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Special Considerations for Real Estate Transactions in Chicago’s Luxury Real Estate Market
Buying your dream home is a big milestone, but it’s one that can take some time and dedication to achieve. Luxury properties in Chicago have everything you could want in a home, but there aren’t as many available, and you can face stiff competition from other buyers. For sellers, the news is a bit better, with property values increasing and buyers having to offer higher prices and fewer contingencies to stay competitive. Whether you’re ready to move into the Gold Coast or River North neighborhoods or you’re selling property in the West Loop or Old Town, the attorneys at Nery Richardson & Konewko LLC are here to help.
Chicago’s Luxury Real Estate Market
The real estate market has been booming for the past few years, with the price of real estate skyrocketing across the country. In Illinois as a whole, real estate prices have increased 35 percent from 2020 and a staggering 88 percent since 2000. While the luxury real estate market hasn’t been hit quite as hard, prices are still increasing on average. The average sale price of a luxury home in the United States is $1.17 million, which is an 8.8 percent increase from 2022.
While there is no formal definition of luxury real estate, these properties are generally in highly desirable areas and are priced well into the seven-figure range. Luxury properties can include sprawling estates, suburban mansions, or even opulent penthouse apartments. These properties are generally more spacious than traditional real estate, have higher-end finishes, and speak to an aspirational lifestyle.
The luxury real estate market is not immune to the fluctuations of the traditional real estate market, but it’s generally more stable.
However, the rules of supply and demand remain, with increasing prices being partially attributed to the relatively low inventory currently present in Chicago. As people from states with a higher cost of living, such as California, Massachusetts, and Oregon, look for more affordable housing with all of the amenities and opportunities a big city has to offer, Chicago’s appeal is high.
Important Legal Considerations for High-Value Real Estate Transactions
Any real estate purchase is an investment, and it’s important to do everything you can to protect that investment. It’s tempting to rush the buying process to make sure that you get the property you want, but taking the time to ensure you understand what you’re buying and what special considerations apply can save you problems down the road. For those selling luxury real estate, it’s a good idea to understand what potential buyers are dealing with and to have legal representation as a seller to ensure your interests are protected.
Understanding Zoning Regulations
While zoning regulations probably aren’t at the top of your list of things to consider when buying a property, they should be. Zoning rules specify how land and property can be used and what kind of development is allowed. For example, the zoning regulations may stipulate whether you are able to run a business out of your home or the size and height of an addition you may want to put on. If you are considering buying property in a historic district, there may be zoning rules regarding what you’re allowed to change. For example, you may have to choose from specific paint colors or agree to do any renovations with period-appropriate fixtures.
Reviewing Homeowners Association Contracts
Luxury properties that are part of historic districts or exclusive neighborhoods may be part of a homeowners association (HOA). HOAs can create rules regarding what you can do with and on your property, and they are generally focused on ensuring a cohesive aesthetic for the neighborhood and protecting the property values. HOA neighborhoods often come with perks, such as pools or clubhouse access, but it’s important to understand what you’re agreeing to. HOAs often come with large monthly or yearly dues, and you can be subject to fines or even a lien against your home if you violate the bylaws.
Before purchasing a home with an HOA, it’s important to review the HOA contract carefully with the assistance of a real estate attorney so you can ensure that the terms are agreeable to you and that you understand what the consequences could be for any violations.
Exercising Due Diligence
A luxury property is a large investment, and it’s one that needs extra time and attention. Buyers must exercise their due diligence by thoroughly inspecting the property for any issues and ensuring that it meets all of their needs. Sellers may also want to ensure that buyers are property qualified to ensure they are only dealing with those with a legitimate interest in the property. Other aspects to consider include the seller’s obligation to provide a full and accurate property disclosure and any tax implications, such as capital gains taxes.
Benefits of Working With a Real Estate Attorney
Buying or selling a luxury property is a high-value transaction, and that means you need professional representation to ensure that you understand your rights and obligations under the law. An attorney can help you prepare and review contracts, negotiate terms and conditions, and provide assistance during the due diligence process. They can also help with a title search to ensure the property is clear and be a valuable asset if there are any conflicts or disputes along the way.
Get help with the legal aspects and considerations of buying or selling in Chicago’s luxury real estate market when you work with the team at Nery Richardson & Konewko LLC. Call our office at 773-582-7000 to learn more.
