Because they had been watching the real estate market, Lisa and Joe Krogman had a feeling their house in Hawthorn Woods in Lake County would sell fast. It sold in a single day, which was "much quicker than I imagined," Lisa Krogman says.
Fortunately they had been looking for temporary housing, so the Krogmans were able to put their house under contract to a seller without anxiety about where they'd go next, a concern that grips many sellers in this year's fast-moving housing market.
When the sale of their house on Governors Way closed March 3, the Krogmans, both engineers, moved their family of five into an Airbnb rental in Mundelein and their furniture into storage.
With the inventory of homes for sale super-tight and affordability high thanks to low interest rates, many homes in the Chicago area are landing buyers within a few days of hitting the market.
There's no official count of quick sales, but so far in 2021, dozens of homes have sold in less than a week, Crain's found by watching sale records. Two among many examples: In Logan Square, a house on Bernard Street came on the market Feb. 2 asking $695,000 and went under contract six days later. The sale closed March 12 at 5 percent over the asking price. In Fox River Grove, a house on Bridle Path Lane went up for sale Feb. 2 at $525,000, got a buyer's contract three days later and sold in March at 2.5 percent over the asking price.
A quick sale makes some sellers "apprehensive because they're afraid they won't be able to find a place to go by the time the sale closes," says Deb Julson, the Keller Williams Success Realty agent who represented the Krogmans' house, which sold at the full $575,000 asking price.
Agents in the city and suburbs say the swift pace of sales means their sellers often aren't prepared to jump to the next home right away, so they're using half-steps. These include Airbnb and rent-backs, where the sellers add a provision to the contract that lets them stay in the house as renters for a specified time after the sale closes.
In Wilmette, @properties agent Laura Fitzpatrick represented clients who planned to sell a six-bedroom house on Elmwood Avenue. They wanted to strike while the market is hot, but also hoped to stay in the home until the end of the school year.
Fitzpatrick put the house on the market Feb. 11, priced at just under $1.5 million and with a note to agents that the sellers would want a rent-back agreement.
"No problem," Fitzpatrick says. "We got seven offers, and all seven buyers were OK with those terms." The house went under contact in five days, and the sale closed March 11 at 5 percent over the asking price. Fitzpatrick says her clients will be in the house for a few months but declines to put them in touch with a reporter. She's had two other sellers require rent-backs from the buyers so far this year.
Real estate attorneys usually advise buyers against rent-backs, largely because of the liability involved. But "when things are happening this fast and you feel like you won't have anywhere to go, people are doing it," says Mario Greco, a Berkshire Hathaway HomeServices Chicago agent. His clients who did a rent-back this spring request that he withhold the details.
The least anxious way to prepare for a quick sale, of course, is to have another home lined up. Patti Michels, a Baird & Warner agent in Downers Grove, has clients who were so unsettled by how fast buyers were interested in their house last fall that they pulled it off the market. Once they had bought their downsizing condo, they put their house on Saratoga Avenue back on the market in late January. It went under contract in three days and sold March 15 for $940,000, which was $1,000 above their asking price.
Michels had another listing, on Lee Avenue, that also hooked a buyer in three days. That kind of speed "is exhausting for the agent," she says, and as word gets out to potential home sellers, "it scares some of them, and they don't want to put their house on the market."
Julson, the listing agent on the one-day sale in Hawthorn Woods, was the one who encouraged her clients, the Krogmans, to look for an Airbnb. That was in part so they'd have somewhere to land and in part as a strategy for the purchase of their next home.
The Krogmans had lost bidding wars on two homes by putting in their offer a home-sale contingency, which gives the buyers time to sell their current home. "In this market, less than 2 percent of contracts go to buyers with home-sale contingencies," Julson says, citing statistics that Midwest Real Estate Data compiles on MLSConnect for agents. She says she thought that if the Krogmans closed their sale and could thus make an all-cash offer, they'd get the house they wanted.
And they did, Lisa Krogman says. Shortly after they moved into their Airbnb townhouse, they put a cash offer on a house in Kildeer. The strategy worked: They're scheduled to close on that purchase at the end of March.
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March 20, 2021 at 03:05AM
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Rent-backs become common in fast-moving Chicago housing market - Crain's Chicago Business
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