It’s been a homecoming of sorts, at my old (business) stomping grounds when I was associated with a real estate company that displays the Rock of Gibraltar, about five years ago. 6430 N Central Ave. in Edgebrook’s central business district, has been home to RE/MAX Cityview for the past year, and is now my new office as well.

The three years I spent at RE/MAX First Class Realty in Skokie were rewarding, from a business point of view, as well as socially, as I met a number of new and familiar colleagues, and Skokie clients. But given the fact that my business centers around Edgebrook, Sauganash, Gladstone Park, and Forest Glen, there was a need to relocate back here. Obviously, in Edgebrook, we’re not suffering from a shortage of real estate offices, and since I bleed RE/MAX red-white-and-blue, the decision to join RE/MAX Cityview was fairly simple. My sincere thanks go to the owners of RE/MAX First Class Realty in Skokie, the Kontos family, for providing me with a first-class business environment during the past three years, and for whom I have the utmost respect. I will miss them and most of my colleagues there, but it was simply time for a change.

RE/MAX Cityview in Edgebrook is owned and operated by Robert and Ramina Padron, a super dynamic couple who are on the fast track to turning this office into a neighborhood real estate powerhouse. I’ve only been here about two weeks, and I already feel at home. Here are a couple of snapshots of my cubical, and of our conference room:

My new office

Conference Room

During my first week, not only did Rob help me hook up my computer to the office/printer network, he also FIXED my PC with a printer problem that I was having for about the past year. And that’s because Rob is not only the broker/owner of this office, but he also has a information technology background. Right up my alley. Rob and the office staff have really done a tremendous job in making my transition super easy, as switching offices even within the RE/MAX system poses some significant administrative challenges. As if that wasn’t already enough of a nice welcome, check out what I ran into the other day, walking in to the office:

Welcome sign

I’m really not much of a ham, actually, more a shy kinda guy, but I suppose that at least all the visitors to Happy Foods now know that I work at RE/MAX in Edgebrook. Thanks Rob and Ramina. You guys really know how to make your new associates feel welcome. And I’m not even talking about the delicious designer cookie basket I found on my desk on my second day in the office.

So, now that we’ve got the big news out of the way, it’s time for you to visit me at my new digs. Whether you’re selling or buying real estate in Edgebrook, Sauganash, Forest Glen, Gladstone Park, or anywhere else in Illinois for that matter, contact me. I am as close as your phone, or email program.

● Borrowers rush in as mortgage rates slip below 5% (Chicago Tribune)

● Chicago single-family-home sales jump, but condos are still suffering (Chicago Tribune)

● Short sales spread across real estate market, leaving frustration in their wake (Chicago Tribune)

● Local home sales up for 2nd straight month (Chicago Real Estate Daily / Crain’s)

● How this week’s FOMC statement affects mortgage rates and homeowners (The Mortgage Reports / Dan Green)

● What the housing ‘rebound’ means for you (CNN Money)

● Rents could skyrocket due to tax increases (Chicago Sun Times)

Be sure to visit one of the 60646 weekend open houses. Have a great weekend.

The peak of the home selling season is almost upon us. This calls for a reminder about a few home selling basics. You may have heard ‘em before, but they’re worth repeating, and without further ado, here they are.

[HT Lani Rosales]

While showing one of our listings to a buyer’s agent and her clients today, she asks me the following questions:

Q1: So, is this house a short sale, or a foreclosure?

Me: Uh, neither. I would have mentioned it in the listing sheet, if it were.

Q2: (After I had already mentioned to her two seconds earlier that the sellers are not aware of any material defects in the house, and have put this down in writing on the disclosure form) So, are there any problems with water in the basement?

Me: Not to the sellers’ nor my knowledge. The disclosure form is clean.

On her way out the door:

Q3: So, how flexible are the sellers?

Me: The ball is in the buyers’ court. It all starts with an offer from the buyers.

Here she was, and hadn’t even had a chance to talk with her clients to see whether or not they liked the house at all, and already she wanted to know how negotiable the sellers are. She was fortunate that I was in a good mood today, otherwise I would have asked her if she wanted to know exactly how much below asking price our clients are willing to accept.

Moral of the story: When your property is on the market for sale, and you are asked questions by a buyer’s agent or by buyers, always be sure to defer them to your real estate professional, as you may run the risk of compromising your negotiation position. Unrepresented sellers (FSBO’s) are a bit at a disadvantage here, but if you do get uncomfortable by certain questions posed to you, please defer them to your attorney.

photo credit: Mohsan

Monday, September 1, 2008. Labor Day. Traditionally, it’s the date for residential real estate sales to wind down. Although the selling season doesn’t end on that date (it never does anyway), many home buyers start thinking about holding off on their purchase plans until the following spring, if they haven’t found anything suitable by then. Unless of course it’s a super deal that can’t be passed up.

But here’s the thing: We have five months and a couple of days left, before Labor Day rings our door bells. Will you have sold and closed on your Edgebrook or Sauganash home by then? I don’t mean to get you worried, but if your home has been on the market for sale for a while, with no serious prospect buyers who have come through your residence at least twice, let alone a bona fide purchase offer, you need to consider the following.

At present, the average market time for homes that have closed within the past 90 days, stands at 171 days in Edgebrook (12 closed SFH), and at 94 days in Sauganash (6 closed SFH). Granted, a number of these homes were marketed over the last fall/winter/holiday season, hence they stayed on the market for a somewhat longer period of time. It is reasonable then to assume that they would have sold faster, had they been placed on the market for sale a few weeks ago. Nevertheless, you should still go with the worst-case scenario, and assume that if you put your Edgebrook house on the market today, it will take an average of almost 6 months, before it sells. That’s one month past Labor Day. In Sauganash, your outlook is better, at 3 months and some change.

But wait, there’s more. When Realtors talk about “market time”, or “days on market” (DOM), we mean the time frame from the date the listing was received by the MLS to the date a purchase contract was accepted by the sellers, and all contingencies except the financing contingency were removed/satisfied. So, that means that you still need to add the time that is required for the purchasers’ lender to underwrite their mortgage application. Again, assume the worst-case scenario which is that your purchasers were not pre-approved for a mortgage and started their application for a mortgage within a few days after you accepted their purchase offer. In the current mortgage climate that we find ourselves in, the process from application to receiving the lender’s “clear to close” can last anywhere between 6-8 weeks, and that assumes that the purchasers had all their ducks in a row. So, in Edgebrook, that could potentially mean that you won’t close on the sale of your house until the end of November, and in Sauganash you would move out at the end of August, if your house entered the market today. Again, I’m looking at worst-case scenarios and current market time averages here. Chances are, that despite the current market conditions you will have sold and closed on your house before Labor Day, provided that you have priced your property correctly and it’s exposed to the max, online.

Contact us, if you feel the need to discuss your home selling plans with us. As your neighbors, we hate to see you leave. But at the very least we may be able to provide you with a fresh perspective on how to accomplish your immediate real estate goal.

Addendum: To see what you currently are, or what you would be up against, in terms of competing home sellers, click here (Edgebrook), and here (Sauganash).

This is a topic that I’ve been meaning to write about for a long time, though never got around to it. But now that the Tribune (via the Washington Post Writers Group) has broken the ice on this subject, I’m ready to chime in: Administrative fees, levied on home sellers by some real estate brokerage firms, over and above the negotiated commission.

Let’s face it, in our daily lives, we are surrounded by companies who charge us all kinds of ancillary fees for services, over and above their main product or service. For example, withdrawing cash from the ATM-machine of a bank that you don’t have a banking relationship with, will debit your account with a nominal (some say outrageous) fee. Or, ordering tickets for a musical event will incur a hefty “convenience” fee on your credit card bill. Pay your parking ticket late by a day, and your fine will double. Apply for a mortgage, and if you don’t shop around carefully, you’ll get hit with a bunch of meaningless junk fees. The point is, fees are all around us, and we try to dodge them as best as we can. Some of them are justified, some are ridiculous, and then again, some are just plain excessive.

Which brings us to what the Tribune article refers to as “add-on brokerage fees”. What I’m about to write, is merely a reflection of my own opinion, and not that of the brokerage firm I’m associated with. Although I’m fairly certain that RE/MAX won’t have a problem with my opinion on this, because their whole business model rests on empowering their real estate professionals from A to Z throughout any business dealing with clients (that’s btw the main reason Christina and I are RE/MAX associates). But I digress.

The last brokerage firm we were associated with, a year and a half ago, introduced administrative fees at some point, claiming that they couldn’t keep up with operational expenses any longer (in hindsight, it turns out they introduced them for a completely different reason, but that’s a whole different story). Up to that point though, they were always quick to point out the lack of administrative fees as a competitive advantage. Says the Tribune:

You might have asked a realty agent to explain why an administrative fee of $450 was needed when you were paying tens of thousands of dollars in commissions. Good question. The answer you got might have been something along the lines of: Don’t blame me. My broker requires it. I don’t a get a penny of it.

Sure, you might refuse to pay an admin fee on top of the negotiated commission, and chances are that most agents would understand and swallow the fee on your behalf out of their commission portion, so as not to lose your listing. But the question is: Why even ask for an admin fee, when the seller is already being charged thousands of dollars in commissions, as the Tribune rightfully suggests? It’s just plain tacky, in my opinion. Sure, what are a few hundred dollars in extra fees when we’re talking about a potential home sale of say, $500,000? The sellers’ perception of being nickel-and-dimed, is what the problem is, and rightfully so.

Christina and I don’t charge our clients add-on fees. Ever. We offer a menu of services which in essence helps our seller clients make an informed hiring decision. It’s all laid out in the open. No hidden surprises, no gimmicks, no nickel-and-diming. Contact us, if you want to learn more about it.

Image courtesy: Jane M Sawyer [morgueFile]

Sure, the winter storm that dumped almost a foot of snow on us last night, was nasty. The good news though is, the mayor hasn’t been vacationing in Florida, and Streets and San have been on the ball with their salt trucks/plows. The day after, all major arteries in Edgebrook and Sauganash are clean as a whistle, and most side streets are plowed as well. We North Edgebrook residents, as part of NECA, pay a private contractor to remove the snow on our streets, because the city doesn’t always get to our problems in time. It works well. Below, is a gallery of pictures I was able to take today, on my way home from work. Click on the pictures for larger images. 60646: It’s a beautiful place to live, in the winter (and in August too).

Received an email yesterday from a Sauganash homeowner whose property has been on the market for sale since the beginning of summer, apparently with no significant buyer interest. His question to me in the email was: “How long should it take to sell this property? I was told that neighborhood sells itself.”

No question about it, Chicago neighborhoods like Edgebrook and Sauganash are indeed magnets for home buyers who are looking to own a slice of the suburbs in the city. And there are quite a few of these buyers out there. However, that doesn’t mean that the basic rule of supply and demand is going to bend out of shape just because these folks are interested in owning a house in Sauganash or Edgebrook. In Sauganash, for example, we are looking at an MSI (Months Supply of Inventory) of 12.4, right now. That means if no more homes came on the market for sale, it would take 12.4 months to sell off the existing inventory that’s for sale. In Edgebrook, the MSI currently stands at 6.7 months. These are metrics that describe a buyers market, more so in Sauganash than in Edgebrook: There is more supply of homes than there is demand, at the moment.

Deal with it? Roll over, and die? Wait until next year? Hardly! I mean, it’s not like Sauganash became a hellhole overnight, and now all of a sudden, we have a massive challenge on our hands to find buyers for properties in this neighborhood. Granted, the peak summer selling season is winding down, as many families who were looking to relocate and get their kids situated in local schools, have already purchased and settled down. Thus, the already limited pool of potential buyers has shrunk even more, and many sellers are now facing a similar situation like the home seller who emailed me. But, real estate sales are not as seasonal as they once used to be, especially in a large metropolis such as Chicago, where a relatively strong labor market provides for a perpetual stream of workers who relocate here year round, and want to buy a home.

Remember a few years back (I’m talking late 90′s) when you were buying your condo or single family home, and your Realtor told you: “The bad news is that there are 14 offers on the house that you just bid on. The good news is that the sellers picked your offer. Congratulations!” Back then, you were so elated with your victory that you barely perceived the pain of paying $20,000 over asking price. After all, you figured that you’d live there for 5 to 7 years, and then it’d be your turn to be in the drivers seat. Well, it’s about 7, 8 years later now, but you’re not in the driver’s seat, as you had planned. Today’s buyers are. The proverbial shoe is on the other foot.

It’s not all doom and gloom though, but the rules of the game have changed. Just like buyers in the sellers market back then were able to eventually purchase a home, your home too will eventually sell in today’s buyers market. To make it so, you need to keep a few important things in mind:

1. The current glut of inventory on the market means that your property has a lot of competitors, all of which will be considered by serious and financially qualified buyers. And that includes unrepresented sellers (FSBOs). Today’s buyers know they’re in the driver’s seat, and they’re ready and willing to capitalize on their advantage, just like sellers did a few years ago. For sellers, this means that your property needs to be priced at, or slightly below current market value, in order to be competitive. Of course, if you have built substantial equity in your home over the years, this course of action won’t hurt you, financially. Alternatively, you might be facing a short sale situation, which is no afternoon at the beach, but still a much lesser evil than foreclosure.

2. Unless you’re planning an “As Is” sale, your property needs to be in impeccable condition. For years and years, Realtors have been impressing on sellers the ideas of uncluttering, cleaning, painting, and repairing, to prepare their homes for sale. During the days of the sellers market, these concepts may have been afterthoughts. They are definitely imperative now. Curb appeal no longer serves as a means to net you $10,000 more, but determines whether or not buyers will consider your property at all, on their short lists.

3. Commissions are negotiable. They always have been. Always will be. But if you are planning on interviewing Realtors to sell your property, please keep in mind that this is not the time to hire a Realtor, based on the lowest quote that you receive. As mentioned above, there are tons of homes for sale on the market. Unlike in a sellers market, properly exposing and promoting your property online and offline to a buyers market requires more of your agent’s advertising dollars to distinguish it from all these other properties, not less. Base your hiring decision on the Realtor’s marketing plan which should be tailored to your specific property, and should include a relevant and meticulous Comparative Market Analysis (CMA). You will eventually succeed!

I’m not an attorney, so the content of this post is not meant to provide you with legal advice. But as a Realtor, I deal with real estate sales contracts on a daily basis, and over the years, I have witnessed numerous cases in which one or both parties to a real estate transaction have inadvertently or deliberately breached the terms and conditions of a real estate sales contract to which they had previously agreed, in writing. Often times this has led to lawsuits, wasted time and resources, as well as headaches for most of the participants in the transaction. I am here to tell you that this ugliness can be avoided, provided that one understands a few basic transaction rules.

For those folks who are not familiar with real estate sales contracts, please note that in most parts of Chicagoland, buyers who work with a Realtor submit a standard 11-page (Multi-Board 4.0) purchase contract to the seller(s). This contract is sanctioned by the Illinois Real Estate Lawyers Association, as well as 14 Realtor Associations in Northern Illinois. Buyers simply need to fill in a variety of blank spaces, and voila, they have a bona fide offer.

There are four important contingencies in this contract that exist to protect the positions of both sellers and buyers.

1. Attorney Review (Paragraph 9)

The respective attorneys for the Parties may approve, disapprove, or make modifications to this Contract, other than stated Purchase Price, within five (5) Business Days after the Date of Acceptance. Disapproval or modification of this Contract shall not be based solely upon stated Purchase Price. Any notice of disapproval or proposed modification(s) by any Party shall be in writing. If written notice is not served within the time specified, this provision shall be deemed waived by the Parties and this Contract shall remain in full force and effect. If prior to the expiration of ten (10) Business Days after Date of Acceptance, written agreement is not reached by the Parties with respect to resolution of proposed modifications, then this Contract shall be null and void.

2. Professional Inspection (Paragraph 10)

Buyer may secure at Buyer’s expense (unless otherwise provided by governmental regulations) a home, radon, environmental, lead-based paint and/or lead-based paint hazards (unless separately waived), and/or wood destroying insect infestation inspection(s) of said Real Estate by one or more licensed or certified inspection service(s). Buyer shall serve written notice upon Seller or Seller’s attorney of any defects disclosed by the inspection(s) which are unacceptable to Buyer, together with a copy of the pertinent page(s) of the report(s) within five (5) Business Days (ten (10) calendar days for a lead-based paint and/or lead-based paint hazard inspection) after Date of Acceptance. If written notice is not served within the time specified, this provision shall be deemed waived by the Parties and this Contract shall remain in full force and effect. If prior to the expiration of ten (10) Business Days after Date of Acceptance, written agreement is not reached by the Parties with respect to resolution of inspection issues, then this Contract shall be null and void. The home inspection shall cover only major components of the Real Estate, including but not limited to, central heating system(s), central cooling system(s), plumbing and well system, electrical system, roof, walls, windows, ceilings, floors, appliances and foundation. A major component shall be deemed to be in operating condition if it performs the function for which it is intended, regardless of age, and does not constitute a threat to health or safety. The fact that a functioning component may be at the end of its useful life shall not render such component defective for the purpose of this paragraph. Buyer shall indemnify Seller and hold Seller harmless from and against any loss or damage caused by the acts or negligence of Buyer or any person performing any inspection(s). Buyer agrees minor repairs and routine maintenance items are not a part of this contingency. If radon mitigation is performed, Seller shall pay for a retest.

3. Mortgage Contingency (Paragraph 11)

Seller [check one] __has __has not received a completed Loan Status Disclosure (see page 11). This Contract is contingent upon Buyer obtaining a firm written mortgage commitment (except for matters of title and survey or matters totally within Buyer’s control) on or before _______________, 20___ for a [choose one] __fixed __adjustable; [choose one] __conventional __FHA/VA __other____________________ loan of $__________________ or such lesser amount as Buyer elects to take, plus private mortgage insurance (PMI), if required. The interest rate (initial rate, if applicable) shall not exceed ____% per annum, amortized over not less than _____ years. Buyer shall pay loan origination fee and/or discount points not to exceed _____% of the loan amount. Buyer shall pay the cost of application, usual and customary processing fees and closing costs charged by lender. (If FHA/VA, complete Paragraph 35.) (If closing cost credit, complete Paragraph 33.) Buyer shall make written loan application within five (5) Business Days after the Date of Acceptance. Failure to do so shall constitute an act of Default under this Contract. If Buyer, having applied for the loan specified above, is unable to obtain such loan commitment and serves written notice to Seller within the time specified, this Contract shall be null and void. If written notice of inability to obtain such loan commitment is not served within the time specified, Buyer shall be deemed to have waived this contingency and this Contract shall remain in full force and effect. Unless otherwise provided in Paragraph 31, this Contract shall not be contingent upon the sale and/or closing of Buyer’s existing real estate. Buyer shall be deemed to have satisfied the financing conditions of this paragraph if Buyer obtains a loan commitment in accordance with the terms of this paragraph even though the loan is conditioned on the sale and/or closing of Buyer’s existing real estate. If Seller at Seller’s option and expense, within thirty (30) days after Buyer’s notice, procures for Buyer such commitment or notifies Buyer that Seller will accept a purchase money mortgage upon the same terms, this Contract shall remain in full force and effect. In such event, Seller shall notify Buyer within five (5) Business Days after Buyer’s notice of Seller’s election to provide or obtain such financing, and Buyer shall furnish to Seller or lender all requested information and shall sign all papers necessary to obtain the mortgage commitment and to close the loan.

4. Sale of Buyer’s Real Estate (Paragraph 31)

THE FOLLOWING OPTIONAL PROVISIONS APPLY ONLY IF INITIALED BY ALL PARTIES
____ ____ ____ ____ 31. SALE OF BUYER’S REAL ESTATE:
Initials
(A) REPRESENTATIONS ABOUT BUYER’S REAL ESTATE: Buyer represents to Seller as follows:
(1) Buyer owns real estate commonly known as (address):
_________________________________________________
(2) Buyer [check one] __has __has not entered into a contract to sell said real estate. If Buyer has entered into a contract to sell said real estate, that contract:
(a) [check one] __is __is not subject to a mortgage contingency.
(b) [check one] __is __is not subject to a real estate sale contingency.
(c) [check one] __is __is not subject to a real estate closing contingency.
(3) Buyer [check one] __has __has not listed said real estate for sale with a licensed real estate broker and in a local multiple listing service.
(4) If Buyer’s real estate is not listed for sale with a licensed real estate broker and in a local multiple listing service, Buyer [check one]
(a) __Shall list said real estate for sale with a licensed real estate broker who will place it in a local multiple listing service within five (5) Business Days after the Date of Acceptance.
For information only: Broker: _________________________________________________
Broker’s Address: _________________________________________________ Phone: ________________________
(b) __Does not intend to list said real estate for sale.
(B) CONTINGENCIES BASED UPON SALE AND/OR CLOSE OF BUYER’S REAL ESTATE:
(1) This Contract is contingent upon Buyer having entered into a contract for the sale of Buyer’s real estate that is in full force and effect as of ____________________, 20_____. Such contract shall provide for a closing date not later than the Closing Date set forth in this Contract. If written notice is served on or before the date set forth in this subparagraph that Buyer has not procured a contract for the sale of Buyer’s real estate, this Contract shall be null and void. If written notice that Buyer has not procured a contract for the sale of Buyer’s real estate is not served on or before the close of business on the date set forth in this subparagraph, Buyer shall be deemed to have waived all contingencies contained in this Paragraph 31, and this Contract shall remain in full force and effect. (If this paragraph is used, then the following paragraph must be completed.)
(2) In the event Buyer has entered into a contract for the sale of Buyer’s real estate as set forth in Paragraph 31 (B) (1) and that contract is in full force and effect, or has entered into a contract for sale of Buyer’s real estate prior to the execution of this Contract, this Contract is contingent upon Buyer closing the sale of Buyer’s real estate on or before _________________________, 20_____. If written notice that Buyer has not closed the sale of Buyer’s real estate is served before the close of business on the next Business Day after the date set forth in the preceding sentence, this Contract shall be null and void. If written notice is not served as described in the preceding sentence, Buyer shall be deemed to have waived all contingencies contained in this Paragraph 31, and this Contract shall remain in full force and effect.
(3) If the contract for the sale of Buyer’s real estate is terminated for any reason after the date set forth in Paragraph 31 (B) (1) (or after the date of this Contract if no date is set forth in Paragraph 31 (B) (1)), Buyer shall, within three (3) Business Days of such termination, notify Seller of said termination. Unless Buyer, as part of said notice, waives all contingencies in Paragraph 31 and complies with Paragraph 31 (D), this Contract shall be null and void as of the date of notice. If written notice as required by this subparagraph is not served within the time specified, Buyer shall be in default under the terms of this Contract.
(C) SELLER’S RIGHT TO CONTINUE TO OFFER REAL ESTATE FOR SALE: During the time of this contingency, Seller has the right to continue to show the Real Estate and offer it for sale subject to the following:
(1) If Seller accepts another bona fide offer to purchase the Real Estate while the contingencies expressed in subparagraph (B) are in effect, Seller shall notify Buyer in writing of same. Buyer shall then have ____________ hours after Seller gives such notice to waive the contingencies set forth in Paragraph 31 (B), subject to Paragraph 31 (D).
(2) Seller’s notice to Buyer (commonly referred to as a kick-out notice) shall be served on Buyer, not Buyer’s attorney or Buyer’s real estate agent. Courtesy copies of such kick-out notice should be sent to Buyer’s attorney and real estate agent, if known. Failure to provide such courtesy copies shall not render notice invalid. Notice to any one of a multiple-person Buyer shall be sufficient notice to all Buyers. Notice for the purpose of this subparagraph only shall be served upon Buyer in the following manner:
(a) By personal delivery of such notice effective at the time and date of personal delivery; or
(b) By mailing of such notice to the addresses recited herein for Buyer by regular mail and by certified mail. Notice served by regular mail and certified mail shall be effective at 10:00 A.M. on the morning of the second day following deposit of notice in U.S. Mail; or
(c) By commercial overnight delivery (e.g., FedEx). Such notice shall be effective upon delivery or at 4:00 P.M. Chicago time on the next delivery day following deposit with the overnight delivery company, whichever first occurs.
(3) If Buyer complies with the provisions of Paragraph 31 (D) then this Contract shall remain in full force and effect.
(4) If the contingencies set forth in Paragraph 31 (B) are NOT waived in writing within said time period by Buyer, this Contract shall be null and void.
(5) Except as provided in subsections to subparagraph (C) (2) above, all notices shall be made in the manner provided by Paragraph 27 of this Contract.
(6) Buyer waives any ethical objection to the delivery of notice under this paragraph by Seller’s attorney or representative.
(D) WAIVER OF PARAGRAPH 31 CONTINGENCIES: Buyer shall be deemed to have waived the contingencies in Paragraph 31 (B) when Buyer has delivered written waiver and deposited with the Escrowee the additional sum of $____________________ earnest money within the time specified. If Buyer fails to deposit the additional earnest money within the time specified, the waiver shall be deemed ineffective and this Contract shall be null and void.
(E) BUYER COOPERATION REQUIRED: Buyer authorizes Seller or Seller’s agent to verify representations contained in Paragraph 31 at any time, and Buyer agrees to cooperate in providing relevant information.

Conclusion: One might be tempted to refer to the above as legal mumbo-jumbo, but please note that this is the verbatim language of the real estate sales contract that is utilized in our neck of the woods. It is enforcible in a court of law, and it does spell out relatively clearly what is expected of the parties to a real estate transaction. Contingencies are safety mechanisms, for both sellers and buyers, and as long as the parties to a real estate transaction understand this and adhere to the prescribed duties, chances are that they are both going to walk away happily from the closing table, instead of from the judge’s bench. Please consult with a real estate attorney for any matters relating to real estate contract contingencies.

Here’s a controversial subject that has been raised by some of our seller clients whose homes have been on the market for awhile without drawing any significant buyer interest: While marketing our property, should we offer an extra incentive to buyers’ brokers?

It’s not a far-fetched question, however, it cannot be answered with a simple yes or no, in my opinion. The idea would be to offer buyers’ brokers an extra incentive, over and above the advertised coop compensation rate in the MLS, to motivate them to show the incentivised property to their buyers. What most sellers and many agents don’t realize is that this very question of incentives could potentially trigger a business ethics debate, in which the unethical don’t wish to participate, and the majority may have differing views, based on their past experiences.

The ethics question may surface when considering that an extra incentive to the buyer’s agent may conflict with the fiduciary duties that the agent owes to his/her buyer client. The buyer’s impression of her agent could potentially be that the agent is only showing her properties that have an extra incentive attached for the buyer’s agent, hence the agent is not looking out for the buyer’s best interest. On the other hand, market transparency issues clearly belong to the past, as evidenced by statistics from NAR, showing that the overwhelming majority of buyers nowadays start their property searches online, before they even contact a Realtor.

According to Chicago Agent magazine, the venerable Donald Trump recently announced to Chicagoland brokers at a sales event that the commission on sales of condominiums at Trump International Hotel and Tower at 401 N. Wabash would be raised by 1.5%. Was he hoping that the cooperating sales armies would immediately reach for their cell phones to dial up their ultra-wealthy buyer clients to place mass calls for action? Is it conceivable that these wealthy buyers were not yet aware that the Donald was in the midst of building an ultra luxurious hotel-condo building right next to the Wrigley building, and buyers needed to be informed of the upcoming availability of real estate at that location? And what if they had already been presented with models of the finished product? Was the professional crowd at the Trump event, dollar signs twinkling in their eyes, supposed to forcibly persuade their clients, to proceed with a purchase at TIHT? Perhaps, Trump wanted to speed up sales of his units before undecided buyers would collectively jump the fence and opt for units at the Calatrava Spire, assuming that it will be built (Trump doubts this, of course). No one but the Trump organization and their representatives knows for sure.

But here is my take on the subject of incentives: In most neighborhoods of the Chicagoland real estate market we are experiencing a buyers market. Furthermore, it is rather safe to assume that most serious buyers nowadays have a pretty good idea of the existing inventory of properties that would meet their search parameters, either through their own research on sites like realtor.com, or through venues like Trulia, Craigslist etc. If they are working with a Realtor already, they have a complete understanding of all available properties for sale, due to automated MLS listing mailers. As a seller, who is contemplating offering an incentive to buyers’ agents as a motivation boost, why not consider reducing your asking price by the same amount, instead. At the end of the day, your property will be relatively more competitive price-wise, and I am willing to go out on a limb in predicting that the vast majority of buyers’ agents will be happy to know that they have guided their clients towards suitable properties at competitive prices, rather than holding out for that extra vacation trip to Hawaii that they could have gained otherwise.