Wednesday, March 07, 2007

looking at houses in Chicago

My wife is driving the real estate search.

We have about 40 houses to look at. Some are tier 1 (most interested), tier 2 (interested), and tier 3 (maybe). Our realtor has offered to review the tier 3's to see if we should spend time looking at them.

We'll visit Chicago this coming week and look at the houses over 3 days. We've planned to take our eldest, however, my wife is worried the rapid pace will be too much for him. I know he'll be disappointed and I'll miss him horribly, but it might not be fair to drag him around through such an aggressive schedule.

I'm expecting a Chicagoland house will cost about $850,000 - $1,050,000. Somehow I just don't feel comfortable spending more than $1M. I've heard there are formulas you can use to calculate how much house you should own. Some say never buy more than twice your income; i.e. a salary of $100k should buy a $200k or less house. Others say limit mortgage and related payments to 25% of your income (or less).

One of the questions is whether we should look for a larger lot - perhaps in a less densely populated neighborhood with 1-2 acres OR a smaller lot - about 1/4 acre - in a more densely populated area. The smaller lot approach assumes neighbors would have children in adjacent back yards, etc.... Would more neighbors in closer proximity increase the number of playmates for our young children?

I doubt our house in North Carolina will sell for much of a profit, if any. It's probably worth about $500k +/- $20k. We've barely lived in it for a year. The greatest challenge will be absorbing the broker's commission cost. The rule of thumb seems to be about 7% for commissions, transfer taxes, etc.... I'm skeptical we'll arrive where we need to be to break even - though we might get lucky. I need to budget for several months duplicate mortgages - the thought is very depressing. We may also be in a situation where our buyers in NC ask for a contingency on the sale of their home - I really don't like that - it locks up our house without a buyer's commitment.

We need to find the new house by May and would hope to move into it in June. That will be a truely interesting experience. Big Company and my wife's employer will both help with the move. I wonder how much we'll have to personally throw in after it happens.

Regards, makingourway


fin_indie said...

850k-1M will get you a pretty nice house in Chicago. Any idea what suburbs you're looking in yet? (Or are you talking about a house in-city?) Either way, best of luck. Chicago is a GREAT town.

Denise Mall said...

I'm just throwing this out here, take it for what you will. I have lived in the Northern Illinois/Chicago Area my whole life.

Check out Elburn, IL. The town is smaller, yet close enought to everything - St. Charles, Batavia and the Train to Chicago is close by. The schools are AWESOME, Kaneland.

I also believe, the northern sides of Sugar Grove go to Kaneland Schools.

This would give your family a smaller town to call home. Would place you in an area with people of your same financial place. You have the ability in the area to buy land, feel safe and prosper. With easy access to your city job.