Chicago Condo Sellers FAQs (Frequently Asked Questions)
Selling your condominium can be an exciting process, but it can also be stressful one, especially if you're new to the process. We feel your pain. That’s why we’ve prepared this detailed sellers’ guide that includes many of the frequently asked questions that Terri has received in her decades of working in the Chicago real estate marketing. Below, you'll find a wealth of information designed to help you make informed choices throughout the process. Though we'd always recommend speaking to an expert before selling your home, this FAQ should answer any initial questions you might have.
Don't see your question here? Contact Terri today to receive local, up-to-date answers about buying and selling Chicago condos. She has years of experience she’s willing to share with you—with no obligation necessary. Terri and her team are dedicated to helping you make smart decisions and, ultimately, get the price you deserve for your condo.
Q. How is selling a condominium different than selling a traditional single-family home?
In cities like Chicago, condo ownership has long represented an appealing alternative to traditional homes by offering affordable lifestyles in popular downtown locations like River North, the Gold Coast, and Streeterville. Though single-family homes remain the most appealing option for larger families, condos are a particularly attractive option for professionals, first-time homebuyers, investors, and people looking to downsize.
When it comes to selling a condo, the fundamentals are no different than selling a house: you set an asking price, get your condo ready for sale, market and show it, negotiate with potential buyers, and finally close the deal. (You can read more about this process in our Chicago condo selling guide.)
Before starting, though, you’ll want to carefully consider the factors that do set condominiums apart from detached homes:
Setting a Price
While it can often be a challenge to find the right price for a single-family home, determining a value of a condo might initially seem easier because there are likely identical or very similar units that have recently entered the market. If you see a condo on your floor that went for a particular price, for instance, you can use this value as a starting point.
That said, just because your unit shares the same floor plan or square footage as another in your building, doesn’t mean you’ve found the right price for you. There are plenty of other factors that you’ll want to take into consideration. What’s the view like? Can you see Lake Michigan or just into the condo across the street? What’s the exposure like? Does your condo face north, south, east, or west? Does it get hot during the day? Is it mostly cast in darkness? Is it a corner unit? Is it directly across from an elevator or stairwell? What floor are you on? In other words, what makes your condo unique? What makes it more or less desirable than others that have recently sold in your building? Asking these types of questions, in consultation with a REALTOR, will help you determine the correct price.
The Importance of Staging
Many people selling their condos are surprised to learn that, because space is often at a premium, staging is actually more important when it comes to condo sales.
Why? If you’ve been living in a smaller space for a while now, chances are that you’ve accumulated a lot of personal items that could be perceived as clutter. While you may value these items, this can be distracting for potential buyers and might give the impression that space is more cramped than it seems.
Professional staging and storing any inessential items off-site are two ways you can make your place more appealing to potential buyers. Resist the urge to push things into closets, onto a balcony—or even building storage rooms—as a condo buyer is particularly likely to check out their storage options, and crowded closets are likely to put them off.
The usual steps—a thorough cleaning, fresh coats of paint, small household repairs, and replacing older appliances—are also recommend, of course. Ultimately, the challenge with a small space is to help potential buyers imagine themselves living there. If you can’t move out entirely—and that's often the case—you’ll likely find this to be one of the major challenges of selling your Chicago condo.
Think About The Neighbors
Because condo life ultimately implies living in shared spaces, another big consideration that condo buyers will be particularly anxious about are the people they’ll be living near. Even townhouses provide some buffer between you and the people next door, but condos can often lead to tighter arrangements. Depending on your position in the building and your soundproofing, the quality of your neighbors might be a big question for buyers. Few will want to live next door to somebody who parties all night or below a careless tenant with a history of causing floods. Though sometimes it's difficult to deal with these situations, any effort you put into making sure the neighbors fall in line will pay off in the long run.
If you’re friendly with the immediate neighbors, you may wish to make the rounds and let them know when you’ll be showing your condo. Hopefully, they’ll keep any noise to a minimum during the duration when others are visiting. In cases where relationships with neighbors are more strained, try to make sure that any disputes are resolved before you begin selling your home, or try to arrange showings in times when you know the neighbors are not around. The point is not to deceive your buyers, but to show the condo in the best light.
When considering resale, your condo’s Homeowners Association (HOA) will have a bigger role to play in how your condo is perceived by potential buyers and their lenders. Sometimes condo owners complain about expensive HOA fees, and potential buyers may be put off by them, but you should remind yourself that higher fees may have benefited you in the long term if the HOA reserves have been used to correctly maintain the property. In addition to building maintenance, your HOA likely charges each unit for landscaping, trash removal, amenities, and building insurance, and all of these can add value to your home.
As a matter of course, the buyer’s lender will conduct a review of the HOA’s records, taking into consideration the HOA’s reserves of cash for maintenance and emergencies, any pending litigation, and the ratio of renters compared to owners. This is where things can get alarming: if your HOA hasn’t been doing their job, lenders may choose not lend on your building, which would restrict your pool of buyers to only those who can put down cash.
If you’re thinking about selling in the future, make sure that your Homeowners Association is doing their best to help you maintain its value. Get involved and make sure your opinion is heard, especially. Participation in your HOA is not just about maintaining your current quality of life, it’s also about ensuring that the future sale of your condo goes as smoothly as possible.
Q. How long will it take to sell my Chicago condo?
This is a very common question, since every seller is understandably anxious to see their home sell. Though condos typically move faster than single-family homes—because they tend to be less expensive and have lower associated maintenance costs—there’s no universal answer that covers every situation. Market conditions, available inventory, listing price, time of year, the agent you work with, and many other factors can make a tremendous difference in how your home sells.
In other words, it depends. Some data points could help answer this question. You need to find out what is the average time that it takes to sell a “like” or “similar” property in your neighborhood can give you a fairly good idea of what to expect. Being objective and understanding the facts will be your best strategy to get to the answer of that question.
That’s also why working with a REALTOR experienced in selling Chicago condos, like Terri McAuley, is important. You want someone who understands the current conditions and who can help you list and market your property accordingly.
Median Days on Market
Every REALTOR worth their salt can recite the current average (or, more correctly, median) days on market. According to Illinois REALTORS®, in recent years the days on the market for a Chicago condo ranges from 40-70 days, a number that has fluctuates depending on the time of year and the current supply of condos on the market. In some cases, a unit can go under contract in less than a week!
When to Act
It’s easy to grow anxious when your property lingers on the market for weeks—or even months—but it’s important to correctly evaluate your circumstances before taking corrective action. Many REALTORS recommend making changes 30, 60, and 90 days into the lifespan of a listing, but there are many factors you should consider first. Even in a hot market, it’s not unusual to see sellers who prematurely reduce the asking price, costing themselves thousands of dollars, or others whose condo bounces between indifferent agents with little knowledge of how to get the word out.
If you’ve been resisting the investment of time and money necessary for professional staging or photography, for instance, now might be a good time to reconsider. Are you doing everything you can to make your condo appealing as possible to buyers? What about any cosmetic touch-ups that you’ve put off because you didn’t think they mattered? Maybe this is a sign you’ll want to take action. Only after you’ve taken an honest look at your efforts to prepare and market your condo should you think about altering the price. Even a gorgeous condo in a desirable location can benefit from a little TLC.
Ask yourself about your own motivations for selling too—are you in a hurry? Or can you afford to wait? If the market is currently over-saturated with units like your own, then you might wait until the economics of supply and demand shift more in your favor. Yes, this could had months to your timeline, but for many people that's better than reducing the price.
While there are definitely times when lowering the list price is definitely necessary, you’ll want to avoid a price reduction if at all possible. Consulting with an experienced REALTOR who can look at average closing costs and comparable condos in your neighborhood is definitely the best approach, as you'll want someone who knows the market extremely well to help you make this decision. Ultimately, it’s about having someone you trust provide you with an honest opinion, preferably from the beginning.
Q. How much does it cost to sell a condo?
When you decide to sell your condo, one of the first things you do is determine what the total overall closing costs of the sale will be, as well as the amount you still might owe on your mortgage. If you go into the sale thinking only about the final sale price, you are likely to come away from the sale disappointed, or even with a net loss! So before selling, make sure you know how much of the sale price you would get to keep, so that you know what a good sale price would actually mean for you.
The first, and usually the largest, cost to selling your condo will be the commission that the seller's agent takes—and while you can try to save that money by selling your condo yourself, there are usually other costs involved in a FSBO selling process. Traditionally, the seller's agent will ask for a 6% commission, though recent trends have seen that number falling a bit, with some agents willing to accept only 5 or even 4%. When you enter into a selling agreement with your agent, you'll commit to the exact commission percentage up front, so you'll know this cost right from the start.
After the agent's commission, the largest closing cost is usually property taxes, though these aren't truly a cost. In Illinois, we pay property taxes after the fact, so that you're always paying for the previous year that you occupied the property. As a result, when you sell your Chicago condo, you'll be expected to give the buyer the money they will need to pay for your property taxes the next year. So while this cost will come out of the sale price in practice, in reality you're just paying what you already owe to the government for the time you lived in your condo. You'll also be paying city, county, and state taxes.
Other closing costs include the title fees, the attorney's fees (in Illinois, real estate attorneys are required to finalize any sale), and the costs of any necessary inspections. Usually, a good rule of thumb to estimate your total closing costs will be 3% above commission, so that a standard 6% commission would mean you pay a total of 9% of the sale price in closing costs. But remember, this is only a guideline, and each situation will be slightly different.
Q. Is now a good time to sell my condo? Will my condo sell for a higher price if I list it in the spring?
Though it’s not a very satisfactory answer, the truth is that it depends. It depends on the number of properties that are similar to your condo and are on the market in your building. It may also depend on your neighborhood and if your property has some or many unique features.
Typically the spring market is the best time to list a property for sale, but a unique property or a condo with an amazing view may be in a good position to sell at any time. If you’re at all unsure of when you want to go on the market, seeking the opinion of a real estate broker that you trust is almost certainly your best move.
Q. Isn’t it better to list my condo with a big real estate firm?
Maybe. The best thing to do is to interview two or three agents and ask them similar questions. It’s definitely more important that you are comfortable with the agent that will be representing you than listing with a large firm. Understand the agents’ strategy, marketing plan and see if they have any unique ideas that you think could help you sell your Chicago condo.
Agents associated with large firms often promise additional services that may or may not apply to you, but they shouldn’t be the deciding factor when it comes to picking a real estate agent. It’s much more important that you find someone who you’re convinced knows the local market and who will be a strong negotiator on your behalf. You should also reasonably expect an agent to work hard to sell your condo, no matter its value—if your listing agent isn’t doing their all to help you get the best price for your property, you might consider moving on, no matter what they.
Q. Why shouldn't I just sell my condo privately?
When you look at the size of a standard commission for a seller's agent, it starts to seem very attractive to go the For Sale By Owner (FSBO) route. A successful FSBO sale can save you tens of thousands of dollars, and recently developments in online tools to help owners sell their properties themselves have made some aspects of FSBO easier than ever.
However, there are some downsides to not using a seller's agent. Agents will provide you with access to the MLS®, as well as to their extensive experience and expertise marketing homes. In today's competitive condo market, it's important to know how to find the right buyers and to stand out from the other options on the market, and a professional REALTOR® can do all of that for you. Finally, Chicago condos are popular among foreign buyers, and a seller's agent will know how to navigate the intricacies of those sale. Do some research into the pros and cons of FSBO and decide for yourself!
Q. I'm selling the condo of an aging or deceased relative. What do I need to know?
Seeing a loved one grow older or pass away can be emotionally difficult, but it's an unfortunate reality of life. One of the practical concerns that often results from these tragic circumstances is the sale of property. If it falls to you to handle the sale of your loved one's property, there are a few steps you can take to make sure that you handle this important responsibility correctly.
First, make sure that you do in fact have the right to sell the property. You will typically have this right under one of two circumstances. First, if your relative is aging or infirm, they can grant you power of attorney. With power of attorney, you'll be legally empowered to handle the sale of their property on their behalf. Be careful, however, to make sure that your power attorney documentation is in good shape, as older or very recent documents sometimes won't hold up to legal scrutiny.
If your relative has passed away, then you will have the legal right to sell their condo provided that they prepared an estate plan in which they named you as an executor of their estate, or as a successor trustee. However, not all people put together thorough estate plans, in which case the inheritance of property and the right to sell it can become complicated. It's not uncommon for families to have to turn to the courts to resolve matters of ownership when no estate plan was available.
Finally, once you are certain that you can legally sell the condo, make sure to gather all of the necessary information. Take account of all loan agreements, title reports, and deeds, as well as any other legal or financial ties the condo may have. Once you have all of this information, you will be well equipped to make the sale properly.
Q. How do I sell a condo with a current tenant?
If you’ve purchased a Chicago condo as an investment property, and are now antsy to sell, you may find yourself in a common situation. Existing tenants may be impeding you from selling, or even showing, your property. What can you do?
First, discuss selling your condo with your tenants, providing them with as much advance notice as possible. Sometimes, tenants may be potential buyers If you think they might be interested, especially if you have an established long-term relationship, its worth having the conversation before you begin marketing.
Though consulting with a professional is always recommended, some condo owners find that this path allows them to avoid commissions and other associated costs. However, this kinds of deals can easily fall through and sometimes lead to bad blood that might make it more difficult to sell in the long-run. If you’re unsure, consult a professional before you begin.
What if tenants are on a fixed-term lease?
If your tenants don’t want to buy or are otherwise incapable of doing so, you’ll need to be careful that you stay on the right side of the law as you sell. Clients on a fixed-term have the right to remain living on your property, for instance, until that term is up.
If they’re on a fixed-term lease that you’d like to terminate prematurely in order to sell, you will need to secure a mutually acceptable agreement with them or risk legal action for violating the Chicago Landlord Tenant Ordinance.
What if tenants are on a month-to-month lease?
Courtesy and circumstance will certainly determine how much advance notice you give month-to-month tenants, but you must still be careful to observe the law.
According to the Chicago Landlord Tenant Ordinance, a landlord is required to give notice in writing at least 30 days prior to the termination date of a month to month rental agreement. If you fail to give proper notice, tenants are legally entitled to remaining up to 60 days after the termination date, which could lead to major problems if a buyer is ready to move in.
What are a selling landlord’s entitlements?
One extra complication when selling an investment property is that landlords don’t have the right to stage their tenant’s apartments. You can repair anything that isn’t working, add a coat of paint or new fixtures, but moving furniture or personal items requires your tenant’s permission. You are, however, entitled to give showings to potential buyers, so longs as you provide at least 24-hours notice. Tenants aren’t required to leave during a showing, no matter how much you might want this.
The solution to many of these issues is to maintain a strong, personable relationship with your tenants. If you’re a good landlord, chances are most tenants will be agreeable as long as their rights are trampled. Attempting to force a tenant out by making their life uncomfortable is ultimately the worst approach you can take.
Q. What is a rent-back agreement?
Strictly speaking, a rent-back agreement is an agreement in which the sellers of a condo or home agree to pay rent to the buyer after the offer closing. It’s sometimes also referred to as a post-settlement occupancy agreement, and it can sometimes come into play during negotiations. The most common reason that a seller might want a rent-back agreement is that they need some extra time to move or that they need the finances from the sale in order to make their own offer on a property.
It’s usually recommended that both parties treat a rent-back agreement like a standard lease. There should be a clear stipulation of when the agreement terminates, a security deposit for any damages incurred after the seller becomes a renter, and renter’s insurance is strongly recommended as well. Except in rare circumstances, rent-back agreements are typically 60 days and can sometimes even outline financial penalties for overstaying.
Q. I've received an offer. Now what?
When you receive your first offer, you will likely have a strong emotional reaction. After all the waiting and the many showings—unless you get an offer right away—you'll be excited to see what the offer is. It might be a great offer, in which case you'll feel like you should rush to accept it, or it might be enough below your asking price that you feel offended. The key to reviewing an offer is to keep a level head. Talk the offer through with your agent, and remember that you're always free to reject an offer or propose a counter-offer.
Once you've accepted an offer, your contract will enter the attorney review and inspection process, which is typically between five and seven days, depending on the contract. A lot needs to happen during this time, so it's important to be prepared to move quickly. First, you should immediately schedule any and all inspections, as inspectors will need time to view the condo and usually take a few days to write up and send their report. Second, be aware that your attorneys will be in process of reviewing the contract during this time as well. Once everything is approved, the sale will be final. Congratulations!
Q. What is "Earnest Money"?
An earnest money deposit is an important part of any selling process. In short, it is a deposit of money that the prospective buyer makes in order to show that they are serious about the purchase. As a seller, you could be taken advantage of if you didn't ask for an earnest money deposit—it would be easy for a buyer to express interest and take your condo off the market, but then turn around and decide that they liked another property better. With an earnest money deposit, however, the buyer is required to put money on the line when they agree to buy the condo, disuading them from making insincere offers.
Generally, you should ask for 1 to 2% of the total purchase price of the condo you're selling as an earnest money deposit. You might ask for the lower end of that range in a slower market, and the higher end in a hot market. Additionally, highly motivated buyers might offer a larger earnest money deposit to show you they mean business, or in exchange for a slightly lower total price. However, keep in mind that you will not get to keep the money—normally, the money is held in escrow until the purchase goes through, at which time it is applied to the buyer's down payment. And most contracts still allow the buyer to get back some or all of their earnest money under certain circumstances, such as if they find a problem with the condo.
Q. What is a 22.1 Disclosure?
When you sell your Chicago condo, you'll be required to make sure that your buyer gains access to a series of documents known as a 22.1 disclosure. The 22.1 disclosure provides a prospective buyer with information about the condo association's finances, fees, and regulations, which allows the buyer to enter into the purchasing agreement with a full understanding of the expectations and circumstances of the condo association they'll be joining. Other key details included in a 22.1 disclosure relate to any existing legal actions, information about insurance, and information about plans to alter or improve the unit. 22.1 disclosures help protect the buyer from entering into an unfair agreement without full knowledge, and they are only one type of disclosure required by Illinois law, along with disclosures about harmful building materials such as lead paint.
While all of the information contained in a 22.1 disclosure relates to your condo association, and not you personally, it is usually a good idea to get the process started yourself once you decide to sell your condo. Some condo associations provide all of the relevant documents online, making 22.1 disclosures easy, but it is in your best interest to make sure your association gets its documents together in a timely manner, so that your buyer has all the information they need to make a final commitment to the purchase.
Q. What is a contingency?
In a real estate contract, a contingency clause is something that a buyer who has made an offer has to do in order for the negotiation to go forward. This can be as simple as waiting on a pre-approval letter, an inspection report, or even a co-signatory. Sometimes a contingency will be inserted by the buyer that prevents the deal from going through until they sell their home. As a seller, you should expect financing contingencies but talk to your agent before accepting any others.
Sometimes you will see listings that are marked as “contingency” or “under contract.” This is a signal to you that there is an accepted offer on the property but that is still subject to some contingency that is delaying the sale. While you can make an offer on a contingent listing, you should talk to your real estate agent to make sure it’s a smart choice. In some situations, it may be a waste of time.
Q. What is a "final walk-through"?
Not to be thought of as a substitute for a professional home inspection, a final walk-through is typically a checkup to ensure that any stipulated repairs have been made and that the property is in the same condition it was when the buyer last looked at it. If your property will be sitting vacant, you should visit frequently to ensure that things are still as they appeared when the buyer first made an offer. Flooding, insect infestations, or other issues that can sometimes develop might sour a deal during the final walk-through.
Q. Does a new construction condo need a home inspection?
When you purchase a brand new condominium, you’ll be offered a pre-delivery inspection (PDI) during which you’ll have the chance to look over the unit. Though it might be tempting to stop there, it’s important to recognize that a PDI only looks at surface-level details. Yes, you can ensure the countertops weren’t scuffed or that the casement windows open correctly, but deeper problems lurk below. A PDI will not, for instance, catch significant issues with plumbing or electrical systems.
For this reason, you should always hire a third party inspector who can look over the condo before you close, which will allow you to revise your offer or change the terms. Depending on the size of your unit, the inspection will take up to three hours, but a professional report will include remarks on:
- Cracks in the wall or foundation
- Leaks, water pressure, or other issues with pipes
- Electrical problems, like faulty circuitry
- HVAC issues
- Faulty appliances
Don’t let the status of “new” fool you into thinking there can’t be costly problems that you otherwise might have seen.