Tag Archives: inspections

Could Your Property Pass a Section 8 Inspection?

If you’re involved in the rental business it won’t be long before you hear about Section 8. Chances are good that you’ve heard of it even if you aren’t involved with renting. It’s bandied about by NIMBY residents who don’t want poor people living in their neighborhood. You see, “Section 8” refers to a portion of the US Housing Act of 1937, which authorized the government to pay rent on behalf of residents who would not otherwise be able to afford it. While it generally is used by low income residents, it’s also used in some occasions to assist people who have lost their homes to natural disasters, as was the case after Hurricane Katrina.

In Chicago it’s administered by the Chicago Housing Authority and utilizes two main types of homes: those owned and managed by CHA, and privately owned apartment buildings throughout the city.

… Not that Section 8

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9 Experts Every Home Buyer Should Have On Their Team – Part II

Real Estate wasn’t the first industry to require a 9-person team.

On Wednesday I covered the first five experts that most buyers will need to have lined up before they start looking for a home. They were the credit counselor, the lender, the Realtor, the wingman and the handyman. Between those five you should be able to get from day one of your search to a signed contract to purchase a home. However, it’s a long way from a signed contract to the day you move in, and there’s still a lot of ground to cover. Let’s look at who’s involved in the second half of your purchase.

6. Attorney

Once you sign a purchase contract, your Realtor can’t touch it anymore. Unless your Realtor is also a licensed attorney, they are not allowed to write legal documentation or provide you with legal advice. Therefore, once you and the seller sign on the dotted line it’s all in the hands of your lawyer and your lender. Your Realtor may be able to nudge them along in order to meet certain deadlines, but he/she cannot take any direct action from that point forward.

Your attorney is your lifeline if things go south once you’re under contract. They will be the ones to help you terminate the deal if something is discovered in the inspection or in the condo documentation that you don’t want to deal with. They’ll review the agreement and look for any weird clauses. Postal workers and meter readers generally have the right to walk on your land, but some homes allow other people to cross their borders. Your attorney will make sure nobody else has a claim to the property and notify you as to who has a right to enter your property after you buy it.

7. Inspector

You don’t have to have your home inspected before you buy it. Personally, unless you’re planning on tearing the property down and rebuilding, I really recommend that you get an inspection. Housing inspectors can alert you to appliances that are about to fail, structural issues that could cost you a lot of money, and identify signs of pest infestations. They are also able to alert you to potential fire hazards and environmental issues that could endanger you and your family.

Even – or, I should say especially – in the case of an “as-is” purchase where the seller will not do anything to resolve issues with the property, it’s still important to know what you will need to pay to repair early on in the game.

8. Insurance Agent

If you’re buying a single family in Chicago you will need to provide proof of a homeowner’s insurance policy in order to close. If you’re buying any type of property with a loan you will need to have insurance. If you’re planning to escrow your property tax payments instead of paying them direct to the county twice a year, your lender may require you to escrow your insurance payments too.

Buyers considering properties in multiple neighborhoods may want to consult with an insurance agent before you make an offer. Some policies may be affected quite drastically by such elements as the age and construction material of the property, its proximity to a fire station, and the crime rates in the immediate vicinity. If you’re buying at the top end of your monthly budget, the cost of your insurance premiums is definitely a valid concern.

Either way, once you’re under contract you don’t want to forget that you need to purchase insurance before you get to the closing table, and provide proof of purchase to your lender.

9. Movers

I have seen any number of high end buyers spend months fussing and fuming over their choice of home, and then hire any old moving company off of Craigslist to handle their furniture. Your movers will determine if your first day in your new home is a pleasant or miserable. Take some time to shop around. If you’re moving into a condo building make sure that you check on the building’s moving policies. Do they require entry through the rear? Is there a service elevator? Do they allow weekend moves? How about time of day, do you have to reserve an elevator? Can you move in after 5pm? Will your movers have to carry your stuff up the stairs? Outdoors? Where can they park the truck? Is there an alley?

You definitely want to find movers who are insured, experienced, and familiar with Chicago. I’ve seen moves delayed when drivers didn’t realize how low the CTA and Metra bridges are on the north side. I’ve seen movers get frustrated with trying to get sofas up a stairwell and abandon them halfway up. I have also seen a truly effective team that cleared 3/4 of a two bedroom apartment while I was showing it. Buyers who’ve just purchased a new home are usually not in a position to pick up a whole bunch of new furniture as well. Make sure your crew can handle your stuff properly.

The Economic Implications

This belongs here because I say it does.

I would be remiss to not end this two-article essay with a little social commentary. As many as 9 people may need to lend their expertise in order to get you into your new house. I didn’t even touch on some of the high end specialists like interior designers and feng shui consultants. Many of the experts who work in these fields are independent contractors or entrepreneurs. Couple this with all of the people who are assisting the seller – agents, attorneys, staging experts, photographers and more – and you begin to see why the housing market and the economy are so tightly linked.

Regardless of how your politics fall, the single most important way you can affect the economy is to get involved in the housing market. Even a small purchase helps to boost the smallest business owners in a way that very few other purchases can do. The only other two things you can do to cause an equally large effect on so many incomes are to get married or have a child – I have to say, homeownership has the lowest entry cost and the easiest exit strategy of the three options.

Did I miss someone? Do you think I went overboard with my team recommendations? Let me know if the comments. I’ll be back on Monday with a return to investigating eviction statistics in Chicago.

Weekend Links

I figure you guys could use a weekly break from my yammering so I’ll be doing links on the weekends. Don’t know if this will continue forever but it’s worth a shot.

  • The Future is now: The Illinois legislature has approved an amendment to the Illinois Security Deposit Return Act that allows deposit receipts and statements of damages to be sent via email instead of registered post. Friend of the blog Rich Magnone gives some good analysis of the new amendment.
  • Saying nice things: I should also mention that Rich is an excellent Chicago Eviction attorney and legal advisor for landlords. His site, ChicagoEviction.com, contains a ton of good info for landlords from the legal POV. He’s thorough and practical and has excellent taste.
  • Gambling with Apartments: It’s always interesting to see what big corporate thinks of our living situation. See how the REITs who invest in large-scale apartment complexes are assessing Chicago’s rapidly rising rents and falling vacancy levels. REIS Reports has one take on the booming downtown luxury rental market, and Crain’s Chicago Real Estate Daily has another great take on the matter.
  • Oldie but goodie: over on Get Rich Slowly, a blogger talks about how ruining his credit score was the best thing he could have done for learning how to live within his means.
  • A bit of good news: Another agent in my office (Baird & Warner City North) was one of the experts consulted for a front page Chicago Tribune article on Friday. Chicago home prices break 49 month losing streak.
  • The ultimate move-in checklist: The Chicago Housing Authority performs some of the most stringent housing inspections in the area on behalf of its Housing Choice Voucher Holders, also known as recipients of “Section 8” housing assistance. They make a version of their inspection checklist available for the public. See if your apartment would pass a CHA inspection. (PDF)
  • Eviction of the week: a tenant renting out his apartment for short stays using the popular AirBnB short term rental service has found himself served with an eviction suit. Maybe he can use some of the $20k he earned from his illicit side business to buy his own place instead. Find out his side of the story at Fast Company.