North Lake Shore Drive apartments (Chicago, Montrose: for sale, real estate, renters)

[Sahona]

Is there any area on North Lake Shore Drive which is "undesirable"? I have been looking for a 1 bed apartment to buy for no more than $170K and all the properties that come up are high rises on Lake Shore Drive (all numbers are above 3000). Is there anything wrong with this area or these buildings? From the pictures they look nice, but am I missing something here?


Thanks.

[jessiegirl_98]

No, they are all desirable; however, look closely at the assessments, which can often explain the lower prices. For instance, I know a building around Belmont and LSD that has assessments that are well over $600/month....and this is extra money that goes above and beyond your mortage. They also had taxes that were RIDICULOUS. So, just check out those things!

If a lot of places are for sale in the same building, that may be a red flag about the building, but I don't know of any places specifically.

[Drover]

I'd be a little cautious of the area between Montrose and Foster Avenues (4400-5200). Other than that you're good to go. Be sure to find out what the monthly assessment fee is before you get too attached to a condo. They can be quite steep around here.

And a lot of places for sale in the same building often just means that the building is being converted from apartments to condos.

[Sahona]

Thanks guys.

I have a few more questions - sorry if they seem basic but I live in a 3 bed semi detached house in the suburbs of London so the housing over there is a little different to what I'm used to!

What is considered high for monthly assessments? I think I have seen figures around $500 a month. Add that to the mortgage and I am coming up with a total of around $1350, which for me doesn't sound too steep if everything is included???? (Our mortgage won't be too big because we are saving our British pounds at the moment and they make good American dollars so we will have a good deposit to put down!)


Also, what is the difference between a condo and an apartment? Is one easier to buy than the other?

Thanks again!

[OrangeAndBlue]

What is considered high for monthly assessments really depends on what you can afford and live with comfortably. For a 1 Bedroom condo, I would consider anything over $600 to be very high, but someone buying a small condo in Lake Point Tower might think that's a bargain.

The difference between the terms "condo" and "apartment" refers to ownership. A condo is a unit inside a larger building you buy and own. An apartment is a place you rent. In some cases, people will rent out a condo they own so you could rent one, but you can't buy an apartment. In today's market, you will often get more house for a given monthly price if you rent.

[jessiegirl_98]

Originally Posted by Sahona

Thanks guys.

I have a few more questions - sorry if they seem basic but I live in a 3 bed semi detached house in the suburbs of London so the housing over there is a little different to what I'm used to!

What is considered high for monthly assessments? I think I have seen figures around $500 a month. Add that to the mortgage and I am coming up with a total of around $1350, which for me doesn't sound too steep if everything is included???? (Our mortgage won't be too big because we are saving our British pounds at the moment and they make good American dollars so we will have a good deposit to put down!)


Also, what is the difference between a condo and an apartment? Is one easier to buy than the other?

Thanks again!

Condo and apartment are used interchangably for the most part.
I'm currently apartment hunting and I won't pay over about $300/month for assessments unless they include amentities (such as heat, cable, a gym, etc). So, you need to figure out what those higher prices include. How much you want to spend on assessments is up to you, but remember, that this is money that you will always be paying to the condo association that doesn't go towards your mortage. You'll also need to ask if there are any "special assessments" coming and find out about the history of special assessments and how much money the condo association currently has. One of my friends, for instance, received a "special assessment" of $5000 once because the roof was going bad. Another received a "special assessment " (that was actually vetod eventually- the beauty of living in small building) of $1000 for gardening!!! (She offered to go to home depot and buy some plants for $100, but that didn't go over well ). So, you never know what's going to happen, but it's great if you find a place that actually has money saved just in case and that doesn't have a really old roof or really old elevators or something. Lastly, if you have a car, beware that buying parking can somethings be up to 30-40K (although right now in Lakeview, I'm seeing it more as 25Kish), and, in some highrises, you still have to rent a space instead of buying. Which, can up up to $200-250 per month, depending on where you live, and sometimes there can be a wait list, which is really annoying because you'll have to look for parking elsewhere. That may not apply to you, but just something else!!! You'll also want to get a copy of the minutes from the condo associations meetings so you can see 1) how strict they are (my friend lived in a building from hell..they complained about EVERYTHING) and 2) how they spend the money (and how they decide how they are going to spend the money).

Good luck!

Ah.... I'd love to be able to save in London for awhile

[Drover]

Originally Posted by Sahona

Also, what is the difference between a condo and an apartment? Is one easier to buy than the other?

Generally speaking, a condo denotes a unit in a building where units are individually owned whereas an apartment denotes a unit in a building with a single owner who leases each unit. Apartment units are not for sale. Sometimes units in a condo building are for lease, but it is the unit owner who holds it out as such, not a common building owner. Sometimes "apartment" can refer to both -- I believe it's common in New York to call it an apartment regardless of the ownership arrangement of the building.

There, is that confusing enough?

[M4rT1N]

Hi, I'm also moving to Chicago and hope to buy a condo sometime this year. I'm by no means a property guru, but I've been doing a lot of reading/research on buying a condo in the States and here's some of the stuff that I've taken note of. It might be useful for you.....

Things to do and look out for

How much are your annual house taxes and assessments going to cost you?

On new condos, sometimes the developer sets the maintenance fees artificially low to entice buyers. Then when the developer hands maintenance over to the homeowners association, the fees shoot up in price.

Check the litigation, if any, history of the building. Any history of lawsuits can kill the resale value.

Obtain a copy of the condo associations bylaws and regulations. This is a must, in order to know what you’re buying. If it’s not possible to see these, steer clear and look for another condo instead.

Check out the management company. Make sure that they aren’t a tenant and are professional, in business for many years. (You won't have to worry about the possibility of this if you're going high rise)

Find out if the condo association can approve / screen new tenants. If so steer well clear of this. Not good for resale.

Poor sound proofing, you can here your neighbor's TV too clearly etc.

Purchasing in a building where more than 10% of the other units are rented out is not good, as renters may not take great care of the property. This also makes for a tough resell as mortgage lenders typically steer clear of giving mortgages out to buy in this type of development.

Has the condo unit been professionally inspected? If so, request a disclosure form. The law states that the seller has to disclose any known defects to the buyer

View is important for resell. Don’t buy inward facing units, over a courtyard etc.

Is it designed well? Lots of light inside, Kitchen next to eating area, bathrooms not near eating area.

Get your own Illinois licensed professional home inspector in. This is critical.

Disclosures: Learning that property has defects is of no use unless you can do something about these defects. You must give yourself the option to approve the disclosure report, prior to being legally responsible to go through with the purchase. 2 weeks is the standard timeframe to get an inspection done.

Scrutinize the HOA insurance. What if the building burns down, is your investment still protected? You may have to continue paying the mortgage, even if the property isn’t there.

Financing. Avoid Banks.

Banks probably aren’t the best place to be looking for a mortgage as their mortgage interest rates are typically high. When comparing loan interest rates, be careful to look at more than just the interest rate itself, as doing this will not guarantee the best deal. You have to look at the big picture, interest rate, points and fees altogether to see the total cost of what you’ll be paying back.

“Mortgage Bankers” are typically a good source to borrow from. They deal directly with the public and specialize in mortgages only, so their rates are thought to be quite competitive.

“Mortgage Brokers” are also a very good source to borrow from. Note* You shouldn’t have to pay the mortgage broker a fee to get a loan. They present you with the mortgage, as a retailer, whereas the loan provider is a wholesaler, so the broker should not charge you for any mortgage fees from the lender.

What are mortgage points? Points are 1 percent of the mortgage amount. Watch out for lenders advertising a low interest rate, but with a few “points” tacked on. A few points tacked on is effectively the same thing as a higher interest rate when you look at your repayments.

(ARM) Adjustable Rate Mortgages are mortgages that fluctuate and are tied to an index. They also have a limit as to how high the interest can go, but this limit is typically high. If considering one of these, check the 20 year history of the index.

Beware of caps on your monthly mortgage repayments. If you’re limited in how much you can pay back each month, your mortgage could end up costing you more than you had originally planned for.

Avoid Option Mortgages.

Find out if the lender will charge you for their attorney fees when it comes time to purchase. They may charge you for having their attorney look over documents. If they do tell them to naff off and find another lender. This as a fee that they should be paying as a cost of running a business.

On that note, the mortgage lender company may try to throw in a few extra silly fees that they should be paying themselves. These need to be spotted and complained about early on. This really goes for any fees, attorney fees etc.., get them up front so there are no surprises at the time of closing the deal. It may be too late at that stage to back out.

Making the condo purchase.....

The “Purchase Agreement” is critical and should be tailored to your specific purchase, not just a cheap photo copied template etc.. Get a real estate attorney to go over it, it won’t cost much. Escape or get out clauses must be inserted into the purchase agreement before you sign it. You must include a “property drawn inspection clause” which states that if your inspector finds something during the inspection (which he will include in the inspection report) that you don’t like or approve of, you can back out of the purchase. You need to specify in writing, in the purchase agreement, how you will be informing the seller if you disapprove of the inspection report. The disapproval typically comes in the form of a signed statement.

There will be a time limit on how long you have to carry out the inspection, this is typically 2 weeks or so

Watch out for “liquidation damages” which can allow the seller to keep your deposit if you do not follow through with the purchase. Put down as little as possible as a deposit.

good luck with the condo search!

[Sahona]

Thanks for the clarification everyone; I think I understand now!

M4rT1N - lots of great info there; thanks so much, I am sure it will be very helpful when I purchase a place. Which area do you plan on buying in?

[M4rT1N]

we haven't really decided yet, but hope to find a nice neighborhood type area... a small city within a city if you know what I mean? Nice parks, restaurants, access to the lake etc..

you mentioned Lakeview, that's got a lot to offer. Property there's a bit pricey... but there you go... you get what you pay for etc.. Having said that, when compared to property prices in London, Chicago property’s really cheap... even in the more sought after areas.