There is something wonderful about living in a brand new piece of Chicago real estate – call it that new property smell. However, there are some precautions you should take before you purchase a newly constructed Chicago condo, so be sure to go through this checklist before you sign on the dotted line.

1. Research the Developer’s Background – Has the development company has ever had to return a project to the bank? How are their recent projects selling? Take the time to examine the firm’s background and previous projects (the internet makes this easy) before you fall in love with their new buildings.

2. Work with the Right Realtor – When you are purchasing new construction, it is important to work with a realtor who has experience in that area and understands its idiosyncrasies, because there are key details like layout plans, finish selections, and other nuances that only come with a background in new construction.

3. Compare and Contrast Cost per Square Foot – Comparing the cost per square foot to other, similar new construction projects gives you an idea of the relative worth of your unit and ensures that you are getting good value for your money.

4. Floor Price Differential – It is important to recognize that the price of otherwise identical units changes per floor, as this will give you insight about the views and how the existing buildings surrounding the property might affect a future resale.

5. Check out the Neighbors – The buildings surrounding your new home not only have an effect on your current view, other new developments may appear in the future so be sure to inquire about the zoning and any future construction nearby. Keep in mind that buildings with views that will forever be unobstructed usually have fantastic resale value; two Chicago examples are 2520 Lakeview and 340 On the Park. Be aware that if a unit is located just one or two stories above the rooftops of neighboring buildings, this may be an aesthetic issue that affects resale as well.

6. Height Matters – A ceiling height of at least nine feet is preferred, however, you can expect to find ten and eleven foot ceilings in luxury new construction developments. Also, notice the unit’s entry door height - eight foot doors are typically found in the more expensive luxury units, and if the condominium has larger doors, the finished product will feel more elegant.

7. Open the Door - Many of the sales center model units do not include doors, because the lack of doors make the unit look larger - so it important to ask if the doors in your unit are going to be solid core. If yes, you will know that your doors will be more soundproof and that the unit has superior finishes.

8. Look for Millwork – This is one of the many important fine points that separate mediocre construction from a luxury product. Custom-made nine inch high baseboards with architectural detailing is a definite sign of luxury, while finely crafted custom crown mouldings and door casements make a luxury statement.

9. Examine the Appliances and Cabinets - Upscale brand names are obviously the most desirable, and the big names certainly help identify the quality level of the new construction development. Snaidero cabinetry, SubZero refrigerators, Wolf ranges, Viking microhoods and Miele dishwashers are names associated with high quality and luxury. Many developments feature alternative brand names so be sure to consult your realtor for the particulars of the appliance and cabinet package offered.

10. Look At the Windows - Will the size and shape of windows in the model reflect exactly what will be in your unit, or will there be variations within the building? Some buildings do have variations in window height, so it is important to find out which floors exceed the average as these apartments will ultimately be worth more (and larger windows are more aesthetically pleasing for you!).

11. Look Up at the Ceiling – Ask what kind of ceilings will be in your unit. If they are reinforced concrete, it is essential to determine whether the concrete will be finished or if the ceiling will be showing the rough seams.

12. The Finishing Touches – If you enjoy the look and minimalist feel of rough concrete finishes, go for this design features. Also, be aware that if you paint the concrete areas post-purchase, the value of the unit may be compromised.

13. Appraisal Research – When purchasing newly constructed property, it is important to work with a realtor who has access to the new construction information from the Appraisal Research Counselor compiled report. This contains a wealth of information about all the developers and their finishes as well as the percentage of units sold. In addition, you can also determine sales velocity for a project and when the development started its marketing campaign.

14. Heating and Air Conditioning – Ask if the building is going to be on a four pipe system and where the ducts (ceiling or floor) will be for both the heat and air.

15. Where to Park? - If the building is already constructed, check the exact location of the parking lot. Make certain you can park without being forced to back into a spot, or if it is up against a wall or any columns. Remember that ease of entry and exiting are critical. If purchasing parking off of construction plans try to stay away from walls unless the parking spot is extra wide.

16. Escrow Money - Most developer contracts require ten percent of the entire purchase price down, including the cost of the parking. On the contrary, your objective should be to put as little money down as possible. Try to have the contract written with five percent down, at least initially. If the developer will not accept the smaller escrow, you may try an incremental dollar strategy over a period of six months or five percent immediately after attorney approval and then five percent once construction begins. Note that all escrow money should be provided only after you own attorney has approved the contract – their offer should be modified to state that the escrow money should be provided one or two days after you and your lawyer have agreed to all the terms.

17. Contract Modifications – If you want to be more conservative, you should consider possible “what if scenarios”, namely loss of your job or another catastrophic situation which would change your ability to move forward with the closing of the property. Have your attorney examine the contract to see if there are any written provisions and if the developer is willing to make these modifications.

18. Property Report and Condo Declaration - This is a document that you will receive and you will have to sign a receipt for it – you do not have a contract with the developer until you receive and sign for this document. It is essential that you review this material because it provides important information about what you can and cannot do once you own the property, such as whether you can rent the condo out, what procedures and fees are involved if you do, how soon you can sell the unit after you close, and if you can sell the parking to an individual who does not reside in the building. Last but not least, you also want to make sure that your parking is stated as garage covered parking.

Sheldon Salnick is a Realtor with Rubloff Residential Properties. He has worked with new construction buyers for over 19 years and has represented over $200 million in new construction. For more information on new construction single family homes, townhomes or Chicago condos, he can be reached at 312.264.5853 or email him at SSalnick@Rubloff.com

July 11, 2008

Mary Umberger 

July 13, 2008

Here’s a nugget of good news about the real estate market, though it may warm only the hearts of those who need to hear it the least: the rich.

Sales are up for some of the most expensive real estate in Chicago, according to a couple of area agents who watch that sector.

Bob Untch, a Coldwell Banker agent in Barrington, says that moneyed suburb has seen a “surge” in sales of homes priced at $2 million and up.

“Through June, we’ve had 12 properties sell over $2 million, and all of last year we had four, so we’re 200 percent over 2007 sales,” he said. “With all the gloom and doom, this is a huge surge.”

Untch says the pace also is picking up between $1 million and $2 million. “In all of 2007, there was a grand total of 71 sales closed over $1 million, and this year, we have already gotten 52,” he said.

Hearing this, I rang up Jim Kinney, president of Rubloff Residential Properties in Chicago, who said the numbers are improving at the highest end in the city too.

Kinney said Chicago has had 103 closings in the $2-million-plus bracket in Chicago since the beginning of the year; up from 89 a year earlier. And in the next rung down—$1 million to $2 million—there were 372 closings in the first six months of 2008, up from 309 in the year-ago period.

Untch theorizes that pricey purchases have picked up because consumers lying in wait have decided it’s time to move.

“I sold a $3.5 million property, and the buyer flat-out told me, ‘Oh, yeah, we’ve been watching it since September,’ ” Untch said. When the price dropped $200,000 recently, the buyer pounced, he said.

Upper-bracket buyers are rarely intimidated by the aches and pains of the general market, Untch said.

“People with money don’t really have a lot of issues. The mortgage situation doesn’t really scare them off,” he said. “They just want a good deal.”

So if, as F. Scott Fitzgerald so famously observed, the rich are different from you and me, what possible difference could it make that more contracts are being signed on mansions these days?

Because it might—just might—mean something for the rest of us.

“The high end comes back first,” Kinney said. “It’s the last to turn down and the first to pick back up. They go to the sidelines when they feel things are going to tumble. They can afford to buy but don’t want to catch a falling knife.”

Neither Kinney nor Untch are doing handsprings, however, because there remains the nagging little issue of a bumper crop of homes still for sale.

“Inventory is up, but at least we’re making a dent in it,” Untch said.

Kinney said top-quality resale properties have held their own in the city, but new construction “is deathly.”

He said the city has 13,000 new units in the pipeline, yet just 200 purchase contracts were signed in the first quarter.

Though he sees the upper-bracket sales as encouraging, they don’t herald a turnaround, he said.

“There is no tsunami coming,” Kinney said. “It’s more like a tidal pool.”

Hear Mary Umberger at 12:49 and 11:15 p.m. Tuesday and Thursday and at 10:30 a.m. Saturday and Sunday on WGN-AM 720. Write to her at Real Estate, Chicago Tribune, 435 N. Michigan Ave., 4th Floor, Chicago, IL 60611 or send e-mail to housing news@comcast.net.

By Mark Pullinger

Every gathering of real estate marketers these days seems to start with the same question: “Are you guys still doing print?” Statistics from the National Association of Realtors tell us that when it comes to finding a home, consumers are voting with their mouse in favor of the Web.

In reality, consumer behavior is not hard to understand. Simply think about how you live your life from day to day and suddenly the clues as to how and why technology is revolutionizing our lives become immediately apparent.

Consumers search with Google and in around a nanosecond, get all the information they need about a neighborhood, including homes for sale and agents who successfully sell in that area. The information is largely accurate and is often updated in real time, and agents can retrieve everything without getting out of their pajamas.

So does this mean that an agent who just figured out how to attach a file to an e-mail is destined to become roadkill on the information super highway? Not necessarily, but to survive in this new environment agents have to adapt.

First, agents have to remember that real estate is about selling, and the basic principles of selling have not changed. Agents should start by getting to know the people in the area in which they are trying to do business. In the not so distant past, this meant handing out business cards at community events, joining local organizations, sending out postcards, advertising in the newspaper, holding open houses and making phone calls. All of these methods are still relevant; however, in addition to these strategies, agents now have new, more effective tools that can successfully place them in front of potential clients quickly.

E-mail marketing is a well-established and effective way to reach buyers and sellers. A number of companies offer professional-looking e-postcards as a service to agents. It’s time to retrieve your contacts’ e-mail addresses off of the dinner napkins and envelopes at the bottom of your kitchen junk drawer and enter them into an Excel spreadsheet. This is assuming you have collected your contacts’ e-mail addresses. Of course, if you have not, you need to do so right away. When prospecting or sitting at an open house, it is critical you ask for e-mail addresses.

Though they are quick and effective, like postcard mailings, e-mail postcards have many downsides. With spam becoming an ever-growing problem, response rates are on the decline. In order to be meaningful, the person receiving the message should know you, or the message should at least offer an added value or service. People always like to know what is happening in their neighborhood market, so a simple list of recently sold homes can be effective.

Creating and maintaining a personalized Web site is another useful marketing technique and it’s becoming very easy to do. Many firms, including Rubloff, offer agents simple Web site solutions. Having a successful Web site, however, is not that easy.

Success is all about SEO, or search engine optimization. If your Web site is optimized, which means that it comes up frequently in queries on Web search engines. How does one optimize? By having content — lots of it, which takes work.

Sheldon Salnick, an agent at Rubloff Residential Properties, has maintained a Web site for three years. When visiting SheldonChicago.com, you’ll instantly notice that Salnick’s home page is rich with information. He has invested time into optimizing his site and reports that 75 percent of his business is generated via the Web.

Blogging is another way to reach your target market. Blogs facilitate an interactive conversation via written dialogue on the Web. Eric Rojas, another Rubloff agent, swears by this technique. His blog, ChicagoRealEstateLocal.blogspot.com, has a hometown appeal that would be easy to mistake for nothing more than some guy who writes about everyday life. Most of Rojas’ leads come from his blog and he is now a rising star in Rubloff’s Lincoln Park office.

How can that possibly work, you ask? The simple answer is Google. The posts on Rojas’ blog constitute a veritable library of Chicago real estate information. When someone searches for real estate on the Web, Rojas’ blog is likely to come up in the results. It has an informal feel and the information is valuable because it’s credible. Instead of the old sales approach with a big-hair photo and an “I’m great” headline, Rojas’ blog takes a simple, understated and honest approach. It establishes him as someone consumers can trust.

On the same note, Rojas advises that his approach will not work for everyone. Find an approach that matches your style of selling. Rojas is so confident about his approach that when I asked him for a business card, he at first struggled to find one, and then finally said, “Just Google me.” So I did.

Like Mark Twain, whose early demise was wrongly printed in a newspaper, it may be premature to count print advertising out. People still read newspapers and magazines. It is an important element of a mix of advertising techniques, partly because sellers expect to see properties in print advertisements. And remember, print advertisements can drive traffic to your blog or Web site. Just don’t forget to include the Web address!

Mark Pullinger is vice president of marketing for Rubloff Residential Properties in Chicago. With nearly two decades of experience in resale real estate and development marketing, Pullinger creates and successfully executes an integrated marketing program offering both agents and consumers an innovative mix of tools and services unique to Rubloff. To contact Pullinger, visit Rubloff.com or e-mail him at mpullinger@rubloff.com.