Per Loseth

Per Loseth

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You Need to Appeal Your Property Tax!


Thursday, 07 Nov 2019 at 05:05 pm

Whether you aim to sell your house/condo or keep it, you need to appeal your property tax.  You have literally nothing to lose! The following is based on a Chicago Tribune article:

The painful truth is that if you don't appeal your Cook County property tax assessment every chance you get, you're a fool.

Seeking a reduction is a free shot at saving big money on your tax bill. Not only does it cost nothing, there is no chance — zero, according to Tom Shaer, spokesman for Cook County Assessor Joe Berrios — that officials will examine your appeal, take a closer look at your home and similar surrounding properties and say, "Hey, thanks for calling this to our attention! Your place is actually worth more than we thought."

"Citizens are guaranteed equal protection under the law," Shaer explained. "Everyone must be assessed using a formula based on the pattern of sale prices and market conditions, and we won't change that on you just because you avail yourself of the right to appeal."

The no-risk nature of such appeals is standard practice nationwide, according to Larry Clark, director of strategic initiatives for the Missouri-based International Association of Assessing Officers. "Increases on appeal are virtually unheard of," Clark said, even when homeowners ask for

Another reason you're a fool if you don't appeal is that your free shot is likely to hit the mark. A little more than 50 percent of reduction requests were OK'd at the first stage in 2016, and after certain rejected appeals were considered by the Cook County Board of Review that figure rose to 80 percent.  Spot checks by a Chicago Tribune reporter in other nearby counties found initial success rates for appeals running over 40 percent, though Will County reported a success rate of just 2.4 percent.

And the reason this is a painful truth is that I have been just such a fool. In more than 30 years of owning property in Cook County, I've appealed my assessment just once.

I deferred in part because the assessments have generally seemed reasonable to me — about what I expected. And also in part because I was under the false impression that an appeal was a gamble I might lose.

It wasn't laziness. I found the process easy the one time I tried it. Going through the assessor's website I found several houses in my neighborhood that were similar to mine but assessed at a lower value, filled in a few blanks and clicked "submit." A couple of weeks later I received a note that I'd earned a modest reduction.

Shaer said finding comparables in one's neighborhood takes about seven minutes, and filling out the forms takes about five minutes. Further, county employees can help homeowners find appropriate comparable properties.

inRead invented by Teads

Do you need a lawyer to walk you through the process? No. It's very straightforward. And contrary to what I'd always assumed, a lawyer doesn't even seem to help.

Shaer said that residential appeals filed with the help of an attorney had a 53.9 percent initial success rate in 2016, while those filed without the help of an attorney had a 55.3 percent success rate.

In 2015 the spread was a bit wider, 52.3 percent success with an attorney, 56.7 percent without.

But although filing an assessment appeal isn't technically difficult, costs nothing even if you hire an attorney (they typically work on a contingency basis and take a cut of your tax savings, if any) and can be accomplished relatively quickly, it still requires a certain savvy and comfort with the system. And it's a lot easier if you have ready access to a computer and know how to use it.

So, in fairness, you may not be a fool like me if you don't appeal. You may be intimidated by the bureaucracy, confused by the lingo and misled by the myths. You may not be able to afford internet service or have the time to go to one of four assessor's office locations for help.

These realities tend to skew the benefits of the appeals process toward people in higher income brackets, a phenomenon thoroughly documented in Tribune reporter Jason Grotto's recent series

Over time, wealthier neighborhoods like mine, where a greater percentage of people file appeals, tend to become under-assessed. And since property taxes are a zero-sum game, poorer neighborhoods become over-assessed.

Shaer said the county is trying to rectify this problem by focusing tax-appeals seminars in lowincome neighborhoods.

But given how easy he says it is and how often appeals result in lowered assessments, why not incorporate appeals directly into the assessment process? Why not automatically run every property through the Assess–o-meter and introduce more fairness into the system?

Shaer said this would be a waste of time and resources, as only 19 percent of owners of residential properties appealed last year — 14 percent if you don't count condos, which appeal at a very high rate. "It can't possibly be that the other 81 percent don't know how to appeal," he said. "They don't appeal because the assessor's office initial figure is far more in line with market value than we get credit for."

To file an appeal go to https://appeals.cookcountyboardofreview.com/. You can either file after your township is re-assessed, at which time they deem your township to be "open", or you can pre-register for the time it will open in the future.  You township is Hyde Park.


First Time Home Buyer


Wednesday, 06 Nov 2019 at 12:21 pm

From Renter to Homeowner

Perhaps  you have been renting a house or an apartment for a while, and you are now ready to get your own  place.  There are many reasons people choose owning rather than renting; some of them are access to better schools,  better control over expenses,  and long  term appreciation.

Maybe you have thought of owning previously, but have been discouraged by one or more of the following factors.  Here are  some common impediments to owning, and  some solutions:

Lack of Sufficient Down Payment

Whereas there is no doubt that a large down payment, such as 10 or 20% will get you the best deal on a mortgage,  there are programs that  will get you into a house or condo with substantially less.  The tradeoff is  that you will pay somewhat more per month in your mortgage payments. The best known low down payment plan is FHA, with a down payment requirement of 3.5%.  The interest rate tends to run a little higher than the market rate for conventional loans, and in addition, they will usually require mortgage insurance, which can add up to 1% to the interest rate.

Low FICO Score

As you probably know, the FICO score is a kind of shorthand for you overall creditworthiness seen through the eyes of a potential lender or creditor.  The theoretic range is from   xxx to xxx.  If your score just needs a small boost, you might look into being a user on someone's credit card that has a good credit rating.   You will benefit from that person's higher FICO score.

The House or Condo Needs Work

Ordinarily, this is a deal-killer, as the run-of-the-mill mortgage lenders will not issue a mortgage for a property that needs a lot of work.  However, there is a  special program designed to deal with this.  Here are the particulars:

This program is  for owner-occupied single family homes, condominium apartments, or multiple family homes from 1 to 4 units.

 It  is called FHA 203K, and it's only  for owners who want to live in the property. Under this program you can get a 15 or 30 year mortgage. The loan can be up to 96.5% of the lesser of As-is value plus total rehabilitation cost, or 110% of the After Improved Value. Minimum FICO credit score is 580.  For renovation costs greater than $35,000 you must use a Licensed HUD consultant, who does the following:

Inspects the property and in consultation with the owner decides what needs to be done. Writes up all repairs and estimated costs Works with  contractors to get bids and to remain within the budget Inspects the work during the renovation process and approves periodic payouts to contractor.

 Up to 6 months of loan payments, insurance, and property tax payments can be included in the loan. No advance payments to contractors are permitted.  Payments only as work is completed.

If the subject home is a condominium apartment, the condo association must be on verifiably sound financial footing, and adequately insured.

 

You are Self-Employed

Usually not a problem, if you can show by your federal tax returns sufficient net income for the last three years to support the mortgage payments and other housing expenses.

 

Your Income is Insufficient

One way to handle this is to get a co-signer. The co-signer's income must be sufficient by itself to handle the mortgage payments plus  the other expenses involved in the ownership.

 

You Filed for Bankruptcy or Had a Foreclosure

If it has been over two years since this occurrence, you are not disqualified from getting a mortgage.  You may have to pay a higher interest rate and accept a shorter term, however.  And to the extent it affects your FICO score, it is definitely a detriment.

 

The Illinois Housing Development Authority (IHDA) created the Access Mortgage program to help state residents realize their dreams of homeownership. It offers 30-year fixed-rate loans, as well as down payment and closing cost assistance up to $10,000. Home Access is available in every Illinois county through a network of trusted partners.

To qualify, the property must be your primary residence and you can't have owned a residential property in the last three years. Most programs also require a FICO® credit score of at least 640 and completion of a homeownership course, in addition to certain household income and purchase price limits. For some loans, borrowers only need to contribute $1,000 or 1% of the home's price upfront.

Here are the programs they offer:

IHD Access Forgivable

Pros

– Very low down payment requirements
– Forgivable loan up to $6,000 for down payment and closing cost assistance
– Competitive interest rates

Cons

– Strict household income and purchase price limits

Eligibility

– Credit score of at least 640
– Must complete homeownership counseling

Best For

– Low-income individuals who need help with the upfront costs of a home purchase

With Access Forgivable, the biggest benefit is in the title. Borrowers receive down payment and closing cost assistance of 4% of the home's purchase price up to $6,000, which is forgiven if you can't pay it back in 10 years. Plus, the mortgage interest rate is fixed. You'll know the full cost of the loan as soon as you sign up.

As with all IHD programs, you'll have to meet income and purchase price limits and complete some homeownership education. If you qualify, it's more than worth it. With a minimum contribution of $1,000 or 1% of the home's price, you could buy a new home for next to nothing.

IHD Access Deferred

Pros

– Very low down payment requirements
– Deferred loan up to $7,500 for down payment and closing cost assistance
– Competitive interest rates

Cons

– Strict household income and purchase price limits

Eligibility

– Credit score of at least 640
– Must complete homeownership counseling

Best For

– Mid- to low-income individuals who need help with the upfront costs of a home purchase

Much like Access Forgivable, Access Deferred offers Illinois homeowners in every county a safe, 30-year fixed rate mortgage. It also offers the same deal where you only need to provide as little as $1,000 or 1% of the purchase price to secure your first home. 

To help with the upfront costs of homeownership, it also provides 5% of the home's purchase price (up to $7,500) in down payment and closing cost assistance. What separates the payment assistance with Access Deferred from other IHD programs is that the loan is interest-free. What's even better: you don't have to pay it back until you've refinance your home, sell it or pay it off fully.

IHD Access Repayable

Pros

– Very low down payment requirements
– Interest-free loan up to $10,000 for down payment and closing cost assistance
– Competitive interest rates

Cons

– Strict household income and purchase price limits

Eligibility

– Credit score of at least 640
– Must complete homeownership counseling

Best For

– Anyone that doesn't have enough savings for a typical down payment

Access Repayable works much in the same way that Access Forgivable and Access Deferred do. It provides a fixed-rate loan with a competitive interest rate and borrowers only have to contribute as little as $1,000 or 1% of the home's purchase price out-of-pocket. 

Access Repayable, though, focuses  on helping low- and mid-income individuals who can't afford standard down payments. The program provides 10% of the home's purchase price, up to $10,000, in down payment assistance. Best of all, the down payment loan is interest-free. Unlike with the other IHD programs, you will have to pay this one back over a 10-year period.

1stHome Illinois

Pros

– Very low down payment requirements
– Up to $7,500 for down payment and closing cost assistance
– Competitive interest rates

Cons

– Strict household income and purchase price limits
– Cannot be used for newly constructed homes

Eligibility

– Credit score of at least 640
– Must complete homeownership counseling

Best For

– Mid- to low-income individuals looking to live in Boone, Cook, DeKalb, Fulton, Kane, Marion, McHenry, St. Clair, Will or Winnebago counties

You can combine 1stHomeIllinois with a 30-year fixed-rate FHA, VA, USDA or conventional mortgage. It also provides a grant of up to $7,500 to help with your down payment and closing costs. Can't afford to pay it back? So long as you live in the home for at least five years, the grant is forgiven. 

The only catch for 1stHomeIllinois is that you must be buying a home in Boone, Cook, DeKalb, Fulton, Kane, Marion, McHenry, St. Clair, Will or Winnebago counties. Even if you weren't expecting to move to one of these counties, this program should make them look much more attractive.

 


Dealing With Mold When Selling


Wednesday, 06 Nov 2019 at 10:11 am

Selling a House With Mold

This is tricky business, as a lot of people panic when they hear the word. In reality, mold is all around us, and seldom makes anyone sick, because the molds are dispersed throughout our environment. But things being what they are, if you have mold in your house, and you're trying to sell it, you've got a problem.

Unfortunately, Illinois laws, and the laws of most other states, makes it mandatory to disclose the presence or history of mold in a house to potential buyers.  This is true even if you have successfully remediated the problem.

So here are  some ideas of  what to do.

First you need to establish the extent of the problem.  Mold generally cannot exist without water, so  most likely the mold in your house is in wet or moist areas.  You will be able to see it, as mold is generally black or green. Take note of the kinds of surfaces the mold is on; whether it is primarily on drywall, on wood, or on tile, for instance.  You might also measure the extent of it, so that you can convey that to a contractor, if you go that route.

Next, it is advisable to have the mold analyzed to see which species it is.  Some species are very toxic, but other are relatively harmless.  The experts you want to do this are Industrial Hygienists. They will collect samples, and have them submitted to laboratories for analysis. They will then  tell you the degree of danger the mold poses.

If the mold is relatively benign, and your are dealing with drywall, you could probably do the remediation yourself.  Removal of the mold with soap and water is the first step.  Thorough saturation with a good quality  commercial fungicide is the next step.  After things have dried, you should paint the area with a shellac  based primer, such as Binz or Zinsser, then paint it two coats with any latex or alkyd paint.

If the mold is a  very toxic black mold, such as Stacybotrys,  you may have to  totally remove the drywall that has been infested.  You're now into a whole other ballgame,  and it's definitely not a DIY project. It's advisable to hire a contractor to do the removal and subsequent replacement of the drywall. The contractor will have the proper safety equipment and know the best procedures to follow.

Having removed the moldy surfaces, and/or completely sealed  them,  you can now  order tests of the inside air to make sure all of the mold spores are gone.  You will want to keep copies of the lab reports to show to potential buyers.

Could you sell a house with mold without doing anything to it?  Yes, provided that you disclose this in the standard disclosure reports which  you get as part of the listing agreement.


Dealing With Foundation Cracks


Tuesday, 05 Nov 2019 at 05:29 pm

You could tackle foundation cracks-- but would you want to?  Here is what is involved, as narrated by the expert Will Decker.

A Guide to Foundation Cracks

By Will Decker, CRI, CMI

One of the biggest concerns for home buyers and many homeowners is when they find cracks in their house's foundation. I will admit that if you have a crack, or cracks, in your house's foundation you have a problem, but the problem may not be a big one. Foundation cracks usually only mean that you may get a little water seepage into the basement during a heavy rain, but they can also be a symptom of severe and dangerous structural problems.

How do you tell the difference?

What follows is some guidelines and examples of the many types of foundation cracks that inspectors see and how we interpret them and explain them to our clients. Our hope is that this article will help you in keeping your house safe and ally some unnecessary fears.

Please keep in mind that while many home inspectors, especially advanced professionals who have had special training, like a Certified Master Inspector (CMI) are a very good source to evaluate foundation cracks, when we encounter "iffy" situations, an evaluation by a licensed structural engineer may be required, especially if a detailed repair plan is needed.

Types of Foundations:

Before we begin explaining foundation cracks, lets first understand the different types of foundations houses can have. I live and work in the Chicagoland area where the foundations are usually poured concrete and most houses have basements. In the southern United States, most houses have crawlspaces instead of basements. In Florida, where my daughter lives, most foundations are just slabs of concrete poured on the ground (the water table is too high in Florida and basements would just fill up with water). Different areas have different soil conditions and climates, calling for different types of construction. All foundations, however, serve to provide the structural base for the building. As you can see from the diagram, all types of foundation begin with a wide base, called a footing, upon which the foundation wall rests. The footing provides a wide area resting on the ground to distribute the weight of the building evenly. The footing is usually placed deep in the ground (in this area, footings should be at least 4 feet deep) so they will not be moved by water or freezing ground in the winter. The foundation wall, what most people think of as the house's foundation, rests on the footing and extends upwards to where it meets the house's exterior walls.

The foundation wall can be constructed of different types of materials, again depending upon local conditions and construction requirements. Some areas use concrete blocks, also referred to by their old name of cinder block. Some older houses in my area have brick foundations. There are even some areas, usually dry, desert states, where the foundations are constructed out of wood. In my area, most foundations are poured concrete with a few that are concrete block or brick and I will limit this article to those types.

Types of Foundations and How to Fix

Foundation cracks have many causes, but the cause of the crack can usually be determined by the type of crack, as can the solution to the crack problem.

 
   
   

Vertical crack: A vertical foundation crack is a crack that goes straight up and down or slightly diagonal, within 30 degrees of vertical. Vertical cracks are of least concern and are commonly seen in almost all houses. In fact, it is very rare in this area to have a concrete foundation that does not have one or two vertical cracks. They occur because concrete is very strong under compression but cracks easily under tension. Most houses will see one, two or even three vertical cracks form within the first couple of years after construction. These cracks are not a real structural concern, but they can allow seepage of water through the foundation wall during heavy rains. Again, this is normal and commonly seen. The solution to vertical cracks is usually simple, inexpensive and permanent.

       
       
 

We recommend that you have a vertical crack repaired by urethane or epoxy

Diagonal cracks can be repaired in the same manner as vertical cracks, but more injection material is usually called for to account for any additional future movement. Repairing diagonal cracks also calls for determining the cause and position of the differential settling. This is where a certified Home Inspector, one who has specialized training in structural and foundation issues, can be of help.

Horizontal Cracks: Foundation cracks that run sideways are the most serious type of cracks. They are sometimes seen in poured concrete foundations but more commonly in concrete block and brick foundations. Horizontal cracks are caused by a bowing foundation. The foundation wall's exterior is usually covered by the back filling of dirt and gravel. If this back fill is improperly done, does not get proper drainage or gets overly compressed (many times by the construction equipment that was used to build the house) the excessive pressure against the foundation wall cases it to bow inwards. Sometimes there is excessive rain which can also be followed by a freeze. This can increase the hydrostatic pressure behind the foundation wall and cause it to bow inwards. Bowing foundations are serious and can lead to structural failure of the foundation and collapse of the house.

 

There are a couple of different techniques for fixing horizontal foundation cracks. Some involve the installation of high-strength strapping on the interior of the foundation to keep the wall from bowing further. Sometimes a number of reinforcing posts or braces are installed in the basement of the crawlspace. There are also techniques that use anchors buried in the surrounding soil that pull the foundation wall back out and secure it.

Regardless of the solution, a bowing foundation should always be evaluated by a licensed Structural Engineer and the repair technique and plan be determined by him/her. Bowing foundations are serious and their repair should always be done by a professional.

Step Cracks: Some times the cracks are not on the foundation but are seen on the exterior wall above the foundation. This is commonly seen in brick or concrete block exterior houses. Step cracks should be treated just like diagonal cracks and are the result of differential settling of the house. If the cracks are only in the mortar joints between the brick or block, the problem is usually not serious and can be repaired by the re-pointing of the mortar. However, if the brick or block is displaced (moved in or out from the material on the other side of the crack) or the cracking extends through the blocks, the problem may be more serious. Step cracks should always be evaluated by a Certified Home Inspector or a Structural Engineer to determine their severity.

House buying companies such as Chartered Quarters LLC  specialize in buying houses with problems such as cracks in foundations and will accept a house in as-is condition without you having to get involved at all. You can contact them at (312) 476-9207, or just fill out the form here.

©2019 - Decker Inspection Services


Inheriting a House in Illinois


Tuesday, 22 Oct 2019 at 01:23 pm

 

This could be a very stressful situation, and it is essential to have some basic knowledge of the Illinois laws in this regard. After the debts are paid, and the dust settles, of course the burning question is: "whose house will it be ?" It is helpful to obtain a copy of the deed for this.  If you can't get it by usual means,  you can always get it from the recorder's office at the county courthouse.

Here are some things you should know in regard to Illinois law.  Disclaimer: for more details, and to be sure you are doing the right thing, consult a law firm.  I highly recommend Brabender Law, LLC  in Chicago. 

  1. First thing to establish: how is the house legally owned?
  • The simplest case: sole ownership.  If there is only one name on the deed, that's what you got.  If there is a will, then the ownership goes according to the will, if not, then a new owner takes over according to the laws of the state where the decedent lived. In this post we'll assume it's Illinois.  In either case,  it has to go through probate court proceedings.  However, there is an exception to this.  If the owner of the house signed and notarized a Transfer on Death (TOD) deed then probate is not necessary, and the new owner named in the TOD can take over right away. 
  • Tenants in common. If there are two or more names on the deed, and the deed does not have the words "joint" or "entirety" on it, then the house is owned by the individuals named as "tenants in common". In this case the owners each own a fraction of the property, say 1/2 or 1/3, depending on how many owners, and whether the percentage or fraction  of ownership is stipulated.  If one owner dies, his/her ownership interest is passed on to his/her heirs, but only after probate court proceedings, and it does not affect the other owners at all.
  • Joint Tenancy.  Here too there are two or more names on the deed, but if one of the owners dies, the other(s) automatically acquire his/her portion.  In the case of married couples who are joint tenants, if one should die, the other gets 100% sole ownership without going through probate. But if the surviving spouse should die,  since he/she has sole ownership,  it has to go through probate. Tenancy by the Entirety  is a  special form of joint tenancy that only applies to married people; for our present purpose, the rules are the same as for joint tenancy.
  • Beneficiary of a Land Trust. In this case, the house is legally owned by a Trustee, and not necessarily by the person living in the house. There should be a trust agreement signed by the trustee and the decedent.  If you can't find it, you could contact the trust company to get a copy. The decedent is most likely designated as the beneficiary of the trust. Most trust agreements have successor beneficiaries named,  and when the first line beneficiary dies, the successor will automatically take over, without having to go to court.  The reason for this is that legally the house never changes hands, it is still owned by the trustee.  Once you are the beneficiary, and have the power of direction, you can take it out of the trust if you wish.  Hint: If you find out the house is in a trust, but you don't know where, check with the Chicago Title and Land Trust Company, as it took over many land trusts from banks that discontinued their land trust departments.

2.  What next?

If the following  hold,  you are going to have to go to probate court:

  • Sole ownership,  with or without a will; in either case a judge will have to bless the arrangement. If there is no will, the inheritance will occur in accordance with the succession rules of the State of Illinois, which is explained later in this post. The exception to this is if the decedent executed and had notarized a Transfer on Death deed.
  • Tenants in common.  Here you inherit only the portion or percentage of the property the decedent owned, and the person or persons who inherit will be in accordance with the laws of Illinois.
  • Joint tenancy, where both or all of the joint tenants are deceased.

If one of the following  conditions are true, you don't need to go to court to establish ownership:

  • Sole ownership, when the decedent executed a Transfer on Death deed, naming you as the new owner.
  • Joint tenancy, or tenancy by the entirety, where you are named as one of the joint tenants.
  • If the property is in a Land Trust, or another kind of trust, which legally owns the property, and the trust agreement names you as a successor beneficiary.

If probate court is necessary, here is a summary of the Illinois laws of succession as stated in 755 ILCS 5/2-1.

If the decedent left a will, then the property will go to the person or persons named in the will after the probate judge approves.   If no will was left, here is a  simplified version  of the laws that apply:

  • If the person dies leaving a spouse and no children, everything goes to the spouse.
  • If the person dies leaving no spouse, but only children,  the children split the inheritance evenly.
  • If the person dies leaving a spouse and also children, the estate goes 1/2 to the spouse, and the other 1/2 to be split equally among the children.
  • If there is no spouse, and no children, the property goes to the decedent's parents and siblings, in such a way that each parent and each sibling takes an equal share.  If a sibling has died before the decedent, then that sibling's children will take his/her share.

In the probate court,  usually one of the first orders of business is to appoint an executor.  Normally this job goes to the closest relative of the deceased.  If it is the will of the beneficiaries of the  estate that the property be sold,  rather than passed on to them, the first order of business for the executor is to order an appraisal, With that in hand, he may then put the property up for sale, and when he finds a buyer willing to pay at least 90% of the appraisal amount, seek the approval of the judge before the sale can be finalized.

Per is not a lawyer, and cannot give legal advice, but he served as a Receiver in the Chancery Court of Cook County, representing several banks, and is familiar with court proceedings. Coupled with his 30 years of experience as a general contractor, he is well qualified to help you with a house you have inherited, or are about to inherit.  You may reach him immediately on his mobile at (312) 476-9207.