Deconversion of a Condominium – Is a Bulk Sale the Right Choice for Your Property?

Illinois real estate lawyersAcross the country, condominiums are suffering. Some units are sorely outdated. Others are unable to maintain an occupancy rate that can sustain the association’s annual investment. Whatever the reason, deconversion may be the answer. However, it may not be the appropriate option for every condominium association. Learn more about the deconversion of condominium units, including how to tell if it may be the right choice for your property.

The Rise of Deconversion

In the early 2000s, condominium units were all the rage. They were so popular, in fact, that many apartment complexes were converted into condos. Sadly, the boom died out, which is why many condominium associations are now struggling to fill their units. This lack of occupancy, paired with the cost of maintenance and upkeep, has been the catalyst for the rise in deconversions – a process in which condominium units are converted to apartments.

Potential Benefits of a Deconversion

The bulk sale of a condominium unit may be appealing to owners and associations because it offers a way out. Deconversion may also fetch a better price than other sale options, such as fire sales. It may also offer everyone a chance to bow out of their obligation in less time than it would take to sell the units individually. Still, deconversions do have their potential drawbacks.

Potential Risks of a Deconversion

Deconversions may give owners and associations a fast out, and they may offer a better price, but there are also some serious risks that owners should be aware of before agreeing to sell. The first is that a bulk sale may result in an unfair price for some. The reason behind this is that condo owners are supposed to split the proceeds, based on their percentage of ownership; if one unit looks the same as it when it was built, but another has significant and costly upgrades, the latter owner may lose out. Still, there are provisions that can protect owners, such as the right to appeal the value given to their unit.

Contact Our Seasoned DuPage County Real Estate Attorneys

If your condominium association is considering a bulk-sale of the property, or if you are an association interested in deconversion, contact Stock, Carlson, Oldfield & McGrath, LLC for assistance. Dedicated and experienced, we can examine your situation and help you determine the most appropriate path for you. Get started with a personalized consultation. Call our DuPage County real estate attorneys at 630-665-2500 today.

Source:

http://www.chicagotribune.com/classified/realestate/ct-re-0604-condo-living-20170530-column.html

Home Buying Basics for Illinois Residents

DuPage County real estate attorneysBuying a home is a significant milestone that can give you and your family years of joy and a lifetime of fond memories. Unfortunately, the process itself can be highly complex, and missteps along the way can delay home ownership. Thankfully, there are ways to smooth the process. The following information explains, and it provides details on where to find assistance with your next (or first) Illinois home purchase.

Working with a Realtor

While homeowners may want to skip the real estate agent to save money on the sale of their home, this decision can be a grave mistake for buyers. Real estate agents do more than just show potential homes. Knowledgeable on the communities, market conditions, and median home prices in the area you are searching in, real estate agents can work with your family’s needs and budget. They can aid you in preparing pertinent documents, such as your viable offer. Best of all, the agent’s commission is typically covered by the seller (covered in the purchase price) once the home closes. Just remember to shop around. Find one that has experience representing buyers, good references, and an understanding of the area.

Home Inspections and Seller Disclosures

Illinois state law requires that sellers provide potential homebuyers with a disclosure statement, which offers details on whether the home has any major issues that may impact the home’s value. Examples include defects like:

  • Termite infestation (or recent treatments);
  • Cracks in the foundation;
  • Lead paint or pipes; and
  • Previous flooding or fire.

However, buyers should not rely solely on these disclosures. Sellers may not know the full history of the home, or may not be aware of new but potentially serious issues. A home inspection can ensure these potential problems are discovered before you complete your purchase. Just do not use one selected by either the realtor or the seller; instead, practice due diligence and find one that comes with experience and good references.

Why Hire a Real Estate Attorney?

Although home buyers in Illinois are not required to hire an attorney, it is still highly recommended (and it may become necessary if you run into title issues or other legal problems). Real estate attorneys can review your contract to check for any problems, and they can work with you during negotiations. They can even draft or review your real estate agent contract to ensure favorable terms.

If you are purchasing a home in Illinois, contact Stock, Carlson, Oldfield & McGrath, LLC for assistance. Dedicated and experienced, our DuPage County real estate lawyers will protect your interests, every step of the way. Call 630-665-2500 and schedule a personalized consultation to get started today.

Sources:

http://www.ilga.gov/legislation/ilcs/ilcs4.asp?DocName=076500770HArt.+2&ActID=2152&ChapterID=62&SeqStart=300000&SeqEnd=1700000

https://www.epa.gov/lead/real-estate-disclosure

https://www.forbes.com/2010/05/25/why-you-need-real-estate-agent-personal-finance-commission.html

 

Selling Your Rental Property? Beware of Capital Gain Taxes

DuPage County real estate lawyersRental property can increase your bottom line, bulk your investment portfolio, and even fund your retirement. Unfortunately, it can also come back to haunt you. Capital tax gains, which are charged by the Internal Revenue Service (IRS), are applied to any asset that you sell for a profit. Learn how to mitigate against this issue with help from the following information.

Offset Gains with Expenditures

If you have an investment portfolio, you can attempt to offset some of the gain from your rental home with expenditures in other investment areas. Alternatively, you may have expenses related to the home itself, which may also be used to cut your tax load. The strategy, known as tax loss harvesting, should be used only under the advisement of a professional.

Use Section 1031 of the Tax Code

Investors who are simply searching for a new property or investment, and not a cash payout, may lower their tax load under Section 1031 of the IRS Tax Code. It does have to include a like-kind investment, but that does not mean you are required to swap out a house for a house. Instead, you can sell a house and trade it out for a condominium or a store. Just make sure the property is not going to be used as your own because that does not count under the exchange rule.

Turn Your Investment into a Home

Selling an investment property and a home you live in are treated as two completely different tax events by the IRS, which is why some investors turn their rental into a primary residence before they sell. Just keep in mind that you must own the home at least five years and live in it as a primary residence for at least two years before you can claim it as your own. Also, because there are some provisions on the deductions you can take, it is encouraged that you speak with a real estate lawyer before making the final decision to live in your rental.

Contact Our DuPage County Real Estate Lawyers

Whether you are planning on buying, selling, or renting a property, contact Stock, Carlson, Oldfield & McGrath, LLC. Dedicated and experienced, our DuPage County real estate lawyers protect your interests and investments. In every situation, we pursue the most favorable outcome. Schedule a personalized consultation to learn more about how we can help with your next real estate transaction. Call 630-665-2500 today.

Source:

http://www.investopedia.com/articles/personal-finance/121415/how-prevent-tax-hit-when-selling-rental-property.asp?lgl=myfinance-layout-no-ads