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Old 02-28-2011, 09:48 AM
 
Location: Dublin, CA
5 posts, read 10,558 times
Reputation: 15

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Hello all,

My wife and I are relatively new to the Chicago area, we are currently renting in the suburbs and are looking to buy in the Lakeview area.

I was just curious if there are any recent stories any of you might have regarding the negotiation process for Condo's in Chicago.

It seems that news isn't very positive about the market these days and there are fewer and fewer buyers out there.

Seems to me like the perfect storm in favor of a potential buyer.

So I am wondering if anyone has any insight to what is happening out there right now, how it compares to the past, and what type of results have they been seeing in terms of concessions from sellers.

We have found several places we like, one is an REO, one is owned by its current occupants. Is there really a difference in how you can negotiate with them?

Thanks in advance, I'll hang up and listen
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Old 03-01-2011, 08:42 AM
 
28,461 posts, read 78,270,332 times
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Yes, there is are a large numbers of condos on the market. Further, many of them are in buildings where financing will be a challenge. Buyers are understanably skittish.

That said i think your description of a "perfect storm" fails to recognize the fact that individual owners and even REOs / lenders have a huge pile of RISK to manage when trying to sell and they are not eager to get "beaten up" by any buyer...

Suppose you go to a new car dealer during a snow storm in late February. He has rows and rows of sports cars and convertibles. You make some ridiculous offer and he rejects becuase he KNOWS he will lose money on that deal. If he can wait to sell those cars in May or June he will make a profit.

So to the lenders would rather sell when the market improves.

Of course if you approach a seller who is thisclose to getting out with just enough "loss" that it won't bankrupt then MAYBE you can get a price that is pretty low, but you can also be sure that OTHERS that see your deal will use it to drive and EVEN HARDER bargain -- in such situations, with the ease of "substititution value" that both buyers and sellers see in condos, it is all but impossible to predict WHEN SPRING WILL COME for condos...
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Old 03-02-2011, 05:54 AM
 
80 posts, read 248,975 times
Reputation: 52
There are several differences in dealing with REO sellers based on my experience buying three condos in Chicago over the last two years.

Many of these loans are securitized and the people who are handling the sales for the trust are often both incompetent and uncaring. They are not very flexible when they first list a property but after a couple deals fall through they seem more reasonable as to price.

They require the use of contract riders which are the most one sided contracts I've ever seen. When, during the attorney approval period, they are faced with your modification requests they sometimes simply ignore them as if you don't exist. They pay very little attention to deadlines. Their closing methods are unorthodox to put it mildly. The people who they hire to close their deals want you to pay many expenses which are pure crap.

The solution, in my humble opinion, is to low ball the hell out of them to make up the difference and let them have it their way. If they reject my price and ask for a better one without providing a counter my response is to tell them that 1) I do not negotiate against myself, and 2) perhaps they would be better off accepting one of the many cash offers that must be jamming their inboxes.

This is the great market to be a buyer. If you miss a couple deals another will come down the pike soon.
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