Fewer buyers want fixer-uppers, broker says

Brian Knott, a broker with RE/MAX Horizon in Elgin, has observed steady progress in the residential real estate market since 2010. The volume of business has consistently risen and, he said, suburban home values have increased at a healthy rate.

“We aren't seeing a boom because people are still cautious. They don't want to become overzealous the way many were back before the recession. But I am very pleased with the progress,” Knott said.

And he doesn't believe Elgin, Dundee, St. Charles and other communities where he routinely lists houses are atypical.

“I believe what we are seeing in this area is what most Realtors in the Chicago-area suburbs are seeing. While it is true you can get more house for the money out here, I still believe the trends here are about equal with the trends being seen in the overall Chicago market,” he said.

“Those of us in the real estate business today have to be managing our time better than ever before because we are really busy. People want our help with not only buying and selling homes, but many people want our help with renting their current home because they aren't yet ready to sell it,” Knott said.

We asked Knott some questions about today's real estate market:

Do you see more movement in any specific sector — i.e. single-family, condominiums or townhouses?

“In today's fast-paced world, young people like newer homes rather than older ones, so if they can get a real nice condominium or townhouse that is newer or more turnkey than a single-family home, they will buy it.

“Most (buyers) don't want to be a slave to their home. They want to be able to enjoy themselves when they aren't working. These days it seems that only those (people) who are in the trades want to buy homes that need to be fixed up.”

Which factors seem most important to your buyers?

“They all want a better quality of life with less commuting time, so that is keeping them searching for homes closer to their place of employment.

“They also want to be close to the conveniences, like grocery stores, and to things they enjoy doing, like biking trails and, in the case of Fox River communities, water sports on the river.”

Knott believes this trend will benefit Elgin as people choose to reinvest in the city's neighborhoods in order to stay closer to these conveniences and riverfront attractions.

“I have even had several older people from Elgin who have moved to Huntley, only to turn around a year or two later and move back to Elgin because they want to be closer to the friends, family, doctors, churches and conveniences. They tell me they are tired of driving.”

Do you see many first-time buyers taking part in the market?

“This is a great time for first-time buyers. Why rent when interest rates and prices are so low? You can get a lot of house for the money.”

Knott has had a number of first-time buyers take advantage of the Welcome Home Illinois down-payment assistance program for first-time buyers or those who have not owned a house in three years or more. The program is administered by the Illinois Housing Development Authority and is only offered through certain lenders.

The program offers up to $7,500 in down-payment assistance on a 30-year, below-market rate mortgage to those who meet certain income requirements; are able to contribute $1,000 or 1 percent of the purchase price toward the down payment; and are purchasing a one or two-unit building in Illinois to be used as their primary residence.

Visit www.welcomehomeillinois.gov for details.

What changes have you seen in the market in the last year?

“The slowdown during the recession allowed us to sharpen our skills and new technology is allowing us to be more proactive, do our jobs more efficiently and be of service to more people. For instance, we can now have clients sign contracts electronically, which saves a lot of time.”

What steps need to be taken for the real estate market to fully bounce back?

“There needs to be more equitable treatment of everyone in order for people to feel good about the real estate market again. For instance, I have had clients who have been forced to see their condos and bring money to the closings because their associations would not allow them to rent out the unit. They were being penalized by a situation they didn't create and they suffered losses as a result.”

Things are getting better, however, Knott said. Distressed properties have been working their way through the market and are no longer holding down prices to the extent they once were.

“I recently had an attorney at a closing tell me short sales are drying up, so they are no longer burning the market like they were. At least when you purchase a foreclosure, you know that you have a deal. With a short sale you could wait for a particular property for months, ignoring others on the market, only to find out the bank wouldn't agree to the deal. Short sales caused a bad situation and most of those are now gone.”

For more information, call Knott at (847) 269-9870 or visit www.knottsrealestate.com.