In the news again is more real estate gloom and doom sprinkled, with a (small) silver lining…

The Illinois Association of Realtors posted a 21.2% decrease in home sales statewide which includes single and attached family home sales. Total sales were reported as 31,451 compared to 39,904 for the same quarter in 2007. The median home price also dropped 8.2% from 207,000 in 2007 to 190,000 in 2008.

In a the 3rd quarter report from the National Association of Realtors, 28 of the 152 metropolitan areas reported increases in median home sales for existing homes from 2007. 4 were unchanged and 120 metro areas experienced declines. Decatur and Bloomington Illinois median home prices were up 8.7 and 8.1% respectively.

The good news is that as the market continues to decline, homes are becoming more affordable for buyers who were pushed out of the market 3 years ago due to rapidly increasing home prices. First time home buyers, newlyweds, and recent college grads all have great opportunities to purchase a home in this market at a great price.

Short sales and REO (bank owned) homes present even better opportunities to head off the curve of the steady decline of home prices.

As homes become more affordable, and the economy begins to stabilize, buyer confidence will also begin to rise. Many first time home buyers are nervous that they could get a lower price further down the road, and thus end up paying too much for their new home today. The fear of many buyers is getting into a negative equity position in their first year of owning their home if they were to buy now. The other problem with getting buyers to the closing table has been the elimination of zero down financing and the lack of available credit. FHA loan guidelines were revamped as of October 1st of this year to require a 3.5% down payment on all purchases with the elimination of all seller assisted down payments, and restricted family gifting guidelines.

Oh, real estate is a mess right now…but so is the economy. I’ll be waiting with everyone else, looking for the light at the end of the tunnel.

Buyers know they have the upper hand in negotiating in this real estate market, and they are using that power to get the best deal on a new home in Illinois. But what can you do as a seller to get the best price for your home in shortest amount of time?

There are a couple of things to understand about the market that can help you equalize the playing field with qualified buyers when it comes to negotiating a sales contract:

• Price your home between the highest and lowest priced comparable home on the MLS. You never want to be the highest priced home on the market.

• Keep close tabs on what the competition is doing. New listings, price adjustments, and price reductions will affect your position on the MLS so it's really important to know where you rank among the competition.

• Instead of lowering your asking price to create new interest in your property, considering offering the buyer a 2-night stay at the Wisconsin Dells or at a hotel in downtown Chicago. Even offering an Illinois home warranty can be enticing for many nervous first time homebuyers.

• If parts of your home need cosmetic updating consider offering an allowance for things such as carpet, paint or new appliances. Allowances are great ways to leverage the contract negotiation back in the sellers favor, at no up front cost to you for repairs.

• Don't leave any unfinished projects for your buyer to have to finish. Buyers detract $$$ every time they lay eyes on one of your ambitious unfinished weekend projects. It doesn't only cost you money on the final sale price it costs you precious market time.

I can help you get the most for your Illinois property, but I can't do it alone. I'll need your help to get the SOLD sign in your yard! By working closely with sellers and keeping a close on the competition you can get the best price for your home in the shortest amount of time... even in a down market.

If you are thinking about buying or selling a home in Will or DuPage County, let's talk! Call me at 630-673-6233. I always answer my phone!

HUD TO ALLOW DOWN PAYMENT ASSISTANCE PROGRAM TO CONTINUE

• Allow down payment assistance for a mortgage where the mortgagor has a credit score equivalent to a FICO score of 680 or greater.

• Allows down payment assistance where the mortgagor has a credit score equivalent to a FICO score of 620 to 679 and the mortgage insurance premium charged would be based upon the score and risk involved.

For credit repair go to: www.htdimortgage.net/zagreb

While I'm not a lawyer or a mortgage broker, I have done a little research on the topic of Illinois foreclosure and short sales for my clients over the last several days. I must admit that I was a little surprised by the range of answers that I found on the Internet in regard to alternatives to foreclosure.

That being the case I decided to go straight to the source at MyFico.com. Basically, A Plainfield short sale and a foreclosure will both damage your credit score to nearly the same extent, about 100-200 points. The difference is really in the recovery time; the time in which your credit score actually begins to improve.

That sounds like pretty crappy news, huh? Yeah, I was pretty surprised by that realization too, but after a little more digging both, a foreclosure and short sale in and of themselves, are much better alternatives to compounding those situations with a bankruptcy.

Even with a foreclosure or a short sale it will be about 2 years before you start to see your credit score improve and both will appear on your credit for 7 years. According to MyFico.com a short sale won't necessarily be any better than an actual foreclosure if you are over 90-120 days before you are able to negotiate a short sale to the closing table. On the other hand if you can get everything wrapped up before the 120 day mark you can avoid additional hits to your credit.

The bad news? Both foreclosures and short sales show up as over 120 days late. The good news? Their impact on your credit begins to diminish after 2 years, and many people can qualify for a reasonable interest rate after 2 years with a short sale; and 3-5 years after a foreclosure. Depending on your long term game plan, you would need to decide how long you are willing to wait before you were able to purchase another home.

A bankruptcy compounds credit problems because even credit and credit cards that were previously current become affected as non-performing accounts. I believe it is reasonably safe to say, based on that information, that a bankruptcy compounded with a foreclosure will have a more derogatory affect on your credit than a foreclosure or short sale alone... although I just want to mention again that I am not an attorney. :)

I personally think that a short sale is still better than a foreclosure, and that a foreclosure should be avoided at all costs. Still, I guess it all depends on your long term plans.

If you are considering a short sale, I do have a team of professional negotiators working through an attorney's office to assist me in selling your home. You can reach me at 630-673-6233 or at JT4NZ @ msn.com.