Tuesday, April 03, 2007

The Gift That Keeps On Giving

It’s difficult to realize that despite all of your hard work, that there are some things you just can’t control.

Such is the way of the foreclosures in my association and on my block.

Despite the fact the process started over two years ago, the repercussions of those foreclosures linger like a bad stench.

I was surprised to see a much lower value for my unit once the appraisal came back last Thursday afternoon.

I cursed the name of the former owners in our association who only seemed to care about their bottom lines and nothing else.

After gulping down that big glass of haterade, I rallied the forces of good and countered with supporting comps of units that weren’t exactly like mine but provided a basis for a much higher appraisal.

An extra $40,000 is nothing to sneeze at.

As of this writing, the appraisal department has the paperwork and will render a decision in the next day or two.

That still leaves me and any other people in my association who try to refi or sell in a hell of a predicament.

Do we accept shit comps from someone who can’t even pull values from around the corner? Do we fight it and hope for the best or do you lower your selling price (and grab your ankles) as the market is still very much tipped toward the buyer?

So like the nice article said, do some homework prior to plunking down your hard earned cash for a place.

If you’ve got a high number of foreclosures and investors with rental properties you may want to steer clear or have a diamond in the rough. It all depends on your outlook.

Let’s say you’re only going to stay for a short while or you’re not the type who’s not into community involvement.

My suggestion would be to head for the hills.

You’re the type of person who wants a ready made hood. A neighborhood with bright young things strolling the boulevards, people with good dental plans, shopping, nightlife and all of that jazz.

And if you have the money, and some do, head for one of the many neighborhoods in Chicago that will fulfill your urban desires.

But for those of us with Tiffany wishes in a Jewelry Exchange world, we have to look elsewhere.

If you are the type who can make a dollar out of fifteen cents and plan on staying put five years or longer, an “emerging” neighborhood may be for you.

You may not have the fabulousness of the ready made hood and you won’t have grocery store anywhere around you, but eventually you will be thought of as the forward thinking type as you had enough foresight to see potential.

Kinda like Gloria Estefan before Emilio got to her.

After all, anyone with money can buy fabulousness; it takes a special breed of person to make fabulousness.

You, my urban pioneer, can consider what type of new construction is (or may be) happening in the neighborhood over the next few years.

While prices may be depressed now, in a year and a half to two years, its gonna be a whole new ball game.

How so?

For those of you who don’t know, real estate appraisal comps are comprised of what has recently sold in your neighborhood or in my case my building and my neighborhood.

Because of the low selling foreclosures in my building (a 2 br for $108K), and three other low selling foreclosures down the block (on average $130K a piece) I should have anticipated that I would have trouble.

Had my appraiser simply taken into consideration the recent sales of the condos around the corner I’d have a whole different ballgame.

Now I don’t have all of the bells and whistles that the units around the corner have (stainless appliances, granite, half bath or parking space) but according to a friend’s calculations that should of only knocked my appraisal down $20,000---not $55,000.

But on the bright side when the proposed developments behind me either get built or sell, real estate in east Woodlawn is quite literally going to go through the roof.

That will take about two to three years to happen, but I’m not in a hurry.

I’ll simply continue to make improvements to my unit so it can be on par with my new neighbors.

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