A Muddled Tale Among Sales (and not) in Chicago Real Estate
The Chicago real estate market is an odd amalgam of elements. You’ve got first-time buyers looking to buy condos in Chicago neighborhoods like Lakeview and Wicker Park. You’ve got folks ready to buy their first Chicago single family homes in areas like Edgewater and Bucktown. You’ve got investors checking out two flats and the like in Chicago areas like Lincoln Square and Ravenswood. And you’ve got suburbanites, ex-pats and jet setters choosing their Chicago in-towns in the Gold Coast and Streeterville.
Pretty much across the board what we’ve got on the buy-side of the Chicago real estate equation are good prices.
And on the other side of the equation we’ve got sellers and their Chicago real estate professionals doing this, that and the other thing trying to concoct scenarios that a) sell the house they are trying to sell and b) trying to push the price as high as possible when they do sell their homes or condos. But sometimes unexpected things happen.
A few weeks ago I was involved in a negotiation for my clients to purchase a corporate-owned home in West Bucktown. It was an odd scenario right out of the box. We had made an offer on the home two weeks earlier but negotiations stalled. Lo and behold two weeks pass and I notice that the seller slashed the price so much that the new price was $15,000 less than where they stopped negotiating with us two weeks prior. (And within five percent of what my clients were willing to pay.)
So the reduction occurred on Thursday and I immediately apprised my clients by email and emailed the agent to let her know that we might revisit with a new offer. She responded the next morning that they had an offer but she urged us to also submit. Without getting into the viscera, before noon Friday we submitted a new offer and by the end of the day we had verbal assent from the seller’s representative and had agreement.
At least that’s what we thought.
Because the home is corporate owned (not by a bank, but by a relocation company), offers were to be submitted with pre-approval from the seller’s lender. But face it, not many among us want to give personal and confidential information that suggests our buying power when it comes to a home save to the lender that we select and wish to work with. Such was the case with my clients – we provided our own pre-approval from Chicago lender Guaranteed Rate and indicated to the seller’s agent that once we reached a mutually agreeable number related to the purchase we would allow their lender to provide their own a pre-approval.
By Monday afternoon, having received the seller’s assent to our offer, we satisfied their request to obtain pre-approval from their lender. We made arrangements for a home inspection to occur later in the week but the sell-side was unable to provide an executed contract. In fact aside from ostensibly having reach agreement on price, the sell-side really wasn’t able to provide much of anything except questions that made my clients more and more uneasy.
It turns out that my clients’ edginess was prescient. By midweek the selling agent was badgering me, saying another offer had been received and asking that I check with my clients to see if they would be willing to restructure their offer to the new reality.
Knowing my clients I told the agent that my clients were not likely to pony up with more money if for no other reason than we had an agreement. But for whatever reason, the corporate entity that owned the home never executed the contract. The upshot is that though we reached agreement we didn’t have an agreement.
And at the end of this story regarding the Chicago real estate market my clients refused to budge from the number we originally had agreed to. Not only was this the right thing to do based on principle, but it was the right thing to do based on practical concerns given how unreliable the seller proved to be.
And so? I and my clients continue looking for the right single family home while the place we were under contract for remains a pending transaction. My only hope is the guy in a cubicle in New Jersey who is made the decision to kick my clients to the curb suffers from prolonged and undisturbed indigestion.
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