the seller or their agent.

Ready to Move In

The house is listed as MLS 08420018 (note: you may need to create a Redfin account to see all the history). Notice that it says (as of this posting) this property has been on the market for 45+ days.

You never really know the story behind a house, unless you have inside information, but you can make some educated guesses.  For one thing, the pictures have no furniture, so presumably the owners have moved.

This house sold for $237K in 1999. Now, 14 years later it’s listed for almost twice that amount. The listing says, and the photos confirm, that the house has been updated.

Newly refurbished & updated thruout w/ refinished hdwd flrs, repainted interior. New 2nd flr bathroom & 1st flr powder room. Lg kitchen w/ island & new granite counters. New ceramic tile flrs in mudroom & bsmt.

To be sure, based on what I know about the neighborhood and this type of house, the asking price isn’t unreasonable. In fact, this is a wonderful house if you like stainglass and woodwork combined with modern amenities like an updated kitchen and Central A/C.  So why hasn’t it sold in this hot, hot market?

Couple of things to consider. One, the house is about 200 yards away from Family Fruit Market, a neighborhood Grocery store that is known for its fresh fruit and vegetables at affordable prices. Kinda like a Stanley’s West. While this shouldn’t be a reason for concern, the fact of the matter is, there is a lot of traffic in and out of the small parking lot. And let’s be honest: where there’s traffic there is inevitably some Dbag who feels that his way of driving trumps common courtesy and/or standard rules of the road.

We actually passed on a house across the street from this one for that very reason. While we were looking at the home, we noticed several cars park on the permit only street, or fight to get into some of the few legal spots in front of Family Fruit Market.

The other thing is that while this house is on a nice tree-lined street, it is also a street that a lot of people seem to use to cut across from Cicero to Milwaukee Avenue. In the less than 5 minutes I spent there taking these pictures, almost a dozen cars came drive through, and not at residential speeds either.

Another thing that is hard to analyze but I would say the number of buyers looking in Portage Park is less than the number of homes available for sale.

Icarus Theorem of Realty: In many cases the person who can afford your Asking Price, doesn’t want to live in your neighborhood and most of the people who want to live in your neighborhood cannot afford or flat out won’t pay your Insane Asking Price.

Portage Park is a great middle class neighborhood in the northwest side of the city. It has reasonable proximity to downtown, O’Hare Airport and is accessible from the highway and the Blue Line.  But unless you grew up here, you probably don’t know it exists.  And most people who cannot afford to buy in the really hot trendy neighborhoods (aka The Green Zone — I’ll do a post on that soon) figure if they are going to go West, why not just move to the Suburbs and be done with it.

My prediction: this house will have to drop under $400K to sell.  Remember, all predictions correct or double your money back!

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DoNotRent.com: A Yelp for apartment hunters

Ever rent an apartment and wish you had known what to expect before you signed a lease? Wouldn’t it be great if you could read reviews ala Amazaon or Yelp from former tenants? Maybe a handy rating system? What about a handy phone app? Unfortunately renting an apartment is one of those things that is still a little behind the technology curve. Generally speaking most renters either stay put because they like their landlord and/or apartment and moving is a hassle, or they move on because of other life events like relocation or buying a home of their own. But what about avoiding those landlords-from-hell?

actual listing, review not shown

Mike Cerny knows the challenges renters face, from finding an apartment that actually matches the online posting to getting the real story on a management company.

“We’re trying to give renters as much access to information as possible so they can make an informed and confident decision about whether they should rent or tour an apartment,” said Cerny, who has a background in commercial real estate. The idea came to the Chicago native when he was finally fed up with his college neighbors below him.

“They were smoking weed that came into our unit and throwing parties every weekend until 3 a.m. while my wife was pregnant,” Cerny said. “We also had a really bad management company that didn’t exterminate the cockroaches in our apartment. We had things break (faucet, dishwasher, dryer, cabinet doors), which they chose to repair versus replace and they would continue to break. It was at that moment I realized there needed to be a way to avoid all this.”

In the fall of 2012, Cerny decided to do something about it–he launched DoNotRent.com. DoNotRent.com is a national apartment review and ratings website where renters can provide honest feedback, good and bad, on apartments they’ve rented or toured. DoNotrent.com encourages renters to write reviews of apartments they toured. They are also customizing their mobile site to make it easier for users to search and write reviews of apartments they rented or toured from their smartphones.

They can upload photos and rate buildings on a scale of 1-5 on parking, noise, grounds, safety, laundry, and management. These reviews help others reviewers make an informed decision about where they should rent.

Hopefully murderer will not be a common searched term

The new social networking website is built on a user-friendly platform. People are able to login through Facebook and post and share reviews on several social media networks, ask a previous reviewer questions, search for apartment buildings in their area and check their availability. All reviews are posted anonymously to protect renters.

“I started DoNotRent.com with a focus on having the best user-friendly experience with social sharing,” Cerny said. “Although I had a bad experience renting, DoNotRent.com is a neutral site where users can write good and bad reviews. In order for renters to have the most current information about a rental, we want landlords to respond to reviews. If an issue was fixed, repaired or if they made an improvement to the property, renters need to know.”

The site is targeted towards 18 to 35-year-old renters or prospective renters, and the site has been tailored for them. The site is developing a plan to provide an incentive platform, which will allow users to earn points for writing reviews, adding photos, referring friends and sharing reviews on their social sites. The points will be redeemable for gift cards
to national retail stores.

Property managers and landlords can add their listings for a small fee in order to add a link to their website, update the property description section, receive inquiries from renters and respond to reviews. They will pay $40 per year for each listing (with discounts for multiple listings) for perks like the ability to respond to reviews, write custom descriptions, and add a link on the listing to their website. Each listing shows how many unique visitors have viewed it. During the next year, the company plans on compiling and publishing rental data along with user review trends.

“We are excited about our future and we are open to talks with investors and potential partnership opportunities,” Cerny said.

By the way, this Chicago start-up is looking for investors in order to compete in the niche apartment review market and take the business to the next level. For more
information, visit http://www.donotrent.com.

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The Little House that Could

One of the houses that would often come up on my searches is 5056 W Winnemac Ave in Jefferson Park.

From the outside, this looked to be a decent looking 5 bedroom 3 bath house that seems to have been converted into separate apartments. Legal 3 unit building is what the description said, though I question how you can legally have 3 units in a place this size.

Three apartments in here? But where do they put the pool?

The configuration would make it good for what’s known as an in-law suite which is French for *you have to take care of one set of parents anyway so you might as well get free child care out of the deal*.

It’s been on and off the market a dozen times since 2010. Over the years I’ve made appointments to see it however the day of the appointment we’d get a call from the seller’s agent explaining that the comps didn’t come through for the place so unless we were making a cash offer, there wasn’t any point of seeing it.

As I said, it would show up in my search criteria but there wasn’t anything about it that made me yearn to see it. In fact, the lack of pictures along with the no Central A/C made it really easy to scratch off the Go See It List.

The owner — most likely a stubborn Pole* — wanted a certain price, $270K IIRC. Well it just sold on May 29 for $240K so it only took 3+ years to get within 10% of Asking Price, so yay Stubborn seller!

* Being Polish I can make those comments!

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FSBO Seller can really shoot themselves in the foot

Our weekends lately involve house hunting. We generally try to go to open houses because they are more casual and if we don’t make it, no one is really put out. This can sometimes backfire though. For instance, we went to see a house in Oak Park that was a For Sale By Owner (FSBO). The seller was exploring selling her home so she put fliers in her neighbors mailbox asking them to refer friends. One of the many friends who want us to buy in their neighborhood passed the info on to me.

For Sale By Owner is one of those things that I think make a lot of sense on paper — like communism and Taylor Swift — but doesn’t work in reality, mostly because the industry resists it at every turn.

This particular FSBO seller was a talker. It wasn’t even so much that she was trying to sell me on the house per se. It was more that she was trying to head off any of my potential objections before I even made them. At the same time she advised me to ask for a new garage if I made an offer!

One of the issues with the house was the small outdated kitchen. It would not only have to be updated but also the size somehow increased. The only feasible way would be to move a wall. I said knowing if it was a load bearing or non-load bearing wall would determine what you could do and how much it would cost. And she would argue with me even when I agreed with her!

“Oh you could move the wall all the way to here and do this and do that,” she rambled on.
“You can do anything if you have the money,” I said. “being on a tight budget, we might not be able to afford to do what someone with deeper pockets might be able to achieve.”

This made her even more determined to convince me it could be done. She was quite the talker and even though I had set the expectation that we had other appointments, she managed to eat up all our cushion time so that we couldn’t check out her neighbor’s open house. It’s not that she didn’t want us to see that house. Quite the opposite in fact. She really wanted us to see that house so that we realized what a price break we were getting on a almost identical house — if by identical you mean 30% smaller and more awkward floor plan.

We missed the window of opportunity to see her neighbor’s house because of her non stop rambling. She missed out on convincing us that her held potential for the same reason.

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House Hunting is a Marathon not a Sprint

Like how I tied this blog into the subject de jour of the last two weeks?  (Disclosure:  I’ve run 21 marathons, 12 of them in Chicago.)

While marathons and house buying might seem like apples and oranges, they do have some similarities.  A lot of training goes into running a successful marathon and a lot of planning and research is necessary for buying a house.  House hunting also takes a bit of time as you get your finances in order, come up with a down payment and figure out where you want to live.

The same can be said about botching either endeavor.  Sure you could just sign up and run a marathon.  You might do alright if you have good genetics and any kind of running base.  Most likely you would run a few miles and then decide to stop at Caribou in Lake View or check out the monkey house in Lincoln Park Zoo.  Similarly, you could just see a house you like with a For Sale sign on the lawn, knock on the door and ask how much.  You might get lucky and get your dream house though more likely you’d get a Money Pit Nightmare down the street from a crack house.

Figure out where you want to live

Gone are the days – if they ever truly existed – when you could buy a home and then sell it a few years later if some life changing event occurs.  Even in the pre-boom years, you typically had to own a home for 3-5 years just to break even on transactions costs (Transfer Tax, Title insurance, realtor fees, etc.).

Sure everyone knows that one guy who bought a property for cheap, painted it and replaced one broken window and then made a fortune when Starbucks opened down the block.  Not only doesn’t anyone like that guy but he’s lying.  Most of the time he didn’t make nearly as much money as he claims, or he’s downplaying how much he really put into the place.

Therefore you really have to figure out where you want to live for the next 7 to 10 years.  Or longer.  My wife and I are looking for our Forever House – the house we plan to live in until we are too old and feeble to take care of ourselves and our kids will force us to sell to pay for the retirement housing, or fight over on our deathbeds.

So here in Chicago the standard debate DINKS go through is City versus Suburbs.  I’ll summarize it for you.  Suburbs have good school systems.  City has walkability and certain amenities that you have to drive to in the burbs.   The irony is that you probably don’t fully utilize those amenities once you have babies, at least not until they are old enough to be left alone or with a sitter for a few hours.

We have opted for the city though we do waiver when we read about things like the Teacher’s Strike and the current state of CPS.  When I say city I’m not strictly referring to downtown or Lincoln Park with anything West of Ashland being considered Schaumburg.  There are tons of great neighborhoods with a 606 zip code that provide within the city limits but most ChicagoNow/Redeye  readers have never been to or wouldn’t admit it if they have.  These homes may be a bit far from the lake but the cost to size ratio usually offsets that giving you more house for your buck.

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