I just listened to a story on WBEZ 91.5 (Chicago Public Radio) about numerous Chicago homeowners facing huge repair bills for their homes constructed with decorative split-face concrete block that wasn’t installed correctly.

Even through City of Chicago inspectors had approved the construction, the homeowners are on the hook for repairs since they now own the buildings, not the developers. Many of the homes with incorrectly installed split-face concrete block are leaking. Mold is developing in some of the homes.

To listen to the story or read the text, visit “Moldy Metropolis: Homeowners Struggle with Leaky Concrete“.

Last week at Baird & Warner’s “Out of the Office” networking event in Chicago for gay pride month, I talked with my friend, Scott, who’s been thinking of buying a condo in or near the Loop for a few years now. He asked me if I thought now was a good time to buy.

There are a lot of good reasons to buy a condo in the Loop area now. Prices are lower. Interest rates are low. There’s an $8K first time home buyer tax credit good through November 30th. Condo buyers in downtown Chicago will also have far more selection and negotiating power this year than next since relatively few new condos will be coming on market next year in those areas. See my post “Regional Economic Forecast 2009 Highlights 3 of 3” for a chart showing the drop in new condos from this year to next.

At the same time, you also need to be careful where you buy since some newer condo developments are in financial trouble. Just this morning Crain’s Chicago Business reported that the 342-unit Lofts at Roosevelt Collection in the South Loop was considering converting the development to apartments since so many units remain unsold. Owners at some condo developments where sales have already closed may be facing higher monthly assessments since the expenses for the common elements must be covered by fewer sold condos.

Remember, sales reps and listing agents work for the sellers, not you! Get a professional on your side. Call me before you start looking at condos!

Today my buyers of a new duplex condo in Lakeview had their home inspection. Even though they are buying a new home with a 1 year warranty, they wisely chose to have a home inspection before continuing with the purchase.

1. By getting a home inspection during an inspection review period, buyers have the option to back out of a purchase, if the issues are unacceptable and cannot be resolved by the builder.

2. Issues identified before closing on the purchase of a new home also tend to get resolved sooner. Builders are more motivated to get issues resolved prior to closing a sale. After a sale, issues are added to the list of other owner issues.

3. Attending a home inspection is also a great way to learn about a home and how to best maintain it. Most home inspectors are more than happy to explain how everything works and how to best maintain the home.

Shown left, home inspector Kevin Fulara (right) explains how to turn on the radiant heat boiler to buyer Brad Krauss (left). In cooler months the boiler will be heating the water circulating below the flooring in the lower level of the condo. Kevin advised turning it on to a moderate temperature in October and adjusting the temperature as desired during colder months. He also advised against turning the radiant heat too high as it would dry out the wood flooring.

This year I will be recommending that my buyers perform a new test during their home inspection. While I recently visited the new condo of some of my buyers in the South Loop, they shared with me that they discovered after they moved in that their granite countertops weren’t properly sealed. Their kitchen countertops were absorbing food stains. Granite is a porous material and the pores need to be kept sealed to prevent it from absorbing stains.

My buyers did some research and discovered The Water Drop Test for checking if granite is sealed. It’s easy and only takes a few minutes. I will be recommending it from now on to all of my buyers. My South Loop buyers also found granite care products at MBStone.com that they like very much. Thank you, Kathy & Lynn, for this helpful information!

Yesterday I attended the SPARKt Technology Conference. The conference featured a dozen or so speakers on technology and real estate.

One of the speakers was Blagica Bottigliero, the founder of CondoPerks.com, which gives Chicago condo owners a place to shop online, get discounts and earn money for their condo associations. Blagica shared her story of buying a condo only to become disillusioned along with many of her condo neighbors. Assessments went up 200%, cracks appeared as the building began to settle, and other problems prompted her to send a survey to 100 of her fellow condo owners. 33% responded that they were not sure that they would buy their condo again knowing what they know now.

In her presentation Blagica shared her disappointment that the developer’s sales rep hadn’t done a better job of educating her about her purchase. One of the audience members asked if she had used a buyer agent to which Blagica replied that she hadn’t used a buyer agent!

I cannot emphasize enough that sales reps work for the sellers, not the buyers! Sales reps at condo developments aren’t required to have real estate licenses. Such reps also aren’t bound by the ethical requirements of the National Association of Realtors (NAR). I’m not saying that condo development sales reps are bad people. They’re just doing their job which is selling condos for the developer. Their job isn’t to look out for buyers and make sure they know what they are getting into.

That’s my job as a buyer agent. Email me before you even start looking for a condo in Chicago or the suburbs.

Yesterday a woman wrote me looking for help with a condo purchase. Three years ago she signed a contract and put 10% down on a condo in the South Loop. The condo will be ready early next year and she now realizes that she won’t be able to get a mortgage for it. The only help I could give her at this point was the name of a good real estate attorney.

If she had contacted me for help well before she walked in the sales office of the condo development, she wouldn’t be going through as much stress as she’s going through now.

Unfortunately, many people don’t think to contact a buyers’ agent before they start visiting new home sales offices. They either think they’re smart enough to buy a home without help or they don’t realize that you can use a buyers’ agent to help you buy a new home. Every developer my clients have bought from was more than willing to pay my commission as long as I accompanied my buyers on their first visit to the sales offices.

Why not have some help on your side when making what will probably be the largest purchase in your life? Call me! Let’s talk about your objectives, your requirements and the home buying process in Illinois before you start looking at models!

Recently I helped a couple of women buy a 3 bedroom condo at Library Tower in the South Loop. Library Tower is just across the street from the main branch of the Chicago Public Library (shown left). When they signed the sales agreement in May, they were told that the condo would be ready around the middle of August.

They then put their 2 bedroom Lincoln Park condo on the market. It has awesome views of the lake and city and with a reasonable price, it wasn’t long before offers started coming in. Of course, they want to time the closing of their condo’s sale with their new construction purchase. So they also kept an eye on how Library Tower was progressing. When the first units for delivery were due and it was obvious that the building wasn’t ready to move into, they pressed for an update. Sure enough, the new estimated delivery for their condo was moved back to mid-September!

Such delays with new construction are not uncommon. If you can’t be flexible with a move-in date, you may want to consider a resale home instead.

A week ago one of my buyers said he wanted to take a second look at a townhouse in Aurora. The showing instructions said to call the seller to schedule showings, so when speaking with the seller, I took the opportunity to ask him a few questions about his home. One of my questions was whether the home was in a Special Service Area (SSA).

According to S. B. Friedman & Company, a real estate and development advisory firm based in Chicago, a Special Service Area “allows local governments to tax for and deliver services to limited geographic areas within their jurisdictions.” Special Service Areas can be used for a variety of support, infrastructure and land & building improvements. For more details on SSAs read S. B. Friedman & Company’s paper, “Special Service Area Implementation Steps & Requirements“.

I asked the seller whether his home was in an SSA for 2 reasons. First, the Multi-Board Residential Real Estate Contract 4.0 used overwhelmingly for the sale of homes in Chicago’s suburbs requires the seller to specify whether the home is in a SSA. Second, the listing for another townhouse I had shown my buyer in a neighboring subdivision mentioned that it was in a Special Service Area, so I thought there was a good chance this townhouse might be as well.

The seller didn’t know what a Special Service Area was. After I explained it to him, he didn’t think that his home was in a SSA. Just to be on the safe side, I called the City of Aurora and asked them. Sylvia in the Finance Department informed me that the home was in not one, but 2 Special Service Areas! One of them was active. The other was dormant meaning that no tax was currently being imposed, but the City of Aurora could start taxing for the SSA in the future, if certain conditions arose.

It is especially important to ask about SSAs when buying in a new development! Builders typically require buyers to use their contract instead of the Multi-Board Residential Real Estate Contract 4.0. Thus, whether the development is in a Special Service Area might not be disclosed. This happened to one of my clients who bought new construction in Montgomery, just southwest of Aurora. He didn’t learn that his home was in a dormant SSA until he sold it!

Yesterday a couple of buyers and I visited new condo development sales offices in Chicago. One of the new developments we visited was 565 Quincy (shown left) in the West Loop neighborhood. The developer is Belgravia Group.

Erin Mandel, the sales representative, gave a good overview of the development which included an impressive multi-media presentation. Some of the information Erin shared should have been in the MLSNI^* listings for 565 Quincy. This includes the combined weight limit for pets and that there will be an area for dog owners to walk their dogs on the roof. It would have been helpful to learn this ahead of time.

Some of the 2 bedroom floor plans have good space and even include a separate bonus room which can be used as an office or for storage.

^*Multiple Listing System of Northern Illinois

Last week I compared the prices of resale vs. new homes at an active adult community in Elgin. Every resale home was listed at a higher price than the same new model. Granted, some of the homes had upgrades which were not included in the new model prices, but the price differences were from $20K to $80K higher for the resale homes. In addition, new homes are typically preferred over the same resale homes. Buyers get a warranty and the option to customize the home they way they want it.

However, buying new also has it downsides. Ask the people who put a deposit on a Neumann Homes house and were waiting for their house to be finished when Neumann Homes filed for bankruptcy recently. In the case of the active adult community in Elgin, sellers have to compete with the developer until the development is finished. New construction may not work for buyers who can’t wait for a home to be completed.